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  • Art. 179 of the second schedule of the Limitation Act
  • sec. 89 of the Transfer of Property Act,
  • Art. 179 of the Limitation Act;
  • sec. 4 of the Limitation Act,
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Citation Codes
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  • Art. 179 of the second schedule of the Limitation Act
  • sec. 89 of the Transfer of Property Act,
  • Art. 179 of the Limitation Act;
  • sec. 4 of the Limitation Act,
Smart Summary

Judgment Summary — Banerjee, J. (with Geidt, J. concurring)

Factual and Procedural Background

This appeal arises from an application for execution of a mortgage decree. Some of the judgment-debtors opposed the execution application; at least one of those objectors was a subsequent (puisne) mortgagee. The objection raised by the objecting judgment-debtors was that execution of the decree was barred by limitation.

The Court below disallowed the objection. It held (1) that there is no limitation for an application for the sale of mortgaged property under section 89 of the Transfer of Property Act, and (2) that even if Article 179 of the Second Schedule of the Limitation Act applied, the decree-holders' conduct (notably an application to put off the sale on 10 June 1895 and pressing an application for permission to bid on that same date) saved the execution application from being barred by limitation.

The objecting judgment-debtors (Appellants) appealed. They challenged the lower Court's holdings on limitation and relied on the contention that prior execution applications made against other judgment-debtors brought the case within the first part of the second paragraph of Explanation (I) to Article 179 of the Limitation Act. The Respondents defended the lower Court's judgment and argued, among other things, that puisne mortgagees could not properly plead limitation and that certain acts by decree-holders gave a fresh start for limitation.

Legal Issues Presented

  1. Whether the Appellants (the subsequent/puisne mortgagees) can plead limitation to object to execution of the mortgage decree.
  2. Whether there is any period of limitation applicable to an application for execution of a mortgage decree (i.e., whether Article 179 of the Limitation Act applies).
  3. Whether execution is barred because prior applications for execution had been made against judgment-debtors other than the Appellants, bringing the matter within the first part of the second paragraph of Explanation (I) to Article 179.
  4. Whether there was any application by the decree-holders for leave to bid within three years before the present application, and if so, whether such an application gives the decree-holders a fresh start (i.e., restarts the limitation period).
  5. Whether the decree-holders' application for postponement of sale on 10 June 1895 was an application to the Court to "take some step in aid of execution" (and so could give a fresh start under Article 179).
  6. Whether the decree-holders' opposition to certain judgment-debtors' applications to sell the mortgaged property in a particular order amounted to an application to the Court to take some step in aid of execution and thereby gave a fresh start for limitation.

Arguments of the Parties

Appellants' Arguments

  • The Court below erred in holding that no limitation applied to an application for sale of mortgaged property.
  • Even if Article 179 applied, the present application was barred by limitation because prior applications for execution had been made against other judgment-debtors, and the decree should be treated as severally enforceable against the subsequent mortgagees — bringing the case within the first part of the second paragraph of Explanation (I) to Article 179.
  • The acts relied on by decree-holders (including the events of 10 June 1895) do not operate to save or restart the limitation period.

