. .

S.C.R.

SUPREME COURT REPORTS 833

of the Indian Penal Code, and direct that he be set at 195" liberty forthwith. In crdinary circumstances, we -d- . . b Afohin er Singh might have remanded the case for a fresh tnal, ut we v. consider that such a course would, in the present The State. case, be unfair and contrary to settled practice, seeing that the appellant has been in a state of suspense over Fail Ali J. his sentence of death for more than a year .

Appeal allowed.

Agent for the appellant: R.S. Narula.

Agent for the respondent: P.A. Mehta.

MANGAN LAL DEOSHI

MOHAMMAD MOINUL HAQUE & OTHERS.

[SHRI HARILAL KANIA C.J., PATANJALI SASTRT

and DAS JJ.]

Indian R<gistration Act. 1908. s. 17 (1) (bl awl (d), !. 17 (21- " Lease "-Conivromise decree c1eatina !tnder.lea.se l.Jetw::e11 A and E on condition that A vavs a. s1t11i. of money to 0-TV!utlrnr comr'llfrorify regist1ab 1e-Aareem£nt to lease not creatin'] i'lnmdiate interest in

lad-Whether ''lease ".

An agreement for a lense, which a lease is by the Indian Registration Act declared to include, must be a document which effects an nctu•I demise and operates as a lease. It must creato a present and irn1nediate interest in land.

Where a litigation between two perrnns A and B who claimed to he tenants under C was settled by a compromise decree tho effect of which \\'RS to create a perpetual underlease between A and B which was to tako effect only on condition that A paid ll.s. 8,000 to C within a fixed period :

He,7d, that such a contingent agreement was not

11 a. lease" within cl. (d) of s. I 7 (1) of the Indian Registrotion Act, ond even though it was covered by cl. (b' of the said section it was exempt from registration under cl. (vi) of subs. (2) of s. 17.

Hemanta Kumari Debi v. Midnapur Zaminiari Co. (I L.R. 47 Cal. 485 P.O.) relied on.

CIVIL

APPELLATE j!JRISmGTION: Civil Appeal No. 94 of 1949. ·

Dec. l,

1950 Appeal from a judgment and decree of the High Court of Judicature at Patna in Appeal from Appel- M";;!:,:ti1 late Decree No. 97 of 1946 (Manohar Lall and v.

Mukherji JJ.) dated 23rd December, 1947, confirming

Mohammad the judgment of the District Judge of Purulia in Jfo;•u! Hague Appeal No. 159 of 1944 .

.tOthera S. P. Sinha (P. K. Bose, with him) for the appellant.

N. C. Chatterjee and Panchanan Ghosh (Chandra Narayan Naik, with them) for the respondent.

1950. December 1. The Judgment of the Court was delivered by

Patanjali PATANJALI SASTRI ].-This appeal arises out of a 8••tri J. suit brought by the respondent in the court of the Subordinate Judge, Dhanbad, for recovery oi arrears of royalty and cess from the appellant and another alleged to be due under a compromise decree passed on the 6th March, 1923, in a previous suit between the predecessors in interest of the parties. The only plea which is material for the purpose of this appeal is that the compromise decree not having been registered was inadmissible in evidence. The courts below held that the document did not require registration and gave effect to its terms in decreeing the suit. The second defendant has preferred this appeal.

The facts are not now in dispute and may be briefly statJ!d. On 11th March, 1921, one Kumar Krishna Prasad Singh (hereinafter referred to as Kumar) granted a permanent lease of the right to the underground coal in 5,800 bighas of land belonging to him to Shibsaran Singh and Sitaram Singh (hereinafter referred to as the Singhs) by a registered patta stipulating for a salami of Rs. 8,000 and royalty at the rate of 2a. per ton of coal raised subject to a minimum of Rs. 8,000 and for certain other cesses and interest. On 7th June, 1921, Kumar executed another permanent patta leasing the right to the coal in 500 bighas out of the 5,800 bighas referred to above to one Prayagji Bo1llavji Deoshi and his son Harakchand Deoshi (hereinafter referred to as the Deoshis). By this document

the Deoshis agreed inter alia to pay royalty at the rate of 2a. per ton on all classes of coal raised subject to a minimum of Rs. 750 a year. The Singhs feeling themselves aggrieved by the latter transaction brought a title suit (No. 1291of1921) in the Court of the Subordinate Judge of Dhan bad for a declaration of their title and for possession of the 500 bighas leased to the Deoshis under the aforesaid patta of 7th June, 1921.

To that suit Kumar was made a party as defendant No. 3, the Deoshis being defendants 1 and 2. The suit was however compromised on 6th March, 1923, by all the parties and a decree based on the compromise was also passed on the same day. The interest of the Singhs was brought to sale in 1938 in execution of a decree obtained against them and was purchased by the plaintiff who instituted the present suit, on 3rd October, 1942, claiming the royalty and cesses payable under the compromise decree for the period from Pous 1345 to Asadh 1349 B. S. from defendants 1 and 2 as the representatives of the Deoshis who entered into the compromise of March, 1923.

In order to appreciate the contentions of the parties, it is necessary to set out the relevant terms of the compromise decree which are as follows :-

" The plaintiffs (the Singhs) within two months from this date shall pay Rs. 8,000 as salami to defendant No. 3 (Kumar). Otherwise all the terms of the compromise will stand cancelled and the plaintiffs shall not be competent to claim any right to or possession over theland covered.by the patta dated 11th March, 1921. ..

The patta which defendant No. 3 executed in favour of the plaintiffs in respect of 5 ,800 bighas of coal land in village Rahraband shall remain in force, and the plaintiffs will get a decree of declaration of their right and title to the 500 bighas of coal land in dispute but defendants 1 and 2 (the Deoshis) shall hold possession as tenants. Besides the terms mentioned below, defendants 1 and 2 shall remain bound by all the remaining terms under which they took settlement of the 500 bighas of coal land from defendant No. 3 under

Mangan Lal

Deoshi

Mohammad

.. 'lloinul Ha2ue

cf Oth!rs.

Patanjali

8a1tri J.

Mangan. Lal

Dtosh$

Mohamma.t Moi01ul Haqus

¢ Otker1.,

Patanjali

Sadr\ J,

patta and Kabuliyat, and both the defendants 1 and 2 shall possess the same under the plaintiffs from generation to generation and all the terms of the said patta and Kabuliyat shall remain effective and in force between them.

Both the defendants 1 and 2 shall remain bound to pay to the plaintiffs commission at the rate of 2a. 6p. per ton on all sorts of coal instead of 2a. a ton as stated before in the pat ta of 5,800 big has of land settled with the plaintiffs ... The plaintiffs shall pay to defendant No. 3 in future the minimum royalty of R.s. 6,000 instead of Rs. 8,000 as stipulated in the original patta of 11th March 1921 and commission at the rate of la. 9p. a ton in place of 2a. a ton as stipulated in the patta of March 21 ...... Unless the plaintiffs pay to the defendant No. 3 Rs. 8,000 within 2 months from this day they shall not be competent to take out execution of this decree, nor shall they be competent to take possession of the land in dispute. The defendants 1 and 2 within one month frcm the date of payment of ls. 8,000 as aforesaid to defendant No. 3 shall execute a new Kabuliyat in favour of the plaintiff in respect of the modified terms stated above, i.e., on the condition to pay commission at the rate of 2a. 6p. per ton ... In the new patta which defendant No. 3 will execute in favour of the plaintiffs he shall embody the condition that the annual minimum royalty will be 11'.s. 6,000 instead of Rs. 8,000 and commission will be at the rate of la. 9p. per ton in place of 2a. per ton as mentioned in the aforesaid patta. If the defendant No. 3 does not execute the patta on the aforesaid modified terms in favour of the plaintiffs within the time aforesaid and both the defendants 1 and 2 also do not execute a kabuliyat on the aforesaid modified terms, then this very rafanama shall be treated as the patta and kabuliyat, and the plaintiffs in accordance with the terms of the rafanama shall pay to defendant No. 3, Rs. 6,000 only as minimum royalty and commission at the rate of la. 9p. per ton with respect to 5,800 bighas and shall continue to realise commission at the rate of 2a. 6p. per ton from defendants 1 and 2 who shall remain bound to pay the same." ,......

The answer to the question whether this compromise decree requires registration depends on the legal effect of the changes in the status quo ante of the parties brought about by the document. A careful analysis reveals the following alterations :-

(1) In the lease to the Singhs, the rate of royalty or commission was reduced from 2a. per ton of coal raised to la. 9p. per ton and the minimum royalty was reduced from I'{s. 8,000 to l'{s. 6,000 while the area of coal land in their khas possession was reduced by 500 bighas.

(2) In the lease to the Deoshis the rate of royalty or commission was enhanced from 2a. per ton to 2a. 6p. per ton and this was made payable to the Singhs.

(3) The Singhs and the Deoshis were brought into a new legal relationship, the former accepting the latter as tenants holding the disputed 500 bighas under them in consideration of the latter agreeing to pay the enhanced royalty to the former.

(4) The whole arrangement was made conditional on the Singhs paying l'{s. 8 ,000 to Kumar within 2 months from the date of the compromise, it being expressly provided that the Singhs were not to be entitled to execute the decree or to take possession of the disputed area of SO::> bighas which evidently had not till then passed into their possession.

