IMPORTANT POINT
Where in preliminary decree, in mortgage suit, payment is directed to be paid in instalments right to supply for final decree would accrue from date of default in payment of instalment and three years period for filing application would start from the date of default, statutory notice issued under Setion 34 of the Bengal Money Lenders Act would not have the effect of extending time limit.

Headnote:Code of Civil Procedure, 1908-Order 34, Rules 2 and 3-Bengal Money Lenders Act, 1960-Section 30-Limitation Act-Article 137-Mortgage decree-Final decree-Time limit for making application-Preliminary decree passed on 18.11.1968-Mortgage money directed to be paid in instalments-First instalment to be paid by 31.3.1969-Last instalment due on 31.3.1972-None of instalments paid-Decree holder issuing mandatory notice under Bengal Money Lenders Act and filed application for final decree on 15.2.1973-Right for applying final decree accrued on default of first instalment and not from demand notice-Application for final decree, having been filed beyond three years, barred by limitation.
Held : It is evident from Section 34 of the Bengal Act that in default of payment of any instalment, the date of such default shall be deemed to be date fixed under sub-clause (i) of clause (c) of sub-rule (1) of Rule 2 for payment of the whole amount. The whole amount found or declared due under or by a preliminary decree becomes payable and the plaintiff becomes entitled to apply for a final decree [Section 34(1)(a)(ii) of the Bengal Act]. It is thus clear that notwithstanding the dates of the instalments having been fixed under the preliminary decree which was subject to the provisions of the Bengal Act, a right accrued to the appellant to apply for final decree on default having been committed by the defendants in payment of the amount of the first instalment. It is not a case of a simple money decree. It is a case of a mortgage where under the preliminary decree, an opportunity is granted to the defendants to pay the mortgage amount in default whereof the plaintiff becomes entitled to apply for a final decree for sale of the mortgaged property. That right accrued to the plaintiff in this case on 31st March 1969. The plaintiff cannot extend the period of limitation by delaying service of notice on defendant under Section 34 of the Bengal Act, which is a pre-condition for making of an application by plaintiff for passing of final decree. The period of limitation would start running from the time the right to apply for final decree accrues and is not dependent on the date of sending of notice by the plaintiff to the defendant as required under the Bengal Act. Therefore, the application for final decree had rightly been mortgage dismissed as time barred. (Para 6)

JUDGMENT

Sabharwal J.-In a mortgage suit, a preliminary decree was passed in favour of the appellant on 18th November, 1968. The said decree directed the payment of the sum of Rs. 24,000/- in four equal instalments. The first instalment was payable on or before 31st March, 1969 and subsequent instalments by 31st day of March of each succeeding years. Thus the last instalment was payable on 31st March, 1972. The decree further stipulated that in case of default of payment of any one of the instalments, the plaintiff may, subject to the provisions of Bengal Money Lender s Act, 1960 (for short, Begal Act), apply to the Court for a final decree for sale of the mortgaged property and on such application being granted, the mortgaged property or a sufficient part thereof shall be directed to be said.

2. It has not been questioned that neither the first instalment payable under the decree on or before 31st March, 1969, was paid by the defendants nor was any subsequent instalment paid.

3. Order 34 Rule 2 of Code of Civil Procedure inter alia stipulates grant of six months time to the defendants to pay the mortgage amount stipulated under the preliminary decree and on default of payment, the plaintiff is entitled to apply for final decree directing sale of the mortgaged property as stipulated by Rule 4 of Order 34. Section 34 of Bengal Act, however, empowers the Court to direct payments by instalments notwithstanding the limit of six months fixed in Order 34 of Code of Civil Procedure. Section 34 of the Bengal Act reads as under:-

"34. Power of Court to direct payment by instalments.-(1) Notwithstanding anything contained in any law for the time being in force, or in any agreement, the Court shall-

(a) in suits in respect of loans to which the provisions of Order XXXIV of the First Schedule to the Code of Civil Procedure, 1908, apply, on the application of the defendant and after hearing the plaintiff, notwithstanding the limit of six months provided herein, direct at the time of the passing of the preliminary decree under rule 2 or rule 4 of the said Order to the effect mentioned in sub-clause (i) of clause (c) of sub-rule (1) of the said rule 2,-

(i) that the payment of the amount found or declared due under sub-rule (1) of rule 2 or sub-rule (1) of rule 4 of the said Order, as the case may be, is to be made, subject to such conditions as the Court may impose in such number of annual instalments and on such dates as the Court thinks fit regard to the circumstances of the plaintiff and the defendant and the amount of the decree; and

(ii) that in default of payment of any such instalment the plaintiff shall, after giving to the defendant such notice as may be prescribed, be entitled to apply for a final decree under sub-clause (ii) of clause (c) of sub-rule (1) of the said rule 2 or under sub-rule (1) of the said rule 4, as the case may be, and the date of such default shall be deemed to be the date fixed under sub-clause (I) of clause (c) of sub-rule (1) of the said rule 2 for payment of the whole amount fund or declared due under or by the preliminary decree:

Provided that nothing in this clause shall affect the power of the Court to allow extension of time under sub-rule (2) of rule 2 or sub-rule (2) of rule 4 of the said Order :

Provided further that if the defendant, after receiving the notice referred to in sub-clause (ii) and before a final decree is passed, makes payment into Court of the amount due from him in respect of any such instalment, the payment of such instalment shall not be deemed to be in default and the Court shall not pass a final decree;

(b) in suits in respect of loans advanced before the commencement of this Act other than those referred to in clause (a)-

(i) on the application of a defendant and after hearing the plaintiff, order at the time of the passing of the decree or,

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2000 Supreme(SC) 396

Cases Referred (1)