01 April 2014
Supreme Court
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V. KALA BHARATHI Vs THE ORIENTAL INS.CO.LTD.,BR.CHITOOR

Bench: P SATHASIVAM,RANJAN GOGOI,N.V. RAMANA
Case number: C.A. No.-003056-003056 / 2008
Diary number: 23828 / 2005
Advocates: Y. RAJA GOPALA RAO Vs DEBASIS MISRA


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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3056 OF 2008

V. KALA BHARATHI & ORS. … APPELLANTS VS.

THE ORIENTAL INS. CO. LTD.,  BR. CHITOOR … RESPONDENT

J U D G M E N T

N.V.RAMANA, J.

1.The short question to be answered in this appeal  is whether the amount deposited by the judgment  

debtor  in  a  decree  is  to  be  adjusted  first  

towards  interest  or  towards  principal  decretal  

amount.

2.The facts of the case are – On account of demise  of an Engineering Graduate, Mr. V. Raja Kumar on  

29.04.1993 in a road accident, his legal heirs,  

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i.e.,  the  appellants  herein  filed  a  claim  

petition being M.V.O.P. 774 of 1993 before the  

Motor Accident Claims Tribunal (for short, ‘the  

Tribunal’) claiming -

3.compensation to the tune of Rs.2 crores.  The  vehicle involved in the said accident was insured  

by  the  respondent  –  Insurance  Company.   The  

Tribunal vide its Award dated 29.04.1997 awarded  

an amount of Rs.98,40,500/- as compensation with  

interest  @  12%  p.a.  from  the  date  of  the  

petition,  i.e.,  25.10.1993  till  the  date  of  

realization,  apart  from  costs  quantified  at  

Rs.99,443/-.

4.Being  aggrieved,  the  respondent  –  Insurance  Company filed an appeal under Section 173 of the  

Motor Vehicles Act, 1988 (for short, ‘the Act’)  

and  to  comply  with  the  provisions  contained  

therein,  deposited  a  sum  of  Rs.25,000/-.   On  

15.12.1997, the High Court in C.M.A. No. 1726 of  

1997 granted            stay of execution of the  

Award dated 29.04.1997 subject to the condition  

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of  depositing  a  sum  of  Rs.30  lakhs  and  

Rs.99,443/-  costs,  which  amounts  were  

undisputedly deposited.  The said order was made  

absolute on 15.07.1998 subject to the condition  

of depositing a further sum of Rs.30 lakhs, which  

was also complied with. A Division Bench of the  

High  Court  partly  allowed  the  appeal  on  

19.12.2001 thereby -

5.reducing  the  compensation  amount  from  Rs.98,40,500/-  to  Rs.56,40,000/-,  however,  the  

interest  rate  of  12%  p.a.  was  retained.   The  

respondent – Insurance Company also deposited a  

sum of Rs.23,27,635/- on 19.09.2002, claiming to  

be full and final satisfaction of the award.  

6.The appellants filed Execution Petition No. 11 of  2003 on 06.06.2003 before the Executing Court /  

Tribunal  claiming  an  amount  of  Rs.20,16,700/-,  

which  claim  was  denied  by  the  respondent  –  

Insurance  Company  on  the  ground  that  its  

liability to pay interest gets discharged when it  

deposits the award amount in full.  Thus, relying  

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on  the  principle  of  accrual  method,  the  

respondent – Insurance Company claimed that since  

it satisfied the award amount in full, no more  

interest was payable and as per its calculation,  

only a sum of Rs.36,650/- was liable to be paid,  

which was deposited on 29.07.2003.  

7.While  adjudicating  the  aforesaid  Execution  Petition, the Executing Court took a view that  

the  amounts  deposited  by  the  respondent  –  

Insurance Company from time to time were liable  

to be adjusted -

8.towards  the  component  of  interest  first  and  thereafter to the portion of the decretal amount.  

After  taking  into  consideration  the  amounts  

deposited by the respondent – Insurance Company  

on different dates, its liability was fixed vide  

order  dated  18.08.2004  to  the  extent  of  

Rs.17,70,657/- together with interest @ 12% p.a.  

from the date of filing of the Execution Petition  

till the date of realization.  

