P L D 1966 (W (PLP)

"By consent decree for Rs. 25,003 (rupees twenty‑five thousand only) together with all costs and interest at Rs. 6 (six) per cent. per annum with effect from the date of the suit till payment. The plaintiff notifies payment of Rs. 10,000 (rupees ten thousand only) paid through the surety to the plaintiff. This decretal amount is exclusive of the decrees of Karachi Small Causes Court obtained by the plaintiff against the defendant No.

1. The said decrees hold good against the defendant No. 1, in Suit No. 1070 of 1956 and 1071 of 1956, of Karachi Small Causes Court. The balance of decretal amount to be paid by instalments of Rs. 200 (rupees two hundred only) per month. This is exclusive of Rs.50 (rupees fifty) only per month to be paid by defendant No. 1 to the plaintiff in two decrees of Karachi Small Causes Court obtained by the plaintiff against the defendant No.

1. In default of any three instalments the whole amount becomes payable at once, and the receiver is discharged." The respondent/decree‑holder filed the above‑mentioned execution application on 21st December 1963 for the recovery of the balance of the entire amount of Rs. 12,237 (rupees twelve thousand two hundred thirty‑seven). In the Execution application Rs. 15,000 (rupees fifteen thousand) was shown as the principal amount, Rs. 6,300 (rupees six thousand three hundred) as interest up to date and Rs. 1,187 (rupees one thousand one hundred and eighty‑seven) were stated to be the costs of the suit. Out of this amount Rs. 10,250 (rupees ten thousand two hundred fifty) as detailed in the Schedule to the execution application was stated to have been paid by the judgment‑debtor. The respondent sought to execute the decree for the balance of the amount of Rs. 12,237 (rupees twelve thousand two hundred thirty‑seven) by arrest and imprisonment of the judgment‑debtor in the Civil Prison. This application was resisted by the appellant on the ground that the default in the payment of the instalments was admittedly committed on 31st March 1959 and the execution application having been filed beyond three years it was barred by limitation. The learned subordinate Court repelled this contention and held the execution application to be within time. In this connection the learned Subordinate Court observed as under:

"According to me, this is not a case where the decree‑holder is seeking an extension of time. The execution application was filed in December 1963. The last payment made by the judgment‑debtor was on 2‑1‑1962. The decree‑holder would make an execution application for the recovery of the instalments which had become due during the three years prior to the filing of the execution application. Authorities for this view are contained in A I R (33)146 Cal. 500 and A I R 1939 Sind

49. According to the Sind ruling, it is the option of the decree‑holder to take or not to take the advantage of the default, for that he cannot be compelled to take advantage of the default on the pain of losing further instalments due to him. Where the decree‑holder failed to take advantage of the default clause his right to recover instalments due to him within three years of the application for execution is not barred. In the circumstances I would find that the execution application is not barred."

3. The learned counsel appearing on behalf of the appellant has urged that under the terms of the decree on the default of any three instalments, the whole decretal amount becomes payable at once. This, according to the learned counsel admittedly was committed on 31st March 1959. The Schedule filed by the respondent/decree‑holder shows that from 31st March 1959 to 15th September 1959, no instalment was paid by the appellant to the decree‑holder. It was urged that since under the terms of the decree the whole amount became payable and the execution application was filed for the balance of the decretal amount the application for execution should be held to be beyond time as it was filed after more than three years from 31st March 1959. In support of his contention Mr. M. A. I, Lakhani, the learned counsel for the appellant relied on Hanmant Bhimrao Kalghatgi v. Gururao Swamirao Kulkarni (A I R 1943 Bom. 36); Lakshman Krishno Mahar v. Parvatibai Vishvanath Suryavanshi (A I R 1943 Bom. 63) and Chunilal Motiram v. Shivram Naguji Ghule (A I R 1950 Bom. 188). In these decisions it was held that where an instalment decree with a default clause making the whole amount payable on one or more defaults has been passed and the decree‑holder, on a default taking place, elects to enforce the default clause by applying for execution in respect of the whole amount without regard to the instalments, his subsequent application for execution must be treated only as an application in respect of the whole decree and not as one in respect of the instalments under the decree. If such an application is made more than three years from the final order on the previous application, it will be barred even with regard to the instalments falling due under the decree within three years of the application.