Now, sub-section (I) of section 17 of the Registration Act, enumerates five categories of documents of which registration is made compulsory which include" (d) leases of immoveable property from year to year, or for any term exceeding one year, or reserving a yearly rent;". Sub.section (2) however provided that "nothing in clauses (b) and (c) of sub-section (I) applies to ...... (vi) any decree or order of court." It may be mentioned in passing that this clause was amended with affect from the 1st April, 1930, by the Transfer of Property (Amendment) Supplementary Act, 1929, so as to exclude from the scope of the exception com pro mise decrees comprising immovable property other than that which is the subject-matter of the suit. But

Mangan La, l

Deoshi

Moliammaci .Uoinul Haqu,4

ct Oth6ra, -,- PatanjaU

Sastr~ J.

19~0

Mangan L:il

DJoshi

Mohrimmad Moin.ul Haque

tl Othors.

Patanjali

S'astri J.

the amendment cannot affect the document here in question which came into existence in 1923. Before tlie amendment, the clause was held to cover even compromise decrees comprising immovable property which was not the subject matter of the suit : lVide Hemanta Kumari Debi v. Ji.1idnapur Zamindari Co. (1)].

That decision app)ies to the present case and obviates the objection that because the compromise in question covered also the remaining 5,300 bighas which were not the subject-matter of the title suit of 1921, it was outside the scope of the exception in sub-section (2), clause (vi).

The only question, therefore, is whether the compromise decree is a "lease" [which expression includes "an agreement to lease" by the definition in section 2 (7)] within the meaning of cl. (d) of sub-section (1).

It is obvious that if th~ compromise decree falls within clause (d) of sub.section (1) it would not be protected under clause (vi) of sub-sect.ion (2) which excepts only documents falling under the categories (b) and (c) of sub-section (1).

The High Court was of opinion that, on a proper construction of the terms of the compromise, it did not fall under clause (d).

Manohar Lall J ., who delivered the leading judgment, observed : "It was a tripartite agreement embodied in the decree of the court and was, therefore, exempt from registration. It will be observed also that so far as the defendants were concerned, their possession of the 500 bighas was not interfered with and they still remained in possession as the lessees, but instead of paying the royalty to the plaintiffs it was agreed between all the parties that the defendants would pay the royalty in future to Shibsaran and Sitaram. If the matter had stood there, the learned Advocate for the appellant could not have seriously contested the position, but he vehemently argued that when the agreement was not to pay the same amount of royalty or commission as previously agreed to but an altered amount of royalty and commission, the document should be held to fall within the mischief of section 17 ( 1) ( d) of the

(1) 47 C•I. 485; P.O.

Registration Act. The answer to this contention is, as I have stated just now, to be found in the Full Bench decision of this court:" [see Charu Chandra Mitra's case (')]. It was there held that a mere alteration of the rent reserved does not make the transaction a new lease so as to bring it within clause (d) of subsection (1).

We are unable to share this view. It oversimplifies the compromise transaction which, in our opinion, involves much more than a mere alteration of the royalties stipulated for in the previous pattas executed by Kumar. Nor can we accept the suggestion of Mr. Chatterjee for the respondents that the compromise operated as an assignment to the Singhs by Kumar of the latter's reversion under the "lease granted to the Deoshis and all that the latter did was to acknowledge the Singhs as their landlords and attorn

to them.

On this view it was said that the transaction would not fall under clause (d), although it would fall under clause (b) but then would be saved by the exception in clause (vi) of sub-section (2).

The argument, however, overlooks that Kumar had leased the area of 5,800

bighas to the Singhs by his patta dated I Ith !\!arch, 1921, and the compromise by providing that the Singhs should pay the reduced royalty of la. 9p. per ton in respect of the whole area preserved Kumar's reversion intact.

He could not therefore be deemed to have assigned any part of his interest in 5,800 bighas as landlord to the Singhs who continue to hold the entire extent as tenants under him. 'vVhat the compromise really did was, as stated already, to bring the Singhs and the Deoshis into a new legal relationship as underlessor and under-lessee in respect of 500 bighas which were the subject-matter of the title suit; in other words, its legal effect was to create a perpetual underlease between the Singhs and the Deoshis which would clearly fall under clause (d) but for the circumstance that it was to take effect only on condition that the

Singh~ paid Rs. 8,000 to Kumar within 2 month::;

IP P, L. J. 2>,5.

Mangan Lal

Deoshi

Mohammad Moinul Haqu1

tt Others.

Patanjali

Sastri J.

Manann Lal

Deas hi

' Mohammad Moi.nul Haque

& Others.

Patanjali

Saatri J,

Dec, 1.

thereafter. As pointed out by the Judicial Committee in H emanta K uinar' s case (1) "An agreement for a lease, which a lease is by the statute declared to include, must, in their Lordships' opinion, be a document which effects an actual demise and operates as a lease ...... The phrase which in the context where it occurs and in the statute in which it is found, must in their opinion relate to some document which creates a present and immediate interest in the land." The compromise decree expressly provides that unless the sum of Rs. 8,000 was paid within the stipulated time the Singhs were not to execute the decree or to take possession of the disputed property. Until the payment was made it was impossible to determine whether there would be any underlease or not. Such a contingent agreement is not within clause (d) and although it is covered by clause (b), is excepted by clause

(vi) of sub-section (2). \Ve therefore agree with the conclusion of the High Court though on different grounds and dismiss the appeal with costs.

Appeal dismissed.

Agent for the appellant: P. K. Chatterjee.

Agent for the respondent : Sukumar Glzose.

RAJA KAMALA RANJAN ROY

BAIJNATH BAJORIA.

(SHRI HARILAL KANIA C.J., PATANJALI SASTRI

and DAS JJ.)

Conlract~Specific perforn"nce-0.ff:r to purchase leasehold right-Stipulation that lesse'J sho-uld obtain consent of lessor-Lessor ttnreasonably refflsing consent-Lessee, 1vhethe' relieved of liribility f0 assign-Suit for sp-1cifi~ verformince by purchasftr-Maintain.• abilitr1-Lea.s9 deed-Covenant prohibitin1 assignm; nt of lease without l . " l _f!sor s co:isent, Sit' i co 1isent, lunv, vr, not to b3 11,11reasonably ui hhJld in case of respectable p!rso'i "-llieaniru; and effect of co1,>!':1tant.

(1) 47 Ca.I. 48-'i, at p. 494.

Indian Penal Code

Fail Ali

R.S. Narula

P.A. Mehta

MANGAN LAL DEOSHI

MOHAMMAD MOINUL HAQUE & OTHERS

SHRI HARILAL KANIA C.J.

DAS JJ.

s. 17

Registration Act

s. 8

s. 17

High Court of Judicature at Patna

S. P. Sinha

N. C. Chatterjee

Panchanan Ghosh

Chandra Narayan Naik

Patanjali PATANJALI SASTRI

11th March, 1921

Kumar Krishna Prasad Singh

Shibsaran Singh

Sitaram Singh

7th June, 1921

Kumar

Prayagji Bo1llavji Deoshi

Harakchand Deoshi

Subordinate Judge of Dhan

Deoshis

6th March, 1923

3rd October, 1942

Kumar

Rahraband

s. 6

s. 6

s. 8

s. 6

s. 8

section 17

Registration Act

1st April, 1930

Supplementary Act, 1929

section 2

Manohar Lall

Shibsaran

Sitaram

section 17

Registration Act

Charu Chandra Mitra

Chatterjee

Mangan Lal

Manann Lal

Saatri

H emanta K uinar

P. K. Chatterjee

Sukumar Glzose

RAJA KAMALA RANJAN ROY

BAIJNATH BAJORIA

SHRI HARILAL KANIA

PATANJALI SASTRI

DAS


Manann Lal

Deas hi

' Mohammad Moi.nul Haque

& Others.

Patanjali

Saatri J,

Dec, 1.

SUPREME COURT REPORTS (1950]

thereafter. As pointed out by the Judicial Committee in H emanta K uinar' s case (1) "An agreement for a lease, which a lease is by the statute declared to include, must, in their Lordships' opinion, be a document which effects an actual demise and operates as a lease ...... The phrase which in the context where it occurs and in the statute in which it is found, must in their opinion relate to some document which creates a present and immediate interest in the land." The compromise decree expressly provides that unless the sum of Rs. 8,000 was paid within the stipulated time the Singhs were not to execute the decree or to take possession of the disputed property. Until the payment was made it was impossible to determine whether there would be any underlease or not. Such a contingent agreement is not within clause (d) and although it is covered by clause (b), is excepted by clause

(vi) of sub-section (2). \Ve therefore agree with the conclusion of the High Court though on different grounds and dismiss the appeal with costs.

Appeal dismissed.

Agent for the appellant: P. K. Chatterjee.

Agent for the respondent : Sukumar Glzose.

RAJA KAMALA RANJAN ROY

BAIJNATH BAJORIA.

(SHRI HARILAL KANIA C.J., PATANJALI SASTRI

and DAS JJ.)

