Mullapudi Sooranna vs Mullapudi Venkanna

Venkataramana Rao, J.—The question in this case is whether the application for execution, out of which this appeal arises, is barred by

limitation. The learned District Munsiff has held that it is barred while the learned Subordinate Judge has taken a different view.

The plaintiff obtained a money decree against defendants 2 to 4 in O.S. No. 913 of 1926 on the file of the District Munsiff''s Court of Kovvur

on the 25th February, 1928. He then made an application (E.P. No. 730 of 1928) for execution of the decree by attachment of the movable

property of the defendants. Defendants 3 and 4 preferred an appeal A.S. No. 375 of 1928 on the file of the Sub-Court, Ellore, and applied for

stay of execution of the decree. By order dated 16th October, 1928, the learned District Judge, before whom the appeal was pending, directed

the defendants to deposit the amount into Court and ordered that the amount of the decree may be paid to the plaintiff on his furnishing security to

the satisfaction of the District Munsiff, but if the amount was not deposited, the execution of the decree may go on. In pursuance of this order

defendants 3 and 4 deposited the decree amount into Court. The plaintiff then drew the amount on executing a security bond in favour of the

District Munsiff of Kovvur in and by which he undertook as follows:

As it has been ordered that I should furnish security, I stand surety for Rs. 585-6-6, out of my free will and I have mortgaged therefor my

immovable property mentioned in the schedule hereunder. If the decree of the lower Court be reversed or modified in the appellate Court, I

hereby agree that I shall be liable to give away in execution of the said decree, any property which I have taken, to take out proceedings properly

and conduct the same, according to the appellate decree, to pay any amount, if any, payable by me under the said appellate decree, that on failure

to do so, you are at liberty to recover the entire amount, that may be found payable by me by means of this mortgage property, if the amount

realised by sale of the mortgage property is not sufficient for the amount payable by me, I, my heirs and my representatives shall be liable to pay

the balance on our personal liability and by means of our other properties and I have executed this security bond. I have retained the said property

in my possession.

After the execution of the security bond the plaintiff received the said amount and thereupon an order of satisfaction of the decree was made.

The order was, ""Enter full satisfaction. Struck off"". Even though an appeal was preferred by defendants 3 and 4 the order of full satisfaction on

payment of the decree amount by defendants 3 and 4 enured also to the benefit of the second defendant because on that date the decree was a

joint and several one and the payment by any one of them would operate as a satisfaction of the entire decree. On 21st October, 1929, the appeal

of defendants 3 and 4 was allowed. They were exonerated without costs of the lower Court and the decree against the second defendant was

confirmed. The operative portion of the decree ran thus:

This Court doth in modification of the decree of the lower Court order and decree that the plaintiff (first respondent) do recover from second

defendant (third respondent) alone the sum of Rs. 398-2-9, with interest thereon at 12 per cent, per annum from date of the plaint (2nd December,

1925) till date of decree of the lower Court (25th February, 1928) and'' further interest on the aggregate sum at six per cent, per annum from 25th

February, 1928, till date of payment and do also recover Rs. 88-3-0 being the costs of the lower Court. This Court doth further order and decree

that appellants (defendants 2 and 4) be hereby exonerated without costs of the lower Court and that each party do bear his own costs of the

appeal.

The present execution application against the second defendant was made on 9th August, 1933, for attachment and sale of the immovable

property of the second defendant. The second defendant pleaded that the application was barred by limitation the same having been filed more

than three years from the date of the appellate decree, namely, 21st October, 1929. But the plaintiff contended in answer that the application was

not barred because it was only on 20th June, 1933, he repaid by way of restitution the amount which was deposited by defendants 3 and 4 and

taken by him on furnishing security and in respect whereof full satisfaction was entered and under Article 181 of the Limitation Act the right

accrued only on the date of the refund. This contention prevailed in the lower appellate Court. The question is whether this contention is tenable.

When a decree has been modified in appeal, it is superseded by the appellate decree and the only decree which is capable of execution is the

appellate decree and the starting point for limitation is three years from the date of the appellate decree as provided by Article 182 of the

Limitation Act. In this case the decree of the first Court was against the defendants 2 to 4 but the appellate decree was only against the second

defendant, the decree against defendants 3 and 4 having been set aside. From the operative portion of the appellate decree which has been already

extracted above, it will be seen that the said decree orders and directs that the plaintiff do recover from the second defendant a certain sum of

money with interest. Thus the appellate Court passed a fresh decree which prima facie is capable of execution. It is contended that Article 181 of

the Limitation Act and not Article 182 should be applied in the present case. But it is only when Article 182 cannot be applied, Article 181 will

come into operation. In 25 CWN 337 (Privy Council) the Privy Council formulated the following test for the applicability of Article 182:

They are of opinion that when the Limitation Act of 1908 prescribes three years from the date of a decree or order as the period within which it

must be enforced, the language read with its context, refers only, to an order or decree made in such a form as to render it capable in the

circumstances of being enforced.