Respondents' Arguments

  • The judgment of the Court below was correct in holding that limitation did not bar execution (including the lower Court's interpretation of section 89 of the Transfer of Property Act).
  • The objecting puisne mortgagees were not competent to contend that execution was barred by limitation because they benefit from execution (being entitled to any surplus), and so they should not be heard to challenge execution on limitation grounds.
  • Even if a puisne mortgagee could raise limitation, the decree-holders' conduct (such as resisting certain applications to change the order of sale) operated to save the present application from being barred by limitation.
  • At one point counsel for the Respondents modified his stance by arguing that, if it were true that limitation was fatal and should have been applied by the first Court under section 4 of the Limitation Act, then it might not be open to the Appellants on appeal to raise limitation to set aside the first Court’s judgment — but no authority was cited for that position.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court (how the opinion used it)
Raghu Nandan (Raghunandan) Misser v. Kali Dutt Misser Treated as authority holding that an application by decree-holders for leave to bid is not an application to the Court to take some step in aid of execution. The Court indicated that if there had been an application to bid within three years this case would have required re-consideration, but noted that some other High Courts have dissented; the majority opinion expressed hesitation about following the rule in this Court's earlier decision but did not need to decide it because no such application had been made within three years.
Toree Mahomed v. Mahomed Mabood Also held that an application by decree-holders for leave to bid is not an application to take a step in aid of execution. Referenced alongside Raghu Nandan as earlier decisions answering the "leave to bid" question negatively; the Court observed its prior rule but did not have to follow or overrule it because no relevant application existed here.
Bansi v. Sikri Mal (Allahabad High Court) Dissenting authority to the rule in Raghu Nandan on whether leave-to-bid applications are steps in aid of execution. Cited to show conflicting authority in other High Courts; Court noted the divergence but did not have to resolve it because of the facts.
Vinayakao Gopal Deshmukh v. Vinayak Krishna Dhebri (Bombay High Court) Dissenting authority to the Raghu Nandan rule (i.e., taking a contrary view on leave-to-bid applications). Also cited to demonstrate that some High Courts took a different view; used to explain why the Court felt hesitation about rigidly following the earlier rule but ultimately did not decide the broader question here.
Sarat Kumari Dassi v. Jagat Chandra Roy Authority for the principle that the relevant date for cl. 4 of Art. 179 is the date of applying, not the date of disposal of the application. The Court relied on this case to hold that an application disposed of on 10 June (though filed earlier) could not make 10 June the starting point for limitation; the date that matters is the date of application.
Fakir Mahomed v. Golam Hossein (Full Bench, Allahabad High Court) Supports the view that the date of application, not the date of disposal, is the relevant date for reckoning limitation under cl. 4 of Art. 179. Relied upon along with Sarat Kumari Dassi to decide that there was no application by the decree-holders within three years which could give a fresh start.
Abdul Hossein v. Fazilun Authority for treating certain postponement applications as not being applications to take a step in aid of execution. The Court held the present postponement application (10 June 1895) was of that character (i.e., not a step in aid) and cited this case in support of that conclusion.
Dharanamma v. Subba Relied on by Respondents to argue that resisting an application (or opposing a particular order) could constitute an application to take a step in aid of execution. The Court distinguished this case on its facts and rejected the Respondents' reliance upon it for the proposition that mere resistance gives a fresh start; accordingly, Dharanamma was held distinguishable and not controlling.
Umesh Chandra Dutt v. Sunder Narain Deo Used for descriptive language of "to obtain some order of the Court in furtherance of the execution of the decree" — clarifying what it means to take a step in aid of execution. Quoted by Geidt, J. in concurrence to explain that "taking some step in aid of execution" means reaching some further point along a route of execution; used to explain why removal of a ban on bidding is not such a step.

Court's Reasoning and Analysis

The Court framed six precise points for decision (see above). The following summarizes its reasoning point-by-point, as set out in the opinion:

1. Competence of Subsequent Mortgagees to Plead Limitation

The Court rejected the Respondents' contention that a subsequent mortgagee (who benefits from any surplus on a sale) cannot object on limitation grounds. The Court observed that if a prior mortgagee's right to sell were shown to be barred by limitation, the subsequent mortgagee's position would not be worsened but improved (he might become, in effect, a first mortgagee). Further, section 4 of the Limitation Act requires the Court to disallow a barred application even if limitation is not pleaded. For these reasons the Court held that subsequent mortgagees can plead limitation. The first point was decided in favour of the Appellants.

2. Applicability of Article 179 of the Limitation Act to Execution Applications

The Court held that Article 179 of the Second Schedule of the Limitation Act does apply to applications for execution of mortgage decrees. It concluded that the lower Court was clearly in error in holding otherwise. The second point was decided in favour of the Appellants.

3. Effect of Prior Execution Applications Made Against Other Judgment-Debtors

The Appellants argued the decree should be treated as several (separately enforceable) against subsequent mortgagees, bringing the case within Explanation (I), and thus prior applications against other judgment-debtors would bar the present application. The Court rejected this: although only the property covered by a subsequent mortgage could be sold as against the subsequent mortgagee, the decree itself did not apportion the debt. Having regard to the terms of the decree, it could not be said to fall within the first part of the second paragraph of Explanation (I). The third point was therefore decided against the Appellants.

4. Whether the Decree-Holders' Application for Leave to Bid Within Three Years Gave a Fresh Start

The Court examined whether there had been any application by decree-holders for leave to bid within three years prior to the present application. It noted earlier decisions of this Court (Raghu Nandan Misser and Toree Mahomed) that had held negatively on whether a leave-to-bid application is a step in aid of execution, and observed that some High Courts had dissented. The Court expressed hesitation about rigidly following the earlier rulings but ultimately found it unnecessary to resolve the conflict because there was no application by the decree-holders for leave to bid on 10 June 1895 or within three years. The Court emphasised that the relevant starting point under clause 4 of Article 179 is the "date of applying," not the date on which the application was disposed of (citing Sarat Kumari Dassi and Fakir Mahomed). Thus, the fourth point was decided in favour of the Appellants (i.e., there was no effective leave-to-bid application within the three-year period that could restart limitation).