Conlract~Specific perforn"nce-0.ff:r to purchase leasehold right-Stipulation that lesse'J sho-uld obtain consent of lessor-Lessor ttnreasonably refflsing consent-Lessee, 1vhethe' relieved of liribility f0 assign-Suit for sp-1cifi~ verformince by purchasftr-Maintain.• abilitr1-Lea.s9 deed-Covenant prohibitin1 assignm; nt of lease without l . " l _f!sor s co:isent, Sit' i co 1isent, lunv, vr, not to b3 11,11reasonably ui hhJld in case of respectable p!rso'i "-llieaniru; and effect of co1,>!':1tant.

(1) 47 Ca.I. 48-'i, at p. 494.

The defendant had obtained certain premises on lease under a deed which contained a covenant by the lessee "not to assign the demised premises or any port thereof without first obtaining the written consent of the lessor, such consent, however, not to be unreasonably withheld in the case of respectable or responsi hie person", After some offers and counter offers the plaintiff finally made an offer to purchase the defendant's leasehold interest on certain terms one of which was that " the consent of the landlord will be obtained by yon before the completion of the sale"; and the offer was nnconditionally accepted by the defendant. The defendant subsequently refused to assign on the ground that the lessor had withheld bis consent, and the plaintiff sued for specific performance of the agreement :

Held, (i) that the agreement was not, for its coming into being, conditional or contingent on the obtaining of the lessor's consent, the obligation ta obtain the lessor's consent being only a term of the agreement which the defendant had to fulfil; (ii) tho words

11 such consent, however, not to be unreasonably withheld in the case of a respectable or responsible person " in the lease deed did not amount to a. separate or indepGndent covenant by the lessor that he would not refuse consent except on reasonable groundR in the case of a reBpectable or responsible person, but only limited or qualified the lessee's covenant not to assign with. out the lessor's consent, by relieving him from the burden of the covenant if the lessor withheld hie consent unreasonably in the case of proposed assignment to a respectable or responsible person ; (iii) that, as the plaintiff was admittedly a respectable and responsible person and on the facts of the case the lessor's refusal to give consent was unreasonable, the defendant could validly assign the lease without such consent ; (iv) that the court could come to a decision on this matter even though the lessor was not a party to the suit and the decision might not bind him ; (v) that the defendant could not under these circumstances plead the absence of the lessor's consent as relieving him from the obligation to perform his part of the agreement if the plaintiff insisted on bis carrying out the agreement even though the lessor had not given his consent; and the plaintiff was therefore entitled to a decree for specific performance of the agreement.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4 of 1950.

Appeal from the High Court of Judicature of Cal. cutta (Sir Trevor Harries C.J. and Mukherjea J.) from a judgment and decree dated .May 30, 1948, in Appeal No. 21 of 1947 confirming with modifications the decree of a single Judge of the same High Court (Ormond J.) dated January 24, 1947, in suit No. 1031 of 1945.

!OS

Eaja Kamala Ranjan Roy

Baiinatlt

Bajoria,

Rr1ja Kamala

Ranjan Roy v.

Baijnath

Bajoria.

Das J.

N. C. Chatterjee (Samarendra Nath f.fukherjee, with him) for the appellant.

P. L. Banerjee (Upendra Chandra f.fullick, with him) for the respondent.

1950. December 1. The Judgment of the Court was delivered by

DAs J.-This is an appeal by the defendant in a suit for specific performance against the judgment and decree of the High Court of Judicature at Fort William in Bengal (Sir Trevor Harries C. J. and Mukherjea J.) dated May 30, 1948, dismissing his appeal and confirming, with certain modifications, the judgment and decree for specific performance passed by Ormond J. on January 24, 1947.

There is no substantial dispJite as to the facts leading up to the suit out of which the present appeal has arisen and they may shortly be stated : Maharaja Sris Chandra Nandy of Cossimbazar is the owner of premises No. 374 Upper Chitpur Road in the town of Calcutta (hereinafter referred to as the "said premises"). By an Indenture of lease made on April 27, 1931, the Maharaja as manager of the Cossimbazar

Raj Wards Estate which was then under the management of the Court of Wards demised the said premises to one Madan Gopal Daga for a term of 51 years commencing from May 1, 1931, at and for the monthly rent of Rs. 1,083-5-3 and upon terms and conditions contained therein.

By sub-clause (6) of clause 2 of the said Indenture the lessee covenanted, amongst other things, ''not to assign the demised premises or any part thereof without first obtaining the written consent of the lessor, such consent, however, not to be unreasonably withheld in the case of respectable or responsible person ......... " There was the usual proviso for re-entry for non-payment of rent for three months or for breach of any of the lessee's covenants, without prejudice to the lessor's right of action for such breach. On March 25, 1943, Madan Gopal Daga, with the written consent of the lessor, assigned the unexpired residue of the lease to the defendant who

was accepted as the lessee by the lessor.

By an agreement said to have been arrived at by correspondence exchanged between the plaintiff and the defendant and their respective solicitors between January 27, 1945, and February 2, 1945, the defendant is alleged to have agreed to assign the said lease to the plaintiff for the unexpired residue of the term with effect from February 1, 1945, at and for the price of Rs. 1,80,000 and upon terms and conditions contained in the correspondence to which reference will be made in greater detail hereafter. On February 21, 1945, the defendant wro!e a letter to the lessor intimating that he had agreed to assign his interest in the lease to the plaintiff and requesting the lessor to give his consent in writing to such assignment. On March 5, 1945, the lessor replied that the question of his giving consent to the transfer of the lease could not be entertained as he had already determined the lease and that in the circumstances the whole initiative was in the hands of the defendant.

This letter clearly indicated that the lease had been determined for non-payment of rents and it obviously implied that it was for the defendant to get the lease revived by paying up the arrears of rent so that the question of giving consent to an assignment of the lease might be considered by the lessor.

On March 8, 1945, the defendant by his solicitors' letter informed the plaintiff's solicitors that the defendant had ap proached the lessor but had failed to secure his consent and that, as no valid transfer could be made without such consent and the agreement for sale was subject to such consent being obtained, the defendant was reluctantly compelled to cancel the agreement. The plaintiff by his solicitors' letter of March 10, 1945, maintained that the agreement was not subject to the alleged condition and that the defendant was. not entitled to cancel the agreement. It was pointed out that under the terms of the lease the lessor could not refuse his consent to the transfer of the lease to a respectable or responsible person which the plaintiff undoubtedly was. It is not necessary to refer to the further correspondence that followed in which each

Raja Kan1ala

Rtlnjati Boy

v, Baijnath

Bajoria.

Das J.

Raja Kamala

Ranjan Roy v.

Ba; jnath

Bajoria.

Das J.

party maintained his own contention.

On March 17, 1945, the lessor filed a suit (being suit No. 425 of 1945) in the High Court against the defendant for the recovery of the demised premises on the ground that the lease had been determined. It was during the pendency of that suit that on July 4, 1945, the suit for specific performance of the agreement to assign the lease out of which the present appeal has arisen was filed by the plaintiff against the defendant.

On July 13, 1945, the lessor's suit for ejectment was settled by the defendant consenting to a decree for Rs. 59,213-11-0 for arrears of rent which was paid up.

There is no dispute that the forfeiture of the lease for non-payment of rent was waived and the lease was accordingly revived. Shortly after the settlement of the ejectment suit the defendant on August 6, 1945, applied to the lessor for his consent to the assignment of the lease and on the same day the lessor in reply declined to give his consent without assigning any reason whatever. The suit for specific performance came up for disposal before Ormond J. in November 1946 when it was heard in part and was adjourned. It was eventually further heard in January 1947 and finally disposed of on January 23, 1947, when Ormcnd J. passed a decree against the defendant for specific performance of the agreement.

The decree provided that in the event of the defendant being unable within a fortnight from the date of the decree to obtain the written consent of the lessor the assignment should be made without such consent.

The defendant appealed.

After two days' hearing, "in order to clear up the matter" the appeal Court "gave the plaintiff an opportunity to examine the Maharaja as a witness in this case so that all relevant facts might be brought out and placed before the Court for the purpose of enabling it to come to a proper decision on this point." The appeal was accordingly adjourned and the lessor was examined on commission and his evidence was filed in the proceedings.

After further hearing the appeal Court dismissed the defendant's appeal and confirmed the decree for specific performance of the agreement

without the need for obtaining the consent of the lessor prior to the execution of the deed of assignment in favour of the plaintiff. This decree was subsequently amended by inserting therein a provision enabling the plaintiff to set off from the purchase price the amount of rent payable as and from February 1, 1945, until the date of conveyance Jess all outgoings and interest on the purchase price at four per cent. per annum from that date to the date of the conveyance. The defendant has now come up before us in appeal from this judgment and decree of the appeal Court.

The first point urged by learned counsel appearing in support of this appeal is that, being subject to the consent of the lessor, the agreement was contingent on the defendant obtaining such consent and as the defendant could not secure the lessor's consent no effective agreement came into being which could be ordered to be specifically performed. The determination of this question must depend on a correct analysis and ascertainment of the meaning and import of the correspondence by which the agreement is said to have been arrived at. It was on January 27, 1945, that the plaintiff offered to purchase the defendant's leasehold interest in the said premises upon terms and conditions set forth in the plaintiff's letter of that date. Clauses 3 and 4 of those terms were as follows :

"(3). The lease will be .transferred in my favour as from the 1st February, 1945, and I shall be entitled to recover rents from the tenants as from that date and shall pay the rent to the superior landlord and municipal taxes from that date. (4).

