Dilipkumar Chimanlal Maniar And ... vs Industrial Credit And ...
2003 Latest Caselaw 1298 Bom

JUDGMENT

Mohite, J.

1. By this Appeal the appellants, (hereinafter referred to as the "Plaintiff's Assignees") seek to quash and set aside the Judgment & Order dated 11-3-1999 (reported in 1999 AIHC 3330) passed by a learned single Judge of this Court on Chamber Summons No. 1758 of 1997 taken out by the original defendants in Suit No. 771 of 1976. By the impugned Judgment & Order, the Chamber summons has been made absolute in terms of prayer Clauses (a), (b) and (c) which are as under :--

(a) That this Honourable Court be pleased to discharge the Court Receiver High Court Mumbai, who has been appointed Receiver of the properties bearing plot No. 159 and 169 more particularly described in Exhibit "E" to the plaint since the Consent Decree dated 9-1-80 has become unexecutable being barred by law of limitation and that the Court Receiver be directed to hand over possession of the said properties to the defendants after removal of all the encroachment and illegal construction on the said properties :

(b) That the Plaintiffs assignees be directed to refund to the defendants the amount of Rs. 7,56,000/- or in the alternative, the Consent Decree dated 9-1-80 may be marked fully satisfied and the Decree holder may be ordered to refund a sum of Rs. 4,35,984/- to over and above of the decretal the defendants being the amount paid in excess dues;

(c) That this Honourable Court be pleased to direct the plaintiffs assignees Nominee to hand the over to the Defendants the title deeds of properties bearing Plot No. 159 and 169 more particularly described in Exh. "E' to the plaint."

2. The brief relevant facts of the case are as under :--

(a) In 1976 the Industrial Credit & Development Syndicate Limited (hereinafter referred to as the "plaintiff filed a suit against one Khanderao Ramrao Shivalkar and 15 other members of his family (hereinafter referred to as the "defendants") for recovery of Rs. 19,56,215,35/-.

(b) On 9-1-1980 a Consent decree came to be passed between the Plaintiff and defendants in the said suit. The Consent decree was passed in terms of the consent terms duly signed by the Advocates on behalf of the parties. The relevant clauses with which we are concerned are Clauses 1 to 7 of the said Consent terms dated 9-12-1979, which were in the following terms :--

(1) Decree on Admission in the terms of prayers (a), (b), (c), (d), (e), (f) and (g) (i) of the Plaint.

(2) Order and Decree that in the event of the defendants paying a sum of Rs. 16,48,571.06 ps. (Rupees Sixteen Lakhs Forty Eight Thousand Five Hundred Seventy one and six paise only) together with interest at the rate of 15% per annum on Rs. 8,00,000/- from 19th December, 1979 on or before the 30th of June, 1981 in the instalments that even the plaintiffs do mark the decree as fully satisfied.

(3) Ordered and decreed that the Defendants do jointly and severally pay to the plaintiffs the sum of Rs. 16,48,571.06 paise (Rupees Sixteen Lakhs Forty Eight Thousand Five Hundred Seventy one and Six paise only) together with interest at the rate of 15% per annum on Rs. 8,00,000/- till the entire decretal amount is paid off in fully in the following instalments :

(a) A sum of Rs. 4,00,000/- (Rupees Four Lakhs only) forthwith on the passing of the Consent Decree as per these Consent Terms;

(b) A further sum of Rs. 4,50,000/- (Rupees Four Lakhs Fifty Thousand only) on or before the 30th April, 1980;

(c) A further sum of Rs. 5,00,000/- (Rupees Five Lakhs only) on or before 30th December, 1980;

(d) And the remaining entire balance of the decretal amount together with interest as aforesaid on or before the 30th June, 1981;

(4) The Defendants do pay to the plaintiffs quantified costs upto today carrying out this decree fixed at Rs. 30,000/- forthwith on the signing of these Consent Terms.

