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Sivan Pillai Vs. Anbayyan and ors. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai High Court
Decided On
Reported in(1976)1MLJ385
AppellantSivan Pillai
RespondentAnbayyan and ors.
Cases ReferredQazi Ghulam Amir v. Mt. Masuda Khatum and Ors.
Excerpt:
- m.m. ismail, j.1. the second plaintiff in o.s. no. 635 of 1957 on the file of the court of the principal district munsif, padmanabhapuram who lost before the courts below, is the appellant herein. the suit was instituted by the prcdecessor-in-interest of the appellant herein and during the pendency of the suit, he having died, the appellant herein was brought on record as his legal representative and as the second plaintiff to prosecute the suit. the suit was to enforce a mortgage and a preliminary decree was passed on 30th january, 1958. thereafter, in 1969, the appellant filed i.a. no. 126 of 1969 purporting to be under order 34, rule 5 of the first schedule to the code of civil procedure for passing a final decret for the sale of the property. admittedly, the amount decreed had not.....
Judgment:

M.M. Ismail, J.

1. The second plaintiff in O.S. No. 635 of 1957 on the file of the Court of the principal District Munsif, Padmanabhapuram who lost before the Courts below, is the appellant herein. The suit was instituted by the prcdecessor-in-interest of the appellant herein and during the pendency of the suit, he having died, the appellant herein was brought on record as his legal representative and as the second plaintiff to prosecute the suit. The suit was to enforce a mortgage and a preliminary decree was passed on 30th January, 1958. Thereafter, in 1969, the appellant filed I.A. No. 126 of 1969 purporting to be under Order 34, Rule 5 of the First Schedule to the Code of Civil Procedure for passing a final decret for the sale of the property. Admittedly, the amount decreed had not been paid by the respondents herein. The respondents put forward the contention that, since the preliminary decree was passed on 30th January, 1958 and since the application in I.A. No. 126 of 1969 was filed after the expiry of 3 years from the date of the decree, the said application was barred by limitation. The Courts below accepted this contention of the respondents herein and dismissed the application filed by the appellant. Hence the present second appeal by the applicant in I.A. No. 126 of 1969 who was the second plaintiff in O.S. No. 635 of 1957.

2. The only question for consideration is whether the said I.A. filed by the appellant herein can be said to be barred by limitation.

3. Admittedly, in this case the preliminary decree, dated 30th January, 1958 Was not passed in accordance with the provisions contained in Order 34 of the First Schedule to the Code of Civil Procedure. Order 34 of the First Schedule to the Code of Civil Procedure deals with suits relating to mortgages of immovable properties. That order covers all types of suits in relation to a mortgage, such as, a suit by the mortgagee for recovery of the money or for sale of the property or for foreclosure. Equally, it deals with a suit by the mortgagor for redemption. In different rules of that Order specific provisions have been made as to the manner in which a suit on a mortgage can be disposed of depending upon the question whether the suit was for an enforcement of a mortgage by way of foreclosure or sale or whether it was a suit for redemption by the mortgagor. All that is necessary for the purpose of the present second appeal is to point out that the said Order contemplates the disposal of the suit in two stages by passing a preliminary decree in the first instance and passing a final decree ultimately. With regard to each one of the types of the suits referred to already, the Order itself indicates what should be the contents of the preliminary decree as well as the final decree. As far as the present case is concerned, we are concerned with a suit for the enforcement of a mortgage by the sale of the mortgaged property. Order 34, Rule 4(1) dealing with a preliminary decree in a suit for sale states that the Court shall pass a preliminary decree to the effect mentioned in Clauses (a), (6) and (c)(i) of Sub-rule (1) of Rule 2, and further directs that, in default of the defendant paying as therein mentioned, the plaintiff shall be entitled to apply for a final decree directing that the mortgaged property or a sufficient part thereof be sold, and the proceeds of the sale, after deduction therefrom of the expenses of the sale, be paid into Court and applied in payment of what has been found or declared under or by the preliminary decree due to the plaintiff, together with such amount as may have been adjudged due in respect of subsequent costs, charges, expenses and interest, and the balance, if any, be paid to the defendant or other persons entitled to receive the same. Rule 2(1) of Order 34 deals with a preliminary decree in a suit for foreclosure and states that:

