JUDGMENT
Kanhaiya Singh. J.
1. This is an appeal under the Letters Patent from the decision of a Single Judge of this Court dated the 1st July, 1958, arising in execution of a decree passed in a Money Suit The judgment-debtor. Narayan Chandra Dutta is the appellant and the Nath Bank Ltd., the decree-holder, is respondent. The respondent, on the 30th July, 1902, obtained against the appellant a decree for Rs. 22,517-0-9 pies with costs, besides interest, at 6 per cent per annum. A sum of Rs. 5.931-0-0 had been attached before judgment, and the decree provided that this amount would be adjusted towards satisfaction of the decree money and the balance of the amount was made payable by annual instalments of Rs 2,000, each instalment falling due in December each year, commencing from 1943. It was further directed that, in the event of default of payment of any one instalment, “the entire unpaid decretal amount shall become payable”.
The first application for execution was made on the 4th September 1942 (Execution case No. 5 of 1942) and was dismissed on part satisfaction on the 25th September 1943 after realisation of the attached amount of Rs. 5,931-6-0 The first instalment fell due in December, 1943, and there was default in the payment of this instalment The judgment-debtor made thereafter payments of Rs. 2,000 on the 23rd September, 1944, and the 22nd December, 1944 each which, it appears, were credited by the decree-holder to the instalments due in December. 1943, and December, 1944. The third instalment, which was due in December, 1945, was also not paid. Because of this default the decree-holder had the option to levy execution in respect of the entire decretal amount then remaining unpaid. This time the decree-holder elected to enforce the default clause in the decree and recover the whole debt in one lump sum and, accordingly on the 6th September, 1946, the decree-holder put the decree in execution for the entire amount remaining unpaid. It was numbered as execution Case No. 5 of 1946.
In this execution proceeding there was on the 16th January, 1947, a fresh Adjustment of the decree to the effect that the annual instalment would he reduced to Rs. 1,000 and would be payable in June each year till the outstanding amount was liquidated, that the next instalment of Rs. 1,000 was to fall due in June, 1947 and that in default of payment of two successive instalments, the entire amount then remaining due would at once be payable and would be recoverable by execution. The decree-holder further admitted that he had received Rs. 2,000 from the judgment-debtor on account of the 1945 December instalment The second execution was, therefore, dismissed on part satisfaction in pursuance of this adjustment on the 16th January. 1947.
2. On the 8th September, 1949, the decree-holder filed a petition before the executing Court, alleging payments of Rs. 2,000 each on the 23rd September, 1944, the 22nd December. 1944, the 28th June, 1948 and the 26th June, 1949. The first two instalments paid on the 23rd September, 1944, and the 22nd December, 1944, had, as stated above, been credited towards the instalments of 1943, and 1944.
3. The third and the last execution, which has given rise to this appeal, was levied on the 15th May, 1952, being Execution Case No. 13 of 1952, and by this execution the decree-holder purported to realise the entire decretal amount remaining unpaid. Notice of this execution under Order 21, Rule 22 was first issued on the 31st May, 1952, and when, despite repeated attempts, the service of notice could not be effected, the decree-holder file d on the 4th August, 1952, an application supported by an affidavit for service of notice on the judgment-debtor under Rule 20 of order 5 of the Code of Civil Procedure. The substituted service of notice was. made before the 11th September. 1952, and on that date the decree-holder was directed to take further steps on the 16th September, 1952. On the latter date the decree-holder filed process fee of Rs. 3 and process for attachment of immovable property, and the Court directed, issue of writ of attachment, fixing the 23rd October, 1952, for return. It was duly effected.
On the date fixed, that is, the 23rd October, 1952, the decree-holder was absent and the judgment-debtor appeared through a pleader and filed objection to the execution of the decree on the ground of limitation. This objection of the judgment debor was set down for hearing on the 20th November, 1952. After several adjournments this objection was taken up for hearing on the 23rd February, 1958. The decree-holder was present on that date, but the judgment-debtor was absent. Thereupon, the executing Court passed an order rejecting the application of the judgment-debtor and directing the decree-holder to file requisites for fixing the valuation of the attached property. On the 13th June, 1953, the judgment-debtor filed another application raising a similar defence, namely, that the application for execution was barred by limitation as it was filed more than 3 years after the disposal of the previous execution case. This was numbered as miscellaneous Case No. 13 of 1953. The reply of the decree-holder was that there was fresh adjustment of the decree in the second execution, and the judgment-debtor made the last payment of Rs. 2,000 on the 26th June. 1949, and that, therefore, the execution was well within time. It was further urged that the present application was barred by the principles of constructive res judicata.
