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2014 (4) TMI 1255 - SC - Indian LawsWhether the amount deposited by the judgment debtor in a decree is to be adjusted first towards interest or towards principal decretal amount? HELD THAT:- The scope of Order XXI Rule 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 subrule (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. 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. 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. We allow the appeal, set aside the impugned judgment passed by the High Court and restore that of the Executing Court dated 18.08.2004 - appeal allowed.
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