JUDGMENT Shivdayal, J.- 1. This appeal arises from a suit instituted by Udairaj (whose legal representative is the present appellant), against (1) Mangalchand, (2) Kanti Prasad and, (3) Rameshchand for recovery of Rs. 15,770 by sale of mortgaged property. 2. The suit was based on foot of two registered mortgage-deeds dated June 12, 1946, and December 13, 1949, executed by Mangalchand, defendant No.1. These mortgages were simple. 3. Earlier Kanti Prasad and Rameshchand, defendants No.2 and 3, had obtained a decree for Rs. 545-8-9 on the basis of a mortgage-deed dated April 18, 1944, executed by Mangalchand. In a suit instituted by these earlier mortgagees (defendants No. 2 and 3) a compromise decree was passed on June 6, 1947, under which Mangalchand was to pay Rs. 545-8-9 to those mortgagees by instalment of Rs 100 per year and also interest at 8 annas per cent per month, and also costs. It was stipulated in the compromise decree that in case of default the decree-holder would be entitled to execute the decree and realise the entire amount at once. A first charge of the decretal amount on the mortgaged property was preserved. Eventually, on May 5, 1951, because of non-payment of the decretal amount, Kanti Prasad and Rameshchand applied for a final decree. A final decree was in fact passed on February 11, 1952. 4. In the present suit the appellant's claim was decreed and a preliminary decree for sale was passed in his favour, but it was made subject to the prior claim of defendants No.2 and 3 under their final decree being satisfied. The learned Additional District Judge, however, directed defendants No. 2 and 3 to bear their own costs. Aggrieved by that decree the plaintiff preferred this appeal and defendants No.2 and 3 filed cross-objections as regards costs. 5. It is not disputed before us that the mortgage executed by Mangalchand in favour of Kanti Prasad and Rameshchand was prior, but it is contended for the appellant that when the preliminary decree was passed the mortgage claim merged in the decree. It is further argued that the compromise decree was itself a final decree and since no application for execution of that decree was made within three years, that decree became extinct and the claim of Kanti Prasad and Rameshchand under that decree was extinguished. It is further argued that the compromise decree was itself a final decree and since no application for execution of that decree was made within three years, that decree became extinct and the claim of Kanti Prasad and Rameshchand under that decree was extinguished. Alternatively, it is argued that the application for final decree was made after the period of limitation had expired 6. It must now be mentioned that regarding the compromise decree there is a dispute about the date of payment of the first instalment, in the copy of the decree which was filed in the Court there is an overwriting. According to the appellant it was July 1, 1947, and according to the decree–holder-respondent it was July 1, 1948. This would have required an enquiry but in our opinion it is unnecessary because the question can be decided without going into that dispute. 7. The appellant's contention that as soon as the compromise decree was passed the mortgage deed, ceased to be secured debt, must be rejected. It is specifically provided in the compromise decree that the first charge on the mortgaged property would be of the decretal amount. 8. Shri Karkare, learned counsel for the appellant, relied on Salmond's Jurisprudence, Chapter 11, at page 243; “Perfect and Imperfect Right”. In our opinion, that statement does not help the appellant at all. 9. Where a compromise decree is obtained in a suit for sale and the mortgagor is to pay the mortgage-money on a date or dates specified in it, it is all the same a preliminary decree. It is open to decree-holder; to obtain an final decree. 10. It was held in Gulab Chand Vs. Sewa Chand, 1959 JLJ 729 that the exigibility clause in a compromise decree is for the benefit of the decree, holder; and not executing a decree for the whole amount as soon as the first instalment becomes due, amounts to waiver. The same principle must apply to a compromise decree containing exigibility clause. The position of a compromise bond is different. See, Devidas Vs. Parma, 1959 JLJ 583 . 11. Moreover, limitation bars the remedy, but does not destroy the right. Even if Shree Karkare's argument had been accepted that the application for final decree was barred by time, that by itself did not extinguish the judgment-debt. 12. The position of a compromise bond is different. See, Devidas Vs. Parma, 1959 JLJ 583 . 11. Moreover, limitation bars the remedy, but does not destroy the right. Even if Shree Karkare's argument had been accepted that the application for final decree was barred by time, that by itself did not extinguish the judgment-debt. 12. Above all, it is a remarkable feature of this case that the final decree was in fact passed and that decree has not been set aside in any proceeding. It cannot, therefore, be said in the present suit that that final decree is inoperative on the ground that the application for final decree was made beyond the period of limitation as alleged by the appellant. The effect of section 3 of the Limitation Act is not to deprive a Court of its jurisdiction. Therefore, decision of a Court decreeing or allowing a suit or proceeding which had been instituted after the period prescribed, is not vitiated for want of jurisdiction. Though section 3 is peremtory, a suit will not lie for setting aside, a decree absolute for sale merely upon the ground that application for such decree was barred by limitation. This was also the view taken in Bhaiga Parida Vs. Gannath Khandai, AIC 1918 Pat, 492. A decree passed in a time-barred suit is not a nullity. It has been laid down in Ittyavira Mathai Vs. Varkey Varkey and another, AIR 1954 SC 907 thus:- "Even assuming that the suit was barred by time, it is difficult to appreciate the contention of learned counsel that the decree can be treated as a nullity and ignored in subsequent litigation. If the suit was barred by time and yet the Court decreed it, the Court would be committing an illegality and therefore, the aggrieved party would be entitled to have the decree set aside by preferring an appeal against it. But it is well settled that a Court, having jurisdiction over the subject-matter of the suit and over the parties thereto, though bound to decide right may decide wrung; and that even though it decided wrong it would not be doing something which it had no jurisdiction to do. But it is well settled that a Court, having jurisdiction over the subject-matter of the suit and over the parties thereto, though bound to decide right may decide wrung; and that even though it decided wrong it would not be doing something which it had no jurisdiction to do. It had the jurisdiction over the subject-matter and it had the jurisdiction over the party and, therefore, merely because it made an error in deciding a vital issue in the suit, it cannot be said that it has acted beyond its jurisdiction." 13. The respondents Kanti Prasad and Rameshchand have filed cross-objections. Their contention is that the trial Court erred in disallowing costs to them. It is true that allowing costs is a matter in the discretion of the Court, but the discretion cannot be arbitrarily or capriciously exercised. The ordinary rule is that the costs must follow the event. The trial Court bas merely said "Defendants No.2 and 3 shall, however, bear their own costs" without assigning any reason whatever. Nor are we satisfied that there was any reason for disallowing costs to these respondents. 14. In the result, the appeal is dismissed with costs. The cross-objections are allowed. The respondents Kanti Prasad and Rameshchand shall get their costs from the plaintffs in the trial Court as well.