IN THE HIGH COURT OF MADHYA PRADESH

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AT INDORE

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BEFORE

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HON'BLE SHRI JUSTICE ALOK AWASTHI

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MISC. PETITION No. 2145 of 2025

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PARTH CREDIT AND CAPITAL MARKET PVT. LTD. AND OTHERS

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Versus

IDEAL ELECTRONICS PVT. LTD. THROUGH DIRECTOR

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PAVANKUMAR CHOPARA

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Appearance:

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Shri Mini Ravindran, learned counsel for the petitioners.

Shri Abhay Chand Jain, learned counsel for the respondent [CAVEAT].

Reserved on : 03.12.2025

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Pronounced on : 27.01.2026

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ORDER

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With the consent of the parties, heard finally.

2. This petition has been filed by the petitioner/judgment debtor

being aggrieved by the order dated 12.04.2025 in Execution Case No.

44/2023 pending before XIIIth District Judge, Indore by which the executing

Court rejected the application filed by the petitioner under Order XXI Rule 2

read with Section 151 of the Code of Civil Procedure, 1908 (hereinafter to

be referred as "CPC").

3. Brief undisputed facts of the case that are necessary for the

disposal of the present petition are that a land sale agreement between the

respondent and the petitioner for Rs. 35,50,000/- was executed as security

against the loan, for which a case No. 69A/2016 was filed for the

1 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

enforcement of a specific agreement and another Case No. 97/2020 for the

amount of Rs. 1,10,73,972/- was filed for the recovery of the money. During

the said period, a compromise was reached on 20.07.2021 for Rs.

5,32,38,000/-, in which, compromise order was passed by the Court below.

4. It was stated that the petitioner had agreed to pay Rs.

5,32,38,000/- to the respondent for the settlement of both the cases and the

respondent himself who wanted assistance under a specific agreement, had

given up the said assistance and accepted the money and had sought the right

to assistance under a specific agreement on the land in lieu of security for

receiving the money. Upon settlement, the petitioner promptly paid Rs.

5,00,000/- as an installment.

5. In the compromise application (Annexure-P/1) dated 19.07.2021, in

Point No. 6, it is clearly mentioned that " that if the defendant does not pay

the entire amount within one year as per the mutual agreement, then in such a

situation, the plaintiff will be entitled to get the sale deed of the agricultural

land mentioned in the plaint situated at Badiyakima, whose details have been

given in step 2, executed through the court. But the condition will be that the

plaintiff will release the agricultural land in proportion to the amount paid by

the defendant to the plaintiff within one year, and in respect of the remaining

land, the plaintiff will be entitled to get the sale deed registered from the

defendant. And if the sale deed is not registered by the defendant, then the

plaintiff will be entitled to get the sale deed registered with the help of the

Hon'ble Court."

6. Further, vide order dated 31.07.2023 passed in M.P. 4318/2023 by

2 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

this Court, it has been held that “ Heard the counsel for both the parties and

perused the record. Annexure P-2 is compromise order between both the

parties passed by IV District Judge, Indore in Case No.69A/2016. According

to the terms and conditions of compromise that judgment debtor paid the

total amount in installment of four months within a year and if total amount

is not paid within a year, then the decree holder may file execution of sale

deed before the Court and have right to execute sale deed through Court. But

it is the duty of the plaintiff to release the land in proportion to the amount

deposited by the defendant in one year."

7. In compliance with the compromise dated 20.07.2021, the

petitioner satisfied the order by submitting separate cheques of Rs.

5,32,38,000/- in the name of the Court and Rs. 5,32,38,000/- in the name of

the respondent in the Court of the Fourth District Judge, Indore, within one

year under Order XXI Rule 1 of CPC. It is an admitted fact that the amount

has been deposited by the petitioners through cheque on 18.07.2022 within

one year and on 25.07.2022, the Court informed the petitioners that the

respondent refused to accept the cheque within 90 days which is mentioned

in the order sheet dated 24.07.2023 and the cheque has not been dishonoured

till date and under Section 266 of the Income Tax Act, any transaction of

more than Rs. 20,000/- shall be done through cheque and not in cash.