4. It will be observed that the preceding execution, that is, the second execution, was dismissed on part satisfaction on the 16th January, 1947. The present application for execution was presented on the 15th May, 1952. The second execution was not for realisation of a particular instalment, but for the entire debt then outstanding against the judgment-debtor. Evidently, the last application was made more than three years after the disposal of the second application, and was apparently barred by time. The decree-holder attempted to bring this application within time by alleging payments of Rs. 2,000 on the 20lh June, 1948, and another sum of Rs. 2,000 on the 26th June, 1949. Both the Courts below have concurrently held that no such payments were made by the judgment-debtor. Therefore, this ground is not available to the decree-holder.
The learned Execution Court, however, held that because of the adjustment in the second execution the decree was made payable by instalments, and, therefore, the execution was not barred by time, so far-as three instalments due prior to the presentation of the application for execution were concerned. He accordingly held that the decree-holder was entitled to recover only the instalments remaining due from December, 1949, amounting to Rs. 4,604-15-9 pies, besides future interest.
The learned Single Judge concurred in the conclusion, but on different grounds. In his opinion, the last execution was also rested on the default clause, and, therefore, the question of limitation did not arise. He did not consider it necessary to express any concluded opinion on the alleged adjustment of the decree in the second execution. He further held that the decree-holder was not entitled to raise the plea of res judicata for the firsl time in appeal here in view of the insufficiency of the materials on the record. He accordingly upheld the decision of the Executing Court, ft is against that order that the present appeal has been filed.
5. In my opinion, the order of the learned Single Judge is not supportable in law and cannot be maintained. The decree under execution was an instalment decree with a default clause, which entitled the decree-holder to recover the whole debt in one lump sum in the event of default in payment of any one instalment. If the decree be a simple instalment decree, there is no dispute that the provisions of Clause (7) of Article 182 applied. Article 182 deals with applications for the execution of decrees, and provides a period of three years for execution of decrees to be computed, inter alia, where the application is to enforce any payment which the decree or order directs to be made at a certain dale, from such date. Therefore, in case of instalment decrees each instalment, as it became due was a claim originating under the decree from the date when such claim arises, and under the provisions of Clause (7) of Article 182 the period of limitation is to be reckoned in respect of each instalment from the date when such instalment fell due. Had the decree under execution been a simple instalment decree, the execution to recover the last three instalments was not barred. See Maung Sin v. Ma Tok, AIR 1927 PC 146.
6. The present decree, however, is not a simple instalment decree. Il no doubt provides for the payment of the decretal amount by instalments, but at the same time it gives the decree-holder a right to recover the entire decretal amount on default of any one instalment. The principles governing the execution of an instalment decree with a default clause are well settled and have been stated with great lucidity by Beaumont, C.J., in the case of Hanmant Bhimrao v. Gururao Swamirao. AIR 1943 Bom 36, which I would, with respect, reproduce below:
“It is well settled that a default clause of this nature is inserted for the benefit of the creditor, and that when default in payment of an instalment occurs, the creditor may either exercise his right to recover the whole amount, or may waive the operation of the default clause, and continue to recover the debt of instalments. But it is clear that he cannot have both rights together, they are alternative rights. If he is entitled to recover the amount in one lump sum. he is not entitled to recover annual instalments. On the other hand, if he is entitled to recover annual instalments, he is not entitled to recover the whole amount in one lump sum. In my opinion, as soon as default occurs, the decree-holder has two alternatives, and inconsistent rights, and he must make up his mind which he is going to rest upon. Having in this case issued a darkhast to recover the whole amount, he has, in my view, unequivocally elected to stand on his right under the decree to recover the whole amount in one sum, and he cannot afterwards go back on that election, and proceed to recover the amount in instalments. . . .