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9.The respondent – Insurance Company assailed the  aforesaid calculation / order of the Executing  

Court dated 18.08.2004 in Civil Revision Petition  

No. 4337 of 2004.  The appellants herein also  

filed  Civil  Revision  Petition  No.  6108/2004  

thereby  challenging  that  the  Executing  Court  

could not have adjusted the amount paid as costs  

towards the decretal amount.  The learned single  

Judge  of  the  High  Court  of  Judicature,  Andhra  

Pradesh,  by  judgment  dated  29.07.2005,  allowed  

both the Civil Revision Petitions while holding  

that (i) the part payments deserve to be adjusted  

towards the principal decretal amount and not any  

component of interest accrued upto that date; and  

(ii) the amount deposited towards costs, in -

10. pursuance of the directions of the court, must  be adjusted towards that, and not towards payment  

of the decretal amount.

11. Learned counsel for the appellants vehemently  contended  that  the  impugned  order  cannot  be  

sustained  being  contrary  to  law  of  the  land  

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declared under Article 141 of the Constitution of  

India (for short, ‘the Constitution’).  He also  

contended that judicial discipline to abide by  

declaration of law made by this Court cannot be  

forsaken under any pretext by any authority or  

court, be it even the highest Court in a State.  

It  tantamount  to  judicial  indiscipline.   In  

support of his submissions, the learned counsel  

relied upon the judgment of this Court Industrial  

Credit and Development Syndicate (ICDS) Ltd. Vs.  Smithaben  H.  Patel  &  Ors. 1999  (3)  SCC  80,  

Venkatadri Appa Rao Vs. Parthan Sarathy Appa Rao  AIR 1922 PC 233, Meghraj Vs. Bayabai 1969 (2) SCC  274 and  Gurpreet Singh Vs.  Union of India 2006  (8) SCC 457.

12. On the other hand, learned counsel appearing  for the respondent – Insurance Company contended  

that, in the facts and circumstances of the case,  

there is no -

13. reason  to  interfere  with  the  impugned  order  passed by the High Court.

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14. We have heard learned counsel for the parties  and gone through the entire material available on  

record.  

15. Before adverting to the various issues involved  in the case and the contentions advanced by the  

counsel on either side, we have given our anxious  

consideration  to  the  judgment  impugned  of  the  

learned single Judge of the Andhra Pradesh High  

Court.  The learned Judge, while adjudicating the  

issue, has considered the judgments of this Court  

in  Meghraj (supra),  Industrial  Credit  and  

Development Syndicate (supra) and Rajasthan State  Road  Transport  Corporation,  Jaipur Vs.  Poonam  

Pahwa, AIR  1997  SC  2951 and  has  passed  the  judgment by giving reasons which are basis for  

his conclusion.   

11. We feel that it is appropriate to extract the  relevant paragraphs from the impugned judgment.  

“It  is  true  that  in  a  plethora  of  judgments, the Supreme Court as well as  the High Courts took the view that any  amount deposited under Rule 1 of Order 21  CPC  must  be  first  adjusted  towards  

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interest. Discussion on those judgments  vis-à-vis sub-rules (4) and (5) of Rule 1  - of Order 21 C.P.C. is prone to be taken  or mistaken as an attempt to explain the  judgments of the Supreme Court or High  Courts.  However,  since  some  of  the  judgments  of  the  Supreme  Court  were  delivered at a time, when sub rules (4)  and (5) were not on the statue book, and  in the judgments rendered thereafter, the  attention  of  the  Hon’ble  Supreme  Court  and  the  High  Courts  was  not  pointedly  invited  to  these  provisions  in  certain  cases  or  they  did  not  fall  for  consideration,  it  is  felt  necessary  to  address the issue…”   “Viewed from this context, it is evident  that Parliament added sub rules (4) and  (5) with a definite and avowed object of  assessing the running of interest on the  deposits made by the decree holder into  a Court.  The background in which those  provisions came to be incorporated has  already been indicated in the preceding  paragraphs.  Sub Rules (4) and (5) by  themselves do not disclose as to whether  the  amount  should  be  adjusted  towards  principal  or  interest.   However,  the  expression  “interest  if  any”  occurring  in both the provisions is significant.  A  decree  may  comprise  of  principle  amount claimed in the suit, as well as a  component of interest up to the date of  decree.   Once  a  decree  is  passed  for  certain amount, it becomes a principle  by  itself  and  the  liability  to  pay  interest thereon, and if so, the rate at  which  it  is  to  be  paid,  would  depend  upon the terms of decree.  The amount  that carries the interest till the date  of  realization  would  be  the  one  

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stipulated  in  the  decree.   It  is  not  permissible  for  a  Court  to  award  interest on interest.   Sub section (3) of Section 3 of the - Interest Act clearly prohibits grant of  interest  on  interest.   Therefore,  the  only component of the decree that can be  related to the expression “interest if  any” occurring in sub sections (4) and  (5) of Rule (1) is the decretal amount,  which,  in  other  words,  is  the  principal.”  

