1. The main question which arises for determination in this appeal is whether the Respondent's application for final decree for sale of certain mortgaged properties, in a mortgage suit, is barred by limitation. Bachawat J. who originally heard this application, has passed a final decree for sale overruling the contention of the mortgagor appellant that the application is barred by limitation.
2. Before us, the learned Advocate for the appellant has raised the question of limitation and another point which was not raised before the trial Court, namely, whether the notice of the application for final decree purported to have beengiven by the respondent under Section 34 of the Bengal Money Lenders Act, 1940, is invalid, not being in the form prescribed by the Rules framed under the provisions of the Bengal Money Lenders Act.
3. Adverting to the question of limitation, it appears that the preliminary decree for sale was passed on the 10th July 1953 under Section 34 of the Bengal Money Lenders Act read with Order 34 of the Code of Civil Procedure, declaring a sum of Rs. 16354/5/8 pies as being due for principal and interest. The decree further provided inter alia as follows:--
'And it is hereby further ordered and decreed that the defendant do by four equal instalments pay into court to the credit of this suit the sum of Rs. 16354/5/8 pies, the first of such instalments to be paid by the 1st day of December 1953 and the subsequent instalments by the first day of December in each year and the taxed costs of the suit awarded to the plaintiff.....And it ishereby further ordered and decreed that in default of payment as aforesaid, the plaintiff may after giving notice to the defendant and subject to the provisions of the Bengal Money Lenders Act, 1940, apply to the Court for a final decree for the sale of the mortgaged properties .....'
4. The appellant defaulted in making payment of all the four instalments which were payable on the 1st December, 1953, 1st December 1954, 1st December 1955 and 1st December 1956. Thereupon, the respondent who is the assignee in respect of the preliminary mortgage decree, gave notice on the 8th March 1957 of his intention to apply for a final decree for sale in terms of the provisions if Section 34 of the Bengal Money Lenders Act. The notice of motion for this application for final decree was taken out on the 15th May 1957.
5. The contention of the appellant is that upon the default being made in payment of the first instalment, the right to apply for final decree accrued on the date of the default and the period of limitation commenced to run from that date under Article 181 of the Limitation Act and as the application for final decree was not made within three years of that date, it is barred by limitation.
6. In order to examine the force of this contention, it is necessary to construe the relevant provisions of Section 34 of the Bengal Money Lenders Act under which the preliminary decree in question was passed and it will, therefore, be convenient at this stage to set out the relevant provisions hereunder:--
'34(1) Notwithstanding anything contained in any law for the time being in force, or in any agreement, the Court shall
(a) in suits in respect of loans to which the provisions of Order XXXIV of the First Schedule to the Code of Civil Procedure, 1908. apply, on the application of the defendant and after hearing the plaintiff, notwithstanding the limit of six months provided therein, direct at the time of the passing of the preliminary decree under rule 2 or rule 4 of the said Order to the effect mentioned in Sub-Clause (i) of Clause (c) of Sub-rule (1) of the sai3 rule 2,--
(i) that the payment of the amount found or declared due under Sub-rule (1) of Rule 2 or sub-rule (1) of Rule 4 of the said order, as the case may be, is to be made, subject to such conditions as the Court may impose in such number of annual instalments and on such dates as the Court thinks fit having regard to the circumstances of the plain-tiff and the defendant and the amount of the decree; and
(ii) that in default of payment of any such instalment the plaintiff shall, after giving to the defendant such notice as may be prescribed, be entitled to apply for a final decree under Sub-clause (ii) of Clause (c) of Sub-rule (1) of the said Rule 2 or undef Sub-rule (1) of the said Rule 4, as the case may be, and the date of such default shall be deemed to be the date fixed under Sub-clause (i) of Clause (c) of Sub-rule (1) of the said Rule 2 for payment of the whole amount found or declared due under or by the preliminary decree:
Provided that nothing in this clause shall affect the power of the Court to allow extension oftime under Sub-rule (2) of rule 2 or Sub-rule (2) oi rule 4 of the said order:
Provided further that if the defendant, after receiving the notice referred to in Sub-clause (ii) and before a final decree is passed, makes payment into court of the amount due from him in respect of any such instalment, the payment of such instalment shall not be deemed to be in default and the court shall not pass a final decree.'