You shall have to obtain the necessary consent for the transfer of the lease in favour of myself or my nominees from the said l\faharaja of Cossimbazar before the execution of the transfer of lease in my favour."

The defendant replied to the plaintiff's above letter on January 28, 1945.

By this reply the defendant expressed his willingness to transfer the lease to the plaintiff on terms contained therein. Clauses 3 and 4 of this letter were as follows:

19~0

Raja Kamara

RanJan Roy

Baijnath

- Bojoria.

Das J.

Raja Karnala

Ranjan Ro11 v.

Baijnath

Bajoria

Dru J.

" (3) If your final acceptance as stated above is received within 30th January current and if I am able to obtain the consent of Maharaja Cossimbazar for transfer of the leasehold interest within the first week of February, 1945, I agree to your para 3.

(4) Your para 4 is agreed to but the name or names of the persons to be mentioned in the sale deed for whom permission is to be taken from Maharaja Cossimbazar should be clearly stated with their respective addresses."

It is quite clear that no agreement was concluded by these two letters for the defendant's letter was not an unconditional acceptance of the plaintiff's offer but amounted in law to only a counter-offer. By clause 3 the defendant offered to transfer the lease to the plaintiff as from February 1, 1945, so as to entitle the plaintiff to realize the rents from that date and to be liable to pay the rent to the lessor also from that date on two conditions, namely, that the plaintiff's acceptance was received within January 30, 1945, and the defendant was able to obtain the lessor's consent within the first week of February, 1945. This clause did not make the offer itself contingent on the obtaining of the lessor's consent but made one of the terms of the offer, namely, that the lease would be transferred as from February 1, 1945, conditional on the obtaining of the lessor's consent within the first week of February, 1945.

Likewise, subject to the name of the assignee being clearly stated the defendant by clause 4 offered to obtain the lessor's consent to the assignment of the lease.

Clause 4 of the defendant's letter was not so expressed as to make the defendant's offer contingent on his obtaining the lessor's consent. On the contrary, clause 4 constituted one of the terms of the offer which, on the offer being accepted, would become binding on the defendant as one of the terms of the agreement. The plaintiff, however, does not appear to have accepted the defendant's counter offer but on January 29, 1945, through his solicitors made a fresh offer to purchase the defendant's leasehold interest at

Rs. 1,80,000 on the following terms:

" (a) That the earnest money will be Rs. 5.000 (Rupees five thousand) instead of Rs. 30,000.

(b) Our client will have the conveyance in his own favour.

The consent of the landlord will be obtained by you before the completion of sale.

(c) That your client will complete the conveyance within a month after the receipt by us of all the original title deeds with you.

(d) That the transfer of the property in favour of our client will take effect on and from the I st February, 1945, irrespective of the date of the conveyance, he being entitled to all the rents, issues and profits and being liable for all the liabilities in respect thereof since the said date.

(e) That our client will not be liable to pay your Solicitor's Bill of cost in respect of the sale."

Again, it will be noticed that by clause (b) the offer was not made contingent on the obtaining of the lessor's consent but the plaintiff insisted on the defendant's obtaining such consent as a substantive term of his offer so that if the offer by being accepted ripened into an agreement the defendant would be bound to obtain the lessor's consent as a term of such agreement. The defendant by his solicitors' letter dated February 1, 1945, purported to accept the plaintiff's last offer with a slight reservation, namely,-

" As regards clause ( d) of your said letter, it is distinctly understood that the same should be given effect to only in case the conveyance is completed in terms of clause (c) of your said letter."

On February 2, 1945, the plaintiff by his solicitors' letter of that date unconditionally accepted this reservation and so a concluded agreement was arrived at between the parties. This agreement was not, for its coming into being, contingent or conditional on the obtaining of the lessor's consent. The obligation to obtain the lessor's consent was cast upon the defendant as a term of the agreement.

In our judgment the Court below was right in holding that the agreement '

Raja Kamala Ranjan Roy v, Bai.inn th Bajoria,

Da.~ J.

Raja Kamala

Ranjan Roy

Baifnnth Baforia

Das J.

itself was not contingent as contended for by the appellant.

The contentions next advanced by learned counsel for the appellant relate to the lessee's covenant contained in sub-clause (6) of clause 2 of the lease to which reference has already been made. The legal incidents of such a covenant are now well established by judicial decisions referred to in the judgment of the High Court and it is not necessary to refer to them in detail. Suffice it to say, that the words" such consent, however, not to be unreasonably withheld in the case of respectable or responsible person" contained in the covenant do not amount to a separate or independent covenant by the lessor that he would not refuse consent except upon reasonable grounds in the case of respectable or responsible person, but that those words limit or qualify the lessee's covenant not to assign the demised premises without the consent in writing of the lessor.

In other words, those words have the effect of relieving the lessee from the burden of this covenant if the lessor withholds his consent unreasonably in case of proposed assignment to a respectable or responsible person.

In this view of the matter, the plaintiff contended that he being a respectable and responsible person the lessor had unreasonably withheld his consent to the proposed assignment to him and had consequently relieved the defendant from the burden of his covenant so that the defendant could legally and validly assign the lease to him without such consent of the lessor.

The first objection taken by the appellant to this contention of the plaintiff is that in his plaint the plaintiff insisted on the defendant obtaining the lessor's consent and that he should not have been permitted to make this new case at the hearing. Both the trial Court and the appeal Court held that there was, strictly speaking, no element of surprise, particularly because the plaintiff relied upon facts admitted and proved by the defendant himself and that it was open to him to take this point. We may also add that lthis point was in a manner indicated in the plaint

itself for in paragraph 11 thereof it was pleaded that the plaintiff was a responsible and respectable person and that if consent to assign in his favour was withdrawn such withdrawal would be unreasonable and would not be valid and binding. In view of such pleading we are unable to say that the point raised by the plaintiff at the trial was an entirely new point or that the defendant was ta.ken by surprise.

The next objection of the appellant was that this point should not have been allowed to be raised and no evidence should have been permitted to be adduced on this point in the absence of the lessor as a party to the suit. We do not think that there is any force in this objection. The Court had to decide whether it was a case where relief by way of specific performance should be given. The Court could not force the defendant to apply to the lessor for his consent nor could the Court force the lessor to give his consent and, if: the matter only depended on the consent, the Court would not have ordinarily, in those circumstances, directed the agreement for assignment to be specifical1y enforced. The Court, therefore, had also to consider, for the purposes of this case, as to whether the circumstances were such as would indicate that the defendant had been relieved of the burden of his covenant by reason of the lessor having unreasonably withheld his consent. It is true that a decision on that question in this suit would not be binding on the lessor, but nevertheless the Court had to come to a decision on that question for the purposes of this suit as between the parties thereto in order to award the relief of specific performance to the plaintiff.

The third objection of the appellant is that the appeal Court should not have allowed the plaintiff to adduce further evidence. It will be recalled that the appeal Court directed the evidence of the Maharaja of

Cossimbazar to be taken during the hearing of the appeal. The judgment of. the appeal Court clearly indicates that it was the appeal Court that "required" the evidence " in order to clear up the matter " and

IQ~

Raja Kamala

&njan Roy v.

Baijnatk

Bajoria.

Das J.

Raja Kamala

Ran}a'lt Roy v.

Baijnath

Ba.ioria.

Das J.

" for the purpose of enabling it to come to a proper decision on this point". The matter, therefore, is fully covered by Order XLI, rule 27 of the Code of Civil Procedure and no objection can be taken to the course adopted by the appeal Court on that ground. We do not think there is any reason to interfere in the exercise of the Court's discretion.

The fourth objection is that the High Court was wrong in holding that the term in the agreement that the defendant must obtain the consent of the lessor before executing the assignment to the plaintiff was a term for the benefit of the plaintiff only. It will be recalled that that was a term which was introduced by the plaintiff in his offer that eventually ripened into an agreement. The term was not expressed in a manner indicating that it was inserted in the agreement for the protection of the defendant. In other words, the objection that the consent of the lessor had not been obtained was one which could be availed of by the plaintiff who could rescind the contract and claim damages for the breach thereof. We cannot see how, in view of the language used in the correspondence, the defendant could plead the absence of the lessor's consent as relieving him from the obligation of performing his part of the agreement if the plaintiff waived the objection and insisted on his carrying out the agreement.

The absence of consent may amount to a defect in the title of the defendant, but which the plaintiff was willing to accept.

Finally it is said that by directing the specific performance of the agreement the Court has exposed the defendant to the risk of an action for damages for breach of covenant. If the assignment of the lease by the defendant to the plaintiff without the lessor's consent amounted to a breach of covenant, the lessor could forfeit the lease and sue for possession. Such a course would affect only the plaintiff but not the defendant, for he had already parted with the lease for valuable consideration. It is said that the lessor could $1.le the defendant for damages for breach of that

covenant and the Court should not, by decreeing specific performance, have put the defendant in that perilous position. There appear to us to be two answers to this argument, namely, (I) that the defendant should have, by proper language, made his obligation to transfer dependent or conditional upoq his being able to obtain the lessor's consent which he did not do and (2) that the plaintiff being a respectable and responsible person of means, the measure of damages could only be a problematic conjecture.

Indeed, it may have been precisely for this very consideration that the defendant had unconditionally agreed to obtain the consent of the lessor and to assign his interest in the lease.