“It is true that the cases decided so  far, do not strictly support this view,  and  in  a  way,  may  suggest  the  other  point of view.  However, an effort is  made  by  this  Court,  to  explain  the  purport of sub-rules (4) and (5) of Rule  1.   This  Court  is  conscious  of  the  requirement to follow the precedents, as  well as its obligation, to give effect  to the legislative mandate.  An endeavor  is made to honour both the obligations.  Having regard to the importance of the  issue and the implications involved in  it,  further  discussion  may  ensue  at  appropriate levels.”

12. From the above findings of the learned Judge,  it appears that he passed the order basing on three  

considerations:

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Firstly, the judgments relied upon by  

the claimants are based on the pre-amended  

provisions of Order 21 Rule 1 C.P.C.

Secondly,  in  the  cases  which  were  

decided subsequent to amendment, the issue  

-

of  appropriation  of  amounts  has  not  

fallen for consideration.

Thirdly,  a  decree  comprises  of  

principal claimed in the suit as well as  

component  of  interest.   Hence,  once  a  

decree is passed for certain amount, it  

becomes  principal  by  itself  and  Section  

3(3)  of  Interest  Act  clearly  prohibits  

grant of interest on interest.   

13. Now, before we proceed to decide the legality  or  otherwise  of  the  order  passed  by  the  learned  

Judge, it is worthwhile to examine Rule 1 of Order  

XXI of the Code of Civil Procedure, 1908 (for short,  

‘the CPC’), which reads as under:

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“ORDER XXI EXECUTION OF DECREES AND ORDERS

1.Modes of paying money under decree. –  (1) All money, payable under a decree,  shall be paid as follows, namely:-

(a) by deposit into the Court whose duty  it is to execute the decree, or sent  to that Court by postal money order  or through a bank; or

(b) out of Court, to the decree-holder  by postal money order or through a  bank or -

(c) by any other mode wherein payment is  evidenced in writing; or

(d) otherwise, as the Court which made  the decree, directs.

(2) Where  any  payment  is  made  under  clause (a) or clause (c) of sub-rule (1), the  judgment-debtor shall give notice thereof to  the decree-holder either through the Court or  directly  to  him  by  registered  post,  acknowledgement due.  

(3) Where money is paid by postal money  order or through a bank under clause (a) or  clause (b) of sub-rule (1), the money order  or payment through bank, as the case may be,  shall  accurately  state  the  following  particulars, namely:-

(a) the number of the original suit;

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(b) the  names  of  the  parties  or  where  there are more than two plaintiffs  or more than two defendants, as the  case may be, the names of the first  two  plaintiffs  and  the  first  two  defendants;  

(c) how  the  money  remitted  is  to  be  adjusted, that is to say, whether it  is  towards  the  principal,  interest  or costs;

(d) the number of the execution case of  the  Court,  where  such  case  is  pending; and

(e) the name and address of the payer.

(4) On any amount paid under clause (a)  or clause (c) of sub-rule (1), interest, if  any,  shall  cease  to  run  from  the  date  of  service of the notice referred to in sub-rule  (2).

(5) On any amount paid under clause (b)  of  sub-rule  (1),  interest,  if  any,  shall  cease to run from the date of such payment.

Provided  that,  where  the  decree-holder  refuses to accept the postal money order or  - payment through a bank, interest shall cease  to run from the date on which the money was  tendered  to  him,  or  where  he  avoids  acceptance  of  the  postal  money  order  or  payment through bank, interest shall cease to  run from the date on which the money would  have  been  tendered  to  him  in  the  ordinary  course of business of the postal authorities  or the bank, as the case may be.”  

14. A  bare  perusal  of  the  aforesaid  provisions  makes it amply clear that the scope of Order XXI Rule  

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1 of the CPC is that the judgment debtor is required  

to  pay  the  decretal  amount  in  one  of  the  modes  

specified in sub-rule (1) thereof.  Sub-rule (2) of  

Rule 1 provides that once payment is made under sub-

rule (1), it is the duty of the judgment debtor to  

give notice to the decree-holder through the Court or  

directly  to  him  by  registered  post  acknowledgement  

due.  Sub-rule (3) of Rule 1 merely indicates that in  

case money is paid by postal money order or through a  

bank under clause (a) or clause (b) of sub-rule (1)  

thereof,  certain  particulars  are  required  to  be  

accurately  incorporated  while  making  such  payment.  