It cannot therefore be said that the form of the appellate decree in this case is such as to render it incapable of being enforced. Again, in 25

CWN 337 (Privy Council) Benson and Bhashyam Aiyangar, JJ., observed at page 789 thus:

The true criterion in determining whether Article 179 (corresponding to Article 182 of the present Act) or 178 (corresponding to Article 181)

applies to a particular application is to ascertain whether any one of the six points of time specified in column 3 of Article 179 is applicable to it and

if none of them is applicable, it is only then that Article 178 will apply.

If we are to apply this test, the second point of time indicated in Article 182, namely, where there has been an appeal, the date of the final

decree or order of the appellate Court or the withdrawal of the appeal will certainly apply here. But the contention urged is that there was already

an order of satisfaction made on 18th December, 1928, and till that order is set aside and the money refunded, it will not be open to the plaintiff to

apply for execution of the decree and therefore the appellate decree, until the money is refunded, is incapable of enforcement and Article 181 will

therefore govern the case. The effect of the decision of the appellate Court is that the original decree is no longer in force and has been entirety

superseded and with it the order of the full satisfaction entered on the 18th December. The appellate decree exonerates defendants 3 and 4 entirely

from liability and wipes out the original decree. The money realised in execution of the original decree against defendants 3 and 4 could no longer

be deemed to be money paid in satisfaction of the decree which has been passed by the appellate Court against the second defendant on the 21st

February, 1929. On the passing of the latter decree, the obligation to refund the sum of money realised from defendants 3 and 4 immediately arose

and the security bond executed by the plaintiff and by which he undertook to refund the said sum of money on the security of his immovable

property became operative. There is no obligation on the part of the plaintiff to make restitution of any sum of money to the second defendant nor

could the second defendant in virtue of the appellate decree call upon him to refund any sum of money realised in execution of any wrong decree

against him. As therefore the sum of money realised from defendants 3 and 4 in execution of the original decree could no longer be said to be

moneys received in satisfaction of the decree against the second defendant the right to execute the appellate decree against the second defendant

arose on the date of the passing of the said decree, namely, 21st February, 1929. The cases relied on by Mr. Desikan and also by the lower Court

seem to me to be distinguishable. Mangamma Nayakuralu v. Ramadasappa Nayanimvaru (1924) 48 M.L.J. 563 was the first case relied on with

considerable emphasis. In that case, a decree was passed by the first Court for a sum of money against the judgment-debtor. In execution of the

said decree, certain zamindari properties were attached. In order to save that property from being sold, the judgment-debtor paid the money and

satisfaction of the decree was entered up and the execution petition was dismissed. But the decree was modified in appeal by adding the words

excluding the zamindari"" thus making it clear that the amount of the decree is not realisable from the zamindari property; but the obligation of the

judgment-debtor to satisfy the decree amount was not interfered with. After the passing of the decree, the judgment-debtor applied for refund of

the amount paid by him by reason of the wrongful attachment of the zamindari property. An order of refund was made and after payment of the

said sum of money the decree-holder applied to execute the decree against the judgment-debtor. Under such circumstances the question arose

whether Article 181 or Article 182 would apply. Odgers and Wallace, JJ., held that Article 181 and not Article 182 would apply on the ground

that the starting point for limitation could not be the date of the appellate decree because by virtue of the previous order of satisfaction it was

incapabale of execution on that date. Therefore by applying the test formulated in 25 CWN 337 (Privy Council) they were of the opinion that in

the circumstances the decree must be held to be incapable of being enforced on the date of the appellate decree. Odgers, J., observes:

A quite possible view is that down to 1918 the decree was in fact non-executable by the decree-holders as they had been paid in full.

Wallace, J., observed:

When the decree-holder in the present case got his final decree as amended by the High Court, the decree he had obtained in the lower appellate

Court was already satisfied and would remain satisfied unless the judgment-debtor chose to recover by appropriate proceedings the amount

already paid. In my view the decree-holder could not, at least until the judgment-debtor demanded restitution, apply for execution of the amended

decree. Until then it was not a decree capable of execution and Article 182 would have no application. Article 181 must therefore apply.

