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CASE NO.: Appeal (civil) 1441  of  1981

PETITIONER: MONOTOSH KUMAR MITRA (DEAD) BY LRS.  ...

       Vs.

RESPONDENT: AMARENDRANATH SHAW (DEAD) & ORS.

DATE OF JUDGMENT:       17/02/2000

BENCH: S.S.Ahamad, Y.K.Sabharwal

JUDGMENT:

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     SABHARWAL J.

     In a mortgage suit, a preliminary decree was passed in favour  of  the appellant on 18th November, 1968.  The  said decree  directed  the payment of the sum of  Rs.24,000/-  in four equal instalments.  The first instalment was payable on or  before  31st March, 1969 and subsequent  instalments  by 31st  day of March of each succeeding years.  Thus the  last instalment  was  payable  on 31st March, 1972.   The  decree further stipulated that in case of default of payment of any one  of  the instalments, the plaintiff may, subject to  the provisions  of  Bengal Money Lenders’ Act, 1960 (for  short, Bengal  Act), apply to the Court for a final decree for sale of  the  mortgaged  property and on such  application  being granted, the mortgaged property or a sufficient part thereof shall be directed to be sold.

     It  has  not  been questioned that neither  the  first instalment payable under the decree on or before 31st March, 1969,  was  paid  by the defendants nor was  any  subsequent instalment paid.

     Order  34 Rule 2 of Code of Civil Procedure inter alia stipulates grant of six months’ time to the defendant to pay the  mortgage amount stipulated under the preliminary decree and  on  default  of payment, the plaintiff is  entitled  to apply  for  final  decree directing sale  of  the  mortgaged property as stipulated by Rule 4 of Order 34.  Section 34 of Bengal  Act, however, empowers the Court to direct  payments by instalments notwithstanding the limit of six months fixed in  Order 34 of Code of Civil Procedure.  Section 34 of  the Bengal Act reads as under :-

     "34.   Power of Court to direct payment by instalments -- (1) Notwithstanding anything contained in any law for the time being in force, or in any agreement, the Court shall --

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     (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 herein, 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  said 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 plaintiff  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 under 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 fund 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 of time under sub-rule (2) of rule 2 or sub-rule (2) of 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;

     (b)  in suits in respect of loans advanced before  the commencement  of  this Act other than those referred  to  in clause (a) --

     (i)  on  the  application  of a  defendant  and  after hearing  the plaintiff, order at the time of the passing  of the decree, or

     (ii)  on the application of a judgment-debtor  against whom a decree in such suit has been passed whether before or after  the commencement of this Act and after notice tot  he decree-  holder, order at any time after the decree has been passed, that the amount of the decree shall, subject to such conditions  as  the  Court may impose,  be  payable  without interest in such number of annual instalments, on such dates and  within  such period not exceeding twenty years  as  the Court  thinks fit having regard to the circumstances of  the plaintiff  and  the defendant or the decree-holder  and  the judgment-debtor  and the amount of the decree, and that,  if default  is  made in making payment of any instalment,  that instalment and not the whole of the decretal amount shall be recoverable;

     (c)   during  the  pendency  of  any   enquiry   under

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sub-clause  (ii)  of  clause  (b)  order,  subject  to  such conditions as the Court may impose, the stay of execution of the decree.

     (2)  In default of payment of any instalment  referred to  in  clause  (b) of sub-section  (1),  the  decree-holder shall,  after  giving to the judgment-debtor such notice  as may be prescribed, be entitled to apply for execution of the decree  in respect of such instalment together with interest thereon  at  the  rate of not more than six per  centum  per annum from the date of such default:

     Provided that nothing in this sub-section shall affect the  power  of  the Court to allow, prior to  an  order  for execution  of  the decree, an extension of time of not  less than one year for the payment of any instalment, and if such extension of time is allowed, the payment of such instalment shall not be deemed to be in default:

     Provided  further that if the judgment- debtor,  after receiving  the  notice referred to in this  sub-section  and prior to an order for execution of the decree, 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  order execution of the decree.

     (3) Any order made under sub-clause (ii) of clause (b) of sub-section (1) shall be deemed to have been passed under section 47 of the Code of Civil Procedure, 1908."

