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Vardichand Ladaji Vs. Achalaji Babutmal and Co. and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtKarnataka High Court
Decided On
Case NumberAppeal No. 60 of 1958
Judge
Reported inAIR1964Kant130; AIR1964Mys130; (1963)2MysLJ338
ActsLimitation Act, 1908 - Sections 19 - Schedule - Article 182(7); Code of Civil Procedure (CPC), 1908 - Order 21, Rule 43
AppellantVardichand Ladaji
RespondentAchalaji Babutmal and Co. and ors.
Appellant AdvocateH.B. Datar, Adv.
Respondent AdvocateM.R. Janardhanam and ;M.V. Raghunath Char, Advs.
Excerpt:
.....that on failure of payment of certain instalments the whole amount due may be recovered the decree-holder is not entitled to exercise his option to recover the whole amount then recoverable if the first default has occurred more than three years before the filing of the execution application and their lordships observed that the right which is given to a decree-holder under a decree to enforce the payment of the full decretal amount in default of payment of any instalment is a right given to a decree-holder for his benefit. ' their lordships further held that when a right accrues to a decree-holder to execute an instalment decree as a whole on failure to pay instalments due, limitation begins to run when the right accrues for the first time and once limitation begins to run it..........default at the very outset in the payment of the very first' instalment. in spite of this the decree-holder first respondent did not sue out execution and attempt to recover the entire decretal amount. in other words, the decree-holder did not make any attempt to take advantage of the default clause in the decree and to recover the entire decree amountthe decree-holder filed the present execution application out of which this appeal arises on 20/11/1954, that is, more than 13 years after the decree was passed. he sought to recover a sum of rs. 26,900/- after making deductions of the payments made by the judgment-debtors. the present appellant resisted the claim of the first respondent on several grounds. we are now concerned only with one ground namely whether the execution.....
Judgment:

Hombe Gowda, J.

1. This appeal is directed against the 'order dated 7th November 1957 passed by the Civil Judge Senior Division, Bijapur in Special Darkhast No. 70 of 1954 overruling the contention of the appellant that the execution application was barred by limitation and was liable to be dismissed and directing the attachment of die moveables of the present appellant under Order XXI Rule 43 of the Code of Civil Procedure.

2. The first respondent obtained a decree against the present appellant and another for a sum of Rs. 20,235/- in Civil Suit No. 1 of 1940-41 on the file of the Civil Judge, Mudhol. The decretal order is in the following terms:

'On the 1st day of Kartik Shuddha of Shaka 1862 the amount Rs. 20,235/- is found due. The defendants should pay the amount of interest at ' the rate of Rs. 6/- per cent per annum thereon to the plaintiff from this day.

`The defendants should pay the said amount by instalments each instalment being of Rs. 2,000/1-every year.

The first instalment should be paid in the month of July 1941. Further instalments should be paid in the month of August every year.

The defendant should pay to the plaintiff interest at the rate of Rs. 6/ per cent per annum till the entire amount is fully paid off.

In case of default of payment of any one instalment the plaintiff is entitled to recover the en-lire amount from the defendants.'

3. The judgment-debtors paid in all Rs. 8.900/ as under:

Rs. 500/- on 28/5/1941Rs. 20000/- on 27/11/1941Rs. 900/- on 8/1/1943Rs. 2,000/- on 21/10/1948Rs. 2,000/- on 18/11/1945Rs. 800/- on 1/9/1946 &Rs.; 700/- on 16/9/1946.

4. It is clear from the above that the judgment-debtors committed default at the very outset in the payment of the very first' instalment. In spite of this the decree-holder first respondent did not sue out execution and attempt to recover the entire decretal amount. In other words, the decree-holder did not make any attempt to take advantage of the default clause in the decree and to recover the entire decree amount

The decree-holder filed the present execution application out of which this appeal arises on 20/11/1954, that is, more than 13 years after the decree was passed. He sought to recover a sum of Rs. 26,900/- after making deductions of the payments made by the judgment-debtors. The present appellant resisted the claim of the first respondent on several grounds. We are now concerned only with one ground namely whether the execution application was barred by limitation and is liable to be dismissed.

5. The appellant contended that by virtue of the letter dated 20/10/1943 which is marked as Exhibit 41, the decree-holder first respondent had exercised his option to take advantage of the default clause in the decree on the happening of the first default and therefore, the period of limitation started from the date of the first default and the present execution application filed 12 years after the said date is clearly barred by limitation.

The appellant did not adduce any evidence to show that the first respondent had exercised his option and taken advantage of the default committed by the judgment-debtors except relying upon Exhibit 41. aS rightly observed by the learned Civil Judge there is nothing in the letter (Ext. 41) which will indicate that the first respondent had exercised his option and attempted to recover the entire decretal amount taking advantage of the default clause in the decree.

It is no doubt true that the first respondent had referred to the default committed by the judgment-debtors in his letter Ex. 41 but all the same he had specifically stated that he would appropriate the payments made by the J. Ds. towards the decretal dues already accrued. He did not indicate in Ex. 41 that he was exercising his option and taking out execution for the recovery of the entire decree amount. There is nothing in Ex. 41 to show or indicate that the first respondent had exercised his option and taken advantage of the default clause. It is significant to note that the appellant paid the several instalments' as indicated above subsequent to the date of Exhibit 41 and that the first respondent adjusted them towards the decretal dues.

Admittedly the first respondent did not file any execution application for the recovery of the balance of the amount till the date of the present application. In these circumstances we entirely agree with the conclusion reached by the learned Civil Judge that the appellant bad failed to establish that the_ first respondent had unequivocally expressed his intention to take advantage of the default clause in the decree and to recover the decretal amount

It is urged by Mr. Datar, the learned Counsel for the appellant, that so long as the present appellant committed the default in the payment of the instalments a right accrued to the first respondent to recover the entire decretal amount as though the decree was not an instalment decree and that since the first respondent did not exercise his option it should be deemed that the present application filed by him is barred by limitation. We are unable to accede to this contention. If this contention of Mr. Datar is accepted it would mean' that a clause introduced in an instalment decree that in case the J- Dr. commits default in the payment of any one or two of the instalments in time the decree would operate as if no instalments, had been granted to the J. Dr. and would in-| variably prove detrimental to the interests of the D. Hr.

A decree which makes the whole of the decree amount payable in case of one or more defaults is only an ancillary clause and has no independent existence. It only means that if the decree-holder so chooses he may take advantage of the default committed by the judgment-debtors and enforce the decree as though no instalments are granted and that he can also ignore the same. He cannot be compelled to sue out execution for the recovery of the entire amount.

A Full Bench of the Bombay High Court in Chunilal Motiram v. Shivram Naguji. 52 Bom LR 250 : AIR 1952 Bom 188 held that where an instalment decree provides that on failure of payment of certain instalments the whole amount due may be recovered the decree-holder is not entitled to exercise his option to recover the whole amount then recoverable if the first default has occurred more than three years before the filing of the execution application and their Lordships observed

'that the right which is given to a decree-holder under a decree to enforce the payment of the full decretal amount in default of payment of any instalment is a right given to a decree-holder for his benefit. He may or he may not enforce it. Although a default may take place he may treat the decree as still a decree for instalments and he may pursue to execute his right to obtain the instalments as and when they fall due.'

Their Lordships further held that when a right accrues to a decree-holder to execute an instalment decree as a whole on failure to pay instalments due, limitation begins to run when the right accrues for the first time and once limitation begins to run it cannot be stopped and that it is open to the decree-holder not to treat the non-payment of the instalment on the due date as a default at all. He may waive or condone the default in which case limitation would not run from the default which was condoned or waived but from the default which the decree-holder treated as a default under the decree. To the same effect is the decision of the Calcutta High Court reported in Sarkar Dutt Roy and Co. v. Shree Bank Ltd. (In liquidation) : AIR1960Cal243 . A Full Bench of the Allahabad High Court took the same view in Joti Prasad v. Srichand : AIR1928All629 . We are of the opinion that the above decisions lay down the correct law on the point and that there is no substance in the contention of the appellant that the present execution petition filed by the first respondent for the recovery of the arrears of instalments due is barred by limitation and is liable to be dismissed. The learned Civil Judge has rightly overruled these objections. We do not find any grounds to interfere with the same.

It is no doubt true that a Division Bench of the former High Court of Mysore had taken a contrary view in Puttiah Gowda v. Kadappa Gowda, 15 Mys LJ 472 and held that an instalment decree with a default clause left no option to a decree-holder to continue in spite of such default on the part of the defendants to recover the amount in annual instalments and hence an application for execution of the decree must be filed within three years of the default under Article 182of Schedule I of the Limitation Regulation. In our opinion this decision does not lay down the correct law on the point.

6. The learned Civil Judge held that the several letters produced by the first respondent which relate to the suit transaction amount to an acknowledgment of the liability by the appellant under Section 19 of the Limitation Act and therefore the claim for the recovery of the arrears of instalment is well within time. Two of the acknowledgments which arc material are Exhibit 36 dated 7/3/1948 and Exhibit 39 dated 22/11/1949 with another endorsement below it on 22/11/1951. In Exhibit 36 the Judgment-debtors have clearly referred to the decree in question and have stated that some instalments had been paid and some yet remained to be paid and that they are making arrangements to pay the amount as early as possible and prayed for a short time to pay the balance of the decree amount. This document, as rightly held by the learned Civil Judge is clearly an acknowledgment within Section 19 o the Limitation Act.' Exhibit 39 dated 22/11/1949 is another document in which there is a clear and unequivocal acknowledgment of the liability of the decree amount by the appellant. The present darkhasr application, as already staled, was filed on 20-11-1954, that is, well within three years from the date of Exhibit 39. In these circumstances we are of the opinion that the learned Civil Judge was perfectly justified, in overruling the objections raised by the appellant and directing the execution to proceed. We do not find any grounds to interfere with the order passed by the learned Civil Judge, Senior Division, Bijapur and this appeal must fail.

7. In the result, therefore, for the reasons stated above this appeal fails and the same is dismissed with costs.

8. Application dismissed.


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