(5) Ordered and decreed that in the event of default by the Defendants in payment of any one of the instalments mentioned in Clause No. 3 hereinabove on or before the respective dates for payment thereof the entire decretal amount as prayed for in prayer (a) of the plaint or the balance thereof then remaining due and payable shall become immediately payable and the plaintiffs shall be entitled to and to be at liberty to execute the decree against the defendants.

(6) In the event of the plaintiffs, become entitled to execute the decree as provided in clause No. 5 hereinabove, the Receiver of this Court shall stand automatically appointed Receiver of the properties mentioned in the plaint and in the Schedules hereunder written with all powers under Order XL, Rule 1 including the power to sell the property by public auction or by private treaty.

(7) Ordered and Decree that in the event of the Court Receiver selling the properties, more particularly described in the Schedules hereunder written by public auction or by private treaty the Court Receiver do hand over the net sale proceeds to the plaintiff of such sale after deduction therefrom his costs charges and expenses and the plaintiffs do appropriate the net sale proceeds against the decretal amount and in the event of there being any deficiency the plaintiffs against the Defendants and the surety for such efficiency.

(c) The drawn up decree which followed was a composite one and not only declared the debt due from the defendants but provided for sale of the mortgaged property which was the security for the transaction and also the mode and manner of execution of the decree in case there was any default of payment as agreed. The clause pertaining to execution as contained in the decree was in the following terms :--

"AND THIS COURT BY AND WITH SUCH CONSENT DOTH FURTHER ORDER AND DECREE that in the event of the plaintiff becoming entitled to execute the decree as aforesaid the Court Receiver High Court Bombay shall stand automatically appointed Receiver of the property mentioned in the Schedule 'A' hereto, with all powers under Order XL, Rule 1 of the Code of Civil Procedure, 1908 including the powers to sell the property by public auction or by private treaty AND THIS COURT BY AND WITH SUCH CONSENT DOTH FURTHER ORDER AND DECREE that in the event of the Court Receiver selling the property more particularly described in the Schedule 'A' hereto by public auction or private treaty the said Receiver do hand over the net sale proceeds of such sale to the plaintiffs after deducting therefrom his costs, charges and expenses and this Court by and with such CONSENT DOTH FURTHER ORDER THAT the plaintiffs do appropriate the net sale proceeds against the decretal amount prayed for as aforesaid and in the event of there being any deficiency the plaintiffs be and they are at liberty to execute the decree personally against the defendants and the Sureties for such deficiency, the Sureties (1) Bhimji Rawji Patel, (2) Babu Vaman Rao and (3) Paresh Kumar Bhimjibhai Patel carrying on business in partnership in their firm name of M/s. Laxmi Construction Company, having their office at 4/B. Anupam building, L. B. Shastri Marg, Ghatkopar, Bombay 400 086, having sumultaneously with the signing of the CONSENT TERMS herein executed a SURETY BOND under Section 145 of the Code of Civil Procedure, plaintiffs, "1908, in favour of the plaintiffs."

(d) The sureties i.e. M/s. Laxmi Construction Company, in accordance with the decree filed a separate surety bond dated 9-1-1980 under Section 145 of the Code of Civil Procedure, 1908 in favour of the Company to secure the interest of the decree holders.

(e) It is not in dispute that on 9-1-1980 the defendants paid an amount of Rs. 4,00,000/- to the plaintiff as contemplated in Clause 3(a) of the Consent terms dated 8-12-1979.

(f) The second instalment for the sum of Rs. 4,50,000/- was however, not paid by the defendants to the plaintiff on or before 30-4-1980. According to the defendants the second instalment in fact, was paid by them a little late, on 28-5-1980 i.e. after a delay of about one month. It is the defendants case that this amount was accepted by the plaintiff in satisfaction of the decretal amount, without protest.

