1. A. S. CHOWDHURY, J.-This appeal is directed against an order made by Mr. P. N. Dam, Subordinate Judge, 1st Court, Chittagong on 25-3-69, in Miscellaneous Case No. 207 of 1968, and it arises in the following circumstances: The Pioneer Bank which is in liquidation obtained a decree for an amount ultimately raised to Rs.
2. 1,41,658.83 paisa. It appears, there was negotiation for a settlement between the decree-holder- bank and the judgment-debtor-appellant. The decree-holder-bank being in liquidation, the Liquidator of the Bank who is an officer of the Court which ordered liquidation, could take a step in a matter like this only with the approval of the Court. He, therefore, applied to the learned Judge taking Original Side matters of this Court for a direction on him as to what he should do in this matter. The application for direction was presented to the learned Company Judge on 24-6-65 and, on that date, the learned Judge rejected the prayer of the Official Liquidator to accept a sum of Rs. 90,000 in full satisfaction of the decretal dues.
3. The learned Judge ordered in the following terms:- "With regard to the prayer (c) the prayer of the Official Liquidator to accept the sum of Rs. 90,000, in full satisfaction of the decretal dues of Rs. 1,41,545.95 from Messrs Kanailal Subakaran of Chittagong Co. Ltd. Is not accepted. The Official Liquidator is directed to go on .With the execution case and to put the mortgaged property-to be sold". This order, as stated above, was made on 24-6-66. But, the Official Liquidator had already received a sum of Rs. 90,000 from the judgment-debtor in full and final satisfaction of the decretal dues, subject to the approval of the learned Judge under whose administrative control he was functioning as Official Liquidator.
4. After he failed to obtain the approval, the Official Liquidator made a further application to the learned Judge as to what he should do with the money already received by him. The learned Judge passed the following order on 18-7-68:- "With regard to the prayer No. 5 the learned Official Liquidator is directed to adjust the sum of Rs.
5. 90,000 which was deposited by the debtor and to proceed with the execution with regard to the balance of the total outstanding dues of Rs. 1,41,543.95 paisa."
6. Mr. M. H. Khondkar submits that the money was received by the Official Liquidator on condition of full satisfaction of the debt subject to the approval of the Company Judge. According to the learned Advocate the condition being ineffective, the decree should be deemed to have been satisfied in full. His alternative argument is that the Official Liquidator has no right to adjust the amount and then to proceed with the execution for the balance of the decretal dues. According to Mr. Khondkar it is plainly his duty to return the amount deposited with him.
7. Mr. Akhtaruddin Ahmed, Official Liquidator who appears in person, submits that he is a decree- holder and the money has come into his hands. He claims that since he has a decree against the judgment-debtor, he is entitled in law to adjust the amount. He further submits that he is an Officer of the Court and he acted on order of the Company Judge and as such he was entitled to adjust the amount as directed.
8. It appears that neither the Official Liquidator nor the learned Advocate has approached the matter correctly.
9. The learned Subordinate Judge dealt with the matter in the following terms:- "The learned Advocate for the petitioners contends that the judgment dated 26-3-67 in Miscellaneous Case 141 of 1966, operates as res judicata and debars the D. H. Bank from making any subsequent adjustment of the aforesaid amount of Rs. 90,000. But the D. H. Bank has now effected the adjustment not suo motu or without authority but in pursuance of the order dated 18- 7-1968 directing the adjustment passed in the Matter No. 23 of 1953 by the High Court, the only competent Court, under the provisions of section 61 of the Ordinance No. LVII of 1962. The plea of res judicata urged by the petitioner's Advocate or the plea of estoppel urged by them in their application has, therefore, no substance at all. The other contention of the petitioners, that the Hon'ble High Court passed that order without issuing notice to them is not supported by any evidence, nor can it be countenanced by this Court. The adjustment is, therefore, held to be legal."
10. From an appreciation of the facts stated above, it would be clear that there is no order of the High Court directing adjustment in the suit or any proceeding arising out of the suit. The direction was by the learned Company Judge to the officer in respect to the management of the Bank. Learned Subordinate Judge is concerned with the decree to be executed by him as an executing Court.
11. Before him the Liquidator-decree-holder and the judgment-debtor are two parties. He is not concerned with the instruction received by the liquidator from the authority subject to whose control, he functions. He is to decide the case on merits on a consideration of facts and relevant law applicable to the matter awaiting his adjudication. This, the learned Judge has totally failed to do. He seems to think that the order of adjustment has been passed by the High Court and as such it is binding on him. If the order of adjustment would have been passed by the High Court in the execution proceedings, or on appeal from an order made by the executing Court, that order would certainly be binding on him. But the executing Court is not to be guided by instruction received by the Official Liquidator from the learned Company Judge who supervises administration of a property under liquidation and gives necessary direction for proper prosecution of a pending suit but does not sit on judgment over the case itself. Distinction is indeed clear.