8. The decree holder himself has accepted on 04.10.2023 in

response to the application dated 20.09.2023 submitted by the judgment

debtor that on 18.07.2022, a cheque of Rs. 5,32,38,000/- has been deposited

by the judgment debtor and has also accepted that the petitioner had given a

3 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

facility to the debtor on humanitarian grounds that if the judgment debtor

pays the amount of the last installment of Khasra No. 8/1/2 and 11/1/2

through Demand Draft with interest @ 12% from the date of decree within

three days, then in such a situation, he was ready and willing to release the

land of both the above mentioned Khasra numbers in lieu of the amount of

the last installment.

9. It was also stated that the respondent had demanded interest

from the decree dated 18.07.2021 but there was no condition fixed in the

agreement regarding interest, yet the decree holder had requested the court

that the question of interest does not arise from 20.07.2021, then if the Court

wishes, the judgment debtor is ready and willing to pay interest from

20.07.2021.

10. That, the petitioner has filed an application under Section 47 of

CPC before Trial Court in respect of execution filed by the respondent,

which was to be resolved first, but the Trial Court did not consider it passed

an order in aid of a specific agreement, not treating the cheque deposited by

the petitioner as payment in accordance with law, being aggrieved with the

aforesaid, present petition is filed.

11. Learned counsel for the petitioner argued that two civil suits

were instituted between the parties, first Civil Suit No. 69A/2016 for specific

performance of contract and another Civil Suit No. 97B/2020 for recovery of

money. During the pendency of the said suits, the parties arrived at a

settlement on 19.07.2021, pursuant to which a compromise decree was

passed on 20.07.2021. As per the terms of the compromise decree, a total

4 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

sum of Rs. 5,32,38,000/- was agreed to be paid by the petitioner to the

respondent within a period of one year, in three installments at intervals of

four months each. It was further agreed that the land in question would be

released in favour of the petitioner in proportion to the amount paid out of

the decretal amount within one year. It was also agreed that in the event of

failure to pay the said amount within the stipulated period of one year, the

Decree Holder would be entitled to seek execution of the sale deed through

the Court and have the same executed in his favour, in terms of compromise

decree.

12. It is further argued that the compromise decree did not stipulate

the payment of interest or the mode by which the Decree Holder was to

receive the payment. Hence, under the terms of the compromise, the

Judgment Debtor had the discretion to deposit the said amount in Court

either by cheque or in cash and the only requirement was that the whole

amount was to be deposited within a period of one year. The Judgment

Debtor/petitioner also had the discretion to get the land released mentioned

in the decree by paying the entire amount within one year.

13. It is also submitted that on 04.05.2022, the Decree

Holder/Respondent filed execution proceedings in Execution Case No. EX A

35/2022, which was a premature execution, as under the terms of the

compromise decree, the Decree Holder/Respondent could file for execution

only after the lapse of one year in case of non-payment of the compromise

amount. It is submitted that on 18.07.2022, the Judgment Debtor/Petitioner

filed an application under Order XXI Rule 2 of CPC, stating that the entire

5 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

amount under the compromise decree had been tendered by way of cheques

in the name of the Court and the Decree Holder/Respondent, and the same

was also informed to the Decree Holder, as reflected in the proceedings dated

18.07.2022 and 25.07.2022. An application was also filed in Execution Case

No. EX A 44/2023 for the release of the land, as the amount under the

compromise decree had been deposited by cheques in Court. However, in

Execution Case No. EX A 35/2022, after the expiry of 90 days, on

25.07.2023, the Decree Holder refused to accept the cheques tendered by the

Judgment Debtor/petitioner before the Trial Court.

14. Learned Trial Court has erred in holding that payment by

cheque is not a valid tender, it constitutes a valid tender, equivalent to

Demand Draft, challan, or any other valid mode of payment. Even after the

Court recognized the validity of the cheque, the petitioner remains ready and

willing to pay the compromise decree amount. The petitioner also submitted

that he is willing to deposit the decretal amount before the Court by way of

Demand Draft along with interest from cheque tendered date 18.07.2022.

15. In support of his submission, counsel for the petitioner has

relied upon the judgment of Hon’ble Supreme Court in the case of K.

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Saraswathy Vs. Somasundaram Chettiar

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reported in AIR 1989 SC 1553,

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Commissioner of Income Tax, Bombay Vs. Messrs Ogale Glass Works Ltd.

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Ogale Wadi

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reported in AIR 1954 S.C. 429

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and Damadilal and Others vs

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Parashram and Others

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reported in AIR 1976 SC 2229

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, to contend that cheque

is a valid tender and the encashment of the payment dates back to the date of

issue of Cheque.