     On  failure of the defendants to pay any  instalments, the  appellant  served  on them notice under  the  aforesaid provision  stating  that  the defendants  had  defaulted  in payment  of  all the instalments in terms of the decree,  an application  will  be  made in the High  Court  of  Calcutta within  30  days for final decree for sale of the  property. The  defendants having still failed to make any payment,  an application  for  passing  final  decree was  filed  by  the appellant in the High Court on or about 15th February, 1973. The  said  application was dismissed by the  learned  Single Judge as time barred and the appeal having been dismissed by the Division Bench, the present appeal has been preferred by the plaintiff.

     An  application  for  passing of the final  decree  is governed  by  Residuary Article 137 of the  Limitation  Act, 1963,  under  which application for passing of final  decree has  to  be filed within three years from the date when  the right  to  apply accrues.  If the right to apply  for  final decree  had  accrued  to  the  plaintiff  on  default  being committed  by  the  defendants  in   payment  of  the  first instalment  itself on 31st March, 1969, the application  for passing of final decree would be required to be filed within three  years  from the date of default.  Not disputing  that the  default  was committed by defendants in payment of  the first instalment, learned counsel for the appellant contends that default committed in each subsequent year in payment of instalment  gives  rise to a fresh cause of action to  apply for  passing  of  final  decree   and,  therefore,  such  an application  having been filed on 15th February, 1973, would not  be  time barred at least in respect of the  instalments which were payable under the decree on 31st March 1970, 1971 and  1972.  It is further contended that the application may

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be time barred, at best, in relation to default committed by defendants for payment of the first instalment payable on or before 31st March, 1969.

     It  is evident from Section 34 of the Bengal Act  that in  default  of payment of any instalment, the date of  such default  shall  be deemed to be date fixed under  sub-clause (i)  of clause (c) of Sub- Rule (1) of Rule 2 for payment of the  whole  amount.  The whole amount found or declared  due under  or  by a preliminary decree becomes payable  and  the plaintiff  becomes  entitled  to apply for  a  final  decree [Section  34(1)(a)(ii) of the Bengal Act].  It is thus clear that  notwithstanding  the dates of the  instalments  having been fixed under the preliminary decree which was subject to the  provisions  of the Bengal Act, a right accrued  to  the appellant  to apply for final decree on default having  been committed  by the defendants in payment of the amount of the first  instalment.   It  is  not a case of  a  simple  money decree.   It  is  a  case  of a  mortgage  where  under  the preliminary  decree,  an  opportunity  is  granted  to   the defendants to pay the mortgage amount in default whereof the plaintiff  becomes entitled to apply for a final decree  for sale  of the mortgaged property.  That right accrued to  the plaintiff  in this case on 31st March, 1969.  The  plaintiff cannot  extend the period of limitation by delaying  service of  notice on defendant under Section 34 of the Bengal  Act, which  is  a pre-condition for making of an  application  by plaintiff  for  passing  of  final decree.   The  period  of limitation  would  start running from the time the right  to apply  for final decree accrues and is not dependent on  the date  of sending of notice by the plaintiff to the defendant as  required  under  the  Bengal   Act.   In  Nalini   Kanto Bhattacharjee v.  Mohan Chand Biswas (AIR 1960 Cal.  477), a Division  Bench of Calcutta High Court rightly held that the starting  point of limitation for making an application  for final  decree  was the date when the first default was  made and  as the application was made more than three years after from  the  date  of  the first default,  it  was  barred  by limitation.   It also held that though the giving of  notice prescribed  by  Section  34  of Bengal Act  is  a  condition precedent to the making of application for final decree, the fact  of giving of the prescribed notice had not the  effect of  arresting the running of normal period of limitation  or enlarging  the period of limitation and further upon default being  made  in payment of any instalment, the whole of  the amount  payable under the decree becomes due on the date  of such default and right to apply, therefore, accrues once and for  all  on the date of the default.  It may also be  noted that  the notice under Section 34 sent by the appellant  was based  on all the four defaults committed by the  defendants and  it  was  not  stated that any  default  was  waived  or condoned.   In  this view, we need not go into the  question whether  in law plaintiff could at all waive or condone  the default  for  the purposes of the Limitation  Act.   Rightly relying  upon the aforesaid decision, the application of the appellant  for passing of the final decree was dismissed  by the  High  Court.   We  find no infirmity  in  the  impugned judgment.

     For  the  aforesaid reasons, the appeal is  dismissed. Parties are, however, left to bear their own costs.