5. Whether the Postponement Application of 10 June 1895 Was a Step in Aid of Execution

The Court considered the content and purpose of the 10 June 1895 application by the decree-holders, which sought postponement of sale on grounds including a change of manager, unfamiliarity with particulars, previous advertisements by the prior mortgagee, and absence of intending purchasers. The Court concluded this application was a request to postpone (a backward or delaying step), not an application to take a step in aid of execution that would improve the decree-holders' position. The Court cited Abdul Hossein v. Fazilun as authority consistent with this view. The fifth point was decided in favour of the Appellants.

6. Whether Opposition to a Different Order of Sale Amounted to a Step in Aid of Execution

The Respondents argued that the decree-holders' opposition to judgment-debtors' applications to sell properties in a particular order amounted to asking the Court to take a step in aid of execution. The Court rejected this reasoning. It explained that asking the Court not to withdraw an already taken step is not the same as asking the Court to take a new step. The Court distinguished Dharanamma v. Subba and other cited authorities on the facts: in those cases the decree-holder sought a positive order or the Court had already made an adverse order and the decree-holder asked for further steps. Here, the decree-holders' conduct was merely negative resistance to changing the order already directed, and did not constitute a fresh application to take some step in aid. The sixth point was therefore decided in favour of the Appellants.

Overall Conclusion of Reasoning

Taking the points together, the Court concluded that the lower Court's order must be set aside because (i) subsequent mortgagees could plead limitation, (ii) Article 179 applies to execution applications, (iii) the prior applications against other judgment-debtors did not bar the present application under Explanation (I), and (iv) none of the actions relied upon by the Respondents (including the 10 June postponement application, any leave-to-bid application within three years, or mere resistance to sale-order changes) operated to give the decree-holders a fresh start for limitation. The appeal was allowed.

Holding and Implications

Core Ruling: The appeal is ALLOWED and the order of the Court below is set aside.

Direct consequences stated in the opinion:

  • The Appellants (subsequent/puisne mortgagees) are entitled to raise the plea of limitation in opposition to the execution application.
  • Article 179 of the Second Schedule of the Limitation Act applies to applications for execution of mortgage decrees.
  • The prior execution application(s) made against other judgment-debtors did not operate to bar the present execution application under Explanation (I) to Article 179.
  • The decree-holders' application for postponement on 10 June 1895, and their opposition to certain applications about the order of sale, did not amount to applications to take some step in aid of execution that would restart the limitation period.
  • The appeal is allowed with costs; the hearing fee was assessed at ten gold mohurs.

The opinion does not purport to establish a new broad precedent on every related question. It resolves the issues in this appeal according to the facts and the application of Article 179 and related authorities; the Court noted existing conflict in prior decisions (and expressed some judicial hesitation about prior rulings on the leave-to-bid point) but did not overrule those authorities in the present judgment.

Disposition

Appeal allowed; order of the Court below set aside; costs awarded. Hearing fee assessed at ten gold mohurs. Geidt, J. concurred and added explanatory remarks on the meaning of "to take some step in aid of the execution of a decree."

    Troilokya Nath Basu And Ors. v. Lala Jyoti Perkash Nandi And Ors.

    Banerjee, J.:— This appeal arises out of an application for execution of a mortgage decree. The application was opposed by some of the judgment-debtors, one of whom, at least was a subsequent mortgagee; and the objection was that execution of the decree was barred by limitation.

    The Court below has disallowed that objection, holding in the first place that there is no limitation for application for the sale of mortgaged property, under sec. 89 of the Transfer of Property Act, and in the second place, that even if Art. 179 of the second schedule of the Limitation Act applies to the case, the application for execution was saved from being barred by limitation by reason of the decree-holders having applied for putting off the sale on the 10th June, 1895, and by reason of his having pressed his application for permission to bid on that same date, which was within three years from the date of the last application.

    The objecting judgment-debtors, being dissatisfied with this decision, have preferred this appeal; and it is contended on their behalf that the Court below is wrong in holding that there was no limitation applicable to the case, and that even if limitation applied execution of the decree was saved from being barred by limitation by reason of what the decree-holders did on the 10th June, 1895. It is further contended for the Appellants that the Court below ought to have held that execution was barred by reason of the previous application for execution having been against judgment-debtors, other than the objectors, as the case comes within the scope of the first part of the second paragraph of Explanation (I) to Art. 179 of the Limitation Act.