In a suit for foreclosure, if the plaintiff succeeds, the Court shall pass a preliminary decree-

(a) ordering that an account be taken of what was due to the plaintiff at the date of such decree for-

(i) principal and interest on the mortgage,

(ii) the costs of the suit, if any, awarded to him, and

(iii) other costs, charges and expenses properly incurred by him upto that date in respect of his mortgage security, together with interest thereon; or

(b) declaring the amount so due at that date; and

(c) directing:

(i) that, if the defendant pays into Court the amount so found or declared due on or before such date as the Court may fix within six months from the date on which the Court confirms and countersigns the account taken under Clause (a), or from the date on which such amount is declared in Court under Clause (b), as the case may be and thereafter pays such amount as may be adjudged due in respect of subsequent costs, charges and expenses as provided in Rule 10, together with subsequent interest on such sums respectively as provided in Rule 11, the plaintiff shall deliver up to the defendant, or to such person as the defendant appoints, all documents in his possession or power relating to the mortgaged property and shall, if so required, retransfer the property to the defendant at his cost, free from the mortgage and from all incumbrances created by the plaintiff or any person claiming under him or where the plaintiff claims by derived title, by those under whom he claims, and shall also, if necessary, put the defendant in possession of the property.

A combined reading of Order 34, Rule 2(1) Clauses (a), (b) and (c)(i) and Rule 4(1) in so far as a suit relating to enforcement of a mortgage by the sale of the mortgaged property is concerned, will involve (i) the Court passing a preliminary decree ordering that an account be taken of what was due to the plaintiff the date of such decree for the principal and interest on the mortgage; (it) or declaring the amount so due at that date; (iii) directing that if the defendant pays the amount into Court so found or declared due on or before such date as the Court may fix within six months from the date on which the Court confirms and countersigns the account taken under Clause (a), or from the date on which such amount is declared the Court under Clause (b); and (iv) directing that, in default of the defendant paying as therein mentioned within the time prescribed, the plaintiff shall be entitled to apply for a final decree directing that the mortgaged property or sufficient part thereof be sold and also the manner in which the proceeds of the sale should be applied. Form No. 5 in Appendix D to the Code of Civil Procedure gives the form of preliminary decree for sale under Order 34, Rule 4 where accounts are directed to be taken and Form No. 5 A of the same Appendix gives the form of preliminary decree for sale under Order 34, Rule 4 when the Court declares the amount due. Clauses 2 and 3 of this Form are as follows and they incorporate the provisions contained in Order 34, Rule 4 read with Rule 2, Civil Procedure Code.

2. And it is hereby ordered and decreed as follows:

(i) that the defendant do pay into Court on or before the...day of...or any later date up to which time for payment may be extended by the Court, the said sum of Rs....

(ii) that, on such payment and on payment thereafter before such date as the Court may fix of such amount as the Court may adjudge due in respect of such costs of the suit and such costs, charges and expenses as may be payable under Rule 10 together with such subsequent interest as may be payable under Rule 11 of Order 34, of the First Schedule to the Code of Civil Procedure, 1908, the plaintiff shall bring into Court all documents in his possession or power relating to the mortgaged property in the plaint mentioned and all such documents shall be delivered over to the defend ant or to such person as he appoints, and the plaintiff shall; if so required recovery or retransfer the said property free from the said mortgage and clear of and free from all incumbrances created by the plaintiff or any person claiming under him or any person under whom he claims and snail if so required, deliver up to the defendant quiet and peaceable possession of the said property.

3. And it is hereby further, ordered and decreed that, in default of payment as aforesaid, the plaintiff may apply to the Court for a final decree for the sale of the mortgaged property; and on such application being made, the mortgaged property or a sufficient part thereof shall be directed to be sold and for the purposes of such sale the plaintiff shall produce before the Court or such officer as it appoints all documents in his possession or power relating to the mortgaged property.

