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  • Act XI of 1859. (The Bengal Revenue Sale Act),
  • article 182 of the Indian Limitation Act
  • article 182 of the Limitation Act
  • Order 34, rule 5(2) of the Code
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
Acts
  • Act XI of 1859. (The Bengal Revenue Sale Act),
  • article 182 of the Indian Limitation Act
  • article 182 of the Limitation Act
  • Order 34, rule 5(2) of the Code
Smart Summary

Structured Summary of the Opinion (Foster, J.; Bucknill, J. concurring)

Factual and Procedural Background

The appellant is the decree-holder under a mortgage decree for Rs. 35,990-10. Part of this sum was realised by sale of Mauza Balbhadrapur Darihat. The appellant made a subsequent application for execution to realise Rs. 715-3-6 from one of the judgment-debtors, Abhoy Kumar Chand, relying on the same decree. The final decree was dated 23 November 1918 (passed on appeal to the Privy Council). An earlier application for sale of Balbhadrapur Darihat was made on 14 December 1918 and the execution process (sale proclamation, sale and delivery of possession) occurred between 14 December 1918 and 1 December 1919.

The Subordinate Judge of Shahabad held the present execution application to be barred by limitation. He gave two reasons: (1) the present application was filed more than three years after the date of the decree and the earlier execution application (which did not seek relief against Abhoy Kumar) could not be counted as the commencement of limitation for the relief against Abhoy Kumar; (2) an additional reason was given but the appellate court regarded that second reason as not requiring further consideration because within three years (in 1919) the decree-holder had obtained several steps-in-aid of execution.

The decree-holder appealed. The principal question on appeal was whether the Subordinate Judge's first reason (that limitation ran from the date of the decree and that earlier execution proceedings did not start the running of limitation as to Abhoy Kumar) was valid.

Legal Issues Presented

  1. Whether the part of the mortgage decree directing payment of Rs. 715-3-6 by Abhoy Kumar was an immediately executable money decree (so that Article 182, Indian Limitation Act would start the three-year period from the date of the decree) or whether that relief was contingent on non-realisation from the mortgaged property (so that limitation would run from the time of failure of the sale of the mortgaged property).
  2. Whether the decree as a whole ought to be treated as one unified mortgage decree (with inter-dependent sources of realisation) or as two several and independent decrees (a mortgage decree for sale of mortgaged property and a separate money decree against Abhoy Kumar), for the purpose of computing limitation.
  3. Whether intermediate steps-in-aid of execution taken within three years after decree affect the running of limitation in the appellant's favour.

Arguments of the Parties

Appellant (Mr. Bose) — Principal Arguments

  • The relief against Abhoy Kumar was contingent on the failure of sale of the mortgaged property Darihat; it was not immediately executable on the date of decree.
  • If a decree is not executable at its date, clause 1 of Article 182 is inapplicable and time does not run from the date of the decree; if no other clause of Article 182 applies, Article 181 would apply. Mr. Bose relied on Maharaja Sir Rameshwar Singh Bahadur v. Homeswar Singh for this proposition, which would mean limitation would run from the date when the sale of Darihat failed to meet the decretal dues.
  • On an alternative line, the mortgage involved two securities (Darihat and Shiupur). Shiupur had been sold under the Bengal Revenue Sale Act (Act XI of 1859) and the surplus proceeds (Rs. 715-3-6) were available to creditors under section 31 of that Act. Those surplus proceeds substituted for the mortgaged property Shiupur by equitable conversion (citing Gosto Behary v. Shib Nath Dut). Because the surplus became immediately executable, there is a distinction in executability between that source and the Darihat property (which had a six-month period of grace).