That the plaintiff was a respectable and responsible person cannot, on the evidence before the Court, be denied or disputed and, indeed, learned counsel for the appellant did not so contend. We find ourselves in agreement with the High Court that in the circumstances and on the evidence on record the lessor had unreasonably withheld his consent so as to enable the defendant to assign the lease without such consent. In the circumstances, we are satisfied that both the trial Court and the appeal Court exercised their discretion properly and no ground has been made out for our interfering with the judgment of the High Court.

The appeal is accordingly dismissed. The appellant to pay the costs of this appeal.

Appeal dismissed.

Agent for the appellant ; P.K. Chatterjee.

Agent for the respondent: S.K. Ghosh.

Raja Kamala Ranjan Roy

Baijnath Bajoria.

Das I.

Manann Lal

H emanta K uinar

P. K. Chatterjee

Sukumar Glzose

RAJA KAMALA RANJAN ROY

SHRI HARILAL KANIA C.J.

PATANJALI SASTRI

DAS JJ.

High Court of Judicature of Cal. cutta

Trevor Harries

Mukherjea

Eaja Kamala Ranjan Roy

Das J.

N. C. Chatterjee

Samarendra Nath f.fukherjee

P. L. Banerjee

Upendra Chandra f.fullick

Ormond

Maharaja Sris Chandra Nandy

Cossimbazar

Calcutta

April 27, 1931

Maharaja

Cossimbazar

Raj Wards Estate

Madan Gopal Daga

May 1, 1931

clause 2

March 25, 1943

January 27, 1945

February 2, 1945

February 1, 1945

February 21, 1945

March 5, 1945

March 8, 1945

March 10, 1945

Raja Kan1ala

Das J.

Raja Kamala

Das

July 4, 1945

July 13, 1945

August 6, 1945

January 23, 1947

Ormcnd

1st February, 1945

Raja Kamara

Clauses 3 and 4 of this letter were as follows:

19~0

Raja Kamara

RanJan Roy

Baijnath
Bojoria.

RanJan Roy

Raja Karnala

Maharaja Cossimbazar

clause 3

January 30, 1945

clause 4

Clause 4

clause 4

January 29, 1945

Raja Kamala Ranjan Roy

Baifnnth Baforia

clause 2

Raja Kamala

the Code of Civil Procedure

P.K. Chatterjee

S.K. Ghosh

Raja Kamala Ranjan Roy

Baijnath Bajoria

Das I.


Deo. l.

SUPREME COURT REPORTS

YESWANT DEORAO DESHMUKH

WALCHAND RAMCHAND KOTHARI.

[SHRI HARILAL KANIA C.J., DAS and

CHANDRASEKHARA AIYAR JJ.]

[1950]

Limitation Act (II of 1908), ss. 14 (21, 18, Art. 182-Giuil Pro C1ldure God• (V of 1908), s. 48-Execution of decree-Application after 12 years from decree and 3 years from order on last application-Fraudulent concealment of property to prevent execution- Maintainability of application-Limitation-Fraud preventing execution against particular property-"Whether saves limitation under Art. 182-Applicability of s. 18-Decree direoting payment of deficit court fe. b•fore execution-Whether conditional decree-Starting point of limita.tian-Time spent in proceedings to adjudge judgmentdebtw insolvent, whether should be excluded.

An application for execution of a decree wos made after the expiry of 12years from the doto of tbe decree and 3 years from the date of the final order on tbe last previous application jor execution.

The decree-holder contended that the judgment-debtor had fraudulently purchased a business in the name of a stranger and bad conducted the same in the name of the latter with a view to prevent the assets of the business from being proceeded against in execution by the decree-holder and that therefore under s. 48 of the Civil Procedure Code be was entitled to make an application even after the expiry of 12 years. The High Court found that, as the decree-holder was prevented by the fraud of the judgment-debtor from executing the decree, the application was not barred under s. 48 of the Code, but as it was made more than 3 years from the date of the order on t.he last application it was barred under Art. 182 of the Limitation Act. The decree-holder appealed contending for the first time before the Supreme Court that as fraud for the purpose of s. 48 of Civil Procedure Code was proved, e. 18 of the Limitation Act was applicable to the case and - his application was not barred under Art. 182 as it was made within three years of the date when he became aware of the fraud and the proper article applicable was Art. 181 :

Held, (i) that the question whother on the proved facts s. 18 was applicable ta the case was a pure question of law and the deoree-hol<ler was entitled ta rsise the question before the Supreme Court, even though he had not raised it before the lower courts;

(ii) though s. 48, Civil Procedure Code, and Arts. 181 and 182 of the Limitation Act dealt with the time limit for making applica tions for execution of decrees and should be read together, they were different in their scope and object, and the fact that the •Pplication was not barred under s. 48, Civil Procedure Code, did not obviate the necessity of considering whether it was barred

under Art. 182; (iii) that, as the fraud committed by the judg. 1950 ment-debtor did not in any way conceal from the decree-holder the knowledge of his right to make an application for execution of Y•awanl .Deorao the decree but only prevented him from exercising that rigbt in .Deshmukh respect of a particular property, s. 18 bad no application to the v. case, and the application was therefore barred under Art. 182 of Walchand the Limitation Act; (iv) the fact that there was no provision in Ramchand Art. 182 for cases where the judgment-debtor had committed a Kothari. fraud as in the present case did not render that article inapplicable and bring the case within the purview of Art. 181 as Art. 182 has to be read with the general provisions contained in s. 18 relating to cases where there is fraud.

Held also, (i) A decree which provides that the plaintiff should pay the deficient court fees before executing the decree is not a

conditional decree and time for making an application for execu~ tion of such a decree runs from the date of the decree, and not from the date on which the plaintiff pays the deficit court fees.

(ii) The period of time during which the decree-holder was prosecuting proceedings for adjudging the judgment-debtor an insolvent cannot be excluded under s. 14 (2) of Limitation Act, in computing the period of limitation for making an application for executing the decree.

Judgment of the Bombay High Ooud affirmed.

APPELLATE JURISDICTION: Civil Appeal No. 37 of 1950.

Appeal from a judgment of the Bombay High Court (Chagla C.J. and Dixit J.) in Appeal No. 281 of 1947 ..

K. S. Krishnaswami Aiyangar (K.

Narasimha Aiyangar, with him) for the appellant.

M. C. Setalvad, Attorney-General for India, (B. Sen, with him) for the respondent.

1950. December I. The Judgment of the court was delivered by

CHANDRASEKHARA AIY AR J.-This appeal, preferred Ohandra,.khara from the decree of the Bombay High Court in Appeal Aiyar J.

No. 281 of 1947, raises the question whether an execution application seeking to execute a final decree, passed by the 1st Class Subordinate Judge's Court at Poona, on 6th December, 1932, for a sum of Rs. 1,24,215 and odd, is barred by limitation. The decree was made in a suit for dissolution of a partnership and the taking of accounts.

; i,,

1950 The execution application was filed on 4th October, Y - 1946, and the amount stated to be due under the decree

"~:; m~~~; ao on that date was Rs. 2,30,986 and odd. The previous

v. execution application No. 946 of 1940 filed in the Court Walchand of the 1st Class Sub-Judge, Sholapur, to which the Ramchand decree had been transferred for execution, was made Kothari on 24th June, 1940. It was dismissed on 9th September,

Chan;:;;, khara 1940, for non-prosecution.

Aiyar J.

It would thus be seen that the present application was filed after the lapse of 12 years from the date of the final decree and 3 years from the date of the final order on the previous application. To surmount the bar of limitation, the decree-holder, who is the appellant before us, raised four contentions: firstly, that the final decree, which provided tha:t the plaintiff should pay the deficit court fees on the decretal amount before the execution uf the decree, was a conditional decree, and that time began to run from the date when the condition was fulfilled on 5th December, 1935, by payment; secondly, that the period occupied by the insolvency proceedings from 10th August, 1937, to 14th December, 1942, initiated by the decree-holder to get the first judgment-debtor Walchand Ramchand Kothari (with whom alone we are now concerned) adjudged an insolvent, should be excluded under section 14 (2) of the Limitation Act ; thirdly, that the period occupied by one Tendulkar, who was the creditor of the present decree-holder, in seeking to execute this decree, should be deducted ; and lastly, that as the judgment-debtor prevented execution of the decree against the 'Prabhat' newspaper by suppressing his ownership of the same, a fresh starting point of limitation springs up in the decree-holder's favour from the date of the discovery of the fraud.

The Subordinate Judge held that the execution application was not barred, agreeing with every one of these contentions. On appeal to the High Court Chagla C.J. and Dixit J. reversed this decision, holding that it was not a conditional decree, that the steps taken by Tendulkar to execute this decree were of no avail, and that the insolvency proceedings were for a

different relief altogether, so that section 14 (2) of the 19~0 Limitation Act could not be invoked. Thev concurred with the finding of the Subordinate Judge that the Yeswant Deorao . b dh f d Deshmukh judgment-de tor prevente t e execut10n o the ecree v. within 12 years by fraudulent concealment of his watchand ownership of the 'Prabhat' newspaper and that the Ramchand twelve years' bar of limitation did not apply ; but they Kothari. held that the application was barred under article 182 -- of the Limitation Act, as more than three years had Cha-; r•sekara run from 9th September, 1940, the date of the dismissal

•Y•• of the previous execution application, before the present application was filed on 4th October, 1946.