In the present case, admittedly the preliminary decree that was passed on 30th January, 1958 has not been in terms of Order 34, Rule 4 as well as Form 5-A of Appendix D to the Code of Civil Procedure. Under these circumstances, the question for consideration is whether the application filed by the appellant herein in 1969 for passing a final decree can be said to have been barred by limitation at all.

4. Before I deal with this question, I may straightway mention certain admitted and well-settled principles. Not merely a suit on a mortgage, but also a partition suit as well as a suit for dissolution of partnership and accounts involve the passing of a preliminary decree in the first instance and thereafter a final decree. Another principle that has been settled is that an application for passing a final decree in the suits mentioned above is not an application in execution of the decree; but it is only an application in a pending suit. Thus, it is clear that the passing of a preliminary decree, does not terminate the suit and notwithstanding the preliminary decree, the suit is pending and the suit is terminated or comes to an end only by the passing of the final decree. A perusal of the various rules contained in Order 34 makes it clear that whatever the nature of the suit on a mortgage, in every suit that Order contemplates the passing of a preliminary decree in the first instance and thereafter the passing of a final decree. Therefore, it clear that Order 34 itself expressly contemplates the passing of a final decree as the only method of terminating a suit in which a preliminary decree has already been passed. As far as the suit for partition is concerned, it has been held by several decisions that there is no period of limitation for the application for passing a final decree. Similarly, an application for passing of a final decree in a suit for dissolution of partnership and accounts is also not governed by any period of limitation. However, as far as a suit on a mortgagees concerned, it has been held by Courts in this country that Article 181 of the First Schedule to the Limitation Act, 1908, corresponding to Article 137 of the Schedule to the, Limitation Act, 1963, applies to an application for the passing of a final decree. In this case, the application was for passing a final decree directing the sale of the property, on default committed by the mortgagor in paying the amount mentioned in the preliminary decree. Article 137 of the Schedule to the Limitation Act, 1963 reads as follows:

'137. Any other Throe When the application for years right to apply which no period of accrues.' limitation is provided elsewhere in this division.

Thus, it is clear that this is a residuary Article not specifically dealing with an application for the passing of a final decree in a mortgage suit and it is by interpretation of Courts that this Article has been held to apply to an application for the passing of a final decree. The period of limitation commences, under the terms of the entry in the third column, when the right to apply accrues, namely, in the case of an application for the passing of a final decree directing the sale of hypotheca, from the date fixed for payment of the mortgage amount in the preliminary decree, if within the time so fixed, the defendant does not pay the amount. Within the period of 3 years from that date, if the application, for passing a final decree is not filed, it has been held that such an application will be barred by limitation. It is too late in the day for questioning the correctness of the view that Article 181 of the old Limitation Act or Article 137 of the new Limitation Act will apply to such an application though it does not appear that a particular feature peculiar to suits of this nature has been considered in the past. As I pointed out already, whether it is a suit for partition or a suit for dissolution of partnership and accounts or a suit on a mortgage the suit does not terminate on the passing of the preliminary decree, but terminates only on the passing of the final decree. In a suit on a mortgage, after the passing of the preliminary decree, if the decree-holder-plaintiff does not apply for the passing of a final decree within the period prescribed by Article 181 of the old Limitation Act or Article 137 of the new Limitation Act and on that ground the said application is dismissed as barred by limitation, what happens to the pending suit itself does not appear to have been considered so far. I gave an opportunity to counsel on both sides to draw my attention to any decision which has considered this aspect to the matter; but the Learned Counsel on both sides represented to me that they were not able to came across any decision which has considered this question. If the analogy of the partition suit is taken, once a preliminary decree declaring the shares of the parties has been passed, that suit is said to be pending till a final decree is passed. And there being no period of limitation prescribed for filing an application for final decree in such a suit, the suit will be pending till a final decree is actually passed and there is no compulsion on any of the parties to the preliminary decree to apply for a final decree within a particular time. This situation has been actually taken into account by this Court in framing the Civil Rules of Practice and Circular Orders. In Rule 26, it is stated:

26. Proceedings not to be adjourned sine die or struck off the file. - No suit, appeal, matter, or proceeding, shall, under any circumstances whatever, be adjourned sine die or struck off the file; and if, by inadvertence, a day certain for the further hearing is not fixed by the Court, or a case is ordered to be struck off the file, the case shall be posted and come on for hearing one month from the day on which it was before the Court, or, if the Court is then closed, on the next day thereafter on which the Court is sitting:

Provided that in a suit for partition in which a preliminary decree has been passed the Court may adjourn the proceedings sine die, with liberty to any of the parties to whom shares have been allotted to apply for the passing of a final decree.

Therefore, with regard to a suit for partition, once a preliminary decree has been passed, it has to be adjourned sine diet with liberty to any of the parties to whom shares have been allotted to apply for the passing of a final decree. If the parties to whom shares have been allotted under the preliminary decree do not apply for the passing of a final decree within a reasonable time, the Code does not confer a power on the Court to dismiss that suit on the ground that nobody has applied for the passing of the final decree, either suo motu or on the application of any one of the parties to the suit. So also even though Order 34 of the First Schedule to the Code of Civil Procedure elaborately deals with the manner of disposal of a suit on a mortgage, it does not contain any provision for dismissing a suit on a mortgage in which a preliminary decree has been passed already, on the ground that the decree-holder had not applied for the passing of a final decree within the time prescribed by law, either suo motu or on the application of the judgment-debtor. As a matter of fact, once the application made by a 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. I may also mention in this context that even though Order 34, Rule 2(1) read with Rule 4(1), Civil Procedure Code contemplates a Court fixing a date within 6 months before which the amount determined by the Court or declared by the Court should be paid by the mortgagor, at every stage, there is provision in that Order itself for extending the time so fixed. As a matter of fact, even in a case where a sale has already been ordered and has been held, there is a provision for payment of the amount due by the mortgagor before the confirmation of the sale All these may indicate that the judgment-debtor has an opportunity of paying the amount not merely within the time prescribed under Order 34, Rule 2(1) read with Rule 4(1), Civil Procedure Code or within the extended time, but also even before the confirmation of the sale itself.

5. It is these features that are present in Order 34, which had been considered by Somayya, J., in Angammal v. Muhammad Sulaiman Lebbai : AIR1946Mad38 . In that case, a preliminary decree for redemption of a usufructuary mortgage was passed on 15th October, 1935, and the time fixed for payment was 15th January, 1936. The plaintiff who was the mortgagor did not deposit the amount by the date fixed, nor did she ask for extension of time under Order 34, Rule 7(2) of the Civil Procedure Code. She deposited the amount towards the end of 1942 and then applied under Order 34, Rule 8 of the Code asking the Court to pass a final decree with a direction to the defendant to deliver the mortgaged property to her Somayya, J., held that she was entitled to the remedy asked for by her in the petition and the outer limit beyond which payment under Rule 8, Sub-rule (1) cannot be made, is the passing of a final decree debarring the plaintiff from all right to redeem the mortgaged property or the confirmation of a sale held under Rule 8(3) of Order 34 of the Code. The learned Judge also stated that the mortgagor was not bound to take out an application within three years of the time for payment fixed by the preliminary decree and that she was entitled to deposit the amount so long as the final decree was not passed.

In the course of his judgment, the learned Judge stated:

Even if we take it that in the case of a decree for redemption of a usufructuary mortgage, the defendant has no right of asking the suit to be dismissed for nonpayment by the mortgagor of the amount decreed the suit will have to be considered to be pending and the mortgagor will have the right of paying the amount at any time. As I pointed out above, in the case of a mortgage by conditional sale, if after a preliminary decree for redemption, the mortgagor does not pay and the mortgagee does not ask for final decree for foreclosure within the time available to him, the result may be that the suit should be considered to be pending as it has been properly terminated. In that case the mortgagor would have the right of payment at any time under Rule 8(1). Similarly in cases where the defendant-mortgagee can ask for a final decree for sale. I do not see therefore any substance in the argument based on the possibility of payment at any time. This may be no doubt very inconvenient. But the Legislature has not provided that the suit may be terminated if neither the mortgagor nor the mortgagee obtained a final decree. The Privy Council has ruled that in a case of a preliminary decree for partition the suit cannot afterwards be dismissed for non-prosecution and must be kept pending. The same result may follow in cases of redemption suits where after a preliminary decree, no action is taken by the parties. It may well be that as the rights of the parties are declared by the preliminary decree, the suits cannot be dismissed for non-prosecution.

