HULAS SINGH Vs. DATA RAM

JUDGEMENT

(1.) This is a defendants appeal arising out of a suit for sale on a mortgage dated 10 July 1925. The defendants contested the suit mainly on the ground that the claim was barred by limitation. This contention of the defendants found favour with the trial Court and that Court accordingly dismissed the suit. On appeal by the plaintiffs, the lower appellate Court reversed the decision of the trial Court on the question of limitation and decreed the suit. The sole question in the appeal is whether or not the plaintiffs claim was barred by limitation and the decision of this question depends on the construction of certain sections of the Encumbered Estates Act ( 25 of 1934) and on the true interpretation of Section 15, Limitation Act.

(2.) The relevant facts are not in controversy and are as follows: The mortgage in suit was executed by the defendants or their predecessors in favour of the plaintiff-respondents on 10 July 1925, and, under the law of limitation, the time for instituting a suit on the basis of the mortgage would have expired on 10 July 1937. The mortgagors, however, on 24 April 1936, filed an application under the Encumbered Estates Act and that application was forwarded by the Collector to the Special Judge on 6 June 1936, in accordance with the provisions of Section 6, Encumbered Estates Act. The application remained pending for some time before the Special Judge but owing to the default of the landlord, applicants, the Special Judge in conformity with the provisions of Sub-section (3) of Section 8, Encumbered Estates Act, dismissed the application on 10 August 1937. The suit giving rise to the present appeal was then filed on 17 September 1937.

(3.) The plaintiffs maintained that in the computation of the period of limitation they were entitled to the exclusion of the period intervening between 6 June 1936 the date on which the Collector had forwarded the application to the Special Judge, and 10 August 1937 when the application of the landlord applicants was dismissed by the Special Judge under Section 8 (3) of the Act. The defendants, on the other hand, contested this position and maintained that the period above referred to could not be excluded in computing the period of limitation for a suit to enforce the mortgage. The plaintiffs placed reliance on Clauses (b) and (c) of Section 43, Encumbered Estates Act, and also on Section 15, Limitation Act. In our judgment, Section 43 had no application to the present case. Clauses (b) and (c) of Section 43, before the amendments introduced by Act, 11 of 1939, ran as follows: When an application has been dismissed under Sub-section (3) of Section 8 or when an order has been passed under Section 20 quashing further proceedings under the Act, the following consequences shall ensue, namely: ... (b) notwithstanding anything contained in Section 18 all rights and remedies and proceedings stayed under Sub-section (1) of Section 9 shall revive to the creditors as if no action had been taken under this Act; and (c) in computing the period of limitation prescribed for any suit or other proceeding for the recovery of debts in respect of which a written statement has been filed under Section 10 the period from the date of the order of the Collector under Section 6 to the date of the order of the Special Judge quashing further proceedings under the Act shall be excluded.