7. An analysis of the different provisions of this Section 34 makes it clear that the object of the framers of the section was to give an opportunity to the judgment debtor to pay the decretal amount by certain annual instalments and, in the event of there being any default in payment of any of such instalments, to give a further opportunity to the judgment debtor to make good the default of any particular instalment by paying the money into court on receiving notice of the decree-holder's intention to apply for a final decree for sale. The mortgagee decree-holder is, therefore, under an obligation imposed by the statute to give the prescribed notice to the judgment debtor and afford him an opportunity to make good the default before he is entitled to make an application for final decree. The decree-holder cannot immediately upon default being committed and without giving the prescribed notice apply for final decree and thus deprive the judgment debtor of the opportunity to pay up the instalment in arrear. So, there can be no doubt that the giving of the prescribed notice is a condition precedent to the making of an application for final decree but the question that arises further is when can the right to apply for final decree be said to accrue for the purpose of the Indian Limitation Act. Can it be suggested that the decree holder by postponing the service of the prescribed notice for an indefinite period enlarge the period of limitation according to his own sweet will? It appears to me that the reasonable construction to be put upon Section 34(1)(a)(ii) is that the decree holder cannot by his own unilateral act of giving the prescribed notice enlarge the period of limitation. Normally, when a default is made in paying the amount due under a preliminary mortgage decree, the right to apply for final decree accrues on the date of the default and under Article 181 of the Limitation Act, the application has to be made within three years from the date of the accrual of the right to apply. As no period has been fixed by Section 34 of the Act for giving the prescribed notice, such notice can be given simultaneously with the first default being committed. There is nothing to prevent the decree holder from giving the prescribed notice at the very moment when the default is made. So there is no doubt that the right to apply for final decree accrues upon the first default being committed. Under Section 34(1)(a)(ii), upon default being made in payment or any instalment, thewhole of the amount payable under the decree becomes due on the date of such default and the right to apply, in my view, therefore accrues once and for all on the date of the default.
8. In a decision reported in Narain Tewari v. Brij Narain, AIR 1931 All 326 where under the terms of a decree the right of the decree-holder to recover some property in the bands of the defendants was made dependent or contingent upon tile decree-holder paying a certain sum of money to the defendants, but no date for payment was specified, it was held that the decree-holder was entitled to pay the money on the very date when the decree was passed and ask for possession immediately after such payment and so the right to make an application for execution accrued to the decree-holder immediately and at once and the decree-holder was not entitled to prolong the date of payment by inaction or laches. A similar view was taken in a decision of the Bombay High Court reported in Gopal Sattu v. Dnyanu Maruti, ILR (1938) Bom 649 at p. 654: (AIR 1938 Bom 367 at p. 369). It may be noted, however, that the views expressed in those cases turned on the construction of the particular provisions of the decrees with which the Courts were concerned in those cases. But it appears to me that the principle of construction which was adopted in those cases is equally applicable to the construction of the preliminary mortgage decree which is before us now. It is quite clear that the decree-holder in respect of a decree passed under the provisions of Section 34 of the Bengal Money Lenders Act has no right to postpone applying for final decree by refraining from giving the prescribed notice for an indefinite length of time. It is only when after the prescribed notice is given and the judgment-debtor makes good the default bf paying the instalment in arrear that the decree-holder's right to obtain a final decree is taken away and he is prevented from getting a final decree passed by the Court. He has then to wait for further default in payment of the subsequent instalments and it is upon such further default being committed and upon his giving the further notice as prescribed in Form No. 15 prescribed under Rule 24(1) of the Rules framed under the Bengal Money Lenders Act that he will be entitled to apply for final decree again. In my view, the right to apply For final decree accrues upon the default being committed in respect of the particular instalment and limitation begins to run under Article 181 from the date of such default. If deault is made with regard to payment of the first instalment, the right to apply for final decree under Article 181 accrues On the date of such default. If default is made in payment of the second instalment, the right to apply accrues on the date of the second default and so on. The question as to when the decree-holder becomes entitled to apply for a final decree for sale of mortgaged properties came up for consideration before Division Benches of this Court and also before a single Judge of this Court in cases reported in Pramatha Nath Sanyal v. Sailesh Chandra : AIR1943Cal214 and Ranga Lal Mondal v. Narendra Nath Ghosh : AIR1944Cal414 and in the case reported in Deba-brata Mukherjee v. Satish Chandra Banerjee, 52 Cal WN 97: (AIR 1949 Cal 304). The first of these cases referred to above is a decision of a Division Bench of this Court presided over by Mukherjea, J. and Pal, J. It was laid that when a default has occurred in the payment of an instalment payable under a mortgage decree passed under Section 34(l)(a) of the Bengal Money Lenders Act, the Court has no power under the first proviso to sub-section (1) (a) (ii) to grant an extension of time in respect ofpayment of any particular instalment which is in default. The proviso only empowers the Court to allow extension of time for payment of the whole amount which on such default becomes payable by the operation of Section 34(1)(a)(ii). It was further held that any default being committed in respect of any particular instalment, the decree-holder becomes immediately entitled to apply for a final decree but the judgment-debtor may under the second proviso yet prevent such decree being passed by paying into Court only the instalment in default. In the second case referred to above which was a decision of a single Judge (Das, J. as His Lordship then was) the question of construction of the provisions of Section 34 of the Bengal Money Lenders Act in relation to the giving of prescribed notices under the said section came up for consideration and the preliminary decree that was passed in that case under Section 34 of the Bengal Money Lenders Act provided bv clause 5 that in default of payment of any one of the instalments or the taxed costs, the plaintiffs might apply to the Court after giving notice to the defendant for a final decree for the sale of the mortgaged property, subject to the provisions of the Bengal Money Lenders Act. In construing this provision the learned Judge made the following observations:
'If the defendant does not pay any of the instalments of claim or any of the instalments of costs, Clause 5 of the decree at once entitles the plaintiffs to apply for a final decree.'