Whatever that may be, so long as the suit is pending, the mortgagor has the right expressly given to him under Rule 7(2) and under Rule 8(1) of Order 34, Civil Procedure Code. The whole scheme of Order 34, Civil Procedure Code, is to give the mortgagor an opportunity of getting the time fixed in the preliminary decree for payment of the amount extended. In case of suits by the mortgagee for foreclosure or sale, provision is made for such extension at the instance of the mortgagor on his showing good cause. Rule 2(2) provides for such extension in a suit for foreclosure. Rule 4(2) provides for similar power in a suit for sale. Without the necessity of showing good cause, the mortgagor is also given by Rule 3 opportunity of paying the amount decreed at any time before a final decree debarring the defendant from all right to redeem the mortgaged property is passed. Similarly in suits for sale the code goes further and Rule 5 provides that such payment may be made at any time before confirmation of a sale held in pursuance of a final decree for sale.

Likewise in suits for redemption filed by the mortgagor we have Rule 7(2) corresponding to Rule 2(2) and Rule 4(2) enabling the plaintiff-mortgagor of getting an extension of time on showing good cause at any time before a decree for foreclosure or sale is passed. Again Rule 8(1) provides just as Rules 3 and 5 that before a final decree debarring the mortgagor of all right to redeem the property is passed or before the confirmation of a sale held in pursuance of a final decree for sale passed under Rule 8(3)(b), the mortgagor may make the payment and that without the necessity of showing good cause. There can be no doubt that these double opportunities given by the Legislature were available to mortgagors suing for redemption of a usufructuary mortgage also prior to 1st April, 1930. Under the rules of Order 34, as they then stood, in a suit for redemption of a usufructuary mortgage, the defendant-mortgagee could, in case of non-payment by the plaintiff-mortgagor, ask for a final decree for sale. Why this was omitted it is difficult to see. Anyway while omitting the right of a usufructuary mortgagee to ask for a final dectee for sale, the Legislature left Rules 7(2) and 8(1) as they stood. There is no intelligible or apparent reason why only in the case of redemption of a usufructuary mortgage, the mortgagor should not have the right of getting an extension even by showing good cause under Rule 7(2) or without showing any cause under Rule 8(1). Under the Code as it stood prior to 1st April, 1930, both Rules 7(2) and 8(1) applied to cases of usufructuary mortgagees because a final decree for sale was expressly granted to a usufructuary mortgagee defendant in a suit for redemption of such a mortgage.

I have extracted in extenso from the judgment of Somayya, J., only for the purpose of showing the scope of the various rules contained in Order 34 as well as for pointing out that once a preliminary decree is passed, the application for passing a final decree is an application only in a pending suit and the Code itself has not provided for the dismissal of that suit after the passing of the preliminary decree on the ground that the decree-holder had not applied for a final decree. The general question, when a preliminary decree has been passed, the suit is still pending and there is no provision in the Code of Civil Procedure for dismissing the suit after the preliminary decree on the ground that the decree - holder has not applied for the passing of the final decree, whether there is any justification at all for applying any Article prescribing a particular period of limitation in the Limitation Act, to an application for passing a final decree, since the failure to apply for the passing of the final decree within the time prescribed by the Article does not terminate the suit, but only produces the anomalous situation of there being a fruitless preliminary decree and the suit itself pending permanently may have to be considered at the appropriate level. It is against the above background, I propose to consider the question that arises in the present case.

