JUDGMENT Harry Griffin and Chamier, JJ.
1. The only question in this appeal is whether the respondent's application for a decree absolute for the sale of mortgaged property was made within time. The decree nisi, which was passed in 1899 upon a compromise between the parties, provided that Rs. 1,374-0-0 with interest at a certain rate should be paid by instalments of Rs. 100 a year along with the interest then due. Payments were to be made by the end of Jeth in each year beginning with Jeth 1957 Fasli (June 1900), and it was provided that if default were made for three years in succession in the payments and interest, the decree-holder would be at liberty to recover at once the whole amount payable under the decree, i.e., to apply for an order absolute for sale of the property and execute the same.
2. No payment was made in 1900 or in 1901, but in June 1902, just before the end of Jeth 1959 Fasli, the appellant paid up all that was due on account of the first three years. He made no payment in 1903, but in June 1904 he paid up all that was due up to the end of Jeth 1960 Fasli (June 1903). No payment was made in 1905, but in June 1906 he paid the instalment and interest which he ought to have paid in Jeth 1961 Fasli (June 1904). It has been found that this payment is covered by the proviso to Section 20(1) of the Limitation Act. The only other payment made was a small sum on account of interest in July 1909 which has no bearing upon the question which we have to decide.
3. The appellant contends that the payment made in June 1906 not having been certified cannot be recognized by the court in view of the provisions of Order XXI, Rule 2. To this the respondent replies that rule is not applicable, inasmuch as the application for a decree absolute is not an application for execution and the court is not being asked to execute a decree but only to continue the suit. The payment in question was made before the passing of the new Code of Civil Procedure. Under the old Code it was, no doubt, held by this Court that an application for an order absolute was a proceeding in execution of a decree-see Oudh Behari Lal v. Nageshar Lal (1890) I.L.R., 13 All., 278--but it was held also in several cases that although an uncertified payment could not be recognized as a payment or adjustment of a decree by a court executing a decree, it was available to a decree-holder for the purpose of meeting a plea of limitation--see for example Kishan Singh v. Aman Singh (1894) I.L.R., 17 All., 42 and Roshan Singh v. Mata Din (1903) I.L.R., 26 All., 36. These rulings are binding upon us. The right which the respondent had before the passing of the new Code of Civil Procedure, to use the payment made in 1906 for this purpose, cannot have been taken away from him by the passing of the Code. We are therefore bound to recognize the payment when dealing with the question of limitation.
4. We have to ascertain what article of the Limitation Act is applicable and when time began to run against the respondent. In Chunni Lal v. Harnam Das (1898) I.L.R., 20 All., 302 Article 179, Schedule II, to the Limitation Act of 1877 (article 182 of Schedule I to the present Act) was held to govern an application for an order absolute for sale of mortgaged property. But the decree nisi in that case was in the common form, whereas in the present case we have an instalment decree containing a provision that the whole amount of the decree may be demanded on the occurrence of three consecutive defaults, and it is difficult to see how any of the provisions of the third column of Article 182 of the present Act can be applied to such a case. It would appear that the article applicable is No. 181. This article corresponds with Article 178 of the Act of 1877, which has been held in many cases to govern applications in execution proceedings to which for one reason or another Article 179 of that Act could not be applied. If, as we think, Article 181 of the present Act is applicable, the right to apply for an order absolute accrued to the appellant on the occurrence of the third consecutive default.
5. The respondent relies upon the decisions in Shankar Prasad v. Jalpa Prasad (1894) I.L.R., 16 All, 371, Ajudhia v. Kunjal (1908) I.L.R., 30 All., 123 and other like cases as authority for the proposition that the respondent was not bound to take out execution, i.e., apply for an order absolute, on the happening of the third consecutive default, though he was at liberty to do so if he pleased, and therefore time did not necessarily begin to run against him from the date of the third consecutive default. We need not discuss these cases, two of which were governed by Article 75, for it cannot be denied that if Article 181 is applicable the right to apply for an order absolute accrued to the appellant on the happening of the third consecutive default. The question is when did that occur? The defaults in 1900 and 1901 were wiped out by the payment made in June 1902. There was a default in 1903, another in 1904 and a third in 1905. The respondent contends that those defaults were wiped out by the payments made and accepted in 1904 and 1906. There is a consensus of opinion among the High Courts that the subsequent payment and acceptance of overdue instalments must be taken into consideration for the purpose of applying the rules of limitation to an instalment decree, although the articles applicable contain no such provision as that to be found in Article 75. The Calcutta High Court seem to treat it as a case of waiver and as an exception to the rule that limitation runs from the date of default--Mon Mohun Roy v. Durga Churn Gooee (1888) I.L.R., 15 Calc., 502--and the same view seems to have been accepted by this Court and by the Madras High Court. The Bombay High Court treat it as a kind of estoppel--Kashiram v. Pandu (1902) I.L.R., 27 Bom., 1. Whatever may be the true reason for the rule, it seems to be well settled that after defaults have occurred, which according to the decree set time running against the decree-holder, the payment and acceptance of the overdue instalments may have the effect of preventing him from saying that the payments were not made regularly and in satisfaction of the decree, and remitting the parties to the rights which they would have had if no default had occurred. In the present case there can be no doubt that the respondent accepted the payment made in June, 1904, in satisfaction of the instalments and interest payable in June, 1903. Similarly he accepted the payment made in June, 1906, in satisfaction of the instalments and interest payable in June, 1904, and if he had applied for an order absolute for sale at any time before July, 1907, it would certainly have been held by this Court that his action was premature.
6. On the authorities we feel bound to hold that the first three consecutive defaults of which the respondent can take advantage are those which occurred in 1905, 1906 and 1907. Consequently his application for a decree absolute made in August, 1909, must be held to have been made within time. We dismiss this appeal with costs.