(g) On 1-5-1980, on account of non-payment of Rs. 4,50,000/- on time, by operation of the Consent decree, the plaintiff became entitled to execute the decree against the defendants. Attempts were made on behalf of the plaintiff to get the Court Receiver to take possession but the attempts of the Court Receiver to take possession were obstructed by one of the partner of M/s. Laxmi Construction Co. In or about 1982, one Mr. Ashar Rubens, a managing Clerk of M/s. Kanga & Co. who were Advocates for the plaintiff filed an affidavit dated 20-10-1982 in disposed Suit No. 771 of 1976. In para-graph-4 of this affidavit there is a clear and express admission made on behalf of the plaintiff to the effect that an amount of Rs. 4,00,000/- had been paid to the plaintiff on 9-1-1980 and amount of Rs. 4,50,000/- had been paid on 28-5-1980, towards the satisfaction of the decree.

(h) Relying upon the aforesaid affidavit of Mr. Ashar Rubens and on hearing the Advocate for the plaintiff, this Court ultimately, passed an order on 4-11-1982 directing the Court Receiver to take forcible possession of the property bearing plot No. 159 TPS-3, Ward No. 4083, Bhagat Galli, Mahim, if necessary, by removing any obstruction and in pursuance of the said order, finally the Court Receiver did take charge of the said property in execution of the decree. The Court receiver did take charge ultimately of plots bearing Nos. 159 & 169 as more particularly described in Exhibit-E to the original plaint in the suit.

(i) By 1986, the sureties M/s. Laxmi Construction Co., had entered into an agreement with the defendants for purchase of plot of 159 and 169 which formed the security for the transaction between the plaintiff and the defendants. They were agreeable to pay the entire decretal dues to the plaintiff and get the decree assigned in their favour or in favour of their nominees and for the purpose of facilitating this, they filed Notice of Motion No. 1209 of 1986 in Suit No. 771 of 1976. On this Notice of Motion a single Judge of this Court recorded an undertaking on 22-8-1986 from one Babu Vamanrao, partner of M/s. Laxmi Construction Co., to the effect that within eight weeks, M/s. Laxmi Construction Co., would pay the entire decretal dues to the plaintiff and get the decree assigned in favour of M/s. Laxmi Construction Co., or their nominees. The assignment was permitted on the undertaking being accepted.

(j) On 16-12-1986 a deed of assignment was executed between the original plaintiff and the plaintiffs assignees who were 4 members of the Maniar family. A glance of this deed of assignment would indicate that the same was entered into in pursuance of the aforesaid order of this Court dated 22-8-1986 and in consideration of the sum of Rs. 18,25,587.58/- paid by the plaintiffs assignees to the plaintiff. At the foot of this document, the mode of payment is mentioned and from the same it is clear that out of the total consideration of Rs. 18,25,587,58/-, an amount of Rs. 12,00,000/- was paid by four separate pay orders issued by he United Commercial Bank at the request of the plaintiff's assignees. One amount of Rs. 6,25,587.50/- was however, paid by a separate pay order issued by the Janata Sahakari Bank Limited at the request of M/s. Laxmi Construction Co.

(k) It is the defendants case that on 27-2-1988 the plaintiff received further amount of Rs. 5,00,000/- towards satisfaction of the decree.

(l) The record indicates that by 1990 disputes had arisen between M/s. Laxmi Construction Co., and their nominees i.e. the present plaintiff's assignees and this resulted in proceedings being taken out by Laxmi Construction Co., as well as the defendants in the disposed High Court Suit No. 771 of 1976, Some of the relevant details pertaining to these proceedings are as under :--

(i) On 15-6-1980 M/s. Laxmi Construction Co., took out Chamber summons No. 794 of 1989 for stay of sale in execution. In this, they obtained an ad interim stay on 15-6-1999 which according to the defendants continued till 22-6-1990. This stay according to the defendants was in operation for a period of seven days.

(ii) On 17-5-1991 M/s. Laxmi Construction Co., took out another Chamber summons bearing No. 453 of 1991 for stay of proceedings in the execution and in this Chamber summons, on 17-5-1991 they obtained a stay of such proceedings. This stay was in operation till 3-4-1992, when this Chamber summons came to be dismissed. The record indicates that this stay was in operation for 345 days.