The decree was originally a decree for payment by annual instalments. As soon as default was made, the decree-holder was given two inconsistent rights; he could continue under the decree to recover the amount by instalments, or he could recover the whole amount at once; but he could not do both. He was bound to limit his darkhast to a principal sum either of Rupees 1850 or Rs. 300. He had alternative rights and debtor was subject to alternative obligations. The creditor having elected to enforce his right to recover the whole debt in one lump sum, the future obligation of the debtor was filed accordingly, and, in my opinion, it was not open to the creditor subsequently to turn round and seek to enforce the decree as an instalment decree.”
7. The aforesaid view was approved by a Full Bench of the Bombay High Court in Chunilal v Shivram, AIR 1950 Bom 188. It has been laid down by the Full Bench that where an instalment decree provides that on the failure of payment of certain instalments the whole amount due may be recovered, the decree-holder is not entitled to exercise his option to recover the whole amount then recoverable when the first default has occurred more than three years before the filing of the execution application. It is no doubt open to a decree-holder to waive the benefit of a default clause and although a default may take place, he may treat the decree as still a decree for instalments and he may pursue in execution his right to obtain the instalments as and when they fall due. But once the right to enforce the default clause accrues to the decree-holder for the first time and there is no waiver of such right, time begins to run from the date of such accrual and would not be stopped by reason of subsequent defaults. An execution application to enforce the de fault clause filed more than three years from, the date of such accrual would be barred under Article 181.
A Full Bench of the Calcutta High Court also has made a similar pronouncement in Ranglal v. Shyamlal 50 Cal WN 735 : (AIR 1946 Cal 500) The Full Bench has laid down that where a decree directs payment of the decretal amount by instalments on particular dates and provides that in case the judgment-debtor fails to pay any instalment at the stipulated period, the entire decretal amount would be due and a default occurs, the decree holder has an option either to demand immediate payment of the entire amount or waive his right, no express waiver by an affirmative act need be proved; an application, after a default has occurred, for execution relating to the subsequent instalments as such, is maintainable, such an application is governed by Article 182, Clause (7) of the Limitation Act, 1908, and would be within time, although made beyond three years of the default, if made in respect of only the instalments which fall due within three years of the dale of the application
The same view has been expressed by a Full Bench of the Allahabad High Court also in Sheo Lal v. Devi Das, AIR 1952 Allahabad 900. It has laid down that the words “when the right to apply accrues” in the third column in Article 181 must mean the first default giving rise to the particular cause of action on the basis of which the application for a final decree is made, unless there has been a waiver express or implied, of the first default in which case the words “when the right to apply accrues” would mean the next succeeding default which is not waived, but the decree-holder will have a righl to apply for realisation of each successive instalment as it falls due provided the decree is not so worded that the only right left to the decree-holder after the first default is to realise the whole decretal amount. In such a case the right to apply for a final decree in respect of the instalments not barred by limitation as individual instalments would remain intact in spite of the omission to take advantage of the default clause provided the default clause is not so worded that the decree-holder has a right to rely on that alone and the decree after the default ceases to be an instalment decree. A somewhat similar view has also been expressed by this Court in Nirash Singh v. Baldeo Singh, ILR 25 Pat 664 : (AIR 1947 Pal 350).
In the instant case there is absolutely no ambiguity. The second execution, being Execution-Case No. 5 of 1946, was levied in respect of the entire decretal amount then remaining outstanding on the strength of the default clause, and this execution was dismiss ed on part satisfaction on the 16th January, 1947. Therefore, the third and last execution presented on the 15th May, 1952, was manifestly out of time since it was made more than three years after the dismissal of the prior execution. Once the election has been made to recover the entire decretal amount in consequence of the default in payment of any one instalment, it is final, and the decree-holder cannot but file the subsequent application for execution in respect of the entire amount remaining unrealised, and that too within three years of the dismissal of the preceding execution. He cannot approbate and reprobate and seek to realise different instalments remaining due in disregard of the election previously made by him.