4. On the other hand Mr. Nathulal, the learned counsel for the respondent has relied on Lekhraj Sirumal v. Khubchand (A I R 1939 Sind 49), Ranglal Agarwalla v. Shyamlal Tamuli (A I R 1946 Cal. 500) and Ram Parsad Ram v. Jadunandan Upadh is (A I R 1934 All. 534). It was held in these cases that where a decree directs payment of the decretal amount by instalments and provides that in case the defendant fails to pay any instalment at the stipulated period, the entire decretal amount would be due, then, after a default has occurred, an application for execution relating to subsequent instalments, as such, is maintainable and any application, made more than three years after the first default, but relating only to instalments which fell due within three years of the date of the application, is within time and is governed by Article 182(7), Limitation Act.

5. Mr. M. A. I. Lakhani, the learned counsel for the appellant contended that on the terms of the compromise decree passed in the present case there was no option of the decree holder to execute or not to execute the decree because "in default of any three instalments the whole amount becomes payable at once". He contended that it is not one of those cases in which on the happenings of the default the decree‑holder had the option to execute or not to execute the decree and, therefore, even if the execution application is taken to be for recovery of the remaining instalments within time it was barred by time. In my opinion, the contention of the learned counsel has not much force. It cannot be disputed that when a debtor agrees to make payment by instalments or when the decree directs payment in instalments, the direction is for the benefit of the debtor or the judgment‑debtor. Similarly, the default clause is inserted to ensure regular payment of the instalments and is solely for the benefit of the creditor. The default clause can be expressed in so many ways, but unless it is in such terms which compels the decree‑holder to execute the decree as a whole, it will always be at his option to execute the decree for the instalments due or for the entire decretal amount. There would be no compulsion on the decree‑holder to execute it on default for the whole decretal amount. In this connection reference may be made to Article 75 of the Limitation Act. It provides that if default be made in payment of one or more instalments "the whole shall be due" and the period of three years runs from the time the default is made. Its language also laves no option to the decree‑holder but them are series of decisions on this particular Article in which it has been held that this clause also gives an option to the creditor which he can waive vide the third column of the Article. I don't find any justification to take a different view of the default clause in question. In my view its terms are also for the benefit of the decree‑holder and option to execute the entire decree or for the arrears of instalment rested with him. It was open to him to execute the decree for the entire balance of decretal amount at once or to wait till such time as he liked.

6. The question, therefore, whether the decree‑holder is under compulsion to execute the decree for the whole amount depends on the terms of the default. If it makes it obligatory on him to execute it for the whole amount, on default, an application for execution filed after three years of the default will be barred both in respect of the instalment, within time and for the whole amount. But if it is on the option of the decree‑holder, the determination of the question of limitation would depend on the' prayer made in the execution application. If it is for the entire decretal amount, it should be filed within three years of the default. But if it is for the instalments due, it can be executed for the instalments that are found to be within time on the date of the execution application. Prima facie it further appears that for this purpose the substance of the prayer should be looked into.