Sub-rules (4) and (5) of Rule 1 states from which  

date, interest shall cease to run – in case amount is  

paid under clause (a) or (c) of sub-rule (1), -

interest shall cease to run from the date of service  

of notice as indicated under sub-rule (2); while in  

case of out of court payment to the decree-holder by  

way of any of the modes mentioned under clause (b) of  

sub-rule (1), interest shall cease to run from the  

date of such payment.  

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15. The language contained in the aforesaid sub- rules clearly indicates the appropriation of amount  

to be made in case the decree contains a specific  

clause,  specifying  the  manner  in  which  the  money  

deposited  to  be  appropriated.   Sub-rule  (1)(c)  of  

Rule  1  indicates  the  money  deposited  to  be  

appropriated as per the direction of the Court, if  

there is a provision in that behalf.  In the absence  

of specific direction with regard to appropriation,  

then only the manner of appropriation would arise for  

consideration.   Sub-rules  (2)  to  (5)  of  Rule  1  

indicate  the  procedure  to  be  followed  when  the  

deposit is made either under clause (a) or (b) of  

sub-rule (1) thereof, but it does not leave any scope  

for  interpretation  with  regard  to  appropriation  of  

deposited amount by the decree-holder.

- 16. In this regard, it is also pertinent to extract  Rule 472 of the Andhra Pradesh Motor Vehicles Rules,  

1989 (for short, ‘the A.P.M.V. Rules’), which is as  

under:

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“472. Enforcement of an award of the Claims  Tribunal:- Subject  to  the  provisions  of  Section 174, the Claims Tribunal shall, for  the purpose of enforcement of its award, have  all  the  powers  of  a  Civil  Court  in  the  execution of a decree under the Code of Civil  Procedure,  1908,  as  if  the  award  were  a  decree  for  the  payment  of  money  passed  by  such Court in a Civil Suit.”

The above-said Rule indicates that the award passed  

by the Claims Tribunal is to be treated as if the  

decree for the payment of money passed by the Civil  

Court  in  a  civil  suit.   Hence,  in  view  of  the  

specific provision contained in the A.P.M.V. Rules,  

the  award  passed  by  the  Claims  Tribunal  is  to  be  

treated as a money decree.  In Rajasthan State Road  

Transport  Corporation,  Jaipur (supra),  this  Court  

held  that  in  executing  the  award  of  the  Claims  

Tribunal, Executing Court is competent to invoke the  

beneficial provision under Order 21 Rule 1 of C.P.C.  

- 17. The Privy Council in  Venkatadri Appa Rao Vs.  Parthasarathi  Appa  Rao AIR  1922  PC  233, held  as  follows:

“The  question  then  remains  as  to  how,  apart from any specific appropriation, these  

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sums ought to be dealt with.  There is a debt  due that carries interest.  There are moneys  that  are  received  without  a  definite  appropriation  on  the  one  side  or  on  the  other, and the rule which is well established  in  ordinary  cases  is  that  in  those  circumstances the money is first applied in  payment  of  interest  and  then  when  that  is  satisfied in payment of the capital.”

(Emphasis supplied)

The above principle was reiterated by the Privy  

Council in Rai Bahadur Sethnemichand Vs. Seth Rada  

Kishen AIR 1922 PC 26.  

18. We may notice that the principle laid down in the  above case has been not only approved by the Supreme  

Court, but also followed in several other subsequent  

cases.  In Meghraj (supra), it was held as under:  

“4.  …  Unless  the  mortgagees  were  informed  that the mortgagors had deposited the amount  only towards the principal and not towards  the interest, and the mortgagees agreed to  withdraw the money from the Court accepting  the conditional deposit, the normal rule that  - the amounts deposited in Court should first  be  applied  towards  satisfaction  of  the  interest and costs and thereafter towards the  principal would apply.”