The learned Single Judge was of the view that the last execution was based also on the default clause, and. therefore. was within time. This process of reasoning is not correct. The lasl execution may be for the entire amount and on the strength of the default clause, but it must be filed within the period of limitation that is within three years of the last order passed in the preceding execution If election once made In the decree holder’ is irrevocable and there is no doubt about that–the subsequent execution musl necessarily be for the entire amount and the mere fact that the entire outstanding amount was being sought to be realised is no answer to the limitation. If it were otherwise that the irrevocability of the election loses ail significance, and no question of limitation also arises as the subsequant execution can be levied at anv time, and it will be deemed to be within limitation provided the entire amount due is involved. It is difficult to accept this argument as correct. It is plain, therefore, that the lasl execution was prima facie barred by time.
8. What, however, saved the last execution from being barred was not the then outstanding amount being realised, but the subsequent adjustment of the decree in the second execution The attention of the learned Single Judge was not drawn to this important aspect of the case. As will appear from the above the decree-holder and the judgment-debtor reached fresh amicable settlement by virtue of which the amount remaining unpaid was payable in annual instalments of Rs. 1,000 each instead of Rs. 2,000 as originally agreed I upon in the decree. This subsequent adjustment has to he given effect to and the last execution was for the three instalments falling due preceding the presentation of the application for execution in accordance with the fresh adjustment. The order of the lower Court, therefore, is sustainable on this ground, but not on the reasoning stated by the learned Single Judge. Had the matter rested there the execution must have proceeded for the amount that was found due pursuant to the subsequent adjustment.
There is, however, one serious objection which is fatal to the contention of the judgment-debtor, and that is the question of res judicata. The learned Single Judge refrained from expressing any opinion upon this question on the ground that the materials were not sufficient, and this question could not be agitated for the first time in Second Appeal. Here also the learned Single Judge was in error The question of res judicata is a mixed question of law and fact and can be agitated at any stage of the proceeding, even in Second Appeal, if it does not involve fresh investigation of facts. Here all the relevant facts are on the record, and it is most unfortunate that the attention of the learned Single Judge was not drawn to these facts. It will appear from the above that on the 23rd October. 1952 the judgment-debtor filed an application objecting to the examination on the ground that it was barred by time.
When that application was taken up for hearing after several adjournments, the judgment-debtor was absent, and, thereupon, that application was rejected. Thereafter the second application was made by the judgment-debtor raising similar defence, namely, the execution was filed beyond time. Now the first order rejecting his objection on the ground of limitation operates as res judicata and cannot be reagitated afresh by the judgment-debtor. It is well settled that although Section 11 of the Civil Procedure Code docs not in terms extend to execution proceedings, and other proceedings of tike nature, the general principles of the rule of res judicata including the rules of constructive res judicata, too, do apply to orders and decisions passed in execution cases.
In the case of Mohanlal Goenka v. Benoy Kishna, reported in AIR 1953 SC 65, their Lordships of the Supreme Court have laid down that, that the principle of constructive res judicata is applicable to execution proceedings is no longer open to doubt. It is further beyond controversy that where, a point has once been expressly decided in the execution department, that decision binds the parties in all subsequent proceedings. In cases where a point has not been directly decided but is such as must be deemed to have been necessarily decided before an order of execution was passed, the decision is still binding. If any ruling is needed I may refer to a Bench decision of his Court in the case of Bansidhar Estate Collieries and Industries Ltd. v. The State, reported in AIR 1959 Pat 319, where the previous cases on the point including the case of Mungal Pershad Dichit v. Grija Kant, (1882) 8 Ind App 123 (PC) have been considered. In this case there was a decision of the Court about limitation when the first objection of the judgment-debtor was dismissed For the purposes of res judicata the decision is as effective as a decision on merits.
It has been laid down by a Bench of the Calcutta High Court in the case of Nikunja Behari Das v. Jatindra Nath Kar, reported in AIR 1956 Cal 613. that a decision by necessary implication is as much res judicata as an express decision, and that this is so in the ease where Explanation IV to Section 11, Civil Procedure Code has to be considered, there can be no doubt but even in other cases where a matter has been raised in the pleading, there is no express decision, but there is a decision by necessary implication, the Courts have always held that the principle of res judicata is applicable.