6 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

16. Per Contra, learned counsel for the respondent opposed the

submissions made by counsel for the petitioner and contended that as per the

conditions under the compromise decree, total amount Rs. 5,32,38,000/- was

to be paid in three installments of 4-4 months, within a period of one year

and not by the way of cheque in the court. Also, in execution proceeding

Case No. EX A 35/2022, an application under order XXI Rule 2 of CPC

filed by the judgment debtor was decided along with several other

application by the Court below vide order dated 20.02.2023. Hence, the

present petition is barred on the ground of doctrine of res judicata as the

petitioner did not challenge order dated 20.02.2023 as has also been recorded

in order dated 31.07.2023 passed in M.P. No. 4318/2023.

17. To bolster of his argument, he has relied upon the judgment of

Hon’ble Apex Court in Satyadhyan Ghosal and Ors. Vs Sm. Deorajin Debi

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and Anr. AIR 1960 SC 941, Smt. J. Yashoda Vs.Smt. K. Shobha Rani, AIR

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2007 SC 1721, Hariom Agrawal Vs. Prakash Chand Malviya, AIR 2008

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Supreme Court 166 and Rashid Khan Vs. State of M.P., 2011 (3) MPLJ.

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18. He further contended that there is a limited scope of interference

under Article 227 of Constitution of India and the interference can only be

made when there is a jurisdictional error in the order. Where, there is a

speaking order, it cannot be challenged under Article 227 of Constitution of

India. It has been further argued that judgment debtor had to give the

compromise decree amount directly to the decree holder and not to deposit

before the Court. Only if there was no other option left then only the decree

holder could have deposited the amount in the court.

7 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

19. Heard the counsel for both parties and perused the record.

20. From the perusal of record and arguments advanced by the

learned counsel for the parties, following issues arise for consideration

before this Court:-

(i) Whether the present petition cannot

be entertained on account of being barred by

the principle of res judicata ?

(ii) Whether the cheques tendered by the

petitioner on 18.07.2021 in satisfaction of the

compromise decree dated 20.07.2021

constitutes valid tender? If yes, Whether on

account of such submission of cheque, the

petitioner had satisfactorily complied with

the terms and condition of the compromise

decree so as to avoid execution of

compromise decree for specific performance

initiated by the respondent ?

21. So far as issue relating to doctrine of res judicata of the petition

is concerned, learned counsel for the respondent has drawn attention of this

Court towards order dated 20.02.2023 passed in Case No. EX A 35/2022 to

contend that vide this order application under Order XXI Rule 2 of CPC of

the petitioner had already been rejected and the same was not challenged by

the petitioner and now, he is filing petition against rejection of application

under Order XXI Rule 2 of CPC in Execution Case No. EX A No.44/2023,

and hence the petition cannot be entertained on account of doctrine of res

judicata.

22. To appreciate the argument of the respondent, relevant excerpt

of order sheet dated 20.02.2023 are being reproduced as hereunder :-

8 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

"अिभलेख के अवलोकन से 8पA है Pक PडB'धारW .ारा यह

िन2पादन आवेदन प5 Pदनांक 21.05.22 को इस आशय का e8तुत

Pकया है Pक समझौता आदेश PदनांPकत 20.07.21 के पालन मn 8 माह

हो चुके है, Pकंतु िनणhतऋणी ने कोई भी Pक,त अदा नहWं क' है। अतः

PडB'धारW के पb मn yवBय प5 का िन2पादन कराया जावे। िन2पादन

आवेदन प5 मn सव] नंबर 13/2 का भाग रकबा 0.60 सव] नंबर 13/2

का रकबा 1.40, सव] नंबर 11/2/2 का पाट/ रकबा 0.92 तथा सव] नंबर

12 पाट/ रकबा 0.47 सव] नंबर 11/2/1 का रकबा 0.50 को सेल लेटर

जारW Pकया जावे, gयmPक उX वwण/त सव] नु9बरm क' कृyष भूिमयm क'

8 माह क' कुल रािश 3,26,25,000/- )पये होती है तथा 8 माह क'

Pक,तm को रािश 3,54,52, 000/- अदा क' जानी थी, जो अदा नहWं क'

गई है। इस कारण सेल लेटर जारW कर उX वwण/त कृyष भूिमयm का

क-जा PडB'धारW को Pदलाया जावे।

िनणhतऋणी

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.ारा

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Pदनांक

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11.02.23

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को

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अज/दार .ारा 8वयं बजावरW मn 5 लाख )पये क' रािश मुकदमा नंबर