Points 1 to 3 above mentioned are of no avail to the appellant. The decree was not a conditional one in the sense that some extraneous event was to happen on the fulfilment of which alone it could be executed. The payment of court fees on the amount found due was entirely in the power of the decree-holder and there was nothing to prevent him from paying it then and there; it was a decree capable of execution from the very date it was passed. There could be no exclusion of the time occupied by the insolvency proceedings which clearly was not for the purpose of obtaining the same relief. The relief sought in insolvency is obviously different from the relief sought in the execution application. In the former, an adjudication of the debtor as insolvent is sought as preliminary to the vesting of all his estate and the administration of it by the Official Receiver or the Official Assignee, as the case may be, for the benefit of all the creditors ; but in the latter, the money due is sought to be realized for the benefit of the decree-holder alone, by processes like attachment of property and arrest of person. It may be that ultimately in the insolvency proceedings the decreeholder may be able to realize his debt wholly or in part, but this is a mere consequence or result. Not only is the relief of a different nature in the two proceedings but the procedure is also widely divergent.

The steps taken by the appellant's creditor Tendulkar to attach this decree and put it in execution do not save limitation. His darkhast for attachment of the

l950 present decree was on 3rd April, 1940, and for execution

Y -t-D of the present decree was on 1st February, 1944, es wan eorao . .

Deshmukh more than 3 years from 9th September, 1940, which 1s v. the date of the dismissal of the appellant's prior

Walehana execution petition.

~:t~'::~ The learned Advocate for the appellant therefore __ devoted most of his argument to the fourth contention

Chandrasekhara set forth above. That the judgment-debtor respondent Aiyar J. suppressed his ownership of the 'Prabhat' newspaper and fraudulently prevented the execution of the decree against this property has been found by both the Courts below, as stated already. It was strenuously urged that the fraud so found is not merely fraud as broadly interpreted under section 48 (2), Civil Procedure Code, but also strict or concealed fraud within the meaning of section 18 of the Limitation Act.

In this connection, it is as well to set out very briefly the nature of the concealment and the steps taken by the judgment-debtor to achieve the same. He purchased the 'Prabhat' newspaper with all its assets and goodwill from its previous owner one Purushottam Mahadev in 1938 under the letter marked Exhibit 129.

He opened current accounts in several banks, and gave the name of one Abhyankar as the owner of the paper, but he was himself operating on those accounts. One Rajwade, a friend of the judgment-debtor, was shown as the printer and publisher of the paper. Even in his supplementary written statement filed in Court in answer to the present execution, marked Exhibit 88 (page 53 of the printed book), the defendant asserted in paragraph 2 that he became the owner of the newspaper only in April, 1944, and that previously he had no ownership or right in the same. He did not go into the witness box to refute the allegation that he was the owner ever since the purchase of the paper in 1938 and that he opened accounts in the names of other people on which he was operating for his own benefit. On these facts, the Subordinate Judge found as follows:- "l think on the whole that the evidence establishes beyond doubt that the judgment-debtor had concealed bis proprietary interest in bis newspaper called

'Prabhat' from June, 1938, to April, 1944.

The only rn5o purpose for which the property could have been con- - cealed in this w; iy was probably the fear that the decree-Yes;•:t n;:""' holder would pounce upon it if he came to know about " u it. The decree-holder came to know of this fraud after Walchand April, 1944 ; for thereafter the judgment-debtor made Ramchand an open declaration that the newspaper belonged to him.

Kothari.

I think therefore that this fraud has prevented the 0h d-kh . . an rase ara decree-holder from executmg the decree agamst some Aiyar J. property of the judgment-debtor." In this finding, the High Court concurred. After referring to the stratagem adopted by the judgment-debtor in Bhagu jetha v. Malick Bawasaheb('), the learned Judges observed:-

" In this case, in our opinion, the stratagem is much more dishonest. The attempt on the part of the judgment-debtor was to conceal his property, to deny its ownership and to put forward a mere benainidar as the real owner of that property. In our opinion, therefore, ' the execution of the decree is not barred under section 48.

The judgment-debtor has, by fraud, prevented the execution of the decree within 12 years before the date of the application for execution by the decree-holder and therefore the decree under consideration is capable of being executed."

On the strength of this concurrent finding, Mr.

Krishnaswami Iyengar for the appellant argued that the fraud fell within the scope of section 18 of the Limitation Act and that if it were so, he was out of .,- the woods, inasmuch as the proper article to apply would be article 181 of the Limitation Act. The right to apply accrued to him when the fraud became known to him in or about June, 1946. Till then he was kept by the fraud from the knowledge of his right to make an application against the property. Law does not require him to make futile successive applications in execution, in the face of this fraud. He was not in a position to seek even the arrest of the judgment-debtor as he had got himself declared in the insolvency proceedings as an " agriculturist " within the meaning of the Deccan

Ill 1.i:..R, 9 Rom. sis.

!10

1950 Agriculturists' Relief Act, alleging falsely that he was -t-D not in receipt of any income by way of salary or Yeswan eorao .

D"hmukh remuneration from the newspaper concerned and that v. he was mainly dependent on the income of his family Walcha•a lands for his maintenance.

Romchand There can be no question that the conduct of the Kothtir\. __ respondent was fraudulent within the meaning of Chandrasekhara section 48 (2) of the Civil Procedure Code.

Though Aiyar J. benami transact.ions are common in this country and there is nothing per se wrong in a judgment-debtor purchasing property in another man's name, we have to take into account all the circumstances attending the purchase and his subsequent conduct for finding out whether it was part of a fraudulent scheme on his part to prevent the judgment-creditor from realizing the fruits of his decree. Fraudulent motive or design is not capable of direct proof in most cases ; it can only be inferred. The facts before us here leave no room for doubt that the true object of the judgmentdebtor was to prevent the execution of the decree against the ' Prabhat ' newspaper which he had purchased. Other persons were shown as the printer and the publisher of the newspaper, while Abhyankar was mentioned as the proprietor. The judgment-debtor, was, however, operating on those accounts for his own benefit. In the Insolvency Court, he set up the plea that he was an agriculturist, by suppressing the truth about his ownership of the paper, and pretending that his income was mainly, if not solely, from the family lands. He kept up this show till April 1944, when probably he felt that he was safe from the reach of the judgment.creditor. Even in his answer to the execution application, out of which this appeal has arisen, he had the hardihood to assert that he was not the owner of the paper till April 1944. It should also be remembered that he did not get into the witness box to explain what other necessity there was for all this camouflage, except it be to cheat the appellant of his dues under the decree.

Mr. Setalvad, the learned Attorney-General, who appeared for the respondent, pointed out tha_t there

was no benami purchase and that the holding out of 1950 Abhyankar as the proprietor of the' Prabhat' did not -.- amount to any false representation or misrepresenta- Yes;•~ n::rao

tion to the judgment-creditor, as the accounts on ":, u wl1ich reliance was placed were accounts opened in the Walchana banks and were not ordinarily available for inspection Ramchana by third parties. This line of reasoning is hardly con- Kothari. vincing, when we have to consider whether what is 01 d-kh . . an raae ara attnbuted to the ]Udgment-debtor does not amount to Aiuar J. a fraudulent scheme or device for preventing execution of the decree that had been passed against him for a very large sum of money. In the very nature of things, fraud is secret in its origin or inception and in the means adopted for its success. Each circumstance by itself may not mean much, but taking all of them together, they may reveal a fraudulent or dishonest plan.

It would be convenient to set out here in extenso section 48, Civil Procedure Code, and section 18 of the Limitation Act before we proceed to consider the soundness of the arguments advanced by both sides in support of the positions they have taken up.

Section 48, Civil Procedure Code (which corresponds to section 230 of the Code of 1882), is in these terms:-

" 48. (1) Where an application to execute a decree not being a decree granting an injunction has been made, no order for the execution of the same decree shall be made upon any fresh application presented after the expiration of 12 years from

(a) the date of the decree sought to be executed, or,

(b) where the decree or any subsequent order directs any payment of money or the delivery of any property to be made at a certain date or at recurring periods, the date of the default in making the payment or delivery in respect of which the applicant seeks to execute the decree.

(2) Nothing in this section shall be deemed-

(a) to preclude the Court from ordering the execution of a decree upon an application presented after the expiration of the said term of twelve years, where the

t95o judgment-debtor has by fraud or force prevented the

Y. -- execution of the decree at some time within twelve 8'Want Deorao . d f h l" D"hmukh years immediately before the ate o t e app 1. v. cation; or

Walokand

(b) to limit or otherwise affect the operation of Ramchanci article 183 of the first Schedule to the Indian Limita.

Kothari. tion Act, 1908."