Respondent (Mr. Baghunanda Prasad) — Principal Points as Recorded

  • The opinion records that Mr. Baghunanda Prasad for the respondents adopted arguments similar to those considered and rejected in the cited Allahabad judgment Ram Brick Rai v. Deoo Tiwari, and relied upon authorities including J.P. Wise v. Raj Narain Chakraverty. The text does not set out a detailed separate statement of the respondent's arguments beyond that characterization.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Maharaja Sir Rameshwar Singh Bahadur v. Homeswar Singh Cited for the proposition that when a decree is not executable at its date clause 1 of Article 182 may be inapplicable and Article 181 may be relevant (i.e., limitation running from the time when the right to sue or execute accrues). The Court considered but did not accept Mr. Bose's reliance upon this case: Foster, J. concluded the decree against Abhoy Kumar was immediately executable and therefore the Maharaja Sir Rameshwar Singh Bahadur line did not determine the outcome in favour of the appellant on the contingency point.
Gosto Behary v. Shib Nath Dut Used as an example where substitution of security (sale, partition, exchange) leads to surplus sale-proceeds becoming available as security (equitable conversion). The Court accepted the analysis that the surplus sale-proceeds of Shiupur (Rs. 715-3-6) stood in place of the mortgaged property and were a source of immediate realisation, but treated this as a source of realisation inter-dependent with the mortgage as a whole rather than creating a separate several decree.
Ram Brick Rai v. Deoo Tiwari Held that where one unit of mortgage money is declared and there are mixed sources of realisation (some as sale of mortgaged property, some as a simple money decree), the whole may be regarded as one decree for the mortgage money for the purpose of limitation. The Court found this decision supportive: it summarized that it "sums up the whole case" with respect to limitation and treated the present decree similarly as one unified mortgage decree. The Court relied on that reasoning to reject the view that the part concerning Abhoy Kumar was a several, independent money decree.
J.P. Wise v. Raj Narain Chakraverty Cited by respondents (the opinion does not articulate the precise proposition taken from this case in detail). The Court noted the citation but did not rest the decision upon it; Foster, J. regarded the authorities relied upon by respondents as distinguishable and unpersuasive on the limitation point in this case.
Privy Council decision reported in 27 C.L.J. 303 Report containing the Privy Council decision (used to identify the property and confirm facts such as the touji number and that the decree was passed on appeal). The Court used the Privy Council report as a factual foundation (confirming that the mortgage related to two properties, Darihat and Shiupur, and that an error in the decree referred to Darihat where Shiupur should have been named in one place).

Court's Reasoning and Analysis

The Court proceeded through a focused analysis of the decree's terms and the factual matrix:

  1. Interpretation of the Decree Text: Foster, J. read the decree language literally and concluded that the decree fixed an immediate liability on Abhoy Kumar to pay Rs. 715-3-6. The decree contained an unqualified statement that "The plaintiff will get Rs. 715-3-6 from Abhoy Kumar out of the money of, Darihat" (with the Court noting an obvious clerical reference error — "Darihat" should read "Shiupur" in that clause).
  2. Contingency Argument Rejected: The Court rejected Mr. Bose's contention that the relief against Abhoy Kumar was contingent on the failure of realization from Darihat. Foster, J. observed that there was no reservation in the decree making Abhoy Kumar's liability contingent; further, in the first trial Abhoy Kumar had argued for contingency but that prayer was rejected and the point was not raised again through the long appeal process. This historical fact supported the conclusion that the liability was immediate.
  3. Inter-dependence of Sources of Realisation: The Court analysed the mortgage structure: although there were two sources (Darihat and Shiupur/the proceeds), these sources arose from a single mortgage obligation and were inter-dependent. The mortgagee had the option to proceed against one or other source; realisations from one would reduce the liability of the other pro tanto.
  4. Inapplicability of Explanation 1 (second part) of Article 182: Foster, J. considered whether the latter part of explanation 1 to Article 182 (addressing several decrees) applied. He concluded it did not because Abhoy Kumar's liability was not "several" — i.e., the liability was not such that payment by one debtor would relieve the property of Darihat to the extent of an apportioned share.
  5. Doctrine Supported by Procedure and Authority: The Court pointed to Order 34, rule 5(2) of the Code as consistent with the procedural recognition that a mortgagee may proceed against one source at a time. The Court also relied on the reasoning in Ram Brick Rai v. Deoo Tiwari, which held that where a single mortgage money was declared and there were mixed remedies, it was effectively one decree for the mortgage money for limitation purposes. That case was treated as directly supportive of the present conclusion.
  6. Disposition on Limitation: Because the Court found the obligation against Abhoy Kumar to be immediately executable and part of the single mortgage decree (not a separate several money decree), the Subordinate Judge's first reason — that limitation ran independently from the date of decree against a separate money decree — was held to be incorrect. The Court therefore allowed the appeal.

