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The Chemist a Firm Vs. Ishwarlal Karsondas Kapadia - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtMumbai High Court
Decided On
Case NumberCivil Revn. Appln. No. 1137 of 1967
Judge
Reported inAIR1969Bom282; (1969)71BOMLR31; ILR1969Bom125; 1969MhLJ314
ActsLimitation Act, 1908 - Sections 15 and 15(1)
AppellantThe Chemist a Firm
Respondentishwarlal Karsondas Kapadia
Appellant AdvocateD.R. Dhanuka, Adv.
Respondent AdvocateS.R. Garg, Adv.
Excerpt:
indian limitation act (ix of 1908), section 15(1) - limitation act (xxxvi of 1963), section 15(1)--party undertaking not to execute decree and court accepting it and embodying it in an order--whether order amounts to stay of execution of decree within section 15(1).;when a person gives an undertaking to the court not to execute a decree and the court accepts the undertaking and embodies it in an order of the court, it has the effect of staying the execution and would amount to an order of the court equivalent to an injunction. the effect of such order would not merely be that its breach would be a contempt of court, but also that it would amount to a stay of the execution of the decree in respect of which the undertaking is given within the meaning of section 15(1) of the indian..........limitation act reads as follows:-'15 (1). in computing the period of limitation prescribed for any suit or application for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of the continuance of the injunction or order, the day on which it was issued or made, and the day on which it was withdrawn, shall be excluded'.the question for determination is whether execution of the decree dated 10th october 1955 was stayed either by an injunction or by an order during the time during which the undertaking given by the plaintiffs to the bombay city civil court on 17th november 1959 was in force.5. mr. garg on behalf of the plaintiffs has invited my attention to the case of chaturbhujdas parmanandas v, natvarlal t tribhuvandas,.....
Judgment:
ORDER

1. This is a revision application by the original defendants in R. A. E. Suit No. 6184 of 1964 in the Court of Small Causes at Bombay. The plaintiffs filed a suit against them for ejectment in respect of the suit premises. On 10th October 1955 a decree in ejectment was passed against them, directing them to vacate the premises and to hand over vacant possession to the plaintiffs on or before 10th October 1959. However, before this date, the defendants filed a suit in the Bombay City Civil Court, being suit No. 3100 of 1959 for a declaration that they were the tenants of the plaintiffs in this suit and for an injunction restraining the plaintiffs in this suit from executing the ejectment decree passed by the small Cause Court. On 22nd October 1959 the defendants were granted ex parte injection on a notice of motion came up for hearing on 17th November 1959, when the following order was passed thereon:-

'On the defendants undertaking not to execute the decree dated 10th October 1955 in suit No.6184 of 1954 , pending the disposal of this suit, no order on the motion save and except that costs be costs in the cause.'

2. On 17th September 1964 the City Civil Court ordered the plaint in the suit of the defendants in the Small Cause Court suit to be returned to them for presentation to the proper Court. It is an admitted fact that the plaint has not thereafter been represented to any court. On 11th March 1965 the plaintiffs applied to the Small Cause Court for execution of the ejectment decree. The defendants applied for setting aside the execution on the ground that execution was barred by Article 182 of the Indian Limitation Act, 1908. The plaintiffs relied upon the provisions of Section 15 of the Indian Limitation Act and contended that time form 22nd October 1959 when ex parte injunction was granted by the City Civil Court to 17th September 1964 when the plaint was returned to the defendants for presentation to the proper court be excluded on the ground that due to an injunction and later due to an undertaking being in force, the plaintiffs were prevented form executing the decree. The learned Judge who heard this application decided in favour of the defendants and held that the execution application was barred by the law of limitation. Against this the plaintiffs filed an appeal before a Bench of the Small Cause Court. This appeal was allowed on 7th December 1967 and against that order, the defendants have in their turn come in revision to this Court.

3. Mr. Dhanuka appearing for the defendants has fairly conceded that in any event time between 22nd October 1959 when an ex parte injunction was obtained and 17th November 19590 when an undertaking was given has to be excluded under Section 15 of the Indian Limitation Act, 1908 . The controversy between the parties in whether the period between the parties is whether the period between l7th November 1959 and 17th September 1964 during which an undertaking was in force should be excluded or not. It is agreed that in case this period has to be excluded, the execution application will be within time and otherwise it would be barred by the law of limitation.

4. Section 15 (1) of the Indian Limitation Act reads as follows:-

'15 (1). In computing the period of Limitation prescribed for any suit or application for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of the continuance of the injunction or order, the day on which it was issued or made, and the day on which it was withdrawn, shall be excluded'.

The question for determination is whether execution of the decree dated 10th October 1955 was stayed either by an injunction or by an order during the time during which the undertaking given by the plaintiffs to the Bombay City Civil Court on 17th November 1959 was in force.

5. Mr. Garg on behalf of the plaintiffs has invited my attention to the case of Chaturbhujdas Parmanandas V, Natvarlal T Tribhuvandas, reported in AIR 1931 Bom 509 . In that case on an application by the plaintiff for attachment before judgment of the property of the defendant, the defendant gave an undertaking that he would not sell the same till the disposal of the suit and the Court did not pass any order for attachment. But the defendants sold the property before the disposal of the suit. The plaintiff thereupon applied for proceedings for contempt of Court to be taken against the defendant. The application was granted. The defendant appealed against this order and the question arose whether the undertaking given was equivalent to an order under Order 39, Rule 2 C. P. C In the judgment Baker J. observed at page 510 as under:-

'There can be no doubt that the undertaking given by the defendant not to dispose of his property during the pendency of the suit read in conjunction with the order of the First Class Subordinate Judge referred to above dated 12th January 1927, has the effect of the grant of an injection against defendant 5 restraining him from disposing of his property during the pendency of the suit. This being so, the order is equivalent to one under Order 39, Rule 2, Civil Procedure Code'.

6. It will be seen from the above case that the order accepting the undertaking was in that case equated with an order of injunction under Order 39, Rule 2, C.P.C In the case of Bajranglal Gangadhar Khemka v. Kapurchand Ltd. reported in 52 Bom LR 363= AIR 1 950 Bom 36 the question was whether when a party to the suit gave an undertaking to the Court in a consent decree such an undertaking becomes an order of the Court and can be enforced by the Court by proper committal proceedings. This is a Division Bench Judgment of C.J. and Gajendragadkar J. as he then was. In that case Chagla C.J. observed at pages 371 and 372 ( of Bom LR) = ( at pp, 337-338 of AIR) as under:-

'We are not prepared to accept a position which seems to us contrary to the long practice that has been established in this Court, and, apparently, also in England. There is no reason why even in a consent decree a party may not give an undertaking to the Court. Although the Court may be bound to record a compromise, still when the Court passes a decree, it puts its imprimatur upon those terms and makes the terms a rule of the Court; and it would be open to the Court, before it did so, to accept an undertaking given by a party to the Court. Therefore, there is nothing contrary to any provision of the law whereby an undertaking cannot be given by a party to the Court in the consent decree, which undertaking can be enforced by proper committal proceedings.

It is necessary to understand what the true nature of the committal proceedings is in a case like this. As pointed out by Oswald on contempt of Court, an undertaking entered into or given to the Court by a party or his counsel or solicitor is equivalent to and has the effect of an order of the Court, so far as any infringement thereof may be made the subject of an application to the Court to punish for its breach. Therefore, when an undertaking is given by a party to the Court, it becomes an order of the Court, and a particular mode is prescribed for enforcing that particular order. That mode is that proceedings for contempt can be taken out for the enforcement of that order. Therefore, if we find in this case that an undertaking was given by the party to the Court resulting in that undertaking becoming an order of the Court, then it would be open to the party aggrieved by the non-compliance with the order to come to Court and ask for committal of the party in default. Therefore, what we have to really consider is whether, in fact, the plaintiff gave an undertaking to the Court, and that we can only decide by looking at the consent decree itself.'

Mr. Garg has invited my attention to the case of Sirajul Haq Khan v. Sunni Central Board of Waqf U. P. reported in : [1959]1SCR1287 . In the judgment of Gajendragadkar J. the Supreme Court observes as under:

'It is plain that for excluding the time under this section, it must be shown that the institution of the suit in question had been stayed by an injunction or order; in other words, the section requires an order or an injunction which stays institution of the suit and so in cases falling under Section 15 the party instituting the suit would by such institution be in contempt of Court. If an express order or injunction is produced by a party that clearly meets the requirement of Section 15. Whether the requirements of Section 15 would be satisfied by the production of an order or injunction which by necessary implication stays the institution of a suit is open to arguement. We are, however, prepared to assume in the present is that Section 15 would apply even to cases where the institution of a suit is stayed by necessary implication of the order passed or injunction issued in the previous litigation'.

7. In my opinion, when a person gives an undertaking to the Court not to execute a decree, the undertaking would have no effect, unless it is accepted by the Court . The acceptance would of necessity be embodied in an order of the Court. Once the acceptance is embodied in the order of the Court, it would have the effect of staying the execution. Whether such stay be by an injunction or in an order would be a purely academic question. As observed in Chaturbhujdas's case, AIR 1931 Bom 509, the undertaking would amount to an injunction. But even if one comes to the conclusion that it does not amount to an injunction, in any event, it would amount to an order of the Court equivalent to an injunction. But even if one come to the conclusion that it does not amount to an injunction, in any event, it would amount to an order of the Court equivalent to an injunction. The test laid down by the Supreme Court in Sirajul Haq Khan's case : [1959]1SCR1287 would be satisfied. A reach of the order would amount to a breach of an injunction and would be punishable in contempt. It is true, as the Supreme Court observes, that rules of Limitation are of arbitrary nature and in construing them , it is not permissible to import academic considerations and effect must be given to the strict grammatical meaning of d the words used. Section 15 of the Indian Limitation Act can be attracted only when a suit has been stayed by an injunction or order , and the test would be whether its infringement would or would not be an act in contempt of the Court's order. In this case I am of the view that the provisions of Section 15 of the Indian limitation Act can be attracted only when a suit khas been stayed by an injunction or order, and the test would be whether its infringement would or would not be an act in contempt of the Court's order. In this case I am of the view that the provisions of Section 15 of the Limitation Act are attracted as the execution has been stayed by an order which is equivalent to an injunction or at least an order the breach of which would be punishable by action for contempt of the Court's order. It has been for long a practice of the Court, and apparently also in England, to treat the breach of such orders as breach of injunctions of the Court. This is by reason of the fact that the acceptance of the undertaking is embodied in the order of the Court. The effect of such order would, therefore, knot merely be that its breach would be a contempt of the Court, but also that it would amount to a stay of the execution. of the decree in respect of which the undertaking is given within the meaning of Section k15 (1) of the Indian Limitation Act, 1908. The provisions of Section 15 (1) of the Limitation Act, 1963, are also in the same terms .

8. Mr. Dhanuka has invited my attention to the judgment of the Supreme Court in the case of A.S. K Krishnappa Chettiar v. S.V.V. Somiah, reported in : [1964]2SCR241 in which it was held that Section 15 (1) was restricted in its application to a case where the execution application to a case where the execution of a decree has been stayed by an injunction or an order. It was stated that by no stretch of imagination could it be said that the acceptance by the insolvency court of the composition operated as a stay of execution of the decree more so in a case where the material defendant was not a party to the insolvency proceedings.. It was held in that case that provisions of Section 15 (1) cannot be extended by analogy or reference to proceedings to which they do not expressly apply to could be said to apply by necessary implication. With these observations. I am in respectful agreement. . But in that case, the provisions of the Provincial Insolvency Act created no bar to the institution of a suit. It was stated that worst consequence to the decree-holder as a result of executing the decree would have been j a suit for damages because he was a party to the composition deed. It was held that this did not amount to a stay of execution and was not sufficient for exclusion of time under Section 15. The facts of that case have no application in the present matter.

9. Mr. Dhanuka also invited my attention to the case of Shankarrao v. Hazarimal Nathuramji, reported in AIR 1939 Nag 81. In that case the judgment -debtor had undertaken not to accept any payment from the Court of Wards towards the satisfaction of this decree. The Court held that the said undertaking contained no express prohibition against the execution of a decree. The trial Court held that this undertaking was tantamount to the stay or an injunction or order within the meaning of Section 15. The High Court observed that the conclusion was an equitable one and would have the result of avoiding a serious loss to the decree-holder owing to a bona fide mistake. But in the opinion of the High Court it could not uphold the judgment, I am in respectful agreement with what this judgment decides, but again this is applicable to the facts of the present case.

10. Mr. Dhanuka then invited my attention to the case of Akkayya v. reported in AIR 1947 Mad 238 in that case it was contended that an order of adjudication under the Insolvency Act operated as a stay within the meaning of Section 15 of the Indian Limitation Act. Section 78(2) of the Provincial Insolvency Act provides that the order of adjudication would operate as a stay, but leave of the Court may be taken to execute the decree. It was held that S. 15 of the Limitation Act did not apply to such a case as the order of adjudication did not effect an absolute stay of the execution. This case has also, in my opinion, no application to the facts of this case, because we have before us a case where the undertaking undoubtedly operated as an absolute stay of execution.

11. In my opinion the execution application filed by the plaintiffs in the Bombay Small Cause Court is not bared by the law of Limitation.

12. The revision application must, therefore, be dismissed with costs. Order accordingly. Rule discharged.

13. Revision dismissed


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