The central legal point established in the judgment is the interpretation of Article 181 of the Limitation Act and its application to the accrual of the right to apply for a final decree in a mortgage suit.

Alfred Henry Lionel Leach, C.J.

1. The question in this second appeal is whether an application for a final decree in a mortgage suit is barred by the law of limitation. The case has been placed before a Bench as the facts are unusual and it was considered that there was no authority directly bearing on this case.

2. In O.S. No. 391 of 1935, on the file of the Court of the District Munsiff of Kulitalai, the first, second and third respondents sued to enforce the payment of a debt due on a mortgage which had been created by the grandfather of the appellant. At the time of the institution of the suit the mortgagor was dead, and his son and his two grandsons, of whom the appellant is one, were made defendants in his place. There were six other defendants. These persons were made parties as they had interests in the property by reason of subsequent mortgages. On the 30th September, 1936, the District Munsiff passed a preliminary mortgage decree, -in which he directed that two months time should be allowed for redemption. The defendants did not appear and therefore a decree was passed ex parte. On the 20th October, the first defendant (the father of the appellant) applied for an order setting aside the ex parte decree. This application was heard on the 19th January, 1937, when, with the consent of the plaintiffs vakil, the Court directed that the ex parte decree should be set aside, provided that the first defendant paid within ten days a total sum of Rs. 182-3-0 as costs. The first defendant failed to comply with this condition and accordingly on the 29th January, 1937, his application stood dismissed with costs. The first defendant then filed an appeal in the Court of the District Judge against the conditional order passed by the District Munsiff on the 19th January, 1937. He averred that the decree should have been set aside unconditionally. This appeal was heard on the 24th August, 1937, and allowed. The result was that the District Judge remanded the case to the District Munsiff to hear the application for an order setting aside the ex parte decree and decide it on the merits. In accordance with this order the District Munsiff posted the application for hearing on the 22nd September, but when the case was called on the first defendant was again absent. Consequently, the application was dismissed for default. The first defendant applied for its restoration, but this application was dismissed. The first defendant appealed without success. On the 3rd May, 1940 the plaintiffs applied for a final decree and they also applied for an order excusing the delay. Both these applications were dismissed on the 14th December, 1940. The plaintiffs then appealed against the order of the District Munsiff refusing them a final decree. This appeal was heard by the Subordinate Judge, who allowed it. The present appeal is from this decision.

3. The article of the Limitation Act which applies here is article 181. This fixes the period of limitation at three years from the date when the right to apply accrues. If no application had been filed for an order setting aside the ex parte decree, the right to apply for a final decree would have accrued on the 30th Novem-bar, 1936. But an application was filed and dealt with in the order of the District.

4. Munsiff of the 19th January, 1937. This order operated to extend the time to the 29th January, 1937, and on that date the plaintiffs undoubtedly had the right to apply for a final decree.

5. The Subordinate Judge held that the application was in time because of the order of the 22nd September, 1937, and we cannot agree that time ran from that date. When the District Judge allowed the first defendants appeal on the 24th August, 1937, the position reverted to that on the 20th October, 1936, when the first defendant applied for an order setting aside the ex parte decree. The dismissal on the 22nd September, 1937, of that application for default restored the position to what it was when the preliminary d