    On the other hand, it is argued for the Respondents that the judgment of the Court below was not only right, so far as it went, but that the Court below should further have held that it was not competent to the objectors who were puisne mortgagees, to contend that execution of the decree was barred by limitation, and that, even if it was open to them to raise the contention, the present application was saved from being barred by reason of the decree-holders resisting the application of some of the judgment-debtors for the sale of the mortgaged properties in a certain order.

    The contentions raised in this appeal, therefore, give rise to the following points for determination: first, whether the Appellants, the subsequent mortgagees can plead limitation; second, whether there is any limitation for the execution of mortgage decrees; third, whether execution is barred by reason of the prior applications for execution being made against the judgment-debtors, other than the Appellants; fourth, whether there was any application for leave to bid within a period of three years before the date of the present application, and if so, whether such application can give the Plaintiffs a fresh start; fifth, whether the application of the 10th June, 1895 for postponement of sale was an application to the Court to take some step in aid of execution; and, sixth, whether the decree-holders' opposition to the applications of some of the judgment-debtors to sell the mortgaged property in a certain order gave them a fresh start for reckoning the period of limitation.

    On the first point, the broad contention was that, as the subsequent mortgagee is benefited by the execution proceedings, when the property is sold at the instance of the prior mortgagee, he being entitled to the surplus sale-proceeds, his interest is similar to that of the decree-holder, and it is not competent to him, therefore, to take the objection that execution is barred by limitation. But when it was pointed out that if the application was barred by limitation the Court was bound under sec. 4 of the Limitation Act, to disallow it, even though limitation was not set up. The learned vakil for the Respondents changed his ground a little, and urged that although that might have been true, when the case was before the first Court, it was not open to the Appellants in appeal to raise the plea of limitation and ask the Appellate Court to set aside the judgment of the first Court, if it was not competent to the Appellants to raise the plea of limitation. Now, let us see whether this contention is sound. No authority is cited in support of it, and there is not much reason that we can find in its favour. It is true, the subsequent mortgagee is entitled to the surplus sale-proceeds after the mortgaged property is sold at the instance of the prior mortgagee; but if the claim of the prior mortgagee to sell the property could be shown to be barred by limitation, the position of the subsequent mortgagee would not be rendered worse, but would be rendered better: for he would then occupy the position of a first mortgagee. And it cannot, therefore, be said that it was not competent to him to raise an objection which might improve his position. We must therefore decide the first point in favour of the Appellants.

    As to the second point, we think the Court below is clearly in error; and the learned vakil for the Respondents does not seriously endeavour to support the judgment appealed against upon the second point. There is no reason for holding that Art. 179 of the second schedule of the Limitation Act does not apply to the application for execution of a mortgage decree. The second point must also be decided in favour of the Appellants.

    On the third point, the Appellants' contention is this, that as the judgment-debtors, who are subsequent mortgagees, are liable only to the extent of the properties covered by their mortgage, the decree must be treated as a decree passed severally against them and the original mortgagor within the meaning of the first part of the second paragraph of Explanation (I) to Art. 179 of the Limitation Act; and if that is so, as the previous application was clearly one only against certain judgment-debtors, other than the Appellants, the present application must be barred. We are unable to accept this contention as sound. It is true that the only property that could be brought to sale as against the subsequent mortgagees would be the property mortgaged to them; but the decree does not in any way apportion the mortgaged debt; and it cannot therefore be said, having regard to the terms of the decree, that it comes within the scope of the first part of the second paragraph of Explanation (I). The third point must, therefore, be decided against the Appellants.

    Upon the fourth point, if there had been any application by the decree-holders for leave to bid within three years before the date of the present application, then it would have been necessary to consider whether the cases of Raghu Nandan Misser v. Kali Dutt Misser(1) and Toree Mahomed v. Mahomed Mabood(2) have been correctly decided, so far as the question, whether an application by the decree-holders for leave to bid is an application to the Court to take some step in aid of execution, was answered in the negative, and for that purpose to refer the question to a Full Bench. The earlier of these two cases has, I may add, been dissented from by the Allahabad High Court in the case of Bansi v. Sikri Mal(3) and by the Bombay High Court in the case of Vinayakao Gopal Deshmukh v. Vinayak Krishna Dhebri(4), and speaking for myself, I feel bound to say I have considerable hesitation in following the rule laid down by this Court in the two cases cited above, because an application to the Court by the decree-holder to give him leave to bid is to my mind an application to the Court to take some step, that is, to do something which would aid execution, that is, to make it effective by securing a higher price for the property to be sold. But it becomes unnecessary to pursue this discussion any further, as there was no application by the decree-holders for leave to bid on the 10th June, 1895 or on any date within three years before the date of the present application. Though the application of the 1st June was not disposed of until the 10th, it could not be said that circumstance made the 10th the starting point, the time from which limitation runs, under cl. 4 of Art. 179, being in the words of the clause, “the date of applying,” and not the date on which the application is disposed of. The view we take is in accordance with that taken by this Court in the case of Sarat Kumari Dassi v. Jagat Chandra Roy(5), and the Full Bench decision of the Allahabad High Court in the case of Fakir Mahomed v. Golam Hossein(6). The fourth point must, therefore, be decided in favour of the Appellants.