9. In the last mentioned case which is also a decision of a Division Bench of this Court (Mukherjee, J. and Ormond, J.) the decision reported in : AIR1943Cal214 was followed and it was observed that in default of payment' of any instalment as provided in the preliminary mortgage decree passed under S. 34 of the Bengal Money Lenders Act, the decree-holder becomes immediately entitled to apply for a final decree. It may be pointed out that in these cases the view expressed to the effect that upon default being made the decree-holder becomes immediately entitled to apply for final decree was so held because as soon as the default had occurred, the decree-holder had a right to give the prescribed notice of his intention to apply for final decree at once.
10. It has been contended that the decision of. my learned brother P.B. Mukharji, J. reported in Ganendra Kumar v. Narayan Chandra, : AIR1953Cal562 is inconsistent with the Bench decisions-cited above and it appears that the learned trial Judge also seems to assume that there is some inconsistency between tbe decision of my learned brother and the Bench decision reported in : AIR1943Cal214 . In my opinion, this misapprehension of the learned Judge is due to his failure to appreciate the true scope and implications of the decision of my learned brother and of the Bench decisions. In the case reported in : AIR1953Cal562 the question which was raised for determination was whether the application for a final decree was not maintainable because the time specified in the notice given under Section 34(1)(a)(ii) expired before this application was moved in Court. In considering this question my learned brother made the following observations:
''Section 34(l)(a)(ii) Bengal Money Lenders. Act makes it a condition precedent that the plaintiff-decree-holder before exercising his right to apply for a final decree shall give the prescribed notice. Two conditions, therefore, must be satisfied under this clause before his right to apply for the final decree accrues. First, there must be adefault in the payment of the instalment. Secondly, the decree-holder must give the prescribed notice. So far as the Statute is concerned, these are all the limitations imposed thereunder. The Statute says that 'after' giving the notice the mortgagee decree-holder shall be entitled to apply for the final decree and does not prescribe the time within which to apply once the notice is given which, therefore, remains governed by Article 181 Limitation Act providing a period of three years from the time when the right to apply accrues. The Bengal Money Lenders Act and specially Section 34(1)(a)(ii) thereof do not sav that when the notice is once given the plaintiff's right to apply will further be limited by the time specified in the notice in derogation of Article 181 of the Limitation Act.'
11. In a subsequent paragraph of that judgment the following observations occur:
'There is yet another reason why the time mentioned in the statutory notice should not be read as prescribing a period of limitation. The prescribed statutory notice does not itself lay down the period of time within which the application is to be made. As I have said, the party notifying ineach case by his own hand puts whatever time he chooses to fix. If this were intended to be a limitation as hard as one under the Limitation Act, then the result will be that there will be varying periods of limitation for applying for a final decree according to the whims of the mortgagee decree-holders and according to such times as their fancies dictate. Some may put in the statutory notice 7 days, others a fortnight or one year or 12 years. Is it going to be said that if 12 years' time is given in the notice that will keep alive the right to apply for final decree which normally would have been barred by three years under Article 181 of the Limitation Act. This will lead to most absurd and ridiculous result. This will lead to most unequal laws for the same classes of people. I, therefore, hold that filling up the blank space providing the time within which the application is to be made remains a private act of the party giving the notice and by no such: private act, agreement or consent can the period of limitation as imposed by the Limitation Act be reduced or enlarged or altered.'