695/16 के पेटे Pदया जाना 8वीकृत Pकया है। अतः इस िन2पादन

eकरण को िनर8त Pकया जावे, wजसका जवाब PडB'धारW .ारा इस

आशय का e8तुत Pकया गया है Pक शी% तौर पर िनणhतऋणी .ारा

5,32,38,000/- चेक Pदनांक]18.07.22 को zयायालय के समb

e8तत Pकया, Pकंतु उX रािश को चार-चार माह क' तीन Pक’m मn

Pदया जाना था। अतः yवकय प5m का िन2पादन कराया जाये।

पुनः

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Pदनांक

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11.02.23

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को

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9 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

आवेदन

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प5

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िनर8त

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Pकया

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अिभलेख के अवलोकन से यह 8पA है Pक राजीनामा आदेश

Pदनांक 20.07.21एवं पा”रत PडB'के अनुसार चार-चार माह क' तीन

Pक,तm मn 5.32.38,000/- &पया क' रािश Pदया जाना उभयपb के

म…य तय हुआ, Pकंतु उX रािश Pक,तm मn नहWं दW गई है, बw?क

yवलंब से दW गई है, इस कारण यह 8पA है Pक उX राजीनामा आ;िR

का पालन िनणhतऋणी .ारा नहWं Pकया गया है।

उपरोX

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5 लाख )पया का जो चेक Pदया जाना बतलाया

गया है, उसे Pडक'धारW ने 8वीकार Pकया है। अतः आदेिशत Pकया

जाता है Pक PडB'धारW आगामी पेशी Pदनांक तक wजन भूिम खसरा

नंबरm का िन2पादन करना चाहता है, उनका yवBय का eा)प

zयायालय मn e8तुत कर दे।

eकरण yवBय प5 के eा)प क' e8तुित हेतु Pदनांक 27.

02.23 को e8तुत हो।"

23. Having perused the order sheet (Annexure P/3) and in light of

arguments advanced by the respondent and from bare perusal of order-sheet

dated 20.02.2023, it is ascertained that there is no mention of application

under Order XXI Rule 2 of CPC which was filed by the petitioner on

18.07.2022. On the contrary, it is apparent from the order dated 20.02.2023

that the executing merely rejected objection of petitioner filed on 11.02.2023,

but application under Order XXI Rule 2 of CPC was not decided. Thus, it is

established that application under Order XXI Rule 2 of CPC is still pending

in the Case No. EX A 35/2022, the present petition is in no way barred from

being entertained on account of principle of res judicata.

24. Now, coming for determination of the issue No. 2, application

10 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

under Order XXIII Rule 3 of CPC and Compromise Decree dated 02.07.2021

(Annexure P/2) have been perused and it is found that it was agreed that the

Judgment Debtor/Petitioner shall pay the total amount of Rs. 5,32,38,000/-

in four installments in four months each and it was also agreed on the point

that total amount was to be paid within a year, and if the total amount is not

paid within a year, then, after a lapse of one year, the Decree

Holder/Respondent may file for execution of the sale deed before the Court

and shall have the right to execute the sale deed through the Court with

respect to land with regards to which amount remained unpaid. It was agreed

too that it was the duty of the Decree Holder/Respondent to release the land

in proportion to the amount deposited by the Judgment Debtor/Petitioner

within a period of one year.

25. This Court also finds that under the said compromise application

and decree, installment amount has not been prescribed, no consequence

uponfailure to pay installment has been prescribed, no mode or manner of

payment has been precribed and it has also not been prescribed that Decree

Holder/ Respondent is entitled to any interest over the agreed amount in the

case that the installment is delayed. Hence, in the considered opinion of this

court the only material condition under the said compromise deed is that the

total amount of Rs. 5,32,38,000/- which was to be paid under the

compromise decree was to be paid within one year and only thereafter the

respondent became entitled to seek execution of the compromise decree for

specific performance with respect to land in regards to which the amount

remained unpaid. At the same time, it remained the duty of the

11 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

respondent/Decree Holder to release the land in proportion to the amount

actually deposited by the Defendant/Petitioner within one year.