(iii) On 12-10-1992 the defendants preferred Chamber summons bearing No. 959 of 1992 and obtained a stay of the execution proceedings. This stay was in operation till 23-2-1993. The record indicates that this stay was in operation for 135 days.

(iv) On 23-4-1993 the defendants again obtained a stay in Appeal No. 231 of 1992 filed by them before the Division Bench against the order dated 23-2-1993 dismissing Chamber summons No. 959 of 1992. This stay was in operation till 9-3-1995 and the Appeal came to be dismissed. The record indicates that this stay was in operation for a period of 686 days.

(m) On 9-3-1995 while disposing of Appeal No. 231 of 1993 filed by the defendants, the plaintiffs assignees were granted liberty to take out an application for execution of the decree dated 9-1-1980 passed in Suit No. 771 of 1976.

(n) On 7-4-1995 the plaintiff's assignees filed the aforesaid application for execution of the decree dated 9-1-80 in pursuance of the liberty granted to them by this Court by order dated 9-3-1995.

(o) That, even thereafter, on 26-3-1989 the defendants paid an amount of Rs. 1,00,000/- to the plaintiffs assignees. On 12-10-1992 the defendants deposited a further amount of Rs. 2,00,000/- with the plaintiffs assignees in pursuance of the further directions granted by this Court vide order dated 12-10-1992 and on 15-10-1992 they paid to the plaintiff's assignees yet another instalment of Rs. 3,56,000/- in pursuance of the direction granted by this Court.

(p) On 26-12-1997 the defendants took out Chamber summons No. 1758 of 1997 for several reliefs as prayed for therein and by the impugned order the leaned single Judge of this Court has allowed this Chamber summons in terms of prayer Clauses (a), (b) and (c) as mentioned hereinabove. A glance of the impugned judgment & order indicates that the Chamber summons was allowed on 2 counts :--

(a) that the execution application lodged by the plaintiffs assignees on 7-4-1995 was barred by limitation and that plaintiff's assignees could not get the benefit of the exclusion of 1544 days from the limitation period, which exclusion was sought in respect of the period for which the execution proceedings had been stayed by the Court. This exclusion was refused on the ground that the stay orders had not been obtained by the defendants and had in fact, been obtained by the plaintiffs assignees, and/or their nominees and that thus the period for which such orders were in operation could not be deducted while calculating period of limitation.

(b) that the defendants had established that they had made payments of Rs. 4,50,000/- and Rs. 6,25,587/- towards the satisfaction of the decree, and together with other payments made, the decree stood marked satisfied.

(g) The present appeal was filed against the impugned order of the teamed single Judge on 15-3-1999,

3. The contention raised on behalf of the appellants (plaintiffs assignees) can be briefly summarised as under :--

(a) that firstly the decree dated 9-1-1980 forms a composite decree which provided for execution through appointment of Court Receiver, in the event of a default in payment of any instalment with powers to the Receiver to sell the property. That in such a case, no application for execution was required at all as the decree was composite and self operative;

(b) that in any case, the application for execution filed on 7-4-1995 was filed in time as, if the period for which the stay against proceedings in execution was admittedly in operation is excluded by operation of Section 15 of the Limitation Act, 1963, then the said application would come within the prescribed period of limitation of 12 years. In this regard, it is further contended that the learned single Judge had erred in making a distinction between a stay obtained by the defendants on the one hand and stay obtained by the plaintiff's assignees/nominees. Section 15 of the Limitation Act, 1963 no where prescribed that stay order should be obtained by a particular party, while determining the period to be excluded.

(c) That in any case the finding in the impugned judgment that the decree has been marked satisfied was incorrect. As the payment of Rs. 4,50,000/- and Rs. 6,25,587/- was neither admitted to have been received by the plaintiff or admitted by the plaintiff's assignees nor were these payments recorded by the Executing Court as required under Order XXI, Rule 2 of the Code of Civil Procedure, 1908;

4. On behalf of the Respondents it was contended that in so far as the question of limitation is concerned, a party cannot be permitted to take advantage of its own wrong and therefore, the period of the stay obtained by the plaintiffs assignees or their nominees should not be allowed as a deduction while calculating the period of limitation.

5. We have perused the record and heard the parties at length. In our view, the application for execution filed by the present appellants cannot be said to be barred by limitation. They are entitled to the deductions for the periods for which proceedings in the execution of the decree had been stayed, irrespective of the fact as to who had obtained such a stay order from the Court. Section 15(1) of the Limitation Act, 1963 reads thus:--

"Exclusion of time in certain other cases:--

(1) In computing the period of limitation of any suit or application for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of the continuance of the injunction or order, the day on which it was issued or made, and the day on which it was withdrawn, shall be excluded,

6. That in any case the record indicated that the plaintiff had admitted the receipt of Rs. 4,50,000/- and an amount of Rs. 6,25,587/- was also paid at a point of time when the deed of assignment has not been yet executed and therefore, it must be taken to be the payment on behalf of the respondents by M/s. Laxmi Construction Co. in the capacity of sureties under surety bond dated 9-1-1980. It was contended that if the payments of these amounts were taken into account, in fact excess amount had been made by and on behalf of the defendants and that therefore, there was no error in the impugned judgment and order which recorded that the decree had been satisfied.

7. The plain reading of the Limitation Act, 1963 indicates that in determining if an application for execution of a decree is filed within limitation, the period when any stay of the execution of the decree was in operation will be deductible irrespective of who had obtained the same. The contention made on behalf of the defendants that a party should not be allowed to take advantage of his own wrong, has no force as the deduction is permissible only for the period during which the Court order is operative and this Court order is not an act of the party.

8. It is true that under Order XXI, Rule 2, Sub-rule (3) of the Code of Civil Procedure it is provided that a payment or adjustment which has not been certified or recorded shall not be recognised by any Court executing the decree. However, in the present case, we find a categorical admission made on behalf of the plaintiff in the affidavit of their Advocates Managing Clerk dated 20-10-1982. This affidavit was filed for the purpose of allowing the Court Receiver to take possession and the order passed on the basis of this affidavit is clearly an order passed to facilitate the process of execution of the decree. The executing Court was therefore, clearly informed about the payments of Rs. 4,00,000/- and Rs. 4,50,000/- made by the defendants to the plaintiff. On being so informed, it was the duty of the Court to record the adjustment under Order XXI, Rule 2 of CPC. This has however, not been done. In our view, such an admission made by the plaintiff before the executing Court is tantamount to the decree holders certifying such payment to the Court. It was further the duty of the Court under Order XXI, Rule 2(1) of the CPC to act and record the same accordingly. In such a case, the maxim "Actus Curiae Neminem Gravabit" would apply in full force. The defendants cannot be made to suffer merely because the Court has failed to record the second payment of Rs. 4,50,000/-. It is true that under Order XXI, Rule 2(3) A payment or adjustment, which has not been certified or recorded as aforesaid, shall not be recognised by any court executing the decree. However, we cannot allow this procedural requirement to result in injustice and for this purpose, in order to meet ends of justice, we propose to direct the executing Court to record the payment of Rs. 4,50,000/- admitted by the plaintiff to have been made to them, on the decree. It was contended by the Advocate for the appellants that under Article 125 of the Schedule to the Limitation Act 1963, the application to record an adjustment or satisfaction of a decree would have to be made within 30 days of the payment being made. In our view, no such application was required to be made as once the executing Court was intimated about the receipt of such payment by the decree-holders, it was the Court's duty to record the same and that there is no period of limitation prescribed for the Court to perform its duty. It may be mentioned here that the judgment-debtor also can inform the Court regarding any payment or adjustment by making an application under Order XXI, Rule 2 (2) and clause (Article) 125 of the Schedule to the Limitation Act would apply to such an application.

