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1998 DIGILAW 473 (KER)

Ramavarma Raja v. Canara Bank

1998-09-29

D.SREEDEVI, P.A.MOHAMMAD

body1998
Judgment :- P.A. Mohammed, J. The main question that arises for decision in this appeal centres round the period of limitation applicable to the personal decree under O. XXXIV R.6 of the Code of Civil Procedure, 1908. The trial court held that the application for personal decree filed by the decree holder in this case was barred since the period of limitation would run from the date of confirmation of sale. However, in appeal, the learned single judge found that the application was not barred by time inasmuch as the period of limitation would depend upon the question as to what point of time the amount due was finally quantified. There is no dispute between the parties that the residuary Art.137 of the Limitation Act, 1963 would apply in this case. That means the application shall be filed within three months when the right to apply accrues. In substance the question is when did the right to file the application for personal decree accrue to the appellant in the facts of the present case. 2. The basic facts required for the adjudication of the above dispute are condensed thus: The plaintiff, Canara Bank, Mangalore, obtained a mortgage decree in O.S. No. 59 of 1977 from the Sub Court, Kasargode, for an amount of Rs. 17,613.96. Consequently a preliminary decree was passed on 21.12.1972 and thereafter a final decree was passed for sale of the mortgaged properties on 30.11.1973. Pursuant to the final decree the properties were sold in auction on 15.10.1979 and the sale was confirmed on 7.12.1979. A sum of Rs. 15,010/- was realised out of the sale of two items of properties towards decree debt. On the date of confirmation of sale, a third party filed O.S. No.134 of 1979 before the same court seeking to declare that the sale of item No. 2 of the decree schedule property to be void. The decree holder and the judgment debtors in O.S. No. 59 of 1972 were also made parties to the said suit. Ultimately the said suit was decreed declaring that the sale of item No. 2 was void on the ground that the judgment-debtors had no saleable interest in the said property. Thus, the net result was that the decree-holder could get only Rs. 10,000/- towards the decree debt. Under the above circumstances, the decree holder filed an application LA. Ultimately the said suit was decreed declaring that the sale of item No. 2 was void on the ground that the judgment-debtors had no saleable interest in the said property. Thus, the net result was that the decree-holder could get only Rs. 10,000/- towards the decree debt. Under the above circumstances, the decree holder filed an application LA. No. 677 of 1983 for personal decree under O. XXXIV R.6 of the CPC for realisation of the balance decree amount from the judgment debtors on 7.3.1983. However, the executing Court dismissed the said application on 17.12.1988 finding that the claim for the personal decree was barred by limitation. Being aggrieved by the said order the decree holder filed A.S. No. 393 of 1989 before this Court. The learned single judge by judgment dated 11.6.1997 found that the application for personal decree was not time barred and thereby allowed the appeal reversing the finding of the trial court. As against the said judgment the present appeal has been filed. 3. The executing court relied on the decisions in Surya Narayan Sahu v. Banamali Sahu (AIR 1968 Orissa 202) and S.K. Ajaraddi v. S.M. Sonai Bibi (AIR 1946 Calcutta 65) for holding that the period of limitation starts from the confirmation of sale on 7.12.1979. In that view of the matter, the executing court further found that the application for personal decree filed on 7.8.1983 is barred by limitation. On the other hand, the learned single judge observed that the suit O.S. No.134 of 1979 was filed challenging the sale in O.S. No. 59 of 1972 by a third party impleading the decree-holder as well as the judgment-debtors in O.S. No. 59 of 1972. That suit was finally disposed of on 12.10.1982. Therefore, the learned judge observed that the actual amount due to the decree-holder could be ascertained only after final qualification. That being so, the right to apply for personal decree accrued in this case only on the date of disposal of O.S. No.134 of 1979 on 12.10.1982. That means, the application for personal decree filed on 7.8.1983 is not barred by limitation prescribed under Art.137 of the Limitation Act. For arriving at this conclusion the learned single judge relied on the Bench decision of the Madras High Court in Kamakshi Ammal v. Ananthanarayana Swami Filial (AIR 1948 Madras 33). 4. That means, the application for personal decree filed on 7.8.1983 is not barred by limitation prescribed under Art.137 of the Limitation Act. For arriving at this conclusion the learned single judge relied on the Bench decision of the Madras High Court in Kamakshi Ammal v. Ananthanarayana Swami Filial (AIR 1948 Madras 33). 4. Under Art.137 of the Limitation Act, 1963 the period of limitation begins to run when the right to apply accrues. In order to find out whether an application is barred by time prescribed under this Article, it is a pre-requisite to have the knowledge when the right actually accrued. This is not a static position generally applicable in all cases but individually determinable in each case having regard to its facts. For example, in a case where there is no dispute with regard to the title of the mortgaged property sold in execution of the decree, the right may accrue on the date of confirmation of sale. Whereas in the case where the title of the property sold is challenged by a third party in a suit the right may accrue on the final decision. Suppose third party do not file any appeal therefrom, the right may accrue on the expiry of the appeal time. If there is an appeal or second appeal, accrual of the right may be delayed depending on the decision of the appellate Courts. 