Execution set-off for reversed decree amounts may be recognised on inherent power, while revenue and cess payments remain unrecoverable.

An executing court may recognise, on general principles and inherent power, a claim for adjustment of money withdrawn under a cost decree that was later reversed, even if the claim does not fall strictly within Order 21 Rule 19 CPC. The right to seek restoration accrued only when the appellate process finally determined entitlement, so the objection on limitation failed. Credit was not available for amounts paid towards revenue and cess, because those dues were liabilities of the original proprietors and not of the mortgagee respondent. Adjustment was therefore confined to the amount recovered under the reversed cost decree, and the balance claim was rejected.

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Issues: (i) Whether the judgment-debtor could claim credit by way of set-off in execution for the amount withdrawn by the decree-holder under a cost decree which was later reversed, and whether the claim was barred by limitation; (ii) Whether the judgment-debtor was entitled to credit for the amounts paid by him towards revenue and cess.

Issue (i): Whether the judgment-debtor could claim credit by way of set-off in execution for the amount withdrawn by the decree-holder under a cost decree which was later reversed, and whether the claim was barred by limitation.

Analysis: The executing court could give effect to the claim for credit. A claim of this kind, though not falling within the strict terms of Order 21, Rule 19 of the Code of Civil Procedure, could be recognised on general principles and in exercise of inherent power. The company's liquidation did not defeat the appellant's entitlement, because the doctrine of mutual dealings and adjustment of balance applied in insolvency and in company winding up under the relevant statutory scheme. The right to apply for restoration arose only when the appellate process finally ended, since the ownership of the deposited money remained uncertain until then.

Conclusion: The appellant was entitled to set off the sum withdrawn by the respondent under the reversed cost decree, and the objection on limitation failed.

Issue (ii): Whether the judgment-debtor was entitled to credit for the amounts paid by him towards revenue and cess.

Analysis: The revenue and cess payments stood on a different footing from the amount recovered under the cost decree. The mortgagee respondent was under no liability to meet those dues, which were eventual liabilities of the original proprietors.

Conclusion: The appellant was not entitled to credit for the revenue and cess payments.

Final Conclusion: The objection was allowed only to the extent of the amount recovered under the reversed cost decree, and the remaining claim was rejected.

Ratio Decidendi: An executing court may, on general principles and inherent power, allow adjustment of mutual claims arising out of reversed execution proceedings, and the right to seek such adjustment accrues only when the underlying litigation finally determines entitlement to the money.

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