Bhawanipore Banking Corpora-Tion, Ltd vs Gouri Shankar Sharma

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. LI of 1949

Decision Date: 14 March 1950

Coram: Saiyid Fazal Ali, Hiralal J. Kania, Mehr Chand Mahajan

In this case the Supreme Court of India recorded that the judgment was delivered on 14 March 1950 by Justice Saiyid Fazal Ali, with Justices Hiralal J. Kania and Mehr Chand Mahajan forming the bench. The parties before the Court were Bhawanipore Banking Corporation Ltd, the petitioner, and Gouri Shankar Sharma, the respondent. The case is reported in 1950 AIR 6 and 1950 SCR 25, and is also cited in R 1974 SC 968. The matters under consideration involved the provisions of the Limitation Act (IX of 1908), specifically Article 182, clauses 2 and 3, and the question of when the limitation period for execution of a decree begins. The Court also examined the interpretation of Article 189, clauses 2 and 3, in the context of a review of a decree and the effect of an appeal on the limitation clock.

The factual background set out by the Court showed that a preliminary decree on a mortgage was passed ex parte on 21 August 1940 in a suit filed by the petitioner to enforce the mortgage. The judgment-debtor thereafter filed an application under section 36 of the Bengal Money-Lenders Act on 20 December 1941 seeking to reopen the decree. That application was dismissed for default of appearance. Subsequently, an application under Order IX, rule 9 of the Code of Civil Procedure, seeking restoration of the earlier application, was dismissed on 1 June 1942. In the meantime, a final decree was passed on 22 December 1941. The judgment-debtor appealed the dismissal of the Order IX, rule 9 application, and that appeal was dismissed for non-prosecution on 3 July 1944. On 9 April 1945 the holder of the decree applied for execution of the decree.

In addressing the principal issue, the Court first considered whether the word “review” used in Article 182 could be given a broad meaning that would include the application under section 36 of the Bengal Money-Lenders Act. The Court held that even if “review” were interpreted widely, clause 3 of Article 182 could not apply because the application under section 36 had been dismissed for default. Since the court never had to consider the merits of whether the decree could be reopened, it could not be said that a “review” of the decree had occurred within the meaning of the clause.

Next, the Court turned to the language of clause 2 of Article 182, which states “where there has been an appeal.” The Court read this phrase together with the words “for the execution of a decree or order” appearing in the first column of the Article. It concluded that the mere existence of an appeal from the order dismissing the Order IX, rule 9 application—an appeal that was connected with the pending proceeding under section 36—did not create a fresh starting point for the limitation period under clause 2. Accordingly, the appeal did not restart the limitation clock for execution of the decree.

Finally, the Court summarized its holding: the dismissal of the application under section 36 for default meant that clause 3 of Article 182 was inapplicable, and the appeal from the dismissal of the Order IX, rule 9 application did not satisfy the condition of “where there has been an appeal” required by clause 2 to reset the limitation period. Therefore, the execution of the decree could not be said to be barred by limitation on the basis of the provisions examined.

On 14 March 1950, the judgment was delivered by Justice Fazl Ali. Counsel H. K. Mitter, appearing with another counsel, represented the appellant, while counsel B. C. Mitter represented the respondent. The sole issue for determination was whether the decree that was the subject of the execution proceeding was barred by the limitation period. The court of first instance had held that the decree was not barred by limitation, whereas the High Court of Calcutta had reached the opposite conclusion. After obtaining a certificate under Section 110 of the Civil Procedure Code, the decree-holder appealed the decision of the High Court to this Court, seeking a final determination on the limitation question.

