1952 (8) TMI 34 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the application for the preparation of a final decree was barred under Article 181 of the Limitation Act.
2. Interpretation of the default clause in the decree.
3. Whether the right to apply for a final decree accrues only once or upon each successive default.
4. The effect of waiver or condonation of defaults on the right to apply for a final decree.
5. The impact of the wording of the default clause on the right to apply for a final decree.

Detailed Analysis:

1. Whether the application for the preparation of a final decree was barred under Article 181 of the Limitation Act:
The judgment-debtors contended that the application for the preparation of a final decree was time-barred under Article 181, Limitation Act, asserting that the cause of action accrued on the first default in the payment of two consecutive instalments on 23-12-1937, and thus the application should have been made by 23-12-1940. However, the decree-holder argued that a new cause of action accrued upon every fresh default, allowing the application to be within time for the last five instalments.

2. Interpretation of the default clause in the decree:
The decree provided that in case of default in payment of any two instalments, the whole amount would become payable with interest allowed by law. The interpretation of this clause was crucial in determining whether the right to apply for a final decree accrued only once or upon each successive default. The court considered various case laws and concluded that the default clause, being for the benefit of the decree-holder, allowed him to waive the first default and apply upon subsequent defaults.

3. Whether the right to apply for a final decree accrues only once or upon each successive default:
The court examined the case law and concluded that the right to apply for a final decree could accrue upon each successive default, provided the decree-holder waived the earlier defaults. The principle enunciated by the Privy Council in Lasa Din v. Gulab Kunwar was applied, which stated that a default clause is for the benefit of the decree-holder, and he has the option to enforce it upon each default.

4. The effect of waiver or condonation of defaults on the right to apply for a final decree:
The court held that if the decree-holder waived or condoned the first default, the right to apply for a final decree would accrue upon the next default not waived. The waiver or condonation must be express or implied, and the decree-holder can choose to apply based on subsequent defaults.

5. The impact of the wording of the default clause on the right to apply for a final decree:
The court concluded that the specific wording of the default clause (whether it stated "the decree-holder shall have a right to apply," "the decree-holder shall have the option to apply," "the entire decretal amount shall become payable," "the entire decretal amount shall become due," or "the judgment-debtor shall pay the entire decretal amount") did not affect the decree-holder's rights. The default clause should be interpreted liberally and for the benefit of the decree-holder, allowing him to apply for a final decree upon each successive default, provided earlier defaults were waived.

Conclusion:
The court ordered that the case be laid before the Hon'ble the Acting Chief Justice for the constitution of a Full Bench to decide the following questions:
1. Whether the words "when the right to apply accrues" in Article 181, Limitation Act, include every fresh accrual of the right to apply upon each successive default.
2. Whether the right to apply for a final decree in respect of instalments not barred by limitation remains intact despite the omission to take advantage of the default clause.
3. Whether the wording of the default clause affects the decree-holder's right to apply for a final decree.

The Full Bench answered these questions affirmatively, emphasizing the decree-holder's right to apply for a final decree upon each successive default, provided earlier defaults were waived. The specific wording of the default clause did not affect this right, and the default clause should be interpreted liberally for the benefit of the decree-holder.