This view finds sufficient support from the decision of the Privy Council in the case of Raja of Ramnad v. Velusami Tevar, reported in AIR 1921 PC 23. In that case the judgment-debtors resisted the application for execution on the ground that the decree was barred by limitation The learned Subordinate Judge passed the following order :
“The transfer of the decree in favour of the
petitioner is recognised and petitioner allow
ed to execute the decree . petitioner may file a fresh application for attachment. ”
It will be seen that the learned Subordinate Judge did not pass any explicit order about the question of limitation. Since, however, he allowed the decree-holder to execute the decree, the question of limitation was by implication, decided. In subsequent proceedings the judgment-debtors raised a similar plea of limitation, and then Lordships held that it was not permissible to the judgment-debtors because the issue of the execution of the decree being barred by limitation was in fad before the learned Subordinate Judge on the previous occasion and the Judge was aware of it, and accordingly his decision, permitting the decree-holder to proceed with the execution included (as legally must have been the case) the rejection of this plea. No appeal was brought against that order, and, therefore, it stood as binding between the parties, and, accordingly, it was not competent to the judgment-debtors to raise that plea again. It was, therefore, laid down in that case that where the plea of limitation was raised inter alia in defence to an execution application, and the application was granted. the plea was barred bv res judicata although the judgment did not expressly refer to it.
A similar view has been expressed in the case of Mahadeo Prasad v. Bhagwat Narain, reported in AIR 1938 Pat 427 Mr. Bhabananda Mukherji appearing for the appellant did not contest the correctness of this proposition of law. His contention, however, was that the plea of res judicata is not available in the same proceeding. He submitted that, had the application of the judgment-debtor raising the plea of limitation been filed in a previous execution case, then the rejection of that application, even without decision on merits, would have constituted res judicata in subsequent proceedings. According to him, successive applications under Section 47 can be filed in the same execution proceeding, and the decision in one will not operate as res judicala in respect of the subsequent applications. This contention is utterly devoid of merit and has only to be mentioned to be rejected
A Bench of this Court has laid down in the case of Shamsunder v. Dhirendra, reported in ILR 29 Pat 732 : (AIR 1950 Pat 465) that it is well settled that the doctrine of constructive res judicata is applicable to execution proceedings and where a judgment-debtor fails to raise his objections to the execution, which he might and ought to have raised, and the execution is ordered to proceed, all such ob sections will be deemed to have been impliedly decided against him and he will be precluded from raising the same objection at later stage of the same execution proceeding or in a subsequent execution of the same decree.
In AIR 1953 SC 65, referred to above, the principle of res judicata was applied at the subsequent stage of the same execution proceeding. Their Lordships have laid down that where neither at the time when the execution application was made and a notice served upon the judgment-debtor not in the application for setting aside the two sales made by him does the judgment-debtor raise any objection to execution being proceeded with on the ground that the execution Court had no jurisdiction to execute the decree, the failure to raise such an objection, which goes to the root of the matter precludes him from raising the plea of jurisdiction on the principle of constructive res judicata after the property has been sold to the auction-purchaser who has entered into possession. It must be held, therefore, that the present application under Section 47 is barred by the principles of res judicata.
9. The learned Counsel for the respondent contended that the plea of res judicata was available to the decree-holder on another ground also He pointed out that when the substituted notice under Order 31, Rule 22 was duty served and the judgment-debtor did not appear and object to the execution on the ground of limitation, and the Court allowed the execution to proceed and passed an order on the decree-holder to file processes for attachment of immovable property and directed issue of writ of attachment, the Court impliedly decided that the execution was in time and, therefore, the judgment-debtor was not entitled to raise this plea over again at a subsequent stage of the same proceeding.
