Notice Requirement for Interest Cessation in Money Decree Execution: P&H HC

In a significant legal development, the Punjab and Haryana High Court, through a judgment delivered on August 9, 2023, highlighted the importance of providing notice to the decree-holder about the deposit of the decretal amount in the context of execution of a money decree. The judgment, authored by Justice Namit Kumar, underscores the impact of violating the provisions of Order 21 Rule 1(2) of the Code of Civil Procedure, 1908, and its effect on the cessation of interest on the deposited amount.

The case (CR-449 of 2019) pertains to a claim petition for compensation filed by a petitioner and her son under the Motor Vehicles Act. The Court's observation emphasized that when the judgment-debtor deposits the decretal amount in court, it is crucial to provide notice to the decree-holder about the deposit. The notice requirement signifies that interest will cease to run on the deposit and notice or on tendering the amount outside the court, effectively informing the decree-holder that the amount is available for withdrawal.

Justice Namit Kumar, in the judgment, drew upon the principles established in previous cases, particularly citing the Hon’ble Supreme Court's ruling in Rajasthan State Road Transport Corporation v. Poonam Pahwa. The judgment underscored that the failure to provide notice to the decree-holder could lead to unreasonable delays in releasing the awarded amount and result in a loss of interest to the decree-holder.

The Court held that in the present case, where no notice of the deposit of the awarded amount was provided to the petitioner, the principles of Order 21 Rule 1(2) CPC were violated. As a consequence, the Court set aside the impugned order allowing the refund of interest to the respondent Insurance Company. The Court allowed the case and directed that if the refunded interest amount had already been given, it should be deposited with the Tribunal. The decree-holder (petitioner) was to be informed of this deposit in accordance with Order 21 Rule 1 CPC.

This judgment reiterates the significance of procedural compliance and the imperative role that notice plays in ensuring fair execution of money decrees. The ruling carries forward the legal precedent, ensuring that the decree-holder's right to interest is safeguarded through proper notification in cases of deposit of decretal amounts.

Date of Decision: 09.08.2023

Suresh Devi    vs The New India Assurance Co. Ltd. And others