12. So it is clear from the above observations of my learned brother that his view was that the fact of the giving of the prescribed notice had not the effect of arresting the running of the normal period of limitation or enlarging the period of limitation as provided in Article 181 of the Limitation Act. This is the net effect of the observations made in this case though no doubt if particular sentences are read in an isolated manner and taken out of the context in which they appear a distorted meaning can be given to the expressions used in this judgment, The only question that had to be considered in this case was whether by specifying a particular period in the blank space in the prescribed form of the notice (being Form No. 15) the decree-holder could override the effect of Article 181 of the Limitation Act and the further question before him was whether the decree-holder was bound to apply within the period specified by him in the prescribed notice and if he did not do so, whe-ther his application would fail on that ground. It is while considering these questions that my learned brother had made the above observations to which I have already referred. His mind was concentrated On these questions and he had not had to consider the specific question which is before us now. I do not find anything in the observations made in this decision reported in : AIR1953Cal562 which makes, it in any way inconsistent withthe Bench decisions to which reference has been made in an earlier part of this judgment. There is no doubt that the view expressed by the learned Judges of the Division Bench to the effect that the decree-holder becomes immediately entitled to apply for final decree upon a default being committed is based on the fact that the service of the prescribed notice as contemplated in Section 34(1)(a)(ii) is a condition precedent to the right to make the application for final decree. But as they thought that the prescribed notice could be given at the very moment that the default was committed, they expressed the view that the right to apply for a final decree accrues to the decree-holder immediately upon the default being committed.
13. Our attention was drawn to two decisions of the English courts on which reliance has also been placed by the learned trial Judge in coming to the conclusion that the application for final decree is not barred by the law of limitation. The first case is that of Thorpe v. Coombe, (1826) 29 R. R. 485. This was a case where the question arose as to when the statute of limitation begins to run in respect of a cause of action based on a promissory note which was made payable two years after demand. It was held by Mr. Justice Bayley that in this case the cause of action did not arise until the two years after demand had elapsed and consequently the Statute of Limitation did not begin to run until the two years after demand had elapsed. I cannot see what relevancy this decision has in construing the provisions of the decree with which we are concerned in ihis case and which was passed under the provisions of Section 34 of the Bengal Money Lenders Act.
14. The other decision is reported in Hampstead Corporation v. Gaunt, 1903-2 KB 1. In this case, section 105 of the Metropolis Management Act, 1855, as amended by S. 77 of the English Act of 1862, had come up for consideration. It was held that an action would lie to recover the apportioned part of certain expenses which were incurred for paving a new street against the owner and that the statute of limitation would not begin to run in favour of the defendant, if at all, until payment was demanded from him. Wright J. upon construing the particular section held that the cause of action was not complete until there was demand and so the statute of limitation would not run at all until the date of the demand. So this case also has no bearing upon the question of construction of the particular statute which is before us.
15. The further point that has been urged on this question of limitation on behalf of the respondent is that the preliminary decree being an instalment decree and the acceleration clause to apply for a final decree in case of default of payment of any instalment being a provision which is intended for the benefit of the decree-holder, it was optional for the decree holder to take advantage of this acceleration clause or not and as there is nothing to show that the decree holder elected to enforce this acceleration clause on the default being committed in respect of the first instalment, the decree-holder must be deemed to have condoned or waived the first default and so the application for final decree is not barred in so far as it is based on the three subsequent defaults in payment of instalments. In this connection our attention has been drawn to the three Full Bench cases reported in Rangalal Agarwalla v. Shyamlal Tamuli, 50 Cal WN 735: (AIR 1946 Cal 500), Chunilal Motiram v. Shivram Naguji, : AIR1950Bom188 and Sheo Lal v. L. Devi Das, : AIR1952All900 . In the first mentionedcase where a decree directed payment of the decretal amount by instalments on particular dates and provided that in case the judgment-debtor failed to pay any instalment within the stipulated period, the entire decretal amount would be due and a default occurred, the decree-holder had an option either to demand immediate payment of the entire amount or waive his right; but no express waiver by an affirmative act need be proved and an application, after default has occurred, for execution relating to the subsequent instalments was maintainable; but such an application would be governed by Article 182, Clause (7) of the Limitation Act, 1908, and would be within time although made beyond three years of the default, if made in respect of only the instalments which fell due within three years of the date of the application.
16. In the next case which is a Full Bench decision of the Bombay High Court, namely, : AIR1950Bom188 , it was held that where an instalment decree provides that on the 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 when the first default has occurred more than three years before the filing of the application for execution. It was further held that it is no doubt open to a decree-holder to waive the benefit of a default clause and although a default may take place, he may treat the decree as still adecree for instalments and he may pursue in execution his right to obtain instalments as and when they fall due. But once the right to enforce the default clause accrues to the decree-holder for the first time and there is no waiver of such right, time begins to run from the date of such accrual and would not be stopped by reason of subsequent defaults. So an application for execution to enforcethe default clause filed more than three years from the date of such accrual would be barred under Article 181 of the Limitation Act.