In support of his contention he referred to the decision of the Privy Council in the case of Mungal Pershad Dichit, (1882) 8 Ind. App 128 (PC) referred to above. In that case, after five unsuccessful applications for execution the decree-holder put in the sixth application on 8-8-1874. Notice in that execution was issued on 10-9-1874 and was served on 28-9-1874. The decree-holder filed an application for attachment of property on 8-10-1874. Sale proclamation wag issued on the 27th Agrahayan 1281. But on the application of the judgment-debtor made on 26-1-1875 admitting the debt and allowing the attachment to remain, the execution was dismissed. The seventh and the disputed execution petition was filed on 22-9-1877, and it was pleaded that it was barred as the sixth application for execution was barred by time. It will appear, however, that on the sixth petition for execution the Subordinate Judge passed an order for attachment on the 8th October, 1874, after service of notice on the judgment-debtor on the 23rd September, 1874, to show cause why the decree should not be executed against him. No appeal had been preferred against it. Rather it was acted upon, and the attachment of the property continued until the last application was made. In these circumstances, their Lordships of the Privy Council held that even on the assumption that the sixth application was beyond time, the seventh application must be treated as within time because when on the service of the notice the judgment-debtor did not object to the execution on the ground of limitation, the Subordinate Judge, whether right or wrong, must be considered to have determined that it was not barred. It will be observed that in that case there was no decision on merit. The judgment-debtor did not appear in the execution proceeding on the service of notice and the Court passed orders for attachment in his absence, still their Lordships of the Privy Council held that the judgment-debtor was debarred from questioning the validity of the order, though erroneous, and the order was final between the parties
The reason is that the principle of res judicata is not rested on the correctness of the decision. As held by their Lordships of the Supreme Court in the case of Mohanlal Goenka AIR 1953 SC 65 referred to above, even an erroneous decision on a question of law operates as res judicata between the parties to it. The correctness or otherwise of a judicial decision has no bearing upon the question whether or not it operates as res iudicata. A decision in the previous execution case between the parties that the matter was not within the competence of the executing Court even though erroneous is binding on the parties. It is thus manifest that where the judgment-debtor, after service of notice under Order 21, Rule 22 of the Code of Civil Procedure, fails to appear and plead that the application is barred by limitation, and the Court allows the execution to proceed, there is an implied decision by the Court that the execution is not barred by limitation, and, when this order remains unchallenged eiher by way of review or by way of appeal, the judgment-debtor is precluded from raising the plea of limitation at a subsequent stage of the same proceeding or in a separate proceeding on the principles of res judicata.
The reason is that the Court has jurisdiction to determine whether the decree was barred or not when the application for execution was filed, and when, even without expressly deciding the question of limitation, he passed an order that attachment should issue, and till that stage the judgment-debtor does not come forward, though served with notice, to object to the execution, on the ground of limitation, he is precluded from raising that question again either in the same proceeding or in a subsequent proceeding. In this case, when on the service of the notice to show cause why the execution shall not proceed, the judgment debtor failed to appear, and in the meantime the writ of attachment was issued, the Court must be deemed to have decided the question of limitation, and it was not competent to the judgment-debtor to raise that question again at a subsequent stage of the same proceeding. On this ground also the present application is barred by res judicata.
10. It follows that the judgment-debtor’s application under Section 47 of the Code of Civil Procedure must be dismissed. What is the consequence? The consequence is that the application for execution as presented to the Court shall proceed.
11. The next question is what amount the decree-holder is entitled to recover from the judgment-debtor. When the plea of limitation fails and the execution is taken to be in time, there is no question that the decree-holder is entitled to recover the entire decretal amount then remaining unpaid. The decree including costs was for Rs. 22,517-0-9 pies. The execution costs came to Rs. 19-5-0. Therefore, the entire amount came to Rs. 22,536-6-9 pies. The decree-holder has given a deduction for payments amounting to Rs. 13,931-6-0 and he has claimed in this execution Rs. 8,604-16-9 pies besides interest of Rs. 7,502-7-0, in all, Rs. 16,107-6-9 pies. This account given by the decree-holder is correct with this exception that it overlooks the admitted payment of Rs. 2,000 in respect of the instalment for 1946. The total payments, therefore, come to Rs. 15,931-6-0 instead of Rs. 13,931-6-0, as in the application for execution. In other words the decree-holder is entitled to recover from the judgment-debtor Rs. 6,604-16-9 pies with interest at 6 per cent per annum. The decree-holder will be entitled to interest from the date of disposal of the second application, that is from the 16th January, 1947 till realisation. The office will calculate interest according afresh.
12. The respondent has filed a cross-objection and this relates only to the question of res judicata, which has been dealt with above. It has been held that the application under Section 47 is barred by the principle of res judicata, Therefore, the cross-objection succeeds to that extent.
13. In the result, the appeal fails, though on entirely different grounds, and is, accordingly, dismissed with costs. The cross objection is allowed. The execution shall proceed in respect of the amount stated above.
Ramratna Singh, J.
14. I agree.