12. It will, therefore, appear from an analysis of the facts stated above that the money was in deposit with the Official Liquidator who was to obtain approval to the settlement negotiated by him. In view of his failure to obtain the approval, the position in law remains that the money in his custody is merely a deposit with him. He has two alternatives. He can obtain the approval of the Company Judge or he can accept the amount for the purpose for which it was given, namely, to accept it in full and final settlement of the claim he has against the appellant. If he fails to obtain the approval of the Company Judge his duty is clear. He is to return the amount, which is lying, in the eye of law, as deposit with him.
13. We have already clearly explained as, to why the Official Liquidator is to return the money. It is in deposit with him for a particular purpose and that purpose not being satisfied, the Execution Court cannot accept the position that the adjustment was effected in accordance with law. Therefore, it is plainly the duty of the executing Court not to recognise the adjustment alleged to have been made by the Liquidator.
14. The conclusion reached by us derives support from a decision of the Federal Court of India in the case of R.I Khushroo Bezonjer Capadia v. R.I Jerbai Hirji Bhoy Warden (53 C W N 73 (FC)). In that case Mukherjee, J., delivering the judgment of the majority of the Court observed: "It is a settled principle of law that when money is paid by a debtor with an express intimation that it is to be applied to the discharge of a particular debt, the creditor may not accept the money at all; but if he receives and appropriates it, he cannot be allowed to say that he took it wrongfully on some other account. The ordinary legal consequences of accepting payment as indicated by the debtor would follow in such cases, however, much the creditor might attempt to repudiate them.
15. This being the position, it must be held on the facts of this case that money was not only paid as rent by defendants Nos. 2 and 3 but was received as rent by the plaintiff and consequently a monthly tenancy under the provision of section 116 of the Transfer of Property Act did come into existence. So long as this monthly tenancy is not determined in a manner recognised by law, the plaintiff's suit for ejectment must fail."
16. Mr. Khondkar prays that since it is observed in the above passage that the money so received should be deemed to be a full satisfaction of the claim, similar order should be passed in this case.
17. We cannot do so, for, the present case is distinguishable from the case of Kapadia just referred to above. In that case, the money was paid as rent and was received as rent. In the case before us, the money, was merely deposited to enable the Official Liquidator to obtain the approval of the learned Judge under whose administrative control he manages the Bank. This cannot, therefore, be considered as payment, as visualised in rule 2 of Order XXI, of the Code of Civil Procedure. The opening words of the said Rule clearly say that when a money is paid to a decree-holder out of Court, he is entitled to adjust the same against his dues. But in the present case money was not paid. It was deposited for a particular purpose. That purpose was to obtain the approval of the Company Judge for full satisfaction of the debt. Payment would take place after approval.
18. The case which directly applies to the facts of the instant case is the decision of a Division Bench of this Court in the case of Suruj Mia v. Pioneer Bank Ltd. (20 D L R 1206). It was held in that case that a Liquidator is an Officer of the Court and any instruction received by him is binding on the Official Liquidator only and the executing Court is to decide the case in accordance with law.
19. It was observed:- "It should be remembered in this case the direction is not on any Subordinate Court by a Judge of a High Court but the direction is by the Company Judge to the Official Liquidator, an Officer of this Court and that it is plainly the duty of the Executing Court concerned to pass such order as may be warranted by circumstances. He has to apply law to the facts and circumstances of the case and exercise his direction. We have already made it sufficiently clear that the observation of the learned Judge will not influence in any manner the decision of the Execution Court."
20. With regard to the direction of the Company Judge to put the debtor in civil prison it was further observed: "This order, therefore, is to be read as a direction on the liquidator for making prayer to the Executing Court for such a course being adopted; we would emphasise only if circum--stances specified in section 51 of the Code arises. The only result of the impugned order as found by us is that the prayer of the liquidator to compromise with the debtor has been rejected and he has been directed to proceed with the Execution Case. An order of this nature is an administrative order."
21. Now reverting to as to what should be done with the amount, we recall the observation: "The amount was deposited with an Officer of the Bank subject to the approval of the proposal for compromise by the learned Company Judge; it would logically follow that when the proposal for compromise- has been turned down the Liquidator will have no right to retain the amount which has been deposited by the debtor in good faith."
22. We have already expressed our complete agreement with the above observations.
23. The result, therefore, is that the appeal is allowed in part. The impugned order is set aside. The adjustment made by the Official Liquidator is illegal and is of no effect whatsoever and he will have no right to retain the amount of Rs. 90,000.00 deposited with him by the judgment-debtor. The application under section 47 of the Code of Civil Procedure is disposed of in the above terms. There is no satisfaction in full of the decretal amount as claimed by the judgment-debtor. The decree- holder is entitled to proceed with the execution case subject to his returning the amount of Rs.
24. 90,000.00 to the judgment-debtor.
25. NURUL ISLAM, J.-I agree.