5. In Surya Narayan Sahu's case, supra (AIR 1968 Orissa 206) the Orissa High Court was considering when the right to file an application under O.34 R.6 of the C.P.C. 1908 would accrue. The argument was that on the sale being held, the exact amount for which the property has sold was definitely known and the decree holder was in a position to ascertain whether the net sale proceeds fall short of the amount due to the plaintiff and that the decree holder could not enlarge the time by waiting till the confirmation of sale. Repelling this argument, the Court said: "When a sale takes place and the bid is accepted by the Court, the purchaser is to deposit forth with 25 per cent of the purchase money. On failure the property has to be resold under 0.21 R.84 CPC. Repelling this argument, the Court said: "When a sale takes place and the bid is accepted by the Court, the purchaser is to deposit forth with 25 per cent of the purchase money. On failure the property has to be resold under 0.21 R.84 CPC. Under 0.21 R.85, the full amount of purchase money payable shall be paid by the purchaser into court before the court closes on the 15th day from sale of the property. In case of default, there would be re-sale under O. 21 R.89 on satisfaction of the necessary conditions prescribed therein. The sale may also be set aside under O.21, R.90 on the ground of material irregularity or fraud in publishing or conducting the sale. When the property is resold or the sale is set aside, mere would be no net proceeds of the sale available for the discharge of the dues to the plaintiff. Therefore, the court after analysing the facts said that the limitation would start from the date of confirmation of sale. It may be recalled in this context that the title of the mortgagor was not in dispute in that case and the court was called upon to decide the question that the, decree-holder was in a position to determine whether the net proceeds of the sale are insufficient to pay his dues. In S.K. Ajaraddi's case, supra (AIR 1946 Cal. 65), a learned single judge of the Calcutta High Court on facts found that the preliminary decree specifically reserved liberty to the decree-holder to apply for a personal decree, if necessary. The sale under the final decree took place on 12th July 1937 and the confirmation of which the date is not known must have taken place at least a month later. Therefore, the learned judge said: "The period of limitation for an application for a personal decree in such a case is three years from the date of the confirmation of the sale, 58 Cal. 741= 35 C.W.N. 231, so that on 1st January 1939 about a year and a half of that period had still to run. The effect of that position, in my view, is that on the relevant statutory date, the original mortgage suit itself was pending and the decrees, being decrees in that suit, are decrees in a suit to which the Act applies". 6. The effect of that position, in my view, is that on the relevant statutory date, the original mortgage suit itself was pending and the decrees, being decrees in that suit, are decrees in a suit to which the Act applies". 6. Now let us examine the decision of the Division Bench of the Madras High Court in Kamakshi Animal's case (Patanjali Sastri and Bell, JJ.) (AIR 1948 Madras 33). The facts of that case as stated in the head note are extracted hereunder: "One P obtained a preliminary decree for sale on a deed of mortgage executed by N. The decree was passed on 14.2.1933 and the final decree followed on 9.1.1934. During the pendency of that suit one M brought a suit against N's widow for declaration of title to the mortgaged properties. The mortgagee P was impleaded as defendant. The trial court passed a decree declaring that the suit properties belonged to M and that the mortgage executed by N in favour of P and the mortgage decree obtained by P were not binding on N. From this decree the mortgagee P after an unsuccessful appeal to the first appellate Court preferred a second appeal which was dismissed on 6.8.1941. On 25th August P made an application for a personal against the assets of the mortgagor". Therefore, the court posed the question 'when did the mortgage's right first accrue on the facts of this case?' The answer to this question was given by in a Com! as thus: "Obviously, it accrued only when he was deprived of his security. Can it be said that he was deprived of it as soon as The first court declared Mookayi's little to the mortgaged property? Evidently, he did not think so himself, or he would not have appealed. When deprivation of a mortgage's security turns on the varying fortunes of a law suit, his own view of the manner cannot altogether be ruled out of consideration. If he thought that an appeal was worthwhile and preferred one which he must have done on legal advice, why should he be supposed to have been deprived of his security as soon as the first court gave its adverse decision? Until the second appeal was dismissed by this Court the mortgagor's title was sub judice and the mortgagee cannot in such circumstances be reasonably considered to have been deprived of his security. Until the second appeal was dismissed by this Court the mortgagor's title was sub judice and the mortgagee cannot in such circumstances be reasonably considered to have been deprived of his security. It was, of course, open to him to accept the decree of the first court and apply for a personal decree forthwith. In that case, the date of the deprivation would be the dale of that decision. but he was not bound to do so as the law allows him to take all proper steps to suppon the mortgagor's title, and so long he was bonafide taking such steps, he canon Mnom judgment, be held to have suffered deprivation of his security". The principle laid down in the above case squarely applies to the facts of the present case. 7. In view of what is discussed herein above, we are of the opinion that the view taken by the learned single judge is found to be correct and legal in the facts and circumstances of this case. This appeal is accordingly dismissed. No order as to costs.