26. This Court, in the preceding paragraphs, has held that, under the

terms of the compromise decree, the Decree Holder/Respondent is entitled to

seek specific performance from the Executing Court only after the expiry of

one year. Furthermore, prior to seeking specific performance, the Decree

Holder/Respondent may take recourse to the Executing Court for specific

performance only in respect of the proportion of the land corresponding to

the amount which has not been received by him. In the case at hand, it is

evident from a perusal of the record that, undisputedly within the stipulated

period of one year, on 18.07.2022, the Judgment Debtor/Petitioner deposited

a sum of Rs. 5,32,38,000/- before the learned Court below by way of a

cheque drawn in the name of the Court and the Decree Holder/Respondent

came to the knowledge regarding the same on 25.07.2022 as is evident from

order-sheet dated 25.07.2022. The record further reveals that the said cheques

were never dishonored. However, the Decree Holder did not collect the

cheques from the Court within a period of 90 days despite having knowledge

of the same, whereas, he refused to accept the same, while demanding

payment of the decretal amount along with interest at the rate of 12% per

annum from the date of the decree in his reply to Execution filed by the

petitioner in Case of EX A No. 26/2023.

27. In the aforesaid factual matrix, it is apposite to refer to following

judgments of Hon’ble Apex court, to adjudicate the issue that whether such

submission of cheques satisfied the condition stipulated in the compromise

12 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

decree for payment of compromise amount within one year.

28. On this aspect, the law laid down by A Three-Judge Bench of

Hon’ble Apex Court in the case of K. Saraswathy Alias K. Kalpana (Dead)

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By LRs Vs. P.S.S. Somasundaram Chettiar

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reported in AIR 1989 SC 1553

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has been held as hereunder:-

“5. It is contended before us on behalf of the

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appellant that the cheque for Rs.6,02,000 was

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tendered in Court on 29 May, 1980 and that it

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was duly honoured by the Bank and money

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was realised under the cheque, and therefore

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it must be taken that payment had been

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effected by the appellant on 29 May, 1980

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within the time stipulated by this Court in its

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order dated 29 November, 1979. In

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Commissioner of Income Tax, Bombay

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South, Bombay v. Messrs Ogale Glass Works

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Ltd. Ogale Wadi, AIR 1954 S.C. 429. It was

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laid down by this Court that payment by

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cheque realised subsequently on the cheque

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being honoured and encashed relates back to

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the date of the receipt of the cheque, and in

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law the date of payment is the date of

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delivery of the cheque. Payment by cheque is

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an ordinary incident of present-day life,

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whether commercial or private, and unless it

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is specifically mentioned that payment must

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be in cash there is no reason why payment by

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cheque should not be taken to be due

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payment if the cheque is subsequently

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encashed in the ordinary course. There is

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nothing in the order of this Court providing

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that the deposit by the appellant was to be in

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cash. The terms of the order dated 29

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November, 1979 are conclusive in this

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respect and it is the intent of that order which

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will determine whether payment by cheque

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13 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

within the period stipulated in that order was

<>

excluded as a mode in satisfaction of the

<>

terms of that order. The time for payment is

<>

governed by the order of this Court.’’6. It is

<>

alleged on behalf of the respondent that there

<>

was no money on the date of delivery of the

<>

cheque to support payment of it and that it

<>

was subsequently when arrangements were

<>

made that the cheque was realised. Now, the

<>

High Court has not found that if the cheque

<>

was presented for encash- ment on the date it

<>

was delivered the cheque would not have

<>

been encashed. There is nothing to suggest

<>

also that the cheque was not honoured in due

<>

course and that the Bank had at any time

<>

declined to honour it for want of funds in the

<>

ordinary course. In any event, there is

<>

nothing to suggest that, under the

<>

arrangements made for payment of the

<>

cheque, even if it had been encashed on the

<>

date it was delivered the cheque would not

<>

have been encashed. There is no finding by

<>

the High Court that on 29 May, 1980 the

<>

cheque would not have been realised. That

<>

being so, the question whether the appellant

<>

had wrongly stated that her counsel had

<>

offered to pay cash to the High Court office

<>

on 29 May, 1980 ceases to be relevant. We

<>

also see no substance in the objection taken

<>

before the High Court that in the letter dated

<>

29 May, 1980 addressed by counsel for the

<>

appellant forwarding the cheque for

<>

Rs.6,02,000 there was a request for the return

<>

of the cheque in case it was found that the

<>

appellant was entitled to the set-off claimed

<>

by her. The application of the appellant

<>

claiming adjustment was pending in Court,

<>

and no conclusion can be drawn against her

<>

on the ground that she had requested a return

<>

of the cheque in the event of the adjustment

<>

being allowed by the Court.”