17. In the last mentioned Allahabad case, namely, : AIR1952All900 , the expression 'when the right to apply accrues,' occurring in Article 181 of the. Limitation Act, was construed and it was held inter alia that it meant the first default giving rise to the particular cause of action on the basis of which the application for a final decree is made, unless there has been waiver, express Or implied, of the first default in which case the words 'when the right to apply accrue,' would mean the nextsucceeding default which is not waived.
18. Now, these are no doubt the ordinary effects of instalment decrees containing a default clause but the question which arises is whether Section 34 of the Bengal Money Lenders Act has caused any alteration in the position. In Gourchand v. Pradyumna Kumar : AIR1945Cal6 , Das, J. had to consider the effect of Section 34 of the Bengal Money Lenders Act including the question whether the provisions of this section could be waived by any of the parties. The learned Judge in that connection had made the following observations at p. 510 (of ILR Cal): (at p. 17 of AIR) of that report:
'Section 34 is, to my mind, a typical example of a provision which, although it is contained in an Act generally based on grounds of public policy, is really capable of being waived. It is true that it opens with the usual formula, 'Notwithstanding anything contained in any law for the time being in force, or 'in any agreement' and during the argument I was inclined to think it was based on grounds of public policy. On carefully goingthrough the section, however, I find that the provisions of this section come into play only on the application of the defendant. If the defendant does not appear in the suit, the Court is not called upon to pass a decree in the form mentioned therein. If the defendant appears in the suit but does not invite the Court to pass a decree in terms of Sub-clauses (i) and (ii) of Clause (a) of Sub-section (1), the Court is again, not bound to pass such a decree, but will have to pass an ordinary decree under O. 34 of the Code of Civil Procedure. The very provision that the decree shall be passed in the particular form only on the application of the defendant clearly suggests that this section, at any rate, is not based on any ground of public policy, for, if it were, it would not have been left to the option of the defendant to decide in which form the decree would be passed. It appears to me that the provisions of this section come into play notwithstanding anything contained in any law for the time being in force or in any agreement but only on the application of the defendant. If the defendant does not choose to avail himself of this provision, which is enacted for his benefit and which is available to him for the mere asking he may please himself. In my opinion, the language used in Section 34 of this Act clearly indicates that this section is only for the defendant's benefit and is merely directory and can be waived by the defendant,'
19. So the learned Judge's view is that since it is the defendant alone who can invoke the benefit of the provisions of Section 34, it is open to the defendant to waive its provisions. This case is. however, no authority for the proposition that the decree-holder can also similarly waive the provisions of Section 34. Mr. Subimal Roy has argued that the decree-holder can also waive the provisions of Section 34 which are for the decree-holder's benefit and he lays particular stress on the expressions, 'entitled to' and 'such default,' appearing in Section 34(l)(aXii). Mr, Roy 'has also drawn our attention to the words, 'may apply,' which occur in the preliminary decree itself. To accede to this contention of Mr. Roy, will be that the efficacy of the section will be gone and the very object of the section and the scheme of the Bengal Money Lenders Act will be frustrated by the decree-holder at his own sweet will waiving or ignoring the provisions of that section for stopping or suspending the running of the period of limitation. It is true that if the borrower does not choose to avail himself at all of the benefit of the provisions of Section 34 by making an application to that effect at the time of passing of the preliminary decree, the Court is not called upon to pass a decree in the form contemplated by Section 34 of the Bengal Money Lenders Act and it can pass an ordinary preliminary decree in accordance with O, 34 of the Code but once the defendant invokes the provisions of Section 34 and a decree is passed in accordance with its provisions, the parties must be held to be bound by such provisions and their rights and obligations under the decree will be governed by. those provisions and no question of waiver can then arise inasmuch as the various provisions of Section 34 are linked with and are interdependent on one another and the disturbance of one provision will disturb the entire scheme, the structure and the integrity of that section and also the decree passed thereon. It may be pointed out further that no case of waiver has been pleaded. (See Edridge v. Seth Rustomji Danjibhoy . Moreover, in the case before us, the notice that was given on 8-3-1957, makes it clear that the respondent has based his notice on allthe four defaults and he has not waived or condoned any of the defaults. In my view, therefore, it is not open to him now to turn round and say mat lie had waived the first default. In the circumstances there can be no question that the right to apply for final decree accrued under Article 181 of the Limitation Act immediately on the first default! being committed and the application for final decree was, therefore, barred on the date on which it was brought being more than three years after the accrual of the right to apply for final decree.