Ohandrasekhara Section 18 of the Limitation Act, 1908, runs thus:-

Aiyar J. " 18. \Vhere any person having a right to institute a suit or make an application has, by means of fraud, been kept from the knowledge of such right or of the title on which it is founded, or where any document necessary to establish such right has been fraudulently concealed from him, the time limited for instituting a suit or making an application -

(a) against the person guilty of the fraud or acces. sory thereto, or {b) against any person claiming through him otherwise than in good faith and for a valuable consideration, shall be computed from the time when the fraud first became known to the person injuriously affected thereby, or, in the case of the concealed document, when he first had the means of producing it or compelling its production." Whether the fraud of the judgment-debtor should actually prevent the execution of the decree or whether it is enough if the fraud has been committed without resulting in actual prevention is a question on which there has been some divergence of opinion in the decided cases. The former view was taken in an early Madras case Kannu Pillay v. Chellathammal and Others(') and receives support from the decision reported in Sri Raja Venkata Lingama Nayanim Bahadur Varu and Another v. Raja Inuganti Rajagopala Venkata Narasimha Rayanim Bahadir Varu and five Others(') to which our learned brother Mr.

Justice Patanjali Sastri was a party. The latter view

11) [1898) M.L.J, 208.

12) I. L.R. 1947 M•d. 6~5.

is indicated in M. R. M.A. S. P. Ramanathan Chettiar 1950

v. J.lahalingam Che/ti(') by a Bench of which Sir

--D. . 1

. J b Yeswant eorav Madhavan Nair . was a mem er. It is not necessary D hmukh to determine which view is correct, as we have here " •. definite findings of both the Courts below that there Walchand was fraud preventing the execution of the decree Ramchand within the meaning of Section 48 of the Civil Procedure Kothari.

Code.

Chandrastkhilra The appellant thus escapes the bar of the 12 years' tl.iyar J. period and he has a fresh starting point of limitation from the date of the fraud for section 48 of the Civil

Procedure Code. In other words, the decree-holder has another 12 years within which he can execute his decree.

Having thus got over the difficulty in his way under section 48 of the Code of Civil Procedure, he has next to meet the objection under the Limitation Act. On behalf of the appellant, it was urged that section 18 of the Limitation Act applied to the facts and that the right to apply accrued to the appellant when the fraud by the judgment-debtor became known to him in 1946.

No reliance was placed on section 18 of the Limitation Act in the courts below and no reference to it is found in the grounds of appeal to this court. It is however mentioned for the first time in the appellant's statement of the case.

If the facts proved and found as established are sufficient to make out a case of fraud within the meaning of sec. tion 18, this objection may not be serious, as the question of the applicability of the section will be only a question of law and such a question could be raised at any stage of the case and also in the final court of appeal. The following observations of Lord Watson in Connecticut Fire Insurance Co. v.

Kavanagh (')are relevant. He said: "When a ques. tion of law is raised for the first time in a court of last resort upon the construction of a document or upon facts either admitted or proved beyond controversy, it is not only competent but expedient in the interests of justice to entertain the plea.

The expediency of

(I) I.L.R. 58 Mad. 31 l.

121 [18S2] A.O. 4VS.

1950 adopting that course may be doubted when the plea -- cannot be disposed of without deciding nice questions Y6'wa•t Deo,.ao f f . .d . h. h th t f It• t

D 1 kh o act m cons1 enng w 1c e cour o u 1ma e "~w review is placed in a much less advantageous position

Walohand than the courts below."

Ramchand Mr. Seta\vad, however, urged that the appellant

Kothan. should not be allowed to rely on section 18 now for the

Ghan;;;.;;, khara first time and that even if fraud within the meaning

Aiyar J. of that section had been pleaded the respondent might have adduced counter-evidence by himself going into the witness box or otherwise. Accorc!ing to him, the approach to the question of fraud under section 18 of the Limitation Act is quite different from the approach under section 48 of the Civil Procedure Code. There may be cases where the fraud alleged and found is fraud in the wider sense of the term within the meaning of section 48 (2) of the Civil Procedure Code, but the same facts do not amount to fraud as strictly construed under section 18 of the Limitation Act. The fact that the decree-holder in the lower courts relied on section 48, Civil Procedure Code, only does not prevent him from relying on section 18 of the Limitation Act if the facts necessary to be established for bringing in the assistance of section 18 of the Limitation Act are admitted, or proved. It is not disputed that the fraud contemplated by section 18 of the Limitation Act is of a different type from the fraud contemplated by section 48 (2) of the Civil Procedure Code.

The wording of section 18 which requires the fraud "to prevent knowledge of the right to make the application" is necessarilv of a different nature from the fraud which prevents the decree-holder from making an application for execution.

Concedi!'g to the appellant the right to rely on section 18 of the Limitation Act even at this late stage, let us see if it is really of any help to him on the facts found. The section has been quoted already. It speaks of the right to institute a suit or make an application which by means of fraud has been kept from the knowledge of the person having the right or the title on which it is founded. The right to apply for

execution of a decree like the one before us is a single

J950 and indivisible right, and not a composite right, Y

--D · f d"ff 11 h db d h eswrnt eorao cons1stmg o , 1 erent. sma er ng ts an ase on t e Deshm .. kh decree-holder s remedies to proceed against the person v. of the judgment; debtor or his properties, moveable W•lchand and immoveable. To give such a meaning would be RamchMd to split up the single right into parcels and to enable Kothari. the decree-holder to contend that while his rib" ht to 01 d--kh . d . . l . f ianras~ ara procee agamst a part1cu ar item o property is Aiyar J. barred, it is not barred in respect of other items. \Ve would then be face to face with different periorls of limitation as regards one and the same decree.

An interpretation which lead> to this result is prima facie unsound. Both sides agTeed that this is the true position, but they reached it from slightly varying standpoints.

According to the appellant, fraud even with reference to one property gives him a further extension of 12 years under section 48 (2) as regards the whole decree and it is not necessary for him to show that he had proceeded against the other properties of the judgment-debtor. According to the respondent, the fraud must consist in the concealment of the knowledge of the decree-holder's right to apply for execution of the decree and it is not enough to prove or establish that the fraud prevented him from proceeding against a specific item. The two contentions, lead to the same conclusion about the indivisibility of the decree, but along different lines.

In our opinion, the facts necessary to establish fraud under section 18 of the Limitation Act are neither admitted nor proved in the present case. Concealing from a person the knowledge of his right to apply for execution of a decree is undoubtedly different from preventing him from exercising his right, of which he has knowledge. Section 18 of the Limitation Act postulates the former alternative.

To read it as referring to an application for execution to proceed against a particular property would be destructive of the oneness of the decree and would lead to multiplicity of periods of limitation. It is true that articles 181 and 182 of the Limitation Act and section 48,

1950 Civil Procedure Code, should be read together. The - articles expressly refer to the section. But they are Y"want Deorao d d t ll 1 ' d'ff t h D h kh m epen en or para e prov1s1ons, 1 eren m t eir es ;.u scope and object.

As held in Kalyanasundaram Walchana Pillai v. Vaithilinga Vanniar (1) section 48 (2) extends Ramohand the 12 years' period of closure by a further period of Kothad. similar duration but the necessity of resort to artich d-, 1• cle 182 is not thereby obviated. The decree-holder an rase < i ,.ra . . 4; yar J. must have been takmg steps to keep the decree alive and the onlv circumstance that could relieve him of this obligatfon is the existence of fraud under section 18 of the Limitation Act.

The learned Advocate of the appellant asked how it could be possible for him to apply in execution when there was the fraud and whether the law contemplated that, even though the fraud prevented execution of the decree, he was to go on filing useless or futile applications every three years merely for keeping the decree alive. The answer is simple.

The fraud pleaded. namely suppression of ownership of the 'Prabhat' newspaper, did not conceal from him his right to make an application for execution of the decree.

Indeed, the suppression, which began in 1938, did not prevent the decree-holder from applying for execution in 1940; and in his answers in cro"s-examination, he has admitted that there were other properties to his knowledge against which he could have sought execution, viz., deposits in several banks of the judgment-debtor's monies but standing in his wife's or daughter's names, life insurance policies for which premia were being paid by him, law books written and published by him, movable properties in the house at Poona etc.

As a matter of fact, the appellant's present application seeks execution against several of these properties.

Nothing prevented him therefore , from seeking such execution within 3 years of the dismissal of his prior application in 1940. Even with reference to the 'Prabhat', all that the decree-holder states is that as he had no evidence to prove that the concern belonged to the defendant he did not take any steps, and not that he had no

(lJ I.LJ~. 19.i9 i\lad. 611.

knowledge of the ownership. To quote two sentences 1950 from his deposition : "I had suspected that defendant -- N I h 1 f h b . ll h h.

Y., want D•orao o. was t e rea owner o t e usmess a t e w Ile.

D h kh But I had no positive knowledge or information till ".~" 1946" ....... " I could not take any step for attaching Walchand the defendant's business till 1946 as I had no evidence Ramchand to prove the defendants fraud till then." There is Kotha•i. no obligation on the judgment-debtor to post the Oh d --;.h decree-holder with all details of his properties; it is the ai;:~ J. ara decree-holder's business to gather knowledge about the properties so that he can realise the fruits of his decree.

In dealing with this evidence, Mr. Krishnaswami Iyengar relied on the Privy Council decision, Rahiinbhoy

v. Turner in 20 I. A. I and referred to the following observation of Lord Hobhouse at page 5 : -

"But their Lordships consider, and in this they agree with both the Courts below, that all that the appellant Rahimbhoy has done is to show that some clues and hints reached the assignee in the year 1881, which perhaps, if vigorously and acutely followed up, might have led to a complete knowledge of the fraud, but that there was no disclosure made which informed the mind of the assignee that the insolvent's estate had been defrauded by Rahimbhoy of these assets in the year 1867."

