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Baljit Singh (deceased by L.R's) Vs. J.i. Cunnington and Ors. (08.02.1984 - ALLHC) - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal No. 60 of 1963
Judge
Reported inAIR1984All209
ActsCode of Civil Procedure (CPC) , 1908 - Order 34, Rule 5(3); Uttar Pradesh Encumbered Estates Act, 1934 - Sections 4, 7, 7(2), 7(3), 44, 44(2) and 44(3); Limitation Act, 1908 - Sections 15(1) - Schedule - Article 181; Transfer of Property Act, 1882 - Sections 70
AppellantBaljit Singh (deceased by L.R's)
RespondentJ.i. Cunnington and Ors.
Appellant AdvocateU.N. Chatterjee and ;A.K. Banerjee, Advs.
Respondent AdvocateSantosh Kumar, Adv.
DispositionAppeal allowed
Excerpt:
civil - limitation for application for final decree - order 34 rule 5 of code of civil procedure, 1908 and article 181 of limitation act, 1908 - suit for recovery of amount on basis of mortgage of land - preliminary decree passed for sale of mortgaged land - time limit fixed for payment of amount determined - application for final decree filed after three years of expiry of period allowed -application for final decree held to be time barred. - - the limitation for purposes of article 181 would, there fore, commence to run in this case on june 23, 1929. the application made may 7, 1948 was clearly barred by limitation. it seems to us perfectly clear that a decree-holder can apply for a final decree only when there has been a default on the part of the judgment-debtor in the payment of..........estates act, 1934 on october 28, 1936. the decree-holder applied for the preparation of a final decree under order 34, rule 5 (3) c. p. c. on may 7, 1948 since there had been no payment made in terms of the decree by the judgment-debtors. on august 9. 1952, appellant-brigadiar baljit singh (since dead) made purchase of the bungalow no. 245 from smt. sarswati devi by a registered deed for a consideration of rs. 20,000/-. the preliminary decree dated 22-12-1928 was also obtained by him under assignment dated november 28, 1957 from the decree-holder. the application under section 4 of the u. p. encumbered estates act, 1934 (hereinafter referred to as the act) was rejected on february 21, 1959. the application made under order 34, rule 5 (3) c. p. c. was opposed by the appellant on.....
Judgment:

B.D. Agarwala, J.

1. This appeal is directed against an order of the First Civil Judge, Meerut dated November 16, 1962 under Order 34, Rule 5 (3) of the Civil P. C.

2. The facts relevant briefly stated are that the Bank of Upper India Limited (since liquidated), instituted O. S. No. 100 of 1927 in the Court of Sub Judge, Meerut for recovery of a sum of Rupees 23.993-68 besides interest on the basis of a mortgage deed dated July 13, 1927. The property mortgaged comprised of share to the extent 2/5 in the zamindari properly situate in villages specified in Schedule 'A' and. 2/5 share for bungalow No. 245 situate in Cantonment Area, Meerut besides mango trees in the compound referred to in Schedule 'E' to the plaint, The suit was decreed by the trial court on December 22, 1928 A preliminary decree was passed under Order 34, Rule 4 C. P. C. and the time granted to the judgment-debtors for payment of the decretal amount was up toJune 22, 1929. The first Appeal No. 136 of 1929 filed by the defendants against the preliminary decree was dismissed by the High Court on May 14, 1936. Some of the judgment-debtors filed an application under Section 4 of the U. P. Encumbered Estates Act, 1934 on October 28, 1936. The decree-holder applied for the preparation of a final decree under Order 34, Rule 5 (3) C. P. C. on May 7, 1948 since there had been no payment made in terms of the decree by the judgment-debtors. On August 9. 1952, appellant-Brigadiar Baljit Singh (since dead) made purchase of the bungalow No. 245 from Smt. Sarswati Devi by a registered deed for a consideration of Rs. 20,000/-. The preliminary decree dated 22-12-1928 was also obtained by him under assignment dated November 28, 1957 from the decree-holder. The application under Section 4 of the U. P. Encumbered Estates Act, 1934 (hereinafter referred to as the Act) was rejected on February 21, 1959. The application made under Order 34, Rule 5 (3) C. P. C. was opposed by the appellant on the ground that this was barred by limitation, the property referred to in the preliminary decree had ceased to exist and also that he is entitled to the benefits under Section 41 of the Transfer of Property Act. The objections were rejected and the applications for the preparation of the final decree was allowed by the court below under the impugned order. This appeal was decided by a learned single Judge of this Court ex parte on April 17, 1979. The application to set aside the ex parte order was rejected. In appeal filed by the appellant, the order was reversed by the Supreme Court on May 4, 1982, and this Court was directed to dispose of the appeal on merit

3. Sri A. D. Prabhakar, learned counsel for the appellant, has raised twofold contentions before me in support of this appeal :--

(1) The application made by the decree holder on May 7, 1945 under Order 39, Rule 5 (3) C. P. C. was barred by limitation in view of the provision, contained in Article 181 of the Schedule to the Limitation Act, 1908; and

(2) The properly under the mortgage referred to in the preliminary decree having ceased to exist there could be no, final decree for sale drawn in respect thereof.

4. Taking up ground No. 1 first, Article 181 of the Schedule of the old Limitation Act, 1908 read as under:

181. Applications for which no period of limitationis provided elsewhere in this schedule or by section 48 of the Codeof Civil Procedure, 1908.There yearsWhen the right to applyaccrues.

The corresponding Article 137 in the new Limitation Act, 1963 reads:

137. Any other application for which noperiod of limitation is provided elsewhere in this Division.Three yearsWhen the right to applyaccrues.

5. Under the scheme of the Civil P. C., Order 34, Rule 4 (1) makes provision for the court to pass a preliminary decree for sale of the mortgaged property and requires that the court shall also fix the time for the payment of the amount found due. In case on or before the date fixed, the payment is not made, Sub-rule (3) of Rule 5 comes into play. It provides that in that event, the court shall on application made by the plaintiff in this behalf pass a final decree directing that the mortgaged property or a sufficient part thereof be sold and the proceedings of the sale be dealt with in the manner provided in Rule 4 (1). It is not in dispute that the schedule to the old Limitation Act did not contain any provision: other than Article 181 concerning application for the preparation of the final decree for sale under Order 34, Rule 5 (3) nor was the limitation provided for this purpose under Section 48 C. P. C. Likewise in the new Limitation Act, the provision is contained only in the residuary Article 137. In Kerala Stale Electricity Board case : [1977]1SCR996 it is laid down that this Article 137 as distinct from Article 181 of the old Act governs not merely applications made under the Civil P. C. but also petition or any application under any Act, The earlier view expressed in the case down Municipal Council, Athani : (1969)IILLJ651SC to the effect that Article 13Y governs applications under the Code alone was overruled. It is settled that an application under the Civil P. C. was governed by Article 181 of the old Act. It is clear also moreover that for purposes of a final decree it is incumbent upon the decree-holder to make an application as envisaged under Order 34, Rule 5 (3) C. P. C. The time for payment of the amount found due or declared as outstanding in the preliminary decree by court upon contest between the parties or as the case may be on the basis of the compromise entered into between them is adhered to; it is capable of extension under orders of the Court but in the absence thereof, in case, the payment is nol made, it is up to the decree-holder to move the court for the purpose of the final decree being drawn. In Askari Hasan v. Jahangiri Mal : AIR1927All167 , a Full Bench of this Court held that where the compromise decree provided for payment of the mortgage money in instalments but did not provide any specific mode within six months up to which the payment was to be made, it was unnecessary to make an application under Rule 5. This will have no application where the preliminary decree specifies statutory time limit. In Mohd. Unis v. Janeshar Das : AIR1929All881 , a Division Bench ruled that the decree-holders were obliged to apply for a final decree before they can proceed to execute and in the absence of final decree they were debarred from making an application for sale in the execution court. The decision in Sital Singh v. Baijnath Prasad (AIR1922 All 383) only affirms the position that if the preliminary decree originally prepared is not in compliance with Rule 4, the provision of Rule 5 would not apply.

6. The preliminary decree in the instant case as mentioned above was drawn on December 22, 1928. The period of six months was specified therein and the date given is June 22, 1929. It is undisputed that there was no payment of any amount made within this period. An appeal by the judgment-debtors against this decree was dismissed by the High Court on May 14, 1936. In certain connected suits, the matter was taken further in appeal to the Privy Council whichdecided the same on June 15, 1942. The decision is reported in AIR 1942 PC 67 (68) (Bank of Upper India Ltd. v. Robert H. Skinner). No appeal to the Privy Council was, however, filed by any of the parties against the decision of this Court in F. A. 136 of 1929 arising fromO. S. No. 100 of 1927 with which we are concerned. In terms of the preliminary decree right to apply for final decree accrued to the decree-holder as envisaged in Article 181 of the old Limitation Act on June 23, 1929. The expression when the right to apply accrues means in the context when the right, to apply first accrues vide Gujarat State Fertilizers Co. Ltd. v. Deepak Nitrite Ltd. : AIR1979Guj83 . In contrast to Article 182 of the old Act which relates to an application for the execution of a decree or order of any civil court Article 181 does not refer to the appellate decree or order. For purposes of an application for the execution of the decree, the appellate decree is relevant, but not so for purposes of an application for preparation of final decree. The, mere filing of First Appeal No. 136 of 1929 did not preclude the decree-holder from putting an application for preparation of final decree under Order 34 Rule 5 (3) C. P. C. It is not alleged that there was stay granted by the appellate court against the proceedings to have final decree drawn. As mentioned above too, the proceeding to execute the decree is not identical with that of applying for a final decree being prepared. The limitation for purposes of Article 181 would, there fore, commence to run in this case on June 23, 1929. The application made May 7, 1948 was clearly barred by limitation. Even if the limitation were taken not to commence prior to May 14, 1930 when the appellate courts decree was passed by the High Court, the result is not different since the limitation available was three years only.

7. Sri Santosh Kumar, learned counsel for the respondents urged that the decree-holder is entitled to the exclusion of the period for which the application made under Section 4 of the Act remained pending. It is submitted that the trial court was light in having given the benefit of this period and taking the view on the basis thereof that the applications for final decree was not barred by time. An analysis into the relevant provisions of the Act establishes in my view that this contention cannot be upheld. Section 2 (a) of the Act defines the expression 'debt' as including any pecuniary liability except a liability for unliquidated damages. Private debt means any debt other than a public debt. Public debt is defined as meaning a debt due tothe State or to a local authority. The word 'land' is defined in Section 2 (d) as meaning a share of or interest in a mahal in the State. As per Section 2 (g), the expression 'landlord' means:

'a proprietor of a mahal or of a share of or interest in a mahal and includes an ubaridar, an under-proprietor or a sub-proprietor and a proprietor of specific plots but does not include a mortgagee or a the kadar

Section 4 (1) in so far as relevant says:

'At any time within one year after the date on which this chapter comes into force any landlord who is subject to or whose immovable property or any part thereof is encumbered with private debts, may make an application in writing to the Collector of the district in which his land or any portion of his land is situated staling the amount of such private debts and also of his public debts both decreed and un decreed and requesting that the provisions of this Act be applied to him.'

8. Section 6 enjoins that when an application has been duly made under Section, 4, the Collector shall pass an order that it be forwarded to the Special Judge. Section 3 empowers the State Government to appoint any civil Judicial Officer to be, a Special Judge Section 7 is material also and it provides:

'(1) When the Collector has passed an order under Section 6 the following consequences shall ensue:

(a) all proceedings pending at the dateof the said order in any civil or revenuecourt in the Uttar Pradesh in respect ofany public or private debt up to whichthe landlord is subject, or with whichhis immoveable property is encumbered,except an appeal, review or revisionagainst a decree or order shall be stayed,all attachments and other execution processes issued by any such court and thenin force in respect of any such debt shallbecome null arid void, and no fresh process in execution shall, except as herein after provided, be issued;

(b) no fresh suit or other proceedings other than an appeal, review or revision against a decree or order or a process or ejectment for arrears of rent shall except as hereinafter provided, be instituted in any civil or revenue court in the Uttar Pradesh in respect of any debt incurred before the passing of the said order but if for any reason whatsoever such a suit or proceeding has been instituted, it shall be deemed to be a proceeding pending at the date of the said order within the meaning of Clause (a).'

Provided that when a landlord has executed a usufructuary mortgage in respect of any of his land and is in possession of that land as a 'thekedar' of the mortgagee, no fresh process shall issue for his ejectment from that land for arrears of the theka rent.

(2) After the passing of the said order and until application is dismissed by the Special Judge under Sub-section (3) of Section 8 all proceedings under this Act are quashed under Section 20 or until the Collector has liquidated the debt under Chapter V no decree obtained on the basis of any private debt incurred by the landlord after the passing of the order under Section 6 shall be executed against any of his property, other, than proprietary rights in land, which has been mentioned in the notice under Section Hand the landlord shall not be competent without the sanction of the Collector to make an exchange or gift of, or to sell, mortgage or lease, any of that property. (3) After the passing of the order under Section 6 and until the Collector has declared, in accordance with Section 44 that the landlord has ceased to be subject to the disabilities of this sub-section or until the passing of the order by the Special Judge referred to in Sub-section (2) of Section 44, no decree obtained oh the basis of any private debt incurred after the passing of the order under Section 6 shall be executed against any of the landlord's proprietary rights in the land mentioned in the notice published under Section 11 and the landlord shall not be competent without the sanction of the Collector, to make 'any exchange or gift of, or to sell, mortgage or lease those proprietary rights or any portion of them.

(4) Any transfer made in contravention of the provisions of this section, shall be void.'

Section 44 (2/3) reads as under :--

'(2) When an application is dismissed or when proceedings under the Act have been quashed the landlord shall cease to be subject to the disabilities mentioned in Sub-section (3) of Section 7 from the date of order of the Special, Judge, dismissing the application, or quashing the proceedings.

(3) Notwithstanding anything contained in the Limitation Act or in any other law for the, time being in force, in computing the period of limitations prescribed for any application for execution of any decree stayed under Sub-sections (2) and (3) of Section 7 the period from the date of decree referred to in those Sub-sections up to the declaration under Sub-section (1) of this, section or the order of the Special Judge referred to in Sub-section (2) shall be excluded.'

9. The Act including the Chapter III which incorporates Sections 4 and 7 also came into force on April 30, 1935. The preliminary decree having been passed on December 22, 1928 and the period specified being over on June 22, 1929, it was open to the decree holder to have applied under Order 34, Rule 5 (3) within the statutory period of limitation of three years before the Act was enforced on April 30, 1935. Within the period of limitation prescribed under the law, there was no question of any bar arising to the making of the application for final decree on this account. The application tinder Section 4 (1) was made as said above on Oct. 28, 1936. The date of the order passed by the Collector thereupon under Section 6 is not specified. It may be assumed for the sake of argument that the order of the Collector was passed say on the same date and also that the proceedings in the suit remained pending within the meaning of Section 7 (1)(a) since up to the time, when the Act came in force, the preliminary decree alone had been drawn and no final decree had been prepared. The basic question remains whether on this basis, the decree-holder is entitled to include the period which elapsed between Oct. 28, 1936 (the date of the application under Section 4 (1)) and February 21, 1959 (the date when this application was rejected). I put this to the respondents' learned counsel who frankly stated that in the Act, there is no provision extending the benefit of exclusion of this period for purposes of an application under Order 34, Rule 5 (3). Sub-section (3) of Section 44 quoted above cannot avail the decree-holder for two reasons, firstly, since it pertains to an application for execution of decree and, secondly, because it relates to stay under Sub-sections (2) and (3) of Section 7. Sub-sections (2) and (3) of Section 7 provide for cases where any private debt is incurred by the, landlord after passing of the order under Section 6. in the instant case, the private debt for, forming the subject-matter of the trial court decree was incurred prior: to an application made under Section 4 (1). These sub-sections are consequently of no relevance. Further they make provision only for execution being stayed on that account; Section 44 (3) provides for exclusion of the period for which the execution of an application remained stayed in view of Section 7 (2/3); it cannot be maintained by any stretch that this should also extend to an application for final decree because as explained above, and application to execute the decree is distinct altogether from an application for the final decree for sale being drawn.

10. In this connection, it is worthy of note also as Sri Prabhakar, learned counsel for the appellant stressed that Section 4 (1) extends relief to a 'landlord' who is subject to or whose immoveable property or any part thereof is encumbered with private debt. The mortgagor in the instant case was, no doubt, a landlord vis-a-vis interest in the zamindari property as is manifest from the definition given to the expression 'landlord' and 'land' in Section 2 referred to above. That will cover only the zamindari interest mortgaged as specified in Schedule 'A' of the plaint. This does not extend to bungalow or the trees, standing on the 'compound thereof, since the mortgagor was evidently not the landlord vis-a-vis that property within the meaning of this Act. The trial court has erred in not observing this manifest distinction. It is also overlooked that the benefit is accorded to the landlord who puts in an application or through whom he claims. The application under Section. 4 (1) in the present case was not made by the appellant before us or the vendor from whom he claims to have derived title the application instead was made by some other judgment-debtor under the decree through whom the appellant does not claim any interest. The Act was framed with the intention to give benefit to the Zamindars who incurred debts and the consequent of an application made by other judgment debtors cannot ensue in relation to the final decree sought to be drawn as against the appellant.

11. Sri Santosh Kumar, learned counsel argued that if this view were taken, that would, leave the suit, for the recovery of the mortgaged amount un disposed ofIt is submitted that there could be no execution until the final decree is prepared and if the matter is left at the stage of preliminary decree only, it leaves, the controversy in nebulous stage. A reference was made by him to the decision of a Bench of this Court in Qazi Ghulam Amir v. Mt. Masuda Khatun : AIR1943All321 . The facts thereof show that the preliminary decree therein had not been drawn in conformity with Order 34, Rule 4 and in particular there was no specification of the period or the date within which the amount had to be paid by the judgment-debtor. It was held that if the decree specifics or the agreement incorporated therein mentions that on the happening of certain events the decree-holder shall have a right to apply for a final decree, 'it will be necessary for the decree-holder to apply for a final decree for sale within the prescribed period of limitation.'

12. In case, however, the period is notdenoted in the preliminary decree, the position changes and in that event Rule 5 is not attracted. Accordingly, their Lordships held:

'It seems to us perfectly clear that a decree-holder can apply for a final decree only when there has been a default on the part of the judgment-debtor in the payment of the amount specified in the preliminary decree by the date specified therein. It follows that where no amount is specified and no date is fixed it is not possible for the decree-holder to say that there has been a default by the judgment-debtor in payment as directed by the decree. As we have pointed out above, the blank spaces in the printed form in the decree in question were not filled up. The result was that no amount was mentioned and no date was fixed. In these circumstances we have no hesitation in accepting the contention of the respondent's learned counsel that time never began to run against Mt. Masuda under Article 161 Limitation Act, for the making of an application for the preparation of a final decree.'

13. The specified period within which the amount had to be cleared being specially given herein Rule 5 is not excluded. The learned counsel also referred to Sivan Pillai v. Anbayyan : (1976)1MLJ385 . This follows Allahabad decision cited above. In that case too the finding was that the preliminary decree passed on January 30, 1958 was not in terms of Order 34, Rule 4. The decision arrived at by the learned single Judge was that the provision of Order 34 referred to the default to pay the amount within the date fixed or extended and, therefore, there is no scope for the argument that when the court fails to fix the date within the outer limitation of six months mentioned in the rules of Order 34, the period of limitation under Article 181 must be deemed to have commenced from the date of the decree itself. This is the same thing as was held by this Court in the above mentioned cases. At page 389, in the Madras case, it was observed, however, that once the application made by the decree-holder for passing a final decree is dismissed on the ground that it is barred by limitation, we are left with a peculiar and nebulous position of the suit being still pending and the preliminary decree already passed not having been cancelled but at the same time, the decree-holder in the suit not being able to realise the fruits of the decree which he obtained under the preliminary decree. The learned counsel lays emphasis on these observations. The provisions of the Limitation Act seem at times, as is well known, to be rather arbitrary but it is well settled that equitable considerations are out of place in construing the provisions of a statute of limitation and strict grammatical meaning of the words is the only safe guide, (See : [1963]1SCR70 ). The rule of limitation is based on public policy, There being a presumption that a right not exercised for a long time is non-existent and consequently it is necessary that title to property and matters of right in general should not be in a constant state of uncertainty, doubt and suspense. These rules proceed upon the presumption that claims are extinct or ought to be held extinct whenever they are not litigated in the proper forum within the prescribed period. The conclusion is, therefore, inescapable that there can be no exclusion in this case within the meaning of Section 44 (3) (7) of the Act for the purpose of limitation laid down in Article 181 of the old Limitation Act.

14. Section 15(1) of the old Limitation Act also does not avail the decree-holder. According to this provision, in computing the period of limitation prescribed in any suit or application for execution ofdecree, the institution or execution of which has been stayed by injunction or order the time of continuance of the injunction or order shall be excluded. For the present the question is not of exclusion of limitation for purposes of application for execution of a decree or any suit. Nor may Section 5 of the old Act be said to be of avail. That related to any appeal or application for a review of judgment or for leave to appeal or any other application to which this section might be made applicable by or under any enactment for the time being in force. Nothing contained in the Act aforesaid extended, Section 5 to applications made therein. It is true that Section 5 of the new Limitation Act, 1963 is wider in scope covering as it does any appeal or any application, other than the application under Order 21 C. P. C. but this having come into force only on 1-1-1964 is inapplicable to the instant case.

15. Coming now to the ground No. 2 raised for the appellant, it has been urged that the property in respect of which preliminary decree was passed has ceased to exist. In so far as the interest in the zamindari property specified in Schedule 'A' is concerned, there is no dispute. The right, title and interest of the intermediary has vested in the State free from encumbrance and a decree-holder in respect thereof is, therefore, not in possession to proceed against the same vide Rana Sheo Ambar Singh v. Allahabad Bank Ltd. : [1962]2SCR441 . The appellant's interest is confined to the bunglow No. 245 situate in the Cantonment Meerut. He has asserted that the entire construction is new and this was got rebuilt by him subsequent to the purchase which he made and that in the process, he has invested nearly Rupees 40,000/-. In proof of this averment, the appellant applied for and the Court below issued Commission to Advocate for local inspection and report. The Advocate Commissioner submitted his report dated 4-3-1962 and two additional reports dated 21-5-1962 and 15-10-1962. A perusal thereof would show that he made a detailed inspection of the entire building including the floors, walls, roofing and the foundation and reported in unequivocal terms that the structure was entirely new except for the plinth of a circular room. He found the floor being of Mosaic. The walls were new. Theroofs had lintals. Bath rooms were fitted with flush system and modern sanitary fittings. There were double windows and full size almirahs. The plinth was dug also in presence of the parties and their counsel and was found to be new. It is curious that the lower appellate Court should have dismissed this with casual observation that he did not find reasons for which the Advocate Commissioner reached the conclusion. The reports were read before me in extenso and the respondents' counsel did not find out it reasonably possible to assert that they do not contain reasons or that these are not plausible to lead to the aforementioned conclusion. It is argued that the site of the bunglow be as well taken to have been mortgaged and hence the construction raised by the appellant be taken to be accretion within the meaning of Section 70 of the Transfer of Property Act. The decision in Kastoori Devi v. Guru Granth Saheb : AIR1965All193 and Nannu Mal v. Ram Chander : AIR1931All277 cited by him are based on assumption that site was as well mortgaged. The evidence however, does not bear this out in the instant case. In paragraph 3 of the objections raised by the appellant against the application under Order 34, Rule 5 it was expressly stated that the land belongs to the State and is managed by the Cantonment Board and that the same was not subject-matter of the mortgage. It is significant that in reply to these objections, the decree-holder does not assert anywhere that the site of the bungalow was as well subject-matter of the mortgage. It is argued that even if the mortgagor was a lessee, the mortgage be deemed have been made of the lessee's right. A morgtage of the lessee's rights in the land is not the same thing as that of the site or land itself and on that basis too the benefit of accretion would not extend to the decree-holder.

16. In any view of the matter, therefore, the application under Order 34, Rule 5 (3) C. P. C. was liable to be dismissed.

17. The appeal accordingly succeeds and is allowed. The application under Order 34, Rule 5 (3) C. P. C. shall stand rejected. Costs on parties.


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