20. The further point that has been raised on behalf of the applicant is, as I have pointed out already, whether the notice purported to be given on 8-3-1957 in Form XV is bad because it is based on the defaults of all the four instalments whereas the provisions of Section 34(l)(a)(ii) of the Bengal Money Lenders Act read with Form XV as prescribed by the Rules contemplate that the notice has to be given on the basis of default of a single instalment. It has been argued further that as soon as the first default occurs, the whole of the money payable under the decree becomes due and recoverable and no further question of payment of subsequent instalments can arise and so it is no longer open to the decree-holder to give a notice on the basis of the subsequent defaults. It appears to me that the appellant should not be allowed to raise this point at this stage inasmuch as if this point had been raised before the trial Court, the respondent could have served a fresh notice in accordance with the provisions of the Statute and could have made a fresh application for final decree on the basis of such notice provided, however, the application was not then barred by limitation. Furthermore, it is not necessary for the purpose of disposing of this appeal to decide this question in view of our finding on the question of limitation.
21. In the result, the appeal is allowed and the judgment and decree of the learned trial Judge are set aside. There will, however, be no order as to costs.
P.B. Mukharji, J.
22. I agree.
23. In this appeal, a short but important point of limitation arises for determination. The point is when docs the right to apply accrue under the Article 181 of the Limitation Act, for a final mortgage decree for sale when there is already a preliminary mortgage decree passed under Section 34 of the Bengal Money Lenders Act. The Limitation Act, the Bengal Money Lenders Act and the law of instalment decree invest with more than ordinary importance this short point involved in this appeal.
24. The few material dates for appreciating this point or limitation must be set out first.
25. The Preliminary mortgage decree is dated the 10th July 1953 granting four annual instalments. The first instalment was payable on the 1st December 1953, the second instalment on the 1st of December, 3954, the third instalment on the 1st December 1955 and tte fourth on the 1st December 1956. This particular decree after the first two instalments had become due and not paid was assigned to the present petitioner on the 25th November 1955. The assignee petitioner was substituted as plaintiff on the 25th February 1957 when the other two instalments, namely, the third and the fourth ones had also become due and remained unpaid. The notice under Section 34 of the Bengal Money Lenders Act was given by the respondent on the 7th March 1957 and the application for final decree for sale was not made until the 15th May 1957.
26. It is contended by the appellant mortgagor that the application for final decree is barred by limitation' under Article 181 of the Limitation Act because three years' time from the 1st December 1953, the due date for the payment of the first instalment, had expired on the date of the application for final decree i.e. the 15th May 1957.
27. Ordinarily, in a preliminary mortgage decree under Order 34, rule 2 or rule 4 of the Code of Civil Procedure, one date is fixed for payment of the entire mortgage dues. That is a date within six months from the date on which the Court confirms and countersigns the mortgage account taken under Clause (a) or from the date on which such amount is declared due by the Court under Order 34, Rule 2(1). It is not difficult in those cases to apply Article 181 because the right to apply for final decree accrues within the meaning, of that limitation from the particular date specified in Order 34, rule 2 or rule 4 of the Civil Procedure Code.
28. The difficulty arises in this case becauseof the variation introduced in this type of preliminary decree by Section 34 of the Bengal MoneyLenders Act. The essential variation introduced by Section 34 of the Bengal Money Lenders Act is two-fold: (1) by making it compulsory for the Courtto grant annual instalments in such decree to themortgagor and (2) by allowing the creditor mortgagee, in lieu of this postponement, the right toapply for final decree for sale on the default ofany one of such instalments. Section 34 has twoprovisos which are also material in first preserving the Court's power to grant extensions of timeto pay the entire mortgage debt and not partthereof and secondly, in permitting the debtormortgagor even after default an opportunity to paythe money of the first default and resist the passing of the final decree.
29. The question then is, what is the usual date from which the right to apply for final decree accrues under such a preliminary mortgage decree governed by Section 34 of the Bengal Money Lenders Act. Section 34(1)(a)(ii) of the Act first requires that there must be a default inpayment of such instalment and then it says that the plaintiff, after giving notice in the prescribed form, shall be entitled to apply for a final decree. Thirdly, it requires that the date of such default shall be deemed to be the date fixed under Sub-clause (i) of Clause (c) of Sub-rule (1) of rule 2 of Order 34 of the Code of Civil Procedure for payment of the whole amount found or declared due under or by the preliminary decree, This last provision, therefore, fixes the date on which the right to apply for final decree accrues in lieu of the date which normally would accrue under Order 34 of the Civil Procedure Code.