6. It is admitted that there is no direct authority of this Court on this point. The only direct authority which is available in this case is that of the Allahabad High Court in Qazi Ghulam Amir v. Mt. Masuda Khatum and Ors. : AIR1943All321 . In that case, a preliminary decree fixed neither the amount due nor the date within which it should be paid. Under those circumstances, the question that arose for consideration was whether the application for passing a final decree can be said to have been barred by limitation under Article 181 of the Limitation Act, 1908. The Allahabad High Court pointed out that in the absence of a date fixed for payment of the amount, it could not be said that there had been a default in the payment which was a condition precedent for the accrual of a right to apply for final decree, vide Rules 4 and 5 of Order 34 and paragraph 3 of Form No. 5-A, Appendix D to First Schedule of the Code. The Court proceeded to state:

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 181, Limitation Act, for the making of an application for the preparation of a final decree.

7. Mr. S. Padmanabhan, the Learned Counsel for the respondents conceding that this is the only direct decision available on the point and that decision is in favour of the contention of the appellant, contends that the fixing of a date within which the amount should be paid is not mandatory under the provisions of Order 34 of the Code, and, therefore, it Cannot be contended that the right to apply for the passing of the final decree had not accrued in this particular case. According to the Learned Counsel, when the Court does not fix the time within which the amount should be paid, then the time begins to run from the date; of the decree itself. 1 am unable to accept this argument. The provisions of Order 34 repeatedly refer to the default to pay the amount within the date fixed or the extended time and, therefore, there is no scope for the argument that when the Court fails to fix the date within the outer limit of 6 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.

8. Mr. Radmanabhan, the Learned Counsel for the respondents, then contended that in a case where against a preliminary decree, an appeal has been preferred and the appeal is dismissed, then it has been held that the time begins to run from the date of the appellate decree itself and if that analogy is applied, in this case also, the time must begin to run from the date of the preliminary decree. I am unable to accept this argument either. Where the appeal is preferred against the preliminary decree and the appellate Court dismisses the appeal, the appellate Court will have to necessarily fix a fresh date within which the losing party will have to pay the amount, because by the time the appeal is disposed of, the 'date fixed by the original Court in the preliminary decree would have already passed. Only in the event of the appellate Court not fixing any date, the Courts have held that the time will begin to run from the date of the appellate decree itself. There is no analogy between this situation and the situation resulting from the trial Court itself failing to fix a date for payment of the money as contemplated by the various provisions contained in the rules of Order 34. In view of this position, I hold that the application for final decree made by the appellant in this case was not barred by limitation.

9. I may also point out certain general considerations which also favour the view I have taken in favour of the appellant. I have said enough already to show that under the rules of Order 34, the Court is bound to fix a date within the outer limit of 6 months for the mortgagor to pay the amount in question. If the Court fails to discharge its duty, the general principle is that no litigant should suffer as a consequence of the failure of the Court or the mistake committed by the Court. Secondly, it would have certainly been open to the appellant herein to apply for amendment of the decree to the trial Court, so that the decree could be made in conformity with the requirements of Order 34 as well as Form 5-A already referred to. It is conceded that for applying for amendment of the decree, there is no period of limitation whatever. Therefore if the appellant had first applied for an amendment of the decree and had got the decree amended and thereafter, on default committed by the respondents herein to pay the amount within the date fixed by the amended decree, made the application for passing the final decree, it could not be said that the present application filed by the appellant herein was barred by limitation. These considerations also will support the view taken by the Allahabad High Court already referred to and therefore, looked at from any point of view, the application filed by the appellant herein for passing a final decree for the sale of the property cannot be said to by barred by limitation.

10. Under these circumstances, the appeal is allowed and the judgment and decree of the Courts below arc set aside and the appellant herein will be entitled to a final decree for the sale of the pro-party as prayed for in the I.A. and the learned District Munsifis directed to take the I.A. on his file and pass a final decree for the sale of the property in terms of the provisions contained in Order 34 of the Code of Civil Procedure as wall as the Forms contained in Appendix D of the First Schedule to the Code. There will be no order as to costs.


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