Hem Chandra Bose vs Aparna Prosanna Konar

Mookerjee, J.—For a proper appreciation of the points raised in this appeal we need refer to the following facts:

The predecessor-in-interest of the present Appellants had obtained a preliminary decree against the predecessor-in-interest of the Defendants-Respondents in enforcement of a mortgage bond executed in favour of the former. The judgment-debtors preferred an appeal to this Court (F.A. 279 of 1942). The decree passed by the trial court was affirmed with certain modifications. The amount decreed was directed to be paid in instalments. The direction was in the following terms:

We accordingly direct that the entire decretal amount should be paid in two equal yearly instalments. The first instalment is to be paid on or before the 31st March, 19+6 and the second instalment within one year thereafter. In default of the payment of any of the instalments the Plaintiffs will be entitled to avail themselves of the provisions of the Bengal Money Lenders Act.

The judgment debtors failed to pay either of the two instalments. On November 6, 1948, the Plaintiffs decree-holders filed a petition for making the decree final. On December 3, following that application was dismissed on the ground that the notices required to be giver, on the Defendants u/s 34 of the Bengal Money Lenders Act had not been issued.

On January 20. 1948 the Plaintiffs decree-holders filed another application for making the decree final. Certain notices u/s 34 of the Bengal Money Lenders Act were issued. Objections however were raised by the judgment debtors that, the alleged notices were not in accordance with law. On June 2. 1949 the objections were heard and the court found some of the notices to have been defective. It was ordered:

The decree-holders be directed to give fresh notice in the required form to all the judgment debtors and then apply again for final decree according to law.

On July 13, 1949 the decree-holders filed another petition praying that the final decree be passed. Notices were issued u/s 54 of the Money Lenders Act. Objections raised on behalf of the judgment debtors were of twofold nature that the present application for making the decree final was barred by limitation and that the notices alleged to have been served u/s 34 of the Act had not been properly and validly served on the judgment debtors.

It was contended on behalf of the judgment debtors that they had failed to pay the first instalment which was due on March 31, 1946 and accordingly the entire decretal amount fell due immediately. Limitation began to run with effect from the date of such default. The earlier applications for making the decree final were no proper applications and could not save limitation. More than three years having elapsed from the date of default before the present application was filed on July 13, 1949 the Plaintiffs'' claim had already become barred.

The learned Subordinate Judge upheld the objection and dismissed the application for execution on the ground of limitation. The decree-holders have appealed to this Court.

On behalf of the decree-holders it is urged that the present application filed on July 13, 1949 must be taken to be in continuation of the application previously filed on January 20, 1949, which had not been finally disposed of. The application for making the decree final must therefore be deemed to hare been filed on January 20, 1949 which was well within three years from the date of the default of the first instalment.

The decree-holders further contend that on the failure of the judgment-debtors to pay the first instalment the decree-holders were at liberty to proceed u/s 34 of the Bengal Mosey Lenders Act in respect of the entire decretal amount; that, was an option allowed to the decree-holders. It was open to their, not to avail of that option and they could wait till after the due date of payment of the final instalment.

It is contended in the alternative that even if it be found that the present application filed on July 13, 1949 was not in continuation of the earlier application dated January 20, 1949, at least the second instalment which was due to be paid on March 31, 1947, was not barred as the present application was filed well within three years from the date of the payment of the second instalment.

Similar arguments had been advanced in the trial court and the learned Subordinate Judge has held that the application filed on July 13, 1949 was neither intended to be nor was in fact in continuation of the application filed on January 20, 1949. The period during which the previous applications which had been dismissed by the Court could not be excluded u/s 14 of the Limitation Act for computing the period of limitation to be allowed in the present case.

Reliance was placed on behalf of the decree-holders on Lasa Din v. Guldb Kunwar (1932) L. R. 59 I. A. 376 where the Judicial Committee while interpreting the expression "when the money sued for becomes "due" as appearing in Article 132 of the Limitation Act had observed that when in a mortgage for a term there is a further condition that in case of default in the payment of interest for any year the mortgagee would have the power to realise the entire mortgage money together with the interest due, such condition merely gave an option to the mortgagee to enforce his security at once or to wait till the expiry of the full term. On such a default occurring the mortgage money does not "become due" within the meaning of Article 132. Even when such a default has occurred a suit brought within 12 years from the expiry of the full term is within time if the mortgagee has chosen not to exercise this option to enforce his security on the default occurring.