9. In so far as the payment of Rs. 6,25,587/-, is concerned, there is no admission made on behalf of the plaintiffs that they received the same in satisfaction of the decree. The record indicates that this amount was received by the plaintiff from the plaintiffs assignees towards part payment for the purchase of the decree though the pay order was made out at the behest of M/s. Laxmi Construction Co. It cannot be lost sight of that by the time this payment was made, the Court had already passed an order permitting an assignment in favour of M/s. Laxmi Construction Co. or their nominees. It may be that on the date of the said payment. M/s. Laxmi Construction Co. were duty bound to honour their obligation as sureties but this by itself would not prevent them from investing money for the purchase of the decree. It was open for the defendants to move the executing Court for recording the payment or adjustment and they have failed to do so. In the absence of any clear certification by the plaintiff and also in the absence of any application for recording of the said payment, we are unable to hold that the defendants can obtain any benefit in respect of this amount and the said amount of Rs. 6,25,587/- cannot be marked as paid in satisfaction of the decree dated 9-1-1980.

10. In the net result, we feel that the ends of justice would be met if the following directions are made :--

(a) that it is held and declared that the application for execution of the decree dated 9-1-1980 made by the appellants on 7-4-1995 is not barred by law of limitation.

(b) that while deciding the execution application, the executing Court will record the payment of the following amounts towards the decree :--

(i) Rs. 4,00,000/- received by the plaintiff on 9-1-1980;

(ii) Rs. 4,50,000/- received by the plaintiff on 28-5-1980;

(iii) Rs. 5,00,000/- received by the plaintiffs assignee on 27-2-1988;

(iv) Rs. 1,00,000/- received by the plaintiff s. assignees on 27-3-1989;

(v) Rs. 2,00,000/- received by the plaintiffs assignees on 12-10-1992;

(vi) Rs. 3,56,000/- received by the plaintiffs assignees on 15-10-1992;

(vii) Rs. 1,50,000/- received by the plaintiffs assignee on 1-11-1992;

(viii) Rs. 50,000/- received by the plaintiffs assignee on 9-11-1992;

(ix) Rs. 5,00,000/- received by the Prothonotary & Senior Master, High Court, Mumbai on 2-5-2000 and

(x) Rs. 3,00,000/- received by the Prothonotary & Senior Master, High Court, Mumbai on 4-5-2000

The executing Court will calculate the amount if any still payable under the decree after recording the aforesaid payments and granting a deduction thereof to the defendants.

This exercise of calculating the amount due under the decree will be completed within a period of eight weeks from the date of receipt of this order.

(c) Upon the calculation of the amount due under the decree, the executing Court will, by a notice, call upon the defendants to deposit the amount due within a period of eight weeks and if the defendants or any of them, do so deposit the said amount together with any amount found due to the Court receiver, the Court Receiver appointed by the Court in respect of the property described in Exhibit-E to the plaint shall stand discharged and the decree will stand marked satisfied.

11. If, however, the defendants fail to deposit the amount found due under the decree in spite of being called upon to do so, then the executing Court will be at liberty to take further steps to recover the decretal amount in accordance with law.

12. Over and above the aforesaid directions, in view of the fact that substantial amounts appeared to have been paid by the original defendants, it would be open to them to move an appropriate application before a single Judge for release of either of the two plots of land, which application is permitted to be moved during the pendency of the Execution proceedings. The appellants are directed to furnish a copy of the execution application.

13. The appeal thus stands allowed partly in the aforesaid terms. There shall be no order as to costs.

14. After the order was pronounced. Mr. Nitin Vatkar applies for stay with respect to Clause (10)(b)(ii) wherein we have recorded a payment of Rs. 4,50,000/- received by the plaintiff on 28-5-1980. A part of the order cannot be stayed. Application is rejected.

Parties to act on ordinary copy of this order duly authenticated by the Associate/ Personal Secretary of this Court as true copy.