The factual background began when, on 21 August 1940, a preliminary mortgage decree was passed ex parte in a suit filed by the appellant to enforce a mortgage. The judgment-debtor then filed an application under Order IX, rule 13 of the Civil Procedure Code on 19 September 1940, seeking to set aside the ex parte decree; this application was rejected on 7 June 1941. On 11 July 1941, the judgment-debtor filed another application, this time under Section 6 of the Bengal Money-Lenders Act, requesting the reopening of the preliminary decree; the court dismissed that application for default of appearance on 20 December 1941. Subsequently, a final mortgage decree in favour of the appellant was pronounced on 22 December 1941. The judgment-debtor later filed an application under Order IX, rule 9 of the Civil Procedure Code, asking for restoration of the proceedings under Section 36 of the Money-Lenders Act. The court dismissed this application on 1 June 1942, holding that the applicant had failed to show sufficient cause for his non-appearance and that reopening the preliminary decree would serve no purpose after the final decree had been issued. An appeal against that dismissal was filed in the High Court of Calcutta but was dismissed for non-prosecution on 3 July 1944. On 9 April 1945, the appellant sought execution of the decree against the original judgment-debtor, who had since died; that application was dismissed for default on 11 May 1945. The present execution application was filed on 2 June 1945, more than three years after the final decree. Consequently, the application appears to be time-barred unless it falls within clause 2 or clause 3 of Article 182 of the Indian Limitation Act, which respectively provide that the limitation period begins from the date of the final decree or order of the appellate court, or from the date of a decision rendered on a review.

In this matter, the Court examined whether the present application for execution could be treated as timely on the basis of clause 3 of article 182 of the Indian Limitation Act. Clause 3 provides that the limitation period begins to run from “the date of the decision passed on the review” where a review of a decree or order has taken place. The appellant argued that the judgment-debtor’s application to reopen the preliminary mortgage decree under section 36 of the Money-lenders Act should be regarded as a review, and therefore the limitation period should commence from the date of the final order in the proceedings connected with that application. The Court found that this contention lacked any substance. The essential terms of clause 3 are: (1) “where there has been a review” and (2) “the decision passed on the review”. Both conditions must be satisfied before the provision can be invoked. Even if the word “review” were interpreted in a very wide sense and the application under section 36 were treated as a review, the appellant could not succeed because the Court never actually undertook a review of the decree that is now sought to be executed. What transpired was that the application under section 36 for reopening the preliminary mortgage decree—not the final decree—was dismissed for default, and a separate application under Order IX, rule 9 of the Civil Procedure Code seeking restoration of the proceedings under section 86 of the Money-lenders Act was also dismissed. Consequently, the Court never had an occasion to consider whether the decree could be reopened, and therefore it cannot be said that “there has been a review” of the decree. The subsequent proceedings under Order II, rule 9 of the Code of Civil Procedure are irrelevant to the present issue, because they did not involve a review of the decree that is subject to execution; at most, they constituted a review, if such a term may be applied, of the order dismissing the judgment-debtor’s application under section 36 for default. The appellant also submitted that clause 2 of article 182 might apply, contending that the phrase “where there has been an appeal” could be read broadly enough to include the appeal from the order dismissing the application under Order IX, rule 9 of the Civil Procedure Code in the context of the proceedings under section 36 of the Money-lenders Act. The Court rejected this argument as untenable, observing that the expression “where there has been an appeal” must be read together with column 1 of article 182, which refers to the execution of a decree or order of a civil court. Regardless of how broadly the phrase is construed, it cannot be extended to cover an appeal from an order passed in a collateral proceeding that has no direct or immediate connection with the decree that is to be executed. Accordingly, the Court concluded that the appeal lacked merit and dismissed it with costs.

The Court examined the contention that the appeal could be captured by clause 2 of article 182 on the basis that it originated from proceedings under Section 36 of the Moneylenders Act. The Court described this contention as highly far-fetched. It observed that the phrase “where there has been an appeal” must be read together with the words that appear in column 1 of article 182, namely “for the execution of a decree or order of any civil Court …”. Even if the language were interpreted in the broadest possible manner, the Court held that it could not be said to encompass an appeal from an order that is issued in a collateral proceeding or that bears no direct or immediate connection with the decree that is being executed. Consequently, the Court concluded that the present appeal lacked any substantive basis. Accordingly, the Court dismissed the appeal and ordered that the costs of the proceedings be awarded against the appellant. The appeal was therefore dismissed. The agent representing the appellant was identified as P.K. Chatterji, while the agent representing the respondent was identified as R.R. Biswas.