19. In Mathunni Mathai (supra), it was held that the  right of the decree-holder to appropriate the amount  

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deposited by the judgment debtor, either in the Court  

or paid outside, towards interest and other expenses  

is founded both on fairness and necessity.  It was  

observed that the courts and the law have not looked  

upon favourably where the judgment debtor does not  

pay or deposit the decretal amount within the time  

granted as one cannot be permitted to take advantage  

of his own default.  Therefore, the normal rule that  

is followed is to allow the deposit or payment, if it  

is in part, to be adjusted towards the interest due,  

etc.  

20.  In  Industrial  Credit  and  Development  Syndicate  (supra), it has been held that in cases where the  

trial court has not prescribed any mode for payment  

of decretal amount, except fixing the instalments, in  

the  absence  of  agreement  between  the  parties,  

regarding the mode of payment of decretal amount, the  

-

general  rule  of  appropriation  of  payments  towards  

decretal  amount  is  that  the  said  amount  is  to  be  

adjusted  firstly  strictly  in  accordance  with  the  

directions contained in the decree and in the absence  

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of  such  direction,  it  is  to  be  adjusted  firstly  

towards  interest  and  costs  and  thereafter  towards  

principal amount.  This is, of course, subject to the  

exception  that  the  parties  can  agree  to  the  

adjustment of payment in any other manner despite the  

decree.   In  that  case,  the  Supreme  Court  had  an  

occasion to consider the method of appropriation and  

after  noticing  various  decisions  of  the  English  

Courts and the Privy Council, followed the judgment  

in Meghraj’s case (supra).  

21. We may also notice that in Prem Nath Kapur & Anr.  Vs.  National  Fertilizers  Corporation,  1996  SCC  (2)  71, while differing with the view taken in  Mathunni  Mathai (supra), it was held that the normal rule of  appropriation contained in Order XXI Rule 1 of the  

CPC relating to execution of decrees for recovery of  

money stands excluded by Sections 28 and 34 of the -

Land  Acquisition  Act,  1894  and  the  principles  

contained therein could not be extended to execution  

of award decrees under the said Act.  The relevant  

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para of the said judgment, being portion of para 14,  

reads as under:  

• • “14.  Equally,  the  right  to  make  

appropriation  is  indicated  by  necessary  implication,  by  the  award  itself  as  the  award or decree clearly mentions each of  the  items.   When  the  deposit  is  made  towards  the  specified  amounts,  the  claimant/owner  is  not  entitled  to  deduct  from  the  amount  of  compensation  towards  costs,  interest,  additional  amount  under  Section 23 (1-A) with interest and then to  claim the total balance amount with further  interest.  … … … … …

… … … … … …”

22. In  Gurpreet  Singh (supra),  the  Constitution  Bench of this Court had an occasion to consider the  

issue  regarding  execution  of  money  decree,  the  

principle  of  appropriation  and  its  applicability,  

which was recently followed by this Court in Bharath  

Heavy Electricals Ltd. Vs. RS Avthar Sing & Co., 2013  (1) SCC 243, and culled down the principles laid down  in Gurpreet Singh’s case as follows:  

a) The  general  rule  of  appropriation  towards  a  decretal  amount  was  that  -

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b) such an amount was to be  adjusted  strictly  in  accordance  with  the  directions  contained  in  the  decree  and  in  the  absence  of  such  directions,  adjustment  be  made  firstly  towards  payment  of  interest  and  costs  and  thereafter  towards  payment  of  the  principle  amount  subject,  of  course,  to  any  agreement  between  the  parties.  

c) The legislative intent in  enacting  sub  rules  (4)  and (5) is clear to the  points  that  interest  should  cease  to  run  on  the  deposit  made  by  the  judgment  debtor  and  notice  given  or  on  the  amount  being  tendered  outside the Court in the  manner provided in Order  21 Rule 1 sub clause (D).

d) If  the  payment  made  by  the  judgment  debtors  

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falls  short  of  the  decretal  amount,  the  decree  holder  will  be  entitled  to  apply  the  general  rule  of  appropriation  by  appropriating  the  amount  deposited  towards  the  interest,  then  towards  costs and finally towards  the principal amount due  under the decree.  

e) Thereafter,  no  further  interest would run on the  sum  appropriated  towards  the principal.  In other  words, if a -

f) part  of  the  principal  amount  has  been  paid  along  with  interest  due  thereon as on the date of  issuance  of  notice  of  deposit  of  interest  on  the part of the principal  sum  will  cease  to  run  thereafter.

g) In case where there is a  shortfall  in  deposit  of  the principal amount, the  

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decree  holder  would  be  entitled  to  adjust  interest and costs first  and then balance towards  the principal and beyond  that  the  decree  holder  cannot seek to reopen the  entire  transaction  and  proceed  to  recalculate  the interest on the whole  of  the  principal  amount  and  seek  for  re- appropriation.  