Holding and Implications

Holding:

APPEAL ALLOWED.

Consequences and immediate effects:

  • The judgment and decree appealed against (the Subordinate Judge's order holding the execution application barred by limitation) are set aside.
  • The objection of the judgment-debtor respondent (that the execution application was barred by limitation) is dismissed.
  • Costs of both Courts are awarded to the decree-holder appellant.

Broader implications:

The opinion reasons that where a mortgage decree states a single sum due and identifies multiple inter-dependent sources of realisation, the decree is to be regarded for limitation purposes as one mortgage decree (so that execution against one source follows the same decree and limitation analysis). The Court did not purport to lay down a broader new principle beyond its application of existing rules (Order 34, rule 5(2) and the interpretation illustrated by Ram Brick Rai v. Deoo Tiwari) and therefore the decision's direct effect is to permit execution for Rs. 715-3-6 from Abhoy Kumar in the present proceedings; the opinion does not state that it establishes a novel precedent beyond those authorities it applied.


Additional notes contained in the opinion: Bucknill, J. agreed with Foster, J. The Privy Council report (27 C.L.J. 303) and the factual record showed that the mortgage related to two properties (Darihat and Shiupur) and that a clerical reference in the decree should read "Shiupur" where "Darihat" was mistakenly used in one clause.

    Bishun Chand (Decree-Holder) Petitioner v. Abhoykumar Chand (Judgment-Debtor) .

    Foster, J.:— The appellant holds a mortgage decree for Rs. 35,990-10. Part of this sum has been realized by sale of Mauza Balbhadrapur Darihat, and he is now making a second application for execution for realization of Rs. 715-3-6 from one of the judgment-debtors, Abhoy Kumar Chand, on the basis of the terms of the same decree. The date of the final decree, which was passed on appeal in the Privy Council, was the 23rd November, 1918. The firsts application namely, that for the sale of Balbhadrapur Darihat was made on the 14th December, 1918, and the execution proceeded through the stages of sale proclamation, sale and delivery of possession in the course of the period 14th, December, 1918 to the 1st December, 1919. The present application for execution in respect of the minor relief granted in the mortgage decree, namely for realization of Rs. 715-3-6 from Abhoy Kumat, has been found by the Subordinate Judge of Shahabad to be barred by limitation. The first reason given for this decision by the learned Subordinate Judge is that the present application was filed more than three years after the date of the decree in the Privy Council; and that the previous application for execution, which did not include any relief sought against Abhoy Kumar, could not be counted as the starting point of limitation. The second reason given by the learned Subordinate Judge is be which may be dismissed from further consideration. He finds that the present application for execution was filed more than three years after the previous application for execution, but he has overlooked the fact that within the three years' period, in the year 1919, the decree-holder applied for and obtained in accordance with law several steps-in-aid of execution of the decree, following upon the same application.

    2. The decree-holder has appealed, and the question is whether the first reason given by the learned Subordinate Judge is a valid reason for holding that the execution is barred. It would appear that the Subordinate Judge regarded the whole decree as in form one but in reality two decrees, namely, a mortgage decree against the defendants in respect of the mortgaged property Dari but and a money decree for Rs. 715-3-6 against Abhoy Kumar, and be considered that these two decrees were several and independent, though included in one document. Presumably it was his opinion that time commenced to run in respect of the money decree from the date of the decree independently of the limitation accruing against the mortgage decree. In other words, the part of the decree which be treats as a money decree being immediately executable would become barred under article 182 of the Indian Limitation Act when three years had passed since the date of the decree if no intermediate application for a step-in-aid of execution of this part of the decree had been made in the interim. The terms of the decree are as follows:—

    “The defendants will pay the entire decretal money within six months. In case of non-payment of the same the mortgaged property, subject to the lien of Ram Ratan Sao under the mortgage bond, dated the 5th July, 1889 will be sold no person of the defendants is liable under the decree ……The plaintiff will get Rs. 715-3-6 from Abhoy Kumar out of the money of, Darihat………The sum of Rs. 39,907 decretal money including interest and future interest per month up to the date of realization and costs of this suit with interest thereon at the rate of……per cent from this date of realization be paid by the defendants to the plaintiffs. In case of non-payment of the entire decree money within the period of six months the mortgaged property will be sold at auction.”

    3. There are one or two remarks to be made about this decree. The mortgaged property referred to is admittedly Balbhadrapur Darihat. The Privy Council decision is reported in 27 C.L.J 303, where this village is described by its touji No. 7062. We are informed and there is no contradiction on the other side, the facts being borne out by the Privy Council paper book put with consent of parties before us—that the mortgage was in respect of two properties, which may be described as Darihat and Shiupur. In the course of the plaint the plaintiff stated that Shiupur had been sold for arrears of revenue and was not available for realization of his mortgage. So he only sought relief by sale of Darihat. But in consequence of some points raised by those interested in Darihat it was found that the defendant Abhoy Kumar, (who happened to be also one of the persons interested in Darihat), had received Rs. 715-3-6 out of the sale-proceeds of Shiupur; and so the decree was passed against him for this amount, be having a mortgage over Siziupur which was subsequent in date to that of the plaintiff. The reference to Darihat in the decree in this connection is an obvious mistake, and for “Darihat” should be read “Shiupur.” It is to be noted that the terms of the decree make the mortgage-money payable by “the defendants” to the plaintiff. It appears from the records to which I have referred that pendente lite Darihat was sold for arrears of revenue, and purchased by the real owner. Thus it came about that the mortgage remained enforceable against Darihat.

    4. The question is whether the learned Subordinate Judge's opinion as to the nature of the decree against Abhoy Kumar is correct, and whether the decree-holder is barred by limitation from realization of the sum of Rs. 715-3-6 from Abhoy Kumar.

    5. The first point taken by Mr. Bose on behalf of the appellant is that the relief granted against Abhoy Kumar was contingent, and that he could be proceeded against only if and when the sale of the mortgaged property Darihat had failed to satisfy the decree. The gist of the argument id that when a decree is not executable at its date, clause 1 of article 182 is inapplicable and therefore time does not run from the date of the decree; and, if none of the other clauses of article 182 is in the circumstances applicable the general article 181 would apply—Maharaja Sir Rameshwar Singh Bahadur v. Homeswar Singh (1), from which proposition it would result that time ran from the date when the sale of Darihat failed to meet the decretal dues.

    6. Now the plain and grammatical meaning of this part of the decree appears to me to be that an immediate liability to pay Rs. 715-3-6 is fixed upon Abboy Kumar. There is no reservation, and there appears to be no ambiguity. Mr. Bose has urged that the relief against Darihat and the relief against Abhoy Kumar would overlap if the latter was not contingent. But it is clear that if Rs. 715-3-6 had been at once realized from Abhoy Kumar, the mortgage-debt would be pro tanto reduced. This is the only reasonable construction of the decree taken as a whole. Apart from the incongruity of Mr. Bose's interpretation of the decree, there are facts which show that it is unsustainable. In the first trial of the case the nature of Abhoy Kumar's liability was questioned, but not again. At that time he urged that his liability should be made contingent on non-realization of the decretal dues from the Darihat property, but his prayer was rejected. The case lasted through appeals for the abnormal period of eleven years—as noted by their Lordships of the Privy Council—but, so far as we are informed this matter of Abhoy Kumar's liability was never again brought into discussion. This confirms my conclusion that the decree-holder in his decree obtained a right of immediate execution against Abhoy Kumar.

    7. It would be as well to considsr at this point whether the latter part of explanation 1 of article 182 of the Limitation Act has any application to the present controversy. In my opinion it has not. Abhoy Kumar's liability, on the terms of the decree, is not several; for if he could not pay, the property Darihat would not be relieved to the extent of the burden of his apportioned dues. According to the terms of the decree, as I understand it, had the total mortgage dues been realised by the sale of Darihat a deduction of Rs. 715-3-6 on the ground that was Abhoy Kumar's share would not have been necessary consequence.

    8. I anticipate at this point the conclusions at which I shall arrive in considering Mr. Bose's next argument, and hold that, so far as the sum of Rs. 715-3-6 was concerned the owners of Darihat (to the extent of that property) and Abhoy Kumar were jointly judgment debtors; in other words the decree-holder could at his option realise from one or the other, and realizations from one pro tanto would reduce the liability of the other.

    9. So I proceed at once to Mr. Bose's second argument. His argument put briefly is that there we have a mortgage decree, showing the mortgage dues and the sources opened by the decree for their realization. The original securities or sources of realization were mauzas Darihat and Shiupur. The property mauza Shiupur was lost by sale under Act XI of 1859. (The Bengal Revenue Sale Act), but the surplus sale-proceeds were available under precept of the Civil Court to creditors under the provisions of section 31 of the Act. Such substitution of the security for a mortgage is met with in cases of partition, exchange and sale; an instance, apposite to the circumstances of this case is to be found in Gosto Behary v. Shib Nath Dut (2). The surplus sale-proceeds of Rs. 715-3-6 took the place of the mortgaged property Shiupur and by equitable conversion became available as security.

    10. Now if this construction of the decree is correct the mortgagee was given as decree-holder the right to realize the mortgage dues from certain properties affected by the mortgage lien. From the first there was Darihat available as a course of realization, but the other security, Shiupur, had been greatly impaired, and in its place stood Rs. 715-3-6 in the hands of the Collector, subsequently in the hands of Abboy Kumar. Against the latter property the remedy was immediately executable, but against Darihat execution was delayed by the six months' period of grace. I do not admit that there is any importance in this distinction, which only affects the method of realization: I have only mentioned it because of the arguments of the learned Vakil for the respondents which lay stress on the fact that the decree ??? two separate remedies, one as upon mortgage decree and the other as upon a Sidney decree. It appears to me that the main relief, the realization of the mortgage dues, being the one governing note of the decree, makes the two sources of realization inter-dependent. This is the reason why a mortgages is entitled to proceed against one of his securities at a time, if he thinks it to be sufficient for realization. It is unnecessary to quote authorities to support this, when the terms of Order 34, rule 5(2) of the Code dearly show the procedure recognized by law.

    11. The unity of the decree therefore consists in the fact that the sum of “mortgage money” and the sources of realization are indicated; these sources are inter-dependent because both arise out of the mortgage and because the mortgagee decree-holder has the option to follow one or the other in exacution. Mr. Bose at the last moment discovered a case which I consider supports ibis case to a very considerable extent. Ram Brick Rai v. Deoo Tiwari (3). There, as here, a unit of mortgage money was declared due, and the sources of realization ware partly as in a mortgage decree, and partly as in a simple money decree. The decree-holder first executed the decree so far as it was a decree for sale, and later applied for execution of the simple money decree; the Court held that this “was really one decree for the whole of the mortgage money”, a phrase which appears to me to sum up the whole case, so far as ‘the question of limitation is concerned. Another reason why this judgment of the Allahabad Court is apposite is that Mr. Baghunanda Prasad on behalf of the respondents had adopted exactly the same arguments here as were discussed and refuted in that judgment. In fact Mr. Baghunandan Prosad has quoted the same decision which there was distinguished and which appears to me to be equally distinguishable in this case. He also quoted J.P Wise v. Raj Narain Chakraverty (4). Such cases as these appear to me to propound a rule exactly in agreement with the rule to be found in the second part of explanation 1 of article 182, which as I have already remarked can apply only to a decree which comprises two or more “several” decrees. In my opinion the appeal should be allowed. The judgment and decree appealed against should be set aside, and the objection of the judgment-debtor respondent should be dismissed. Costs of both Courts to the decree-holder appellant.

    12. Bucknill, J.:— I agree.

    13. Appeal allowed.

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    Comments

    Bishun Chand (Decree-Holder) Petitioner v. Abhoykumar Chand (Judgment-Debtor) .
    (Aug 9, 1923)