It is clear from these observations that the judgment-debtor whose liability to satisfy the decree remained unaffected, did pay money in

satisfaction of the decree and it was a proper payment in satisfaction thereof. Therefore it can be said that unless the judgment-debtor chose to

recover the same by appropriate proceedings the decree must be deemed to have been satisfied and until the order of satisfaction is set aside, the

decree would be incapable of enforcement. But the facts in this case are different.

The next case relied on is Raminidy Venkata Appa Row v. Lakkoju China Ayyanna (1906) 17 M.L.J. 194 : ILR 30 Mad. 209. The facts in

that case are as follows. The plaintiff in that case obtained a mortgage decree and had the property sold on the 10th December, 1898; but the sale

was set aside on the 9thof October, 1900, at the instance of the judgment-debtor. The purchaser applied for the refund of the purchase money on

the 19th June, 1901. The Court ordered the decree-holder to refund. On the 20th June, 1904, the decree-holder applied for execution. The

learned Judges held that the application was not barred by limitation. The ground of the decision is thus stated by the learned Judges:

The decree-holder is not however bound to do anything except pay on demand; Section 315 of the CPC empowers the auction purchaser to

require re-payment, but does riot impose upon the decree-holder the duty of tendering the money as; soon as the sale is set aside. Can he then, so

long as he holds the money, apply for another sale?.... So here the judgment-debtor''s action in getting the sale set aside did not injure the decree-

holder until he was compelled to refund the purchase money to the purchaser, and till then he had no right to call upon the judgment-debtor to pay

his debt a second time. He could not resist the claim of the purchaser before the District Munsiff, and at the same time apply for execution of his

decree against his judgment-debtor.

In this view they apply Article 178 of the Limitation Act (XV of 1877) observing that although there were undoubtedly difficulties in the way of

excluding the case from the purview of Article 179 of the said Limitation Act, they were not prepared to dissent from the two cases referred to,

one of the Calcutta High Court and the other of the Bombay High Court which applied Article 178 under similar circumstances, as otherwise

monstrous injustice would ensue. It will be then seen that the case the learned Judges were dealing with was that of a sole judgment-debtor whose

property was sold and it may be argued that until the date of the order for refund, satisfaction against the judgment-debtor could be deemed to be

subsisting because the decree-holder was retaining in his hands the sale proceeds of the judgment-debtor''s property. But the case here is different.

However, with due respect to the learned Judge, the view taken in this case does not commend itself to me to be sound. It will be seen that the

moment the sale is set aside the obligation to refund the purchase money to the purchaser arose. The money in the hands of the decree-holder must

be deemed to be money had and received to the use of the purchaser which in equity he was bound to refund to the purchaser. The money

therefore could no longer be money realised from the property of the judgment-debtor by the fact of the sale having been set aside and the

property of the judgment-debtor being restored to him. It is not therefore possible to understand the observations of the learned Judges when they

observe that till the money was refunded the decree-holder had no right to call the judgment-debtor to pay his debt a second time. It seems to me

that the moment the sale is set aside, the order of satisfaction goes, the decree is capable of execution and the right to apply accrues from the date

of the setting aside of the sale, and even if Article 178 applied, the right would have accrued from 9th October, 1900 and not on 19th June, 1901.

I am not able to understand what any question of damage has to do with the construction of Article 178 or Article 179 of the Limitation Act. Mr.

Desikan also relied on the decision in Borojo Charchi Vs. Odhikari Basudebo Doss, . The said decision only follows Raminidy Venkata Appa

Row v. Lakkoju China Ayyanna (1906) 17 M.L.J. 194 : ILR 30 Mad. 209 and is based on the theory of damage. But these decisions do not

apply to the facts of this case. The logical result of giving effect to the contention of the respondent would be that he can by his own act or default

indefinitely postpone the period of limitation for the execution of the decree. To put the matter concretely, in this case by virtue of the security bond

executed by the plaintiff, defendants 3 and 4 may wait for 12 years and take proceedings to realise the amount to be refunded and the said

proceedings may take any length of time before the amount is actually realised and all this time the decree against the second defendant must be

deemed to be alive, a result which ought not to be allowed, unless there is a compelling provision of law to do so and I have not been shown any. I

am therefore of the opinion that Article 182 is applicable and the execution application is barred by limitation. I may observe that the respondent''s

counsel did not seek to support the judgment of the lower Court on the ground that the execution application in question is a continuation of the

prior execution application.

I therefore reverse the decision of the lower appellate Court and restore that of the District Munsiff with costs throughout.

Leave to appeal refused.