PATNA HIGH COURT
G.N.Prasad, J.
Ramayan Dubey
Versus
Chitradeo Rai
A.F.A.O. No. 197 of 1964 ;
Decided On : APRIL 11, 1967
LIMITATION ACT, 1908 - ARTICLE 182(4) - AMENDMENT OF DECREE - SUBSTANTIAL AMENDMENT - FRESH STARTING POINT OF LIMITATION.
Fact of the Case:
The decree-holders obtained a compromise decree in a money suit. The decree provided that if the judgment-debtors failed to pay a certain sum by a specified date, the decree-holders would be entitled to a decree for the full amount of their claim. The judgment-debtors failed to make the payment, and the decree-holders applied for amendment of the decree, which was allowed. The decree-holders then filed an application for execution of the decree more than three years after the date of the original decree, but within three years of the date of the amendment.
Finding of the Court:
The court held that the amendment of the decree was not a substantial amendment which would give a fresh starting point of limitation. The court held that the period of three years prescribed for the application for execution started from the date of the original decree, and not from the date of the amendment of the decree, and as such, the application for execution filed beyond the period of three years from the date of the original decree must be held to be barred by limitation.
Issues: Whether the amendment of the decree was a substantial amendment which would give a fresh starting point of limitation.
Ratio Decidendi: An amendment of a decree which gives a fresh start to limitation must be an amendment of a substantial character as affecting the rights of the parties.
Final Decision: The appeal was allowed, and the application for execution was dismissed as barred by limitation.
G.N.Prasad, J.
1. This appeal by the Judgment-debtors arises out of an objection preferred by them under Sec. 47 of the Code of Civil Procedure. The decree under execution is a compromise decree passed in a money suit which was instituted by the decree-holders on the foot of a handnote for Rs. 2178/-. The total claim in the suit was for Rs. 2944/10/-. But by compromise between the parties, it was decreed that the judgment-debtors would pay to the decree-holders a sum of Rs. 2.000 on or before the 23rd October 1958 in full satisfaction of their dues up-to-date. There was also a default clause in the compromise petition, which was made a part of the decree, to the effect that if the judgment-debtors did not pay the sum of Rs. 2,000.00 to the decree-holders by the appointed date, then the claim laid in the suit would stand decreed in full together with costs of the suit and future Interest at the rate of 6 per cent per annum. The judgment-debtors failed to make the payment by 23-10-1958. Thereafter the decree-holders made an application for amendment of the decree, which was allowed, and the following words were inserted in the decree:
"It is ordered that the defendants do pay Rs. 2944/10.00 as claim and do also pay Rs. 660/11/- as costs of the suit with future interest at 6 P. C. P. A. to the plaintiff."
The date of the original decree was the 20th July, 1958, and the date of the amendment was the 28th January, 1959. The application for execution of the decree was filed on the 3rd January, 1962 and the same was registered as Execution Case No. 3 of 1962.
2. The judgment-debtors put forward two objections to the execution (i) that the default clause of the decree was unenforceable, being in the nature of a penalty within the meaning of Section 74 of the Contract Act, and (ii) that the application for execution was barred by limitation.
3. Both these objections were overruled by the executing Court. As to the first objection, the executing Court held that it was not competent to go behind the decree, but to execute it as it stood. On the question of limitation, the executing Court held that the starting point of limitation was the 28th January, 1959, when the decree was amended, and the execution petition having been filed within three years from that date, it was within time.
4. Against the decision of the executing Court, the judgment-debtors preferred an appeal in the lower appellate Court where they pressed only their first objection, namely, that the default clause in the compromise decree was penal, and as such not enforceable in law. The lower appellate Court dismissed the appeal holding that the objection was without substance and the judgment-debtors were liable to pay the entire amount of the claim as incorporated in the amended compromise decree. Being thus aggrieved, the judgment-debtors have preferred the present appeal.
5. So far as the objection with regard to the penal character of the default clause in the compromise decree is concerned, I am clearly of the opinion that it cannot succeed. It was really not in the nature of a penalty as urged on behalf of the judgment-debtora It is to be remembered that the decree was passed on the basis of a compromise between the parties. The judgment-debtors did not like to contest the claim which the decree-holders had made in the money suit. They only wanted some concession which the decree-holders agreed to give to them on condition that the judgment-debtors paid to them a sum of Rs. 2,000 in full satisfaction of the claim on or before the 23rd October 1958. This was undoubtedly a very favourable term so far as the judgment-debtors were concerned, because the sum of Rs. 2,000 was less even than the principal amount which was Rs. 2178.00. In other words, what the decree-holders had agreed to forgo was not only the entire interest and costs of the suit, but also a part of the principal sum which had been advanced under the handnote in suit.
As against this, the default
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