23. In the judgment referred to by the High Court in  the  impugned  judgment,  this  Court  and  the  Privy  

Council consistently have taken a view that in case  

of appropriation of amount unless the decree contains  

a  specific  provision,  the  amounts  have  to  be  

appropriated as contemplated under Order 21 Rule 1.  

If there is a shortfall in deposit, the amount has to  

be adjusted towards interest and costs, then it has  

to be adjusted towards principal.  The High Court has  

-

failed to appreciate this fact and misdirected itself  

in observing that these judgments are prior to the  

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amendment to Order 21 Rule 1. In our considered view,  

as far as this aspect is considered, there is no much  

difference in the provisions prior to or subsequent  

to the amendment, because in the objects and reasons  

for amendment to Order XXI Rule 1, as observed by the  

Constitution bench in Gurpreet Singh the legislative  

intent  in  enacting  sub-rules  (4)  and  (5)  is  that  

interest should cease on the deposit being made and  

notice given or on the amount being tendered outside  

the court in the manner provided.  The intent of the  

rule making authority is to leave no room for any  

frivolous pleas of payment of money due under a money  

decree.

24. We may add that the High Court proceeded on the  assumption as if sub-rules (4) and (5) of Rule 1,  

which were inserted pursuant to Amendment to C.P.C.  

in 1976, there is change in procedural law and the  

tenor of sub-rule (1) thereof.  But, sub-rules (4)  

and  (5)  do  not  have  any  relevance  with  regard  to  

appropriation, except stating when interest ceases to  

-

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run. Thus, it is no way guide for appropriation of  

amount as contemplated under Order XXI Rule 1 of the  

CPC.   In  Industrial  Credit  Development  Syndicate  

(supra) which is subsequent to the amendment to the  

provision, this Court has categorically observed the  

procedure to be followed and which squarely applies  

to the case, but the High Court has given its own  

interpretation to the judgment and failed to consider  

the  law  laid  down  by  this  Court  in  its  proper  

perspective.  

25. The  next  finding  of  the  High  Court  is  with  regard to interest on interest.  

In money suit, the amount consists of principal  

and interest till the suit is filed.  But, in case of  

award passed under the Act, the question of inclusion  

of  any  interest  on  the  decretal  amount  does  not  

arise.  Unfortunately, the High Court proceeded on the  

assumption that it amounts to interest on interest  

which is prohibited under Section 3(3)(c) of Interest  

Act, 1978 (for short, ‘the Interest Act’).  This is  

not  so,  as  in  the  facts  and  circumstances  of  the  

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present case, the decree passed by the trial Court or  

-

the appellate Court does not contain the mode of  

appropriation  and  in  the  absence  of  any  such  

direction,  the  decree-holder  is  entitled  to  

appropriate  the  amount  deposited  by  the  judgment  

debtor  first  towards  interest,  then  cost  and  

thereafter towards principal.

26. In view of above and more particularly keeping  in view the ratio of the Constitution Bench judgment  

in  Gurpreet  Singh (supra),  where  considering  an  identical question in respect of Order XXI Rule 1 of  

the CPC, it was held that if the amount deposited by  

the  judgment  debtor  falls  short  of  the  decretal  

amount, the decree-holder is entitled to apply the  

rule  of  appropriation  by  appropriating  the  amount  

first  towards  interest,  then  towards  costs  and  

subsequently towards principal amount due under the  

decree; we are of the opinion that the appellants  

herein  are  entitled  to  the  amount  awarded  by  the  

Executing  Court,  as  the  amounts  deposited  by  the  

judgment debtor fell short of the decretal amount.  

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After  such  appropriation,  the  decree-holder  is  

entitled to interest only to the extent of unpaid -

principal amount.  Hence, interest be calculated on  

the unpaid principal amount.  

27. We, therefore, allow the appeal, set aside the  impugned judgment dated 29.07.2005 passed by the High  

Court and restore that of the Executing Court dated  

18.08.2004.  

28. No orders as to costs.   

.................C.J.I. (P. SATHASIVAM)

.....................J. (RANJAN GOGOI)   

.....................J. (N.V. RAMANA)

New Delhi, April 01, 2014.

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