The passage cited does not apply here because the appellant admits knowledge, which is more than a mere suspicion, but states that he had no evidence to prove the defendant's ownership. In any event, it has not been established within the meaning of section

18 of the Limitation Act that the fraud alleged and proved kept back from him the knowledge of his right to execute the decree.

It is thus clear that the appellant cannot get the benefit of section 18 of the Limitation Act. It was next argued on behalf of the appellant that under section 48(2) of the Civil Procedure Code, because of the fraud of the respondent the appellant got a fresh starting point of limitation for the Limitation Act also

1950 and therefore the starting point contemplated in the third column of the schedule to the Limitation Act

YmDoanht D•kohraorelating to a1, plications for execution should be the

e~ mu . v. date when the fraud was discovered by the appellant.

Walchand In other words, it was argued that the effect of section Ramchand 48 was not merely to make the 12 years' period start Kothari. from the discovery of fraud for the purpose of section

G d--kl 48(2) of the Civil Procedure Code but also to give a han rast iara h . . f h h d 1 h L' . .

Aiyar J.

Ires startrng pornt or t e sc e u e to t e 1m1tat10n Act.

This argument cannot be accepted. If a man is prevented from making an application, because of the fraud of the debtor, he 1s not necessarily prevented from knowing his right to make the application. By the enactment of section 18, the Legislature has distinctly contemplated that for the Limitation Act the starting point is changed on the ground of fraud, only when the knowledge of the right to make the application is prevented by the fraud of the judgmentdehtor.

Having the knowledge that he had the right to make the application, if the judgment-debtor prevents the decree-holder from knowing the existence of certain properties against which the decree could be enforced, the case is clearly not covered by the words of section 18 of the Limitation Act. Therefore the argument advanced on behalf of the appellant is unsound.

It was urged that the various starting points mentioned in the third column to article 182 of the Limitation Act cannot apply because none of them specify a fresh starting point for execution acquired on the ground of the fraud of the judgment.debtor. This argument, in our opinion, instead of helping the appellant, goes against him.

Such a provision in the third column in the article relating to execution of decrees is not necessary because provision for such a contingency is made in section 18. Affirmatively, by the inclusion of section 18 in the Limitation Act, and, negatively, by not providing for a separate period of limitation in the case of the fraud of the judgment-debtor in the third column in the articles, the Legislature has clearly indicated that unless advantage could be taken by the

decree-holder under section 18 on the ground of the 1960 fraud of the judgment-debtor, fraud does not give any -- th

1. f d h L" "t A t Th" h f Yeswant Deorao o er re. 1e un rt e 1m1 a_t10n c : IS _sc eme o Deshmukh the Legislature 1s not inconsistent with sect10n 48 of v. the Civil Procedure Code.

The two provisions in the Walchand two Acts have to be read as related to the same subject Ramcha><d but dealing with two differents aspects.

Without Kothari. section 48 of the Civil Procedure Code a decree-holder, -- .f h d l" · d b 1 181 011andrasekhara 1 e ma e app 1cat10ns as requJre y artic e or A.

J 182 of the Limitation Act, could keep his decree alive •var for an indefinite period. The Legislature, as a matter of policy, ruled that a decree of a civil court (but excluding the High Court) shall not be kept alive for more than 12 years, although all necessary steps are taken under the Limitation Act to keep the decree alive and operative. That is one limit to the right of the decree-holder to enforce the decree of the court.

The second limitation to his right, which is independent of the first, is that he must keep the decree alive under article 182 or 181, as the case may be.

In the case of the fraud of the judgment-debtor provision is made in section 48(2) for enlarging the 12 years period prescribed under section 48.

For defeating the plea of the bar of limitatio:1 under the Limitation Act, in the case of fraud of the judgment-debtor, provision is found in section 18 of the Limitation Act. If the particular case of fraud set up and proved is not covered by those words, there is no protection against the same in the Limitation Act.

Read in that way, the two legislative provisions are neither conflicting nor overlapping; and they are capable of operating harmoniously, as they deal 11ith different situations and circumstances. The argument advanced on behalf of the appellant that because of the fraud he got not merely a fresh starting point for computing the 12 years period prescribed in section 48 (2) of the Civil Procedure Code but is also entitled to an extension of the time under the Limitation Act, must therefore fail.

The second contention urged on behalf.of the appellant that because in the third column of article 182

SUPREME COURT REPORT 5[1950)

1950 fraud is not mentioned, the case is covered by article -- J 81 does not also appear to be sound. The third column

y..,~··~ D~~·· in article 182 prescribes the starting point of limita-

" "'" tion under different specified circumstances. It does v.

Walchand not, and indeed need not. mention the ground of fraud Ramchand because if fraud of the kind against which the Limita-

Kothari. tion Act contemplates relief, as prescribed in section 18

Ch d-,., of the Limitation Act, is established, the time is an rase~1tara . . .

Aiyar J. automatically altered by operation of that sect10n. If the case does not fall under that section, no relief is permitted under the Limitation Act and the starting point for computing the period must be as mentioned in the third column, irrespective of the question of fraud. In our opinion, therefore, the contention that because of the fraud established in the present case under section 48(2) of the Civil Procedure Code, the appellant gets a fresh starting point of limitation under article 182 of the Limitation Act is unacceptable.

The appellant relied on the general principle of jurisprudence that fraud stops or suspends the running of time and that it should be applied in his favour, apart from section 18 of the Limitation Act.

Rules of equity have no application where there are definite statutory provisions specifying the grounds on the basis of which alone the stoppage or suspension of running of time can arise. While the courts necessarily are astute in checkmating or fighting fraud, it should be equally borne in mind that statutes of limitation are statutes of repose.

For the reasons given above we concur in the conclusion reached by the High Court and dismiss the appeal with costs.

Appeal dismissed.

Agent for the appellant : K. ]. Kale.

Agent for the respondent: Gan pat Rai.

YESWANT DEORAO DESHMUKH

WALCHAND RAMCHAND KOTHARI

SHRI HARILAL KANIA C.J.

DAS

CHANDRASEKHARA AIYAR JJ.

Limitation Act

ss. 14

Art. 182

s. 48

Art. 182

s. 18

s. 48

s. 48

Art. 182

Limitation Act

Supreme Court

s. 48

Civil Procedure Code

Limitation Act

Art. 182

Art. 181

s. 18

s. 48

Civil Procedure Code

Arts. 181 and 182

Limitation Act

s. 48

Civil Procedure Code

Art. 182

s. 18

Art. 182

Walchand the Limitation Act

Art. 182

Art. 181

Art. 182

s. 18

s. 14

Limitation Act

Bombay High Court

Chagla C.J.

Dixit

K. S. Krishnaswami Aiyangar

K.

Narasimha Aiyangar

M. C. Setalvad

B. Sen

CHANDRASEKHARA AIY

Aiyar

5th December, 1935

10th August, 1937

14th December, 1942

Walchand Ramchand Kothari

section 14

Limitation Act

Tendulkar

section 14

Limitation Act

Yeswant Deorao

article 182

Limitation Act

9th September, 1940

4th October, 1946

3rd April, 1940

Chandrasekhara

~:t~'::~ The learned Advocate for the appellant therefore  devoted most of his argument to the fourth contention

Chandrasekhara set forth above.

section 48

Civil Procedure Code

section 18

Limitation Act

Purushottam Mahadev

Abhyankar

Rajwade

Kothari

section 48

Krishnaswami Iyengar

section 18

Limitation Act

article 181

Limitation Act

section 48

Setalvad

1950 Abhyankar

Aiuar

section 48

Civil Procedure Code

section 18

Limitation Act

Section 48

Civil Procedure Code

section 230

article 183

Section 18

Limitation Act, 1908

Madras

Patanjali Sastri

J.lahalingam Che

is indicated in M. R. M.A. S. P. Ramanathan Chettiar 1950

v. J.lahalingam Che/ti(') by a Bench of which Sir
D. .

Yeswant eorav Madhavan Nair

Section 48

section 48

section 48

the Code of Civil Procedure

Limitation Act

section 18

Limitation Act

section 18

Limitation Act

Watson

Seta\vad

Kothan

section 18

section 18

Limitation Act

section 48

section 48

section 18

Limitation Act

section 48

Civil Procedure Code

section 18

Limitation Act

section 18

Limitation Act

section 18

Limitation Act

section 48

section 18

section 18

Limitation Act

section 48

section 18

Limitation Act

Section 18

Limitation Act

articles 181 and 182

Limitation Act

section 48,

1950

Civil Procedure Code

Y"want Deorao

section 48

section 18

Limitation Act

Poona

Hobhouse

Rahimbhoy

section

18

Limitation Act

section 18

Limitation Act

section 48(2)

Limitation Act

Limitation Act

section 18

Limitation Act

section 18

Limitation Act

article 182

Limitation Act

section 18

section 18

Limitation Act

section 18

Yeswant Deorao

section 48

Limitation Act

Limitation Act

article 182

section 48(2)

section 48

Limitation Act

section 18

Limitation Act

Limitation Act

section 48

Limitation Act

article 182

article 182

section 18

Limitation Act

Limitation Act

section 48(2)

article 182

Limitation Act

section 18

Limitation Act

K. ]. Kale

Gan pat Rai