The appellant was the holder of a decree against the respondent for a sum of Sh. 8,195/43. The respondent, at a meeting of his creditors, offered a composition which was accepted by a majority of the creditors, and a deed of composition was drawn up and registered with the Registrar of Deeds. The applicant did not assent to or subscribe the deed but filed a bankruptcy petition against the respondent. The petition was dismissed with costs amounting to Sh. 1,502, and execution issued against the applicant in respect of such costs.
The applicant moved the Court to record satisfaction of the order for payment of costs under Order XXI, rule 14(1)(a) of the Civil Procedure (Revised) Rules, 1948. The respondent contended that the applicant had acquiesced in the deed, but that even if he had not, the registration of the deed of composition had the effect of suspending his remedy of execution by arrest, and therefore rule 14 did not apply. The applicant denied acquiescing in the deed but contended that even if there had been acquiescence, the composition scheme was an “adjustment” within the meaning of Order XXI, rule 2, and that it was not open to the Court to recognize any adjustment of the judgment debt unless the adjustment had been certified under that rule.
Held:
(a) It was not established that the applicant had acquiesced in the Deed of Composition.
(b) The Deed of Composition did not bind the applicant unless he had subscribed it or acquiesced in it, and therefore his remedy of execution by arrest was not suspended.
(c) The composition scheme was an “adjustment” within the meaning of Order 21, rule 2.
(d) The Court is not precluded from recognizing an adjustment though it has not been certified under Order 21, rule 2.
Case referred to:
Newell v. Van Praagh (1874) L.R. 9 C.P. 96.
Authorities cited:
Halsbury, Laws of England, 2nd edn., Vol. 2, pp. 444, 455;
Mulla, Code of Civil Procedure, 11th edn., p. 748.
Counsel:
