Skip to content


Veherbhai Vallavbhai Vs. Javer Soma - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtMumbai
Decided On
Case Number Civil Revision Application No. 35 of 1935
Judge
Reported in(1935)37BOMLR942; 160Ind.Cas.527
AppellantVeherbhai Vallavbhai
RespondentJaver Soma
Excerpt:
indian limitation act (ix of 1908), article 182{7) - decree-payment by instalment -default clause-default in payment of one instalment making the whole decree payable-application to recover such of the instalments as are in time.;where a decree for money is made payable in instalments and in default of payment of any instalment the whole of the decree becomes payable immediately, it is open to the decree-holder to apply, even after three years from the date of the default, to recover such of the instalments as have become due within three years of the date of his application.;lasa din v. gulab kunwar (1932) 34 bom. l.r. 1600, p.c. followed.;raichand v. dhondo (1918) 20 bom. l.r. 773, not followed. - - there was a decree dated february 13, 1930, providing for payment of the decretal..........failed to pay any one instalment, plaintiffs might recover the whole debt at once by executing the decree. default was made in the payment of the first instalment, and darkhast proceedings were filed on october 2, 1934. admittedly the first instalment is time-barred, but the darkhast is within three years of the due date fixed for payment of the other two instalments, and the question is whether in view of the default clause in the decree all the instalments became payable at the expiration of october, 1930, so that the darkhast is time-barred. that was the view adopted by the learned subordinate judge.3. the question as to the effect of a default clause has recently been discussed at length by their lordships of the privy council in lasa din v. gulab kunwar : (1932)34bomlr1600 . that.....
Judgment:

John Beaumont, Kt., C.J.

1. This is an application in revision under Section 25 of the Provincial Small Causes Courts Act asking us to review an order of the Second Class Subordinate Judge at Borsad, dismissing a darkhast proceeding.

2. The case raises a point of law upon which there has been considerable difference of judicial opinion, as noted by the learned Subordinate Judge. The point is a very simple one. There was a decree dated February 13, 1930, providing for payment of the decretal amount by three instalments, in October, 1930, October, 1931, and October, 1932, and there was a provision in the decree that if the defendant failed to pay any one instalment, plaintiffs might recover the whole debt at once by executing the decree. Default was made in the payment of the first instalment, and darkhast proceedings were filed on October 2, 1934. Admittedly the first instalment is time-barred, but the darkhast is within three years of the due date fixed for payment of the other two instalments, and the question is whether in view of the default clause in the decree all the instalments became payable at the expiration of October, 1930, so that the darkhast is time-barred. That was the view adopted by the learned Subordinate Judge.

3. The question as to the effect of a default clause has recently been discussed at length by their Lordships of the Privy Council in Lasa Din V. Gulab Kunwar : (1932)34BOMLR1600 . That was a case of moneys payable by instalments under a mortgage bond containing a default clause, and it was held that the mortgage bond did not ' become due ' within the meaning of Article 132 of the Indian Limitation Act until both the mortgagor's right to redeem and the mortgagee's right to enforce his security had accrued. Their Lordships pointed out that the default clause was inserted for the benefit of the mortgagee, that he might or might not take advantage of it, and that it did not lie in the mouth of the mortgagor to insist that the mortgagee must take advantage of the mortgagor's default. The Privy Council overruled various cases in which a contrary view hail

4. In the present case, I think, the Article of the Indian Limitation Act which applies is Article 182(7) which provides that time runs for the execution of a decree or order of any civil Court ' where the application is to enforce any payment which the decree or order directs to be made at a certain date', from such date. In the present case the decree makes the money payable on the three dates specified for payment of the instalments, and those dates are certain. But, as pointed out in Joti Prasad v. Sri Chand I.L.R. (1928) All. 237, it cannot be said that in a decree of this sort there is any certain date for payment of the whole amount in default of payment of any instalment. There is no certainty that there will be default. In terms, therefore, the relevant Article of the Indian Limitation Act is not a bar, and, moreover, I think the reasoning of the Privy Council, in the case to which I have just referred, applies with equal force to a default clause in a money decree, such clause being inserted for the benefit of the creditor, and the creditor being free to take advantage of the privilege or not as he thinks best.

5. The learned Subordinate Judge in a careful judgment considered the ruling of the Privy Council, but came to the conclusion that he was bound by the decision of this Court (Ratehand v. Dhondo : AIR1918Bom163 , to hold that time ran from the date of the default in payment of the first instalment. That was a decision of Mr. Justice Beaman and Mr. Justice Heaton. They differed from the decision in Shankar Prasad v. Jalpa Prasad I.L.R. (1894) All. 371, in which it had been held that under a decree for payment by instalments with a default clause, the occurrence of a default did not make the whole debt payable immediately so that time ran from that date in respect of the whole debt. I must confess that I find the reasoning of the learned Judges in Raichand v. Dhondo very difficult to follow. The Judges seem to take the view that a creditor who gets a decree for payment by instalments is really entitled to a decree for immediate payment, that the privilege of payment by instalments is inserted entirely for the benefit of, and out of sympathy for, the debtor, and that if the debtor fails to take advantage of the privilege accrued to him, then the creditor has a decree for immediate payment of the full amount. It is difficult to see why, if a creditor is entitled to a decree for immediate payment, he should only get a decree for payment by instalments. I think the correct view is that the debtor must be treated in such cases as entitled to a decree for payment by instalments, and that the clause making the whole amount payable on default in payment of any instalment is inserted for the benefit of the creditor, who has an option to enforce the clause or not. It is to be observed that the learned Judges in Raichand v. Dhondo do not refer to any of the articles of the Indian Limitation Act, and do not mention the article under which they held that the darkhast proceedings were barred. In my opinion it is quite impossible to reconcile the reasoning in Raichand v. Dhondo with the reasoning of the Privy Council in Lasa Din v. Gulab Kunwar, and I think we must follow the latter reasoning.

6. In my opinion, therefore, we ought to hold that the fact that default occurred in the payment of an instalment and that the creditor might thereupon have enforced the decree for the whole-amount is irrelevant since he did not in fact attempt to do so, and his omission to do so has not deprived him of the right to recover the instalments which became due within three years before the filing, of the darkhast. The application must be allowed with costs throughout

7. Rule made absolute with costs throughout. Darkhast to proceed.

N.J. Wadia J.

8. The decree in this case expressly made it optional on the decree-holder to recover the whole amount at once on default of payment of any one instalment. The view taken in Raichand v. Dhondo : AIR1918Bom163 , which the learned Subordinate Judge felt himself bound to follow, was that such provision in an instalment decree made it obligatory on the decree-holder to proceed to realize the whole amount at once on the occurrence of a default, and that on his failure to do so, his right to execute the decree would become time-barred after three years from the date of the first default. The learned Subordinate Judge took the view that the decision in Raichand v. Dhondo was not overruled even by implication by the decision of the Privy Council in Lasa Din v. Gulab Kunwar : (1932)34BOMLR1600 , P.C.. It seems to me that he is wrong in this view. It is true that Lasa Din v. Gulab Kunwar was a case dealing with a mortgage bond, But the principle which was there laid down that a proviso of this nature (i.e., a proviso giving the mortgagee an option to realize the entire amount of the debt on the occurrence of a default in payment of any one instalment) was inserted, for the benefit of the mortgagee, must, in my opinion, necessarily apply also in the case of an instalment decree. And there is no reason why the judgment-debtor should be enabled, as a result of his own default in the payment of one instalment, to deprive the decree-holder of the right to recover subsequent instalments which may become due. The terms of Article 182, Clause (7), of the Indian Limitation Act, do not appear to me to debar such a right, The right is one which accrues to him on the date of each instalment, and I see no reason why the. fact that he has waived his right to recover the first instalment should debar him from exercising a right which the decree expressly gives him to recover subsequent instalments. I agree, therefore,,, that the application should be allowed with costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //