Kochupennamma v. The Bank Of Deccan Ltd — 1973 DIGILAW 149 (KER)

JUDGMENT B. Bhaskaran, J. 1. The decree sought to be executed is barred under article 136 of the Limitation Act of 1963 this is the gist of the argument advanced by Sri S. Subramonia Iyer, the learned counsel for the appellants in this second appeal. The contention of Sri T. V. Ramakrishnan, the learned counsel for the respondents, on the other hand is that the petition from which this second appeal has arisen is the continuation of an earlier application for execution filed within time, but happened to be dismissed for default, and in that view the execution was not barred by limitation. A further contention raised by the learned counsel for the respondents, which does not appear to have been raised in the courts below, is that in any event by the operation of section 45 (O) (1) of the Banking Regulation Act, 1949, the execution petition is saved from limitation. 2. The undisputed facts leading to this second appeal, briefly stated, are the following :-The Munsiff's Court passed the decree sought to be executed on 24th February 1965. On 18th January 1966 E. P. No. 34 of 1966 was filed. On 23rd September 1969 the execution court ordered production of encumbrance certificate by 8th October 1969. On 8th October 1969 the decree-holder applied for time for the production of the encumbrance certificate, as he could not get it by then. The petition was adjourned to 21st October 1969. On 21st October 1969 also the. decree-holder applied for time to produce the encumbrance certificate. The petition was then adjourned to 30th October 1969. On 30th October 1969 the decree-holder again applied for time. Rejecting the prayer for adjournment the court dismissed the execution petition on 30th October 1969 for default. On 17th November 1969 the decree-holder filed E. P. No. 315 of 1969. The prayer in the petition, inter alia, reads as follows:- Malayalam The executing court disposed of the judgment-debtor's objection to E. P. No. 315 of 1969 in the following words: "The only objection that is pressed by the learned counsel for defendant is that the present E. P. is barred by limitation. The prior E. P. filed by the decree-holder was dismissed on 30th October 1969 since he failed to produce the Revenue Extract and Encumbrance Certificate. So the dismissal of the prior E.P. is not a judicial dismissal. The prior E. P. filed by the decree-holder was dismissed on 30th October 1969 since he failed to produce the Revenue Extract and Encumbrance Certificate. So the dismissal of the prior E.P. is not a judicial dismissal. So, the E. P. has to be treated as a continuation of the prior E. P. So the decree is not barred by limitation. Hence the objection is overruled. Proclamation notice 29th November 1970". While disposing of the appeal filed by the judgment-debtor against the decision of the learned Munsiff, the learned Subordinate Judge observed as follows:- "The order no doubt, is a judicial one disposing of the then pending execution petition. However the prayer in the next application filed includes one for review of this order and for restoring the E. P. to file. The decree-holder cured the defects and had also shown sufficient cause for the default. The execution court has chosen to condone the delay in exercise of its discretion in holding that the present E. P. is to be treated as a continuation of the prior E. P., though the approach made seems to be not quite correct. The conclusion cannot be assailed and I do not see any reason to interfere with the order that had been passed only in the discretion of the court." The view taken by the learned Munsiff that the dismissal of the prior E. P. was not a judicial one is obviously incorrect. The learned counsel for the respondents does not seriously dispute this position. The contention of the learned counsel for the appellants is that the first appellate court while correctly holding that the order of dismissal was a judicial one, fell into an error in taking the view that the execution court had the discretion to condone the delay, as though section 5 of the Limitation Act applies to execution proceedings. Here also the learned counsel for the respondents concedes that section 5 of the Limitation Act will have no application to the facts of the case for the obvious reason that section 5 of the Act is specific that it will have no application to execution proceedings. 3. Here also the learned counsel for the respondents concedes that section 5 of the Limitation Act will have no application to the facts of the case for the obvious reason that section 5 of the Act is specific that it will have no application to execution proceedings. 3. Sri Ramakrishnan, however, seeks to support the validity of the orders passed by the courts below on the ground that the execution court has inherent power under section 151 of the Code of Civil Procedure to restore an execution petition that has been dismissed for default. His contention is that the dismissal of E. P. No. 34 of 1966 could have been only in exercise of the court's power under section 151 C. P. C, as there is no provision in the Code, other than Order 21, rule 17, which empowers the court to dismiss an execution petition. There is dispute between the parties on the point whether the dismissal is under section 151 C. P. C, or whether it is under Order 21, rule 17, C. P. C, Sri. Subramonia Iyer submits that it was incumbent on the decree-holder to produce the encumbrance certificate along with the execution petition itself in compliance with the provisions contained in Order 21, rule 14, C. P. C, and in an execution petition filed as early as on 18-1-1966 if the petitioner failed to produce it even on 30-10-1969, the dismissal for default is under Order 21, rule 17, C. P. C, and there is no provision in the Code empowering the execution court to restore the petition once it has been finally disposed of as in the present case. In this connection Sri Ramakrishnan brings to my notice the following endorsements on the execution petition and in the 'B' Diary. In this connection Sri Ramakrishnan brings to my notice the following endorsements on the execution petition and in the 'B' Diary. "4-4-1966 Cure defects by 23-6-1966 23-6-1966 C. D. by 13-7-1966 13-7-1966 Issue Rule 66 Notice R. N. by 5-9-1966 Meanwhile produce chitta" (B diary: Malayalam The endeavour of the learned counsel is to establish that the dismissal of the petition on 30th October 1969 was not under Order 21, rule 17, but only under section 151 C. P. C. It is also submitted that the certified extract from the office of the Collector is distinct from the statement of encumbrance referred to in clause (c) of sub-rule (2) of rule 66 of Order 21, C. P. C. Sub-rule (1) of rule 17 of Order 21, C. P. C. provides that on receiving an application for execution of a decree as provided by rule 11, sub-rule (2), the Court shall ascertain whether such of the requirements of rules 11 to 14 as may be applicable to the case have been complied with; and, if they have not been complied with, the court may reject the application if the defect is not remedied within a time to be fixed by it. Rule 330 of the Kerala Civil Rules of Practice provides, inter alia, that the affidavit shall state the encumbrances to which the property is subject and where the amount for the realisation of which the sale is held exceeds Rs. 500 shall be accompanied by an encumbrance certificate covering a period of 12 years prior to the date of the attachment. The production of the affidavit and the encumbrance certificate along with it is required only for the purpose of proclamation of sale to be settled and approved by the court, and in the present case the posting was for the production of encumbrance certificate for the purpose of proclamation. As the office scrutinised the execution petition, noted the defects and, later, having been satisfied that the defects have been cured, posted it for further steps, it cannot be said that the dismissal in the present case is under rule 17 of Order 21 C. P. C. for non-compliance with the provisions of rules 11 to 14 of the said Order. Sri Subramonia Iyer, however, contends that the Civil Rules of Practice (Kerala) came into force only in the year 1971 and that the respondents cannot seek shelter under the provisions contained in these rules, as the dismissal on 30th October 1969 was not for non-compliance with the procedure contemplated in these rules. I have not been shown any statutory provision requiring the production of the encumbrance certificate in an execution petition before it reaches the proclamation stage. If, as a matter of fact, there was such a requirement under any of the provisions of law, while checking up the execution petition that defect also would have been pointed out by the office and the execution petition would have been taken on file and other steps ordered only after the encumbrance certificate was produced. Though this petition has been on the file as early as from 18th January 1966, what we find is that it was only on 23rd September 1969 the production of encumbrance certificate was ordered, and this necessarily was for the purpose of proclamation. I am, therefore, inclined to take the view that the dismissal of the execution petition in the present case was not under Order 21, rule 17 C. P. C. for the failure to take initial steps contemplated under rules 11 to 14 of Order 21, C.P.C. No other specific provision in the Code empowering the court to dismiss an execution petition which has reached the stage of proclamation has been shown to me by the counsel for the appellants and I, therefore, accept the contention of the learned counsel for the respondents that the dismissal of the execution petition in the present case was in exercise of the inherent power of the court under section 151 C.P.C. If the dismissal of the petition was under section 151 C. P. C. the very same provision should be presumed to clothe the executing court with power to restore it to file. 4. The learned counsel for the respondents has raised a contention with respect to the maintainability of the second appeal. According to him, even a first appeal was not competent and, as such, this appeal purported to be one from the decree passed in the first appeal also cannot be maintained. 4. The learned counsel for the respondents has raised a contention with respect to the maintainability of the second appeal. According to him, even a first appeal was not competent and, as such, this appeal purported to be one from the decree passed in the first appeal also cannot be maintained. He argues that the order passed in execution is covered by rule 104 (2) of Order 21 C.P.C, and therefore no appeal from that order is possible. Rule 104 (2) of Order 21 C.P.C, reads as follows: " No appeal shall lie from any order passed in appeal under this section." The contention of the learned counsel for the appellant, however, is that this is a matter that arises under section 47 C.P.C. and therefore both the appeal and the second appeal are competent. The counsel submits that the orders of the courts below themselves would show that the matter has been treated as one arising in execution coming within the ambit of section 47 C.P.C., as it relates to execution, discharge or satisfaction of the decree that has been passed by the Munsiff's Court. It is also pointed out that rule 104 (2) of Order 21 C.P.C. would apply only to the case in which the application is dismissed for nonappearance of the applicant. Default may arise in two ways; either because of the non-appearance of the party or counsel for the party, or it may arise on account of failure to take certain steps legally required to be taken by the party, or as directed by the court. In this case, it was because the decree-holder failed to produce the encumbrance certificate on the due date that the execution petition happened to be dismissed. The submission of Sri Ramakrishnan, counsel for the respondents, is that though the counsel was physically present in court, virtually his presence was of little consequence from the point of view of the prosecution of the case. The submission of Sri Ramakrishnan, counsel for the respondents, is that though the counsel was physically present in court, virtually his presence was of little consequence from the point of view of the prosecution of the case. In support of his contention that the presence of the counsel could not be considered as effective appearance in court as contemplated in the provisions of the Code of Civil Procedure, my attention has been drawn to a decision of Krishna Iyer, J. in Kuruvilla Chandy v. Hassan Bava Rawther 1969 K.L.T 402 wherein it has been observed "But I am inclined to take the view that a beneficial provision calculated to help a party in default should be so construed as to give the benefit of reasonable doubt, if doubt exists, in favour of the party in default. Even otherwise, appearance by pleader in court has a purpose to serve and if the presence of the advocate does not serve that purpose it is as good as non-appearance from the point of view of the party." It is fairly clear that the dismissal of the petition on 30th October 1969 in the present case was for non-compliance with the direction of the court with respect to the production of encumbrance certificate. It is not a case of dismissal for non-appearance of the party, or due to the refusal on the part of the counsel for the petitioner to participate in the proceedings on the plea that he had not received instructions from his client. A distinction has to be drawn between the case in which the counsel expressing his helplessness to proceed with the case on account of the client's failure to comply with the direction of the court, applies for adjournment on the one hand, and the case in which the counsel reports no instruction or refuses to proceed with the prosecution of the case for not having received instruction from his client. In the former case, it was immaterial whether it was the client himself or his counsel that was present when the case was called, as the fact remains that the direction was not complied with and the case could not have been proceeded with in spite of the client or his counsel being present when the case was called. In the former case, it was immaterial whether it was the client himself or his counsel that was present when the case was called, as the fact remains that the direction was not complied with and the case could not have been proceeded with in spite of the client or his counsel being present when the case was called. Even by taking a liberal view, it is difficult to treat the dismissal of the case in such circumstances as one for nonappearance of the party. Moreover, it has to be remembered that the provisions contained in Order 17 are not applicable to proceedings under Order 21. My conclusion, on a careful consideration of the facts brought to my notice, is that the dismissal of the petition on 30th October 1969 was not under Order 21, rule 104 (2), C.P.C. 5. At this juncture it would be worthwhile to examine whether this is a case of restoration of an execution petition which was already dismissed for default or a fresh petition for execution. This, in fact, is the most relevant factor in deciding whether the execution petition is barred by limitation under article 136 of the Limitation Act, 1963, or not. The prayer in the present petition, after narrating the facts leading to the dismissal of the earlier petition, was to review the earlier order, set aside the order of dismissal, restore the execution petition and to proceed with the execution. The learned counsel for the appellants submits that there is no scope for review under Order 47 C.P.C., inasmuch as there cannot be a review taking advantage of his own fault. Here the dismissal was for default because of the failure to produce the encumbrance certificate, and that cannot be a ground for review as it is not a ground mentioned or contemplated under Order 47, C.P.C. 6. Decisions also are to the effect that there cannot ordinarily be a restoration of an execution petition once it has been dismissed. The argument of the learned counsel for the respondents that inasmuch as the dismissal is under section 151 C.P.C. nothing prevents the court in passing such order restoring a petition in exercise of the inherent pewer under section 151 C.P.C, does not appear to be correct. Various decisions have been cited by the learned counsel in support of this argument. The argument of the learned counsel for the respondents that inasmuch as the dismissal is under section 151 C.P.C. nothing prevents the court in passing such order restoring a petition in exercise of the inherent pewer under section 151 C.P.C, does not appear to be correct. Various decisions have been cited by the learned counsel in support of this argument. The contention of the learned counsel for the appellants, however, is that the inherent power of the court under section 151 C.P.C, cannot be invoked except in exceptional circumstances, and that too very sparingly ; and cannot be exercised in favour of one who has been guilty of laches. This is the view that has been taken in Pakkier Kochu Thampi v. Uthumman and others 1959 K.L.J. 943; Janki Sahu Trust v. Ram Palat A.I.R. 1950 Allahabad 580; Delhi Corporation v. Sunni Majlis Aukaf A.I.R. 1968 Delhi 215. Counsel for the respondents further submits that the circumstances would indicate that this is a fit case to exercise the inherent power of the court to meet the extraordinary situation and to further the ends of justice. It has been pointed out that the respondents had applied for the encumbrance certificate much earlier and it was only because they could not get it from the office that they could not produce it, and that on 17th November 1969 the same was produced along with the petition. The learned counsel for the appellants further submits that sympathy and consideration for hardships are no grounds for invoking inherent power, as has been held in Camroo Thakur and others v. Basudeo Narayan and others A.I.R. 1963 Patna 48 and Delhi Corporation v. Sunni Majlis Aukaf A.I.R. 1968 Delhi 215. The learned counsel for the appellants also submits, as has been held in Talab Haji Hussain v. Madhukar Purshottam Mondar A.I.R. 1958 S.C. 376 the inherent power of the court should not be exercised if it will be inconsistent with other statutory provisions or in respect of matters specifically provided for. In this view, in the instant case, by the operation of the law of limitation, a right becomes vested in favour of the judgment-debtor. In this view, in the instant case, by the operation of the law of limitation, a right becomes vested in favour of the judgment-debtor. If the court in exercise of its inherent power under section 151 C.P.C. restores to the decree-holder the right to proceed with the execution which he had already lost by the operation of article 136 of the Limitation Act, 1963, it amounts to the deprival of a right which by the operation of law became vested in the judgment-debtor. I do not think that the court will be justified in exercising inherent power under section 151 C.P.C. in such a way as to result in the deprival of the rights got vested in a person by the operation of statutory provisions. As has been held by the Supreme Court in Ramlal, Motilal and Chhotelal v. Rewa Coalfields Ltd. A.I.R. 1962 S.C. 361 the law of limitation creates a right in the judgment-debtor when the decree is barred by a lapse of the prescribed time and that cannot be taken away unless there is some specific provision enabling such unsettling of the accepted legal position. 7. Apart from this, I find that essentially this is rather a petition for execution, not a petition for restoration of an execution, which was dismissed for default. It may be noted that the number of the earlier petition filed on 18th January 1966 and dismissed on 30th October 1969 was E.P. No. 34 of 1966. On the other hand, the present petition from which this second appeal has arisen is E.P. No. 315 of 1969 filed on 17th November 1969 which is clearly 12 years after the decree which is dated 24th February 1955. The petition is presented in the form of a regular execution petition. No doubt, in the prayer portion, there is a prayer for reviewing the earlier order, to condone the delay, set aside the earlier order, and restore the petition to file. However, the main prayer is for the execution of the decree and that is the manner in which the courts below have treated it. The learned Munsiff treated the previous dismissal as an administrative order and held that the present petition is a continuation of the earlier petition. That view is obviously wrong. However, the main prayer is for the execution of the decree and that is the manner in which the courts below have treated it. The learned Munsiff treated the previous dismissal as an administrative order and held that the present petition is a continuation of the earlier petition. That view is obviously wrong. The learned Subordinate Judge thought that though the dismissal of the earlier petition was a judicial order inasmuch as the executing court had chosen to condone the delay, there was no warrant for interference with the order. The learned Subordinate Judge appears to have thought that section 5 of the Limitation Act would apply to execution proceedings also which, as has already been found, is not the correct position inasmuch as execution proceedings are specifically excluded from the scope of section 5 of the Limitation Act. If the present petition is treated as a new execution petition that is clearly barred by limitation under article 136 of the Limitation Act, 1963, and there is no justification for considering that the earlier order has been reviewed or delay condoned and the petition restored to file setting aside the earlier order of dismissal. In fact, the courts below did not do so, but treated this as a new petition for execution condoning the delay. 'I, therefore, hold that the present petition from which this second appeal has arisen is a new execution petition filed 12 years after the date of the decree and therefore barred by limitation under article 136 of the Limitation Act, 1963, unless saved by some other provision of law. 8. One other contention raised by Sri Ramakrishnan is that in view of the provisions contained in section 45 (O) of the Banking Regulation Act, 1949, from the date of the proceedings for liquidation the execution proceedings are saved from limitation. It is submitted by the learned counsel that the existence of an application for winding up is not a condition precedent for applying the section. Reference to an application for winding up, according to the learned counsel, is only to denote the upper limits of time for the purpose of exclusion while calculating the period of limitation. The learned counsel places reliance on the decision of the Supreme Court in Sree Bank Ltd. v. S.D. Roy & Co. Reference to an application for winding up, according to the learned counsel, is only to denote the upper limits of time for the purpose of exclusion while calculating the period of limitation. The learned counsel places reliance on the decision of the Supreme Court in Sree Bank Ltd. v. S.D. Roy & Co. A.I.R 1966 S.C.1953 in order to stress that the only conditions precedent for applying the section are : (1) the company is being wound up, and (2) that a suit is instituted or an application is made by such a banking company. Even in cases where there is strictly no application for winding up and the order is passed suo motu, the winding up when ordered has to be deemed as one under section 433 of the Companies Act. Thus, when power under section 392 (2) of the Companies Act is exercised, the consequences which ordinarily flow out of an order for winding up should follow from such a case also. The counsel submits that following the guideline given by the Supreme Court in Sree Bank Ltd. v. S.D. Roy & Co. A.I.R 1966 S.C.1953, it has to be held that the conditions for the application of section 45(O) of the Banking Regulation Act, 1949, are present in the instant case. 9. The contention of Sri Subramonia Iyer on the question of applicability or otherwise of section 45 (O) (1) of the Banking Regulation Act, 1949, can be summarised as follows: Section 45 (O) (1) of the Act has no application to this case since there was no petition for winding up in this case. Here the bank was ordered to be wound up by an order under section 392 (2) of the Companies Act. Section 5 (O) being a provision excluding the provisions of the imitation Act, has to be strictly construed. Section 45(O) (1) and (2) refer to the date of the petition as the starting point, from which limitation is to be excluded. When the statute has fixed one starting point, the court cannot substitute that, by another starting point, by accepting the date of the winding up order as the starting point. That will be rewriting the section which is not permissible. Since there is no winding up petition, section 45 (O) becomes unworkable, hence does not apply. 10. When the statute has fixed one starting point, the court cannot substitute that, by another starting point, by accepting the date of the winding up order as the starting point. That will be rewriting the section which is not permissible. Since there is no winding up petition, section 45 (O) becomes unworkable, hence does not apply. 10. A reasonable interpretation has to be given to the provisions contained in section 45 (O) of the Banking Regulation Act, 1949, bearing in mind the background of the legislation, purpose and object with which the section has been incorporated in the statute and the evil sought to be remedied by the application of the provision. The only reasonable view, in this perspective, is that the date of ordering the winding up itself should be treated as the date of presentation of the winding up petition and the time commencing from the date of ordering the winding up of the company excluded for the purpose of limitation. Any other view, in my opinion, would defeat the purpose of the Act. If the view of Sri Subramonia Iyer is accepted, it would virtually mean that the legislature intended to exclude the application of section 45 (O) in cases where a banking company is ordered to be wound up without an application for winding up. There are no specific indications in the Act for taking such a view, apart from the fact that such an interpretation is not in keeping with the spirit of the legislation. 11. This point relating to the application of section 45 (O) of the Banking Regulation Act, 1949, does not appear to have been taken up in the courts below. However, being a question of law which goes to the very root of the matter and which has bearing to the jurisdiction of the court to entertain the application, I thought, I should allow the learned counsel to address his argument on that point. As the full facts relating to the proceedings under the Act have not been placed before me, I think, the matter has to be remanded to the execution court to enquiry into it affording the parties an opportunity to let in evidence on the question of facts relevant to the winding up proceedings. As the full facts relating to the proceedings under the Act have not been placed before me, I think, the matter has to be remanded to the execution court to enquiry into it affording the parties an opportunity to let in evidence on the question of facts relevant to the winding up proceedings. I make it clear that the execution petition will be saved from limitation provided the winding up was ordered before 17th November 1969, on which date E. P. No. 315 of 1969 was filed. 12. In the result, the second appeal is disposed of as indicated above and the matter is remanded to the execution court. The execution court will proceed with the execution if, after making due enquiry, it is satisfied that the limitation has been saved by the operation of the provisions contained in section 45 (O) of the Banking Regulation Act, 1949, and in that view the execution petition filed on 17th November 1969 is within time; if not, dismiss the execution petition. There will be no order as to costs in this second appeal.