<>

14 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

29. In a recent judgment delivered in the case of Vijay Laxmi Singh

& Ors. Vs. Registrar of Cooperative Societies, Govt. of NCT of Delhi &

Anr. decided on 20.04.2022 in W.P.(C) No. 6312/2022, the Division Bench

of High Court of Delhi has taken note of the dictum of Three Judges’ Bench

of the Hon’ble Apex Court in the case of K. Saraswathy alias K. Kalpana

(Dead) By LRs (Supra) and observed as follows :-

“The learned counsel for the respondents

submits that since the payment was made

through cheques and the money has not been

realized, therefore, the petitioners were

deemed to be in arrears. The said argument

has only is stated to be rejected because

tendering of cheques by the petitioners for

the requisite amount and acceptance of the

same by the respondents is as good as cash

being tendered, in view of the provisions of

the Negotiable Instruments Act, 1881 as well

as the dicta of the Supreme Court in

Damadilal and Others v. Parashram and

<>

Others, (1976) 4 SCC 855 and K. Saraswathy

<>

alias K. Kalpana (Dead) By LRs v. P.S.S.

<>

Somasundaram Chettiar, (1989) 4 SCC 527.

<>

The latter held, inter alia, that, “…Payment

by cheque is an ordinary incident of present-

day life, whether commercial or private, and

unless it is specifically mentioned that

payment must be in cash there is no reason

15 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

why payment by cheque should not be taken

to be due payment if the cheque is

subsequently encashed in the ordinary

course…”

In Damadilal and Others v. Parashram and

<>

Others (supra),

<>

the question before Supreme

Court was whether the payment by cheque

was a proper tender. The court held that it is

well-established that a cheque sent in

payment of a debt on the request of the

creditor, unless dishonoured, operates as a

valid discharge of the debt and if the cheque

was sent by post and was honoured on

presentation, the date of payment is the date

when the cheque was posted.”

30. Similarly, in the case of Commissioner of Income Tax, Bombay

<>

South, Bombay v. Messrs Ogale Glass Works Ltd. Ogale Wadi

<>

reported in

AIR 1954 SC 429

<>

, Hon’ble Apex Court has observed as follows :-

“It is said in Benjamin on Sale, 8th Edition,

page 788:-

The payment takes effect from the delivery

<>

of the bill, but is defeated by the happening

<>

of the condition, i.e., non- payment at

<>

maturity."

<>

In Byles on Bills, 20th Edition, page 23, the

position is summarised pithily as follows:' A

cheque, unless dishonoured, is payment." To

the same effect are the passages to be found

in Hart on Banking, 4th Edition, Volume I,

page 342. In Felix Hadley & Co. v. Hadley

16 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

(3), Byrne J. expressed the same idea in the

following passage in his judgment at page

682:

In this case I think what took place amounted

to a conditional payment of the debt; the

condition being that the cheque or bill should

be duly met or honoured at the proper date. If

that be the true view, then I think the position

is exactly as if an agreement had been

expressly made that the bill or cheque should

operate as payment unless defeated by

dishonour or by not being met; and I think

that that agreement is implied from giving

and taking the cheques and bills in question."

The following observations of Lord

Maugham in Bhokana Corporation v. Inland

Revenue, Commissioners are also apposite:

"Apart from the express terms of section 33,

<>

sub-section 1, a similar conclusion might be

<>

founded on the well known common law

<>

rules as to the effect of the sending of a

<>

cheque in payment of a debt, and in the fact

<>

that though the payment is subject to the

<>

condition subsequent that the cheque must be

<>

met on presentation, the date of payment, if

<>

the cheque is duly met, is the date when the

<>

cheque was posted."

<>

In the case before us none of the cheques has

been dishonoured on presentation and

payment cannot, therefore, be said to have

been defeated by the happening of the

condition subsequent, namely dishonour by

non-payment and that being so there can be

17 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

no question, therefore, that the assessee did

not receive payment by the receipt of the

cheques. The position, therefore, is that in

<>

one view of the matter there was, in the

<>

circumstances of this case, an implied

<>

agreement under which the cheques were

<>

accepted unconditionally as payment and on

<>

another view, even if the cheques were taken

<>

conditionally, the cheques not having been

<>

dishonoured but having been cashed, the

<>

payment related back to the dates of the

<>

receipt of the cheques and in law the dates of

<>

payments were the dates of the delivery of

<>

the cheques.