7. In the present case, however, there is not much difficulty on the point under consideration because admittedly after the default which occurred in March 1959, the appellant did pay certain amounts to the decree‑holder towards the payment of the decretal amount. The judgment‑debtor has admitted that he made some payments to the decree‑holder between 12th October 1959 and 10th May 1960. In the affidavit filed by the appellant on 17th February 1964, he, however, disputed seven items alleged to have been paid on 30th December 1958, 3rd February 1959, 28th February 1959, 31st March 1955, 13th January 1961, 28th June 1961 and 2nd January 1962, on the plea that these payments do not appear in the note‑book kept by him. He further alleged in the affidavit that the items of 3rd December 1959 and 4th May 1960, in the Schedule do not correspond with the note‑book so far as the dates are concerned. But he admitted that in the note‑book kept by him payments are recorded to have been made on 5th December 1959 and 5th April 1960. Thus on this admission it is quite obvious that the decree‑holder has waived his right to execute the decree immediately and condoned the defaults committed by the judgment‑debtor by accepting these payments. Besides, I see no ground to differ from the view taken by the learned Subordinate Court that the payments shown by the decree‑holder in the Schedule attached to the execution application were in fact made by the appellant. The appellant's counsel has failed to satisfy me as to why the respondent showed false payment in the Schedule attached to the execution application. These amounts could easily be claimed as arrears of instalments and would have been within time. I would, therefore, accept the finding that all the said amounts were paid by the appellant towards the satisfaction of the decree to the respondent. In that view of the matter the execution application is clearly within time particularly as the last payment was made on 2nd January 1962. It was faintly argued by the appellant's counsel that as these payments were not properly certified by the decree‑holder under Order XXI, rule 2, C. P. C. they cannot be taken into consideration for holding that the execution application was filed within time. In view of the decision of the Privy Council in Raja Shri Prakash Singh v. Allahabad Bank Ltd. (I L R 3 Luck. 684), this contention has no force because it is open to a decree‑holder to certify payments made to him by merely mentioning it in the execution application. In this connection their Lordships observed as under:‑ "The terms of Order XXI, rule 2(1), in their ordinary meaning do not involve any application by the decree‑holder: the decree holder would comply with the terms of the rule if he were to certify to the Court that money payable under the decree had been paid to him out of Court and it would then rest with the Court to record the payment in accordance with the provisions of the rule. The rule imposes a duty upon the decree‑holder to certify the payment, and a duty upon the Court upon such certificate being given to record such payment. Their Lordships further observed: "Rule 2(3) provides that a payment which has not been certified as recorded as aforesaid shall not be recognized by any Court executing the decree. The provision in rule 2(3) no doubt was inserted for good reasons known to the Legislature, and it is obvious that the provision must tend to simplify and expedite the proceedings in the Court executing the decree. There is nothing, however, in sub‑rule (3) to indicate that the Legislature intended that the certification of a payment by the decree‑holder under sub‑rule (1) should be treated as an `application'." In the light of the above observation it cannot be disputed that the decree‑holder can certify the payments made to him by mentioning it in the execution application. Thereupon, it becomes the duty of the Court to record such payments without notice to the judgment‑debtor. The reason is very simple. The benefit goes to the judgment‑debtor and not to the decree‑holder and therefore, no notice is necessary to the judgment‑debtor for certifying such payments.

9. It is quite true that in the present case the decree‑holder has not mentioned in the execution application that he is executing the decree for the remaining instalments. There is much force in Mr. Nathulal's contention that in such cases it is the duty of the Court to look to the substance of the application. In this connection it will be noticed that in the execution application the respondent has claimed a total amount of Rs. 12,237 (rupees twelve thousand two hundred thirty seven). Out of it Rs. 4,750 (rupees four thousand seven hundred fifty) represents the principal amount, Rs.6,300 (rupees six thousand three hundred) represents the interest and Rs. 1,187 (rupees one thousand one hundred eighty‑seven) as costs. The amount due towards the principal amount is clearly within time because it is much less than the amount of those instalments which would be within time or. 21st December 1963. It is not denied that on this date thirty‑six instalments were within time. The amount representing the costs is also within time because under the terms of the decree it was also payable by instalments. The instalments of this amount also are within time even if it is taken into consideration along with the amount claimed as principal. I would, therefore, hold that the execution application in respect of the principal amount and costs is within time and was rightly held to be executable.

10. The claim of interest, however, presents some difficulty. In this connection the respondent has claimed a sum of Rs. 6,300 (rupees six thousand three hundred), which is disputed by the appellant. After hearing the learned counsel for the parties, I have come to the conclusion that the respondent is only entitled to claim interest on the principal amount claimed by him, which is only the sum of Rs. 4,750 (rupees four thousand seven hundred fifty). The interest on this amount will be calculated from the date of the decree till its payment. I would, therefore, direct the Executing Court to calculate interest on this basis and add it with the decretal amount for executing the decree. This he will determine after notice to the parties.

11. In the result subject to the above remarks the appeal is allowed in respect of the claim of interest. In other respect the appeal stands dismissed. Since the parties have shared the success equally they will bear their own costs in these proceedings. S.Q. Appeal partly allowed.