On behalf of the judgment-debtors however it is urged that in the present case the relevant Article which is attracted is not Article 132 but Article 181 of the Limitation Act. In the 3rd column of Article 181 the starting point of the period of limitation is "when the right to apply accrues".

It is contended that there is a substantial difference between the language of the two articles and the authority of the Judicial Committee in Lasa Din''s case cannot be attracted. We shall have to consider later on whether the difference in the language of the two Articles is material or that the Judicial Committee had formulated any general principle which may be attracted to similar facts under the two Articles.

If a preliminary decree provides, in terms of compromise between the parties for payment of the mortgage dues by instalments payable on fixed dates, when does the right to apply for a final decree accrue? There are divergent views on this point and we shall briefly discuss the two lines of decisions. The difficulty arises when it is provided in the decree that in case of default in the payment of any one of the instalments the decree-holder will have the option to apply for a final decree or that the entire decretal amount will fall due. In a series of decisions it has been held that the words "right to apply" are to be liberally and not rigidly construed. If the decree-holder does not choose to exercise the option on the first default but waits for the payment of the future instalments a new cause of action accrues on each of the defaults taking place. Buttan Singh v. Sakhal Raj ILR (1945) All. 161, Gopal v. Alagiriswami I.L.R (1942) Mad. 770, Ram Dutt v. Mahpal Singh AIR (1938) Oudh 112, Rohan Singh Vs. Badri Prasad, .

A contrary view has however been, taken in Bhagabati v. Sant Lal ILR (1946) All. 570. In Chunilal Motiram Vs. Shivram Naguji Ghule and Others, , it was observed that it was open to a decree-holder to waive the benefit of a default clause. Although a default might have taken place the decree-holder may treat the decree as an instalment decree and he may pursue his rights to realise the instalments as and when they fall due. But once the right to enforce the default clause accrues to the decree-holder for the first time and there is no waiver of such a right, time begins to (sic)run from the date of such accrual and can not be stopped by-reason of subsequent default. It was held that an application for execution to enforce the default clause filed more than three years from the date of such accrual would be barred under Article 181 of the Limitation Act.

There are two decisions of the Judicial Committee to which reference has been made during the argument. Both the decisions are based on Articles other than Article 181 of the Limitation Act. The question is whether any general principle had been enunciated by the Judicial Committee in regard to the starting point of limitation when there is default in the payment of instalments which would be attracted to cases under Article 181 of the Limitation Act.

In Lasa Din v. Gulab Kunwar (Supra), Article 132 of the Limitation Act was being considered. In the third column of Article 132 the time from which the period of limitation is to run is stated to be "when the money sued for becomes due". The decisions of the different High Courts were considered as also the observation of the Judicial Committee in AIR 1926 85 (Privy Council) case. A default clause of the nature referred to appearing in a mortgage deed is-

''Exclusively for the benefit of the mortgagees'' and that it purports to give them an option either to enforce their security at once, or, if the security is ample, so stand by their investment for the full term of the mortgage. If on the default of the mortgagor-in other words-by the breach of his contract-the mortgage money becomes immediately ''due'', it is clear that the intention of the parties is defeated, and that what was agreed to by them as an option in the mortgagees Section in effect, converted into an option in the mortgagor.

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They are not prepared to hold that the mortgagor could in this way take advantage of his own default: they do not think that upon such default he would nave the right to redeem, and in their opinion the mortgage money does not ''become due'' within the meaning of Article 132 Limitation Act, until both the mortgagors right to redeem, and the mortgagee''s right to enforce his security have accrued.