    Upon the fifth point, the Appellants' contention is that the application for postponement of sale, such as the one made by the decree-holders in this case on the 10th of June 1895, was not an application to the Court to take some step in aid of execution, but was rather an application to the Court to take some backward step in retardation of execution. Without going so far as to say that there can be no application for postponement of sale which can come within the description of an application to the Court to take some step in aid of execution, we feel bound to say that the application here referred to was clearly not one of that description. The application asked the Court to postpone the sale—why? Because the decree-holders by reason of a change of their manager were not acquainted with all the facts and because several of the properties had been advertised for sale at the instance of the prior mortgagee, and by way of supplement, moreover, because no intending purchasers were present. And the application wound up by praying that the sale might be kept pending for 7 days, and by stating that during the interval all the particulars would be ascertained and then the properties would be caused to be sold. There is no indication here that the decree-holders wanted this postponement with a view to enable them to bring the properties to sale more advantageously for them, as was suggested in the argument. The view we take is in accordance with that taken by this Court in the case of Abdul Hossein v. Fazilun(7). The fifth point must, therefore, be decided in favour of the Appellants.

    On the sixth point, the learned vakil for the Respondents contended that the decree-holders' opposition to the judgment-debtors' application to sell the property in a certain order should be held to be an application to the Court to take some step in aid of execution, within the meaning of cl. 4 of Art. 179; and in support of this contention the case of Dharanamma v. Subba(8) has been relied upon, and certain other cases, not quite in point, have also been cited as supporting the same view. We are of opinion that the argument is not correct, and that the cases cited are distinguishable from the present. The words of the law are in our opinion quite clear. To give the decree-holders a fresh start there must be an application to the Court to take some step in aid of execution. Did the decree-holders by simply resisting the judgment-debtors' application to sell the properties in an order different from that in which they had already been directed to be sold, ask the Court to take some step in aid of execution? What they did was to ask the Court to refrain from withdrawing the step in aid of execution, which it had already taken. That cannot be taken to mean an application to the Court asking the Court to take some step which has not already been taken. The step which the decree-holders by their resistance wanted the Court to persevere in taking had already been taken, and the Court was merely asked not to accede to the judgment-debtors' application, which would have had the effect of making the Court refrain from doing what it had already directed should be done. In the Madras case cited the decree-holder's resistance was not of the simple negative character but was coupled with a prayer to sell the property in an order different as well from that in which the judgment-debtors asked that they should be sold as from the order in which the Court had previously directed their sale. That, therefore, might be treated as an application asking the Court to take some positive step, whether it was really and truly in aid of execution or not, we need not pause to consider As for the other cases cited, there an order adverse to the decree-holder had already been made, and then the decree-holder asked the Court to take some step towards further execution, which they thought was the best they could ask the Court to do. That being so, this point also must be decided in favour of the Appellants.

    The result is that the order of the Court below must be set aside and this appeal allowed with costs.

    The hearing fee is assessed at ten gold mohurs.

    Geidt, J.—I concur in allowing this appeal, and agree, generally, in the reasons set forth in the judgment just delivered.

    In view, however, of the remarks made by my learned brother, I should like to add that, although the correctness of the decision of this Court in the case of Raghunandan Misser v. Kali Dutt Misser does not properly arise in this case, I do not share the doubt entertained by him on this subject.

    There are several routes by which execution of a decree can be attained; and the words “to take some step in aid of the execution of a decree” in my opinion, mean, to reach a further point along one of those routes; or to use the language of this Court in the case of Umesh Chandra Dutt v. Sunder Narain Deo(9) “to obtain some order of the Court in furtherance of the execution of the decree.” I do not regard the removal from the decree-holder of the prohibition to bid as coming within the meaning of the words. The point already reached in the execution of the decree is a sale of property and the removal of the prohibition does not, in my opinion, carry the Court to any further point along the path of execution.

    S.C.S
    Appeal allowed.

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    Comments

    Troilokya Nath Basu And Ors. v. Lala Jyoti Perkash Nandi And Ors.
    (Apr 6, 1903)