30. On the facts of this case, upon the failure, of the appellant to pay the first instalment on the 1st December 1953, that default fixed the date under Order 34, rule 2(1) (c) (i) of the Civil Procedure Code. By reason of the exnress statutory provision this first default made the whole amount I due payable On the date of that first default. In other words, the entire instalment scheme, which the statute had allowed to the debtor, is statutorily withdrawn by reason of his own default and the whole of the mortgage debt made due. That, in my view, fixes the time from which limitation starts running. That is the date when the right to apply for final decree accrues under Article 181 of the Limitation Act. That in order to be entitled to make that application, he has to give the further notice in the prescribed form, only meansthis that such notice has to be given within that period of limitation. It does not mean that by choosing not to give notice, the Limitation Act could be kept in abeyance by the unilateral act of the creditor. Limitation gives a very valuable right to the debtor. The Limitation Act imposes the bar from which a party against whom once it has started running cannot escape by his own unilateral act for its operation, unless of course where it is recognised by the Limitation Act itself or permitted by any other Statute.
31. The argument, that Section 34(1)(a)(ii) of the Bengal Money Lenders Act is an enabling and permissive power granted to the creditor and a power which it is optional for him either to exercise or not to do so is sound only so long as it does not exceed the period of limitation. That clause of the statute gives the mortgagee right to apply for a final decree and therefore limitation runs from that date when the right to apply accrues. The words used in the section are 'the plaintiff shall be entitled to apply for a final decree.' Nobody says that those words 'shall be entitled' should mean that the plaintiff mortgagee must be compelled to apply. They only mean that at that point of time 'his right to apply accrues within the meaning of Article 181 of the Limitation Act. When he is thus entitled to apply and he does not do so, he cannot avoid operation of limitation by waiting any more. To allow him to do so will be to prejudice the valuable right of the debtor acquired by limitation, and will be to permit him to benefit by his own failure to be diligent at the first opportunity to the detriment of the debtor. The decision of : AIR1945Cal6 is an authority for saying that this statutory provision of Section 34 of the Bengal Money Lenders Act can be waived by the debtor. It is, however, not an authority for the proposition that it can also be waived bv the creditor to the detriment of the debtor for that will defeat the very object of the Act.
32. The line of argument which the appellant advanced on the basis of the three Full Bench decisions of the Calcutta, Allahabad and Bombay High Courts has to be judged and tested in this case by the terms of the Statute applicable here. Those cases relate to construction of the different clauses of instalment money decrees independently of Statutes. They are, therefore, on that ground distinguishable. In fact, not one of these Full Bench decisions, namely, 50 Cal WN 735: (AIR 1946 Cal 5001, ILR (1953) 1 All 518: : AIR1952All900 . and Chum Lal v. Shivaram. : AIR1950Bom188 deals with, any special Statute such as the Bengal Money Lenders Act affecting the form of and the rights under the preliminary mortgage decree. The observations, however, in : AIR1950Bom188 help the appellant only to this extent that the character of instalments is completely destroyed by reason of a clause making the whole amount due by reason of one particular default. In so far as that is so. the statutory terms of Section 34(1)(a)(ii); of the Bengal Money Lenders Act is almost similar. The latter part of that clause in Section 34 of this Act is an independent clause which, says that the date of the default shall be deemed to be the date under Sub-clause (1) of Clause (c) of Sub-rule (1) of Rule 2 of Order 34 of the Civil Procedure Code for payment of the whole amount found or declared due under or by the preliminary decree. The only difference in the Full Bench case was that this was a part of the terms of the consent decree there. But the analogy is misleading because the two provisos of Section 34which I have mentioned above introduce different considerations and complications which did not fall to be judged by any of these Full Bench decisions,
33. The learned Judge, in my opinion, was clearly in error in applying the principles of Thorpe v. Coombe. 8 Dowl and Ry. 347 also reported in (1826) '29 RR 485 and of Hampsteacl Corporation case reported in (1903) 2 KB 1. Those cases proceed on an entirely different principle. In the first case the promissory note itself on which the action was based was only payable two years after demand. Therefore, the cause of action itself could not arise except from the date of demand and the expiry of two years from such demand. In the latter case the demand also was part of the cause of action itself because of the special section of a special Statute which made it clear that the Corporation could only recover the amount from the householder or owner the charges which had been notified by them in a demand from such householder or owner Here the preliminary decree itself declared the amount due and was notice enough and order enough upon the debtor to pay them on certain instalments on certain particular dates. Therefore, demand is not a part of the cause of action in this case. The right to apply for final decree certainly cannot be exercised unless a prescribed notice has been given. But this notice is not at all a demand for payment. This notice is only an intimation that an application will be made on the ground of default. It is the default which is the basis and foundation not merely of this notice but also of the application for final decree. Similarly, learned counsel's reliance on the well known decision in Joachimson v. Swiss Bank, (1921) 3 KB 110 also is of no help to him because there the question of limitation was with respect to a current account in a bank between a banker and a customer. A current banking account, for obvious reasons, does not get barred by limitation simply because it is not operated for any length of time and, therefore, a special limitation is provided both in England as well as here in Article 60 of the Limitation Act where demand itself is the basis of the cause of action and, therefore, limitation is made to run from the date of demand. Reference similarly to such Articles as Article 75 or 115 of the Limitation Act is beside the point in the facts of this case.
34. There are also other difficulties on the way of accepting the respondent's argument. If it be said that after the period of instalments ordered under Section 34 of the Bengal Money Lenders Act had expired, the respondent can fall back On any residuary rights for making an application for final decree for sale under Order 34 of the Civil Procedure Code, then the question will be from what date will the period of three years under Article 181 of the Limitation Act run? It is contended by the respondent that it will run from the last date of the limitation after which the whole amount remained unpaid. In other words, this is really another side of the shield of the argument of the respondent that the creditor can waive his rights under Section 34(1)(a)(ii) of the Bengali Money Lenders Act to apply for the final decree on the default of the instalment and wait till all the periods of different instalments are over. This argument is unsound for two reasons. In the first place to accept this argument will mean that the creditor will be in a position to claim two different periods of limitation for his final decree. One is three, years after the date when the first instalment fell due, and the second is three years after when the last instalment fell due. In this case then he willhave one limitation which will expire on the 1st December, 1956, and another limitation which will expire on the 1st December, 1960; in other words, one limitation for three years and another limitation for seven years. In my opinion a construction which will produce two periods of limitation for the same relief is neither sensible nor reasonable and should be avoided. The second reason is that the date, the passing of which under Order 34 rule 5 entitles the mortgagee to apply for a final decree, is not the date when the last instalment remains unpaid, but by Clause 2 of the Statute mentioned above the deeming date is the date of the very first instalment in payment of which default is made. Therefore, the respondent cannot fall back on any residuary right under Order 34 to make his application for final decree for sale, after all the instalments had fallen due and remained unpaid.
35. At one stage of the argument, learned counsel for the respondent argued that even if the first instalment was barred under Article 181, the second, third and fourth instalments were not barred thereunder at the time when the application for sale was made. That means we have to order sale of the mortgaged property not for the entire mortgage debt but for a part thereof. We are of the opinion that is not permissible in law not only because the mortgage is one indivisible but also because by Section 34 of the Bengal Money Lenders Act the entire mortgage debt became due on the first default and the right to sell therefore became barred on the date of this application.
36. Giving notice in the prescribed form under Section 34(1)(a)(ii) of the Bengal Money Lenders Act is certainly a condition precedent to the exercise of the right to apply for the final decree. But it does not postpone operation of the limitation in the sense that unless such notice is given, limitation does not even begin to run. The cause of action for the creditor's right to apply under Section 34(1)(a)(ii) of the Act is the debtor's 'default' mentioned therein. His own act of giving notice is no part of his cause of action to apply which cause of action is created by the debtor's default. He can give notice on the very day when default occurs and apply for final decree. To avail of that cause of action or the right to apply for the final decree, the creditor has no doubt to qualify himself by giving the notice. But that does not affect limitation. Just as in suits against the Government the presence of cause of action can be availed of by a suit by giving a notice under Section 80 of the Civil Procedure Code but that does not mean that the limitation for the cause of action does not start to run at all until the plaintiff chooses to give notice under Section 80 of the Code. But these conditions imposed by Statute do not postpone starting of limitation although the benefit of the period of currency of notices such as in Section 80 of the Code may be added to the limitation after it had started running and before such limitation has expired.
37. In conclusion I have only to say this that the Division Bench of this Court in 47 Cal WN 306: (AIR 1943 Cal 214) and 52 Cal WN 97: (AIR 1949 Cal 304) took a view of the construction of Section 34 of the Bengal Money Lenders Act which is consistent with the view we are taking. Except observing that I adhere to my decision in : AIR1953Cal562 and to the reasons I gave there I need say nothing more after my learned brother's full and exhaustive treatment of that decision.