In Maung Sin v. Ma Tok (1927) L.R. 54 IndAp 272 the mortgage decree provided for the payment of Rs. 2,000 annually and in default of payment on the due dates the Plaintiff became entitled to possession of certain properties. The decree had been passed in 1916 and the application for execution was made in 1924 for two instalments for Rs. 2,000 each and also for possession of the property. No payment had been made of any one of the instalments from 1916. The defence of the judgment-debtor was that the default had taken place in 1916 and the application for execution was barred in 1925. Their Lordships of the Judicial Committee expressed the view upon the construction of the decree that on the occurring of a default on each occasion the right of the Respondent to have the said property made over to her arose and the claim to the lands was not time barred. The provisions in the Limitation Act which the Judicial Committee was considering was Clause 7 in the third column in Article 182 of the Limitation Act which ran as follows:

Where an application is to enforce any payment which the decree or order directs to be made at a certain date, such date.

In spite of the provision in the decree that in default of an annual instalment the right to obtain possession arose, their Lordships observed that upon each instalment as it became due there was a claim originating under the decree from the date when such claim arose attracting the provisions of Clause 7 of Article 182 of the Limitation Act. The direction in the decree being that in default of payment of the annual instalment the property referred to in the decree "would be made over to the "Plaintiff" the occasion of a default in each payment gave rise to a right of the decree-holder to have the said property made ever to him.

The Judicial Committee in Lasa Din v. Gulab Kumar (Supra) and Maung Sin v. Ma Tok (Supra), enunciated the same principle and applied the same test in respect of Articles 134 and 182 of the Limitation Act when dealing with instalment payments.

Does the language used in the third column of Article 181 make such principles inapplicable? In all the decisions where limitation was held to begin to run from the date of the first default the Courts had interpreted the expression "when the "right to apply accrues" as standing for "when the right to ''''apply first accrues". This is not correct. While interpreting the provisions in a Statute, we have to interpret the words as used without adding or omitting any words. If the legislature so intended it was not only possible but quite easy for them to introduce the word "First" in the article. The Court should liberally and not rigidly construe the meaning of the words "the right to apply" appearing in Article 181 of the Limitation Act.

The provision made in the decree passed by the High Court in the case now before us was that in default of either instalment the Plaintiff would be entitled to avail of the provisions of the Bengal Money Lenders Act that is to apply for the passing of a final decree. This was merely to give the Plaintiff the right to apply for a final decree. This was a provision which was for the benefit and advantage of the decree-holder only. If the decree-holder is shown not to have waived that default by any action on his part then starting of limitation would begin to run from the date of first default. In the present case it is evident that the decree-holder had allowed further latitude and opportunity to the judgment-debtor to pay up within the date fixed for the payment of the second instalment. Limitation will in such circumstance run for each of the instalments separately.

Unless we come to the conclusion that the present application is a continuation of the earlier application the Plaintiff is entitled to a final decree only for the second instalment the due date of which was within three years from the date of the present application for execution.

We next proceed to consider whether the present application is a continuation of the earlier application filed by the Plaintiff on January 20, 1949. Reference has already been made to the orders previously passed in connection with the earlier application for the passing of a final decree. The principal question to be considered is whether the application filed on January 20, 1949 had been finally disposed of or was pending on the date when the present application, was filed on July 13. The order dated 2nd June 1949 gives unmistakable indication that the application dated January 20, was finally disposed of. The objection raised by the judgment-debtors was allowed and the decree-holders were directed to give fresh notices in required form to all the judgment debtors and then apply again for a final decree in accordance with law. Objection had been raised about service of notice on some of the judgment-debtors. If the direction were to serve only those who had not been duly served there might have been some room for argument that the earlier application was still kept pending. The Subordinate Judge however directed notices to be issued on all of them. Further, the direction to the decree-holder was to apply again for a final decree according to law. A fresh application therefore was called for. The application filed on July 13, 1949 was in terms of that order and was not in continuation of the previous application.

In view of the nature of the order passed on June 2, 1949 and the clear terms thereof it cannot be argued that the earlier application was kept pending.

In this view the first of the two instalments had become barred and a final decree is to be passed for the second instalment only by the court below.

This appeal is accordingly allowed in part. The order passes by the learned Subordinate Judge on March 17, 1950 is set aside It is directed that a final decree be drawn up by the court below requiring the Defendant to pay the second instalment in terms of the judgment and decree passed by this Court in F.A. 279 of 1942 on November 29, 1945. In view of the circumstances of this case each party will bear the respective costs in this Court.

Renupada Mukherjee, J.

I agree.