Order XXI Rule 1 CPC: Modes of Paying Money Under a Decree
Order 21 Rule 1 of the Code of Civil Procedure, 1908 governs how a judgment-debtor pays money due under a civil court decree, what notice must be given, and when interest on the amount paid ceases to accrue.
Meaning and scope of Order XXI Rule 1
Decree: Under Section 2(2) CPC, a decree is the formal expression of an adjudication conclusively determining the rights of parties regarding matters in controversy in a suit, subject to the statutory inclusions and exclusions. A decree-holder is the person in whose favour a decree or executable order has been made (Section 2(3)); a judgment-debtor is the person against whom it has been made (Section 2(10)).
Order XXI deals with execution of decrees and orders. Rule 1 specifically addresses payment of money payable under a decree. Its current central text was substituted by the Code of Civil Procedure (Amendment) Act, 1976, effective 1 February 1977. State amendments and applicable High Court rules should also be checked.
Rule 1(1): Permitted modes of payment
- Clause (a) - Payment to the executing court: Deposit the money into the court responsible for executing the decree, or send it to that court by postal money order or through a bank.
- Clause (b) - Payment outside court: Pay the decree-holder by postal money order, through a bank, or by another mode in which payment is evidenced in writing.
- Clause (c) - Court-directed payment: Pay in another manner directed by the court that passed the decree.
A bank transfer or another documented payment method may provide written evidence, but the transaction must be identifiable and consistent with the decree and any court directions.
Rule 1(2): Notice to the decree-holder
Where payment is made under clause (a) or clause (c), the judgment-debtor must give notice to the decree-holder either through the court or directly by registered post, acknowledgment due, as provided in the central rule. Preserve proof of service, because service is relevant to the cessation of interest under sub-rule (4).
Rule 1(3): Particulars required for postal or bank remittance
For remittances by postal money order or through a bank under clauses (a) and (b), the payment must accurately specify:
- The number of the original suit.
- The names of the parties, or where there are more than two plaintiffs or defendants, the names of the first two on each side.
- Whether the money is to be adjusted towards principal, interest or costs.
- The execution case number, where an execution case is pending.
- The name and address of the payer.
Rules 1(4) and 1(5): When does interest stop?
| Mode of payment | Ordinary cessation of interest |
|---|---|
| Payment into court or as directed by court, under clause (a) or (c) | From the date of service of the notice required by Rule 1(2), on the amount paid. |
| Payment directly to the decree-holder under clause (b) | From the date of payment, on the amount paid. |
| Postal money order or bank payment refused by the decree-holder | From the date the money was tendered. |
| Decree-holder avoids accepting postal or bank payment | From the date it would ordinarily have been tendered in the normal course of postal or banking business. |
These provisions operate on the amount actually paid or validly tendered; interest may continue on any outstanding amount in accordance with the decree. The Supreme Court has also clarified that, where money deposited in court has actually been withdrawn and credited to the decree-holder, interest on that amount does not continue merely because formal notice was not served; absent notice, cessation may occur on the date of credit. The precise effect depends on the facts and governing decree.
Payment outside court and Order XXI Rule 2
Order XXI Rule 2 CPC separately addresses certification or recording of out-of-court payments and adjustments. A judgment-debtor should not assume that a private receipt alone resolves the execution record. Ensure that any satisfaction of the decree is properly brought before the executing court in accordance with Rule 2 and applicable procedure.
Practical steps for paying decretal money
- Read the decree to identify the amount due, interest rate, costs and any specific payment directions.
- Choose a permitted payment method and check the executing court's deposit procedure.
- Identify the suit and execution proceedings correctly and specify how the payment is to be adjusted.
- Retain bank confirmations, deposit receipts, postal records and any written acknowledgment.
- Serve and retain proof of notice where Rule 1(2) applies.
- Where payment is outside court, follow Order XXI Rule 2 for recording or certification as applicable.
Frequently asked questions
Can a judgment-debtor pay directly to the decree-holder?
Yes. Rule 1(1)(b) permits payment outside court through specified methods or another mode evidenced in writing, subject to proper recording where Rule 2 applies.
Does depositing money in court immediately stop interest?
Ordinarily, under Rule 1(4), interest on the amount deposited stops from service of the required notice, not simply from the deposit date. Judicial decisions recognise fact-specific consequences where the decree-holder actually receives the deposited amount.
What happens if the decree-holder refuses bank payment?
Under the proviso to Rule 1(5), interest on the amount validly tendered may cease from the date of tender; avoidance of acceptance is also expressly addressed.
Official legislation and judicial guidance
- India Code - Code of Civil Procedure, 1908 (official statutory PDF).
- Supreme Court judgment dated 8 December 2022 - notice, withdrawal and cessation of interest.
- Supreme Court judgment dated 8 August 2024 - principles governing interest on court deposits.
Updated 14 October 2026. This article explains the central CPC provisions for general information; local amendments, court rules and the terms of the decree may affect an individual case.