PHALTAN BANK LTD Vs. BABURAO APPAJIRAO

JUDGEMENT

(1.) THIS appeal raises a short question of limitation under Art. 181 Limitation Act. The appellant) the Phaltan Bank Limited, had sued the respondents to recover the amount due on a mortgage executed in its favour (Civil Suit No. 174 of 1937 ). A preliminary decree was passed in favour of the Bank for Rs. 2,242-3-6 on 21-12-1939. The mortgagors preferred an appeal in the District Court of Phaltan. as paupers (Appeal No. 6 of 1941 ). This appeal was dismissed with costs on 27-7-1942. Thereafter, the mortgagors preferred a pauper appeal in the High Court at Phaltan. This appeal was preferred beyond 30 days which is the period of limitation for a pauper appeal, but within 90 days which is the period of limitation for an ordinary appeal. It is clear that the fact that the pauper appeal was beyond time was not noticed by the High Court and notice was issued on the appeal. When the Bank appeared, it drew the attention of the High Court to the fact that the pauper appeal was initially filed beyond time. The High Court thereupon apparently decided to treat the appeal as an ordinary appeal and at the request of the appellants gave them time to pay the requisite court-fee on the memorandum of appeal. The requisite court-fee was not paid by the appellants, with the result that the appeal was dismissed with costs on 9-11-1944. On 11-9-1947, the Phaltan Bank applied for making the preliminary decree final, and this application is resisted by the mortgagors principally on the ground that it is barred by limitation under Art. 181. If the starting point of limitation in respect of this application is the day on which the second appeal was dismissed by the Phaltan High Court on 9-11-1944, then the application is clearly within time. On the other hand, it the starting point of limitation is the date on which the District Court dismissed the mortgagors' appeal on 27-7-1942, the present application is clearly beyond time. The question which therefore falls to be considered in the present appeal is: Which is the starting point of limitation for the application made by the appellant to have the preliminary decree made final?

(2.) IT is now clear that if an appeal has been preferred against a preliminary decree passed under the provisions of Order 34, an application which is to be made to make the decree final is governed by the provisions of the residuary Article 181, Limitation Act. Under this article, limitation is three years and the starting point is the time when the right to apply accrues. Ordinarily, such a right would accrue to the party seeking to apply for a final decree on the date when the preliminary decree is passed. There is, however, no doubt that if an appeal is preferred against such a preliminary decree, the starting point for applying to make the decree final would commence from the date when the appellate Court disposes of the appeal on the merits. In other words, if an appeal is preferred from a preliminary decree,, the decision of the appeal on the merits is substituted as the starting point of limitation under Art. 181, Limitation Act. There was some doubt and confusion as to this position when the provisions with regard to the mortgage decrees were contained in the Transfer of Property Act. But since the said provisions have been incorporated in Order 34, Civil P. C. , this position has been clarified beyond all doubt. It may be relevant in this connection to refer to the decision of the Privy Council in -- 'jowad Hussain v. Gendan Singh', AIR 1926 PC 93 (A), where their Lordships have held that in case there has been an appeal from a preliminary decree and the appellate Court has not extended the time for payment, the period of three years within which under Article 181 an application for a final decree must be made runs from the date of the decree of the appellate Court) not from, the expiry of the time for payment fixed by the preliminary decree. There would be no change in this position although the appeal was by the mortgagee and the question which the Court of appeal had to consider was merely as to the amount for which the preliminary decree should be made.

(3.) THE Courts below have held that the starting point of limitation in the present case is the date of the decision of the first appeal in the District Court and not the date on which the second appeal was dismissed with costs. Mr. Madbhavi contends that this view is wrong because according to him a decree has been formally drawn by the Phaltan High Court and according to this decree it appears that the second appeal preferred by the mortgagors has been dismissed with costs. Mr. Madbhavi's argument is that this decree must be treated as a decree passed by the second appellate Court on the merits; and if that is so, there should be no difficulty in holding that the time for making an application under Art. 181 can start only from the date when the order was passed by the High Court in the second appeal. In dealing with this question, it must be remembered that the High Court at Phaltan did not deal with the merits of the second appeal at all. In fact, it is clear that when dealing with this appeal an initial irregularity was committed in that the appeal was admitted as a pauper appeal without realising that it had been filed beyond the narrow limitation prescribed for pauper appeals. When this mistake was pointed cut to the Phaltan High Court, the appeal was treated as an ordinary appeal and indulgence was shown to the appellants by giving them further time tp pay adequate court-fee on the memorandum of appeal, and when the requisite court-fee thus ordered to be paid was not paid by the appellants, the appeal was dismissed with costs. In the context, the order passed by the Phaltan High Court dismissing the appeal with cost's must mean that the memorandum of appeal was rejected on the ground that it did not bear proper court-fee.