<>

On the footing, then, that the

assessee received payment as soon as the

cheques were delivered to it the question still

remains as to when and where the assessee

received such payment.”

31. The following excerpts of the another case of Hon’ble Apex

Court, Damadilal And Others vs Parashram And Others

<>

reported in AIR

<>

1976 SC 2229

<>

, is worth to be quoted here as under:-

“13. This is what the High Court held on the

validity of tender of rent by cheque:"

The question is as to whether, instead of

presenting the cash, if a cheque is sent to the

landlord, that is sufficient tender of the

arrears of rent or not.......

In the highly deve-loped society, payment by

cheque has become more convenient mode of

discharging one's obligation. If a cheque is an

instrument which represents and produces

18 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

cash and is treated as such by businessmen,

there is no reason why the archaic principle

of the common law should be followed in

deciding the question as to whether the

handing over of the cheque is not a sufficient

tender of the arrears of rent if the cheque is

drawn for that amount. It is no doubt true that

the issuance of the cheque does not operate

as a discharge of the obligation unless it is

encased, and it is treated as a conditional

payment, yet, in my view, this is a sufficient

tender of the arrears if the cheque is not

dishonored. In the present day society, I am

of the view, an implied agreement should be

inferred that if the payment is made by a

cheque, that mode of payment would be

accepted." ………………

On the ground of default, it is not disputed

<>

that the defendants tendered the amount in

<>

arrears by cheque within the prescribed time.

<>

The question is whether this was a lawful

<>

tender. It is well established that a cheque

<>

sent in payment of a debt on the request of

<>

the creditor, unless dishonoured, operates as

<>

valid discharge of the debt and, if the cheque

<>

was sent by post and was met on

<>

presentation, the date or payment is the date

<>

when the cheque was posted. The question

<>

however still remains whether in the absence

<>

of an agreement between the parties, the

<>

tender of rent by cheque amounts to a valid

<>

discharge of the obligation. Earlier, we have

<>

extracted a passage from the High Court's

<>

19 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

Judgment on this aspect of the case. We

<>

agree with the view taken by the High Court

<>

on the point. Rent is payable in the same

<>

manner as any other debt and the debtor has

<>

to pay his creditor in cash or other legal

<>

tender, but there can be no dispute that the

<>

mode of payment can be altered by

<>

agreement. In the contemporary society it is

<>

reasonable to suppose such agreement as

<>

implied unless the circumstances of a case

<>

indicate otherwise. In the circumstance of

<>

this case, the High Court, in our opinion,

<>

rightly held that the cheque sent to the

<>

plaintiffs amounted to valid tender of rent.

<>

The second contention urged on behalf of the

<>

appellants must also be rejected."

<>

32. In the case of K. Saraswathy (Supra),

<>

the law laid down by a

Three-Judges Bench of Hon’ble Apex Court, that tendering a cheque is a

valid form of payment unless cash is specifically required by a Court order.

When a cheque is encashed in the usual course, the payment is considered to

have been made on the date of the cheque was given.

33. In view of the law laid down by the Hon’ble Supreme Court in

Commissioner of Income Tax, Bombay v. Messrs Ogale Glass Works Ltd.,

<>

Ogale Wadi (supra)

<>

, it stands conclusively established that where payment is

made by cheque pursuant to the creditor’s request for remittance, the post

office acts as the agent of the creditor. Though a cheque constitutes a

conditional payment, upon its encashment the payment relates back to the

date and place of its delivery. Accordingly, the act of posting the cheque

20 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

constitutes receipt of income at the place from which it is posted. Applying

this settled principle, the receipt of income in such circumstances is deemed

to have occurred at the place of posting of the cheque, and not at the place

where it is ultimately received by the assessee.

34. Similary, Hon’ble Apex Court in the case of Damadilal And

<>

Others (Supra)

<>

, has observed that tendering rent by cheque constitutes a valid

tender, especially in contemporary society where it is a standard business

practice. Unless a cheque is dishonoured or there is an express agreement to

the contrary, it is treated as a valid discharge of the debt.

35. In these judgments, observation has been made that when a

statute confers protection or rights, and the opposite party accepts benefits

arising from that relationship (such as rent or payment), the law recognizes

continuity of rights and obligations. Acceptance by conduct is sufficient to

establish legal recognition, even in the absence of a fresh agreement.

36. If the present case is tested on the anvil of dictum of law as laid

down in the cases cited hereinabove, it is clear that the petitioner/Judgment

Debtor, within the stipulated period of one year, deposited a sum of Rs.

5,32,38,000/- on 18.07.2022 before the learned Court below by way of a

cheques drawn in the name of the Court and the Decree Holder/Respondent.

The said cheques were never dishonoured. Since the compromise decree did

not prescribe cash payment as the mandatory mode, the cheque deposited by

the Judgment Debtor on 18.07.2022, in compliance of the decree, constitutes

a valid tender in terms of Order XXI Rule 1 of the CPC which expressly

provides for the deposit of the decretal amount before the Court, and a

21 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

cheque, being a negotiable instrument, constitutes payment. Accordingly,

tender of payment by cheque through a banking mode amounts to a valid

tender in the eye of law. Thus, in the considered opinion of this Court, the

decree stood satisfied upon presentation of cheques before Executing Court

and respondent cannot get benefit of his own fault of not presenting the

cheques for encashment despite getting the knowledge of the same well

within time.

37. So far as the judgments relied by learned counsel for the

respondent are concerned, in the case of Satyadhan Ghosal (Supra)

<>

, Hon’ble

Apex Court has held that doctrine of res judicata does apply at different

stages of the same proceedings, but in the present case, on perusal of the

order-sheet dated 20.02.2023, it is evident that no application under Order

XXI Rule 2 of CPC has been decided. Hence, this petition is in no way

barred being entertained on account of doctrine of res judicata.

38. As far as the law relied upon by counsel for the respondent in

the cases of Smt. J. Yashoda (Supra), Hariom Agrawal (Supra) & Rashid

<>

Khan (Supra)

<>

is concerned, the same are not applicable to this case as the

factual matrix in each of these cases, is materially and substantially different

from the facts of the instant case

39. Apart that the respondent was ready to before the trial Court to

<>

take the amount with interest, but in the form of Demand Draft only.

<>

The

compromise decree dated 20.07.2021 does not prescribe any specific mode

of payment nor did it contemplate payment of interest. The only condition

stipulated was that the entire compromise amount was required to be paid

22 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

within a period of one year. The material on record unequivocally

demonstrates that the petitioner tendered the entire decretal amount within

the stipulated period by way of cheques and duly informed the decree holder

thereof. The said tender was neither disputed nor shown to be invalid, nor

was the cheque dishonoured at any point of time.

40. The Executing Court failed to appreciate that payment by

cheque constitutes a valid tender in the eyes of law and that refusal by the

decree holder to accept such payment does not render the tender illegal or

ineffective. The impugned order further overlooks the binding terms of the

compromise decree and travels beyond the scope of execution by introducing

conditions not agreed upon between the parties. Such an approach is

impermissible in execution proceedings.

41. This Court also finds no merit in the objection raised on behalf

of the respondent regarding doctrine of res judicata or maintainability, as the

issue relating to satisfaction of the decree on account of lawful tender within

the stipulated time, was neither finally adjudicated earlier nor barred from

consideration. The Executing Court, therefore, committed an error resulting

in failure of justice, warranting interference under the supervisory

jurisdiction of this Court.

42. Accordingly, this Miscellaneous Petition succeeds and impugned

order dated 12.04.2025 passed in the Execution Case No. 44/2023 by the

XIIIth District Judge, Indore is hereby quashed.

43. The petitioner/judgment debtor is directed to deposit decretal

amount of Rs. 5,32,38,000/- before the Executing Court by way of new

23 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495

(ALOK AWASTHI)

<>

JUDGE

<>

cheque alongwith simple interest at the rate of 12% per annum from

18.07.2022 within a period of 30 days from the date of passing of this order.

The petitioners’ old cheque be returned to him by the concerned Executing

Court.

44. If the petitioner fails to comply with the aforementioned

directions, the executing Court shall proceed with execution proceedings in

accordance with law without further reference to this Court.

45. With the aforesaid observations and directions, this Miscellaneous

Petition stands allowed and disposed of.

Vindesh

24 MP-2145-2025NEUTRAL CITATION NO. 2026:MPHC-IND:2495