1963 (3) TMI 72 - SC - Indian Laws

Appeal Dismissed: Execution Applications Barred by Time

A.S. Krishnappa Chettiar and Ors. Versus Nachiappa Chettiar and Ors.

The Supreme Court upheld the decision of the High Court, dismissing the appeals and holding that the execution applications were barred by time. The court ... - Issues Involved1. Whether the execution applications are within time.2. Whether the composition scheme operated as an adjustment or satisfaction of the decree.3. Whether the principles underlying Section 15(1) of the Indian Limitation Act, 1908, are applicable.4. Whether the letter dated April 19, 1949, constitutes an acknowledgment of liability under Section 19 of the Limitation Act.Detailed Analysis1. Whether the Execution Applications are Within TimeThe central issue in these appeals is whether the execution applications are within the prescribed time limit. The appellants contended that the period of four years during which the trustees were required to realize the Burma properties and pay off the debts should be excluded from the limitation period. They argued that this period should be considered as a stay of execution, invoking the principles underlying Section 15 of the Indian Limitation Act, 1908. The Subordinate Judge accepted this contention, but the High Court disagreed, holding the execution petitions were barred by time.2. Whether the Composition Scheme Operated as an Adjustment or Satisfaction of the DecreeThe composition deed provided for the payment of 40% of the dues to the creditors. The appellants argued that the composition scheme did not amount to an adjustment or satisfaction of the decree until the acts required under the scheme were performed. The Subordinate Judge held that the composition scheme operated as an adjustment of the decree from the date of its effectuation, but this view was not upheld by the High Court. The High Court did not consider the composition scheme as an adjustment or satisfaction of the decree within the meaning of Order XXI, Rule 2 of the Civil Procedure Code.3. Whether the Principles Underlying Section 15(1) of the Indian Limitation Act, 1908, Are ApplicableThe appellants argued that the principles underlying Section 15(1) of the Limitation Act should apply, which would exclude the period during which the trustees were managing the properties from the computation of the limitation period. However, the court noted that Section 15(1) explicitly applies only to cases where the execution of a decree has been stayed by an injunction or order. The court held that the acceptance of the composition scheme by the insolvency court did not operate as a stay of execution and that the second defendant, not being a party to the insolvency proceedings, could not benefit from such an order.4. Whether the Letter Dated April 19, 1949, Constitutes an Acknowledgment of Liability Under Section 19 of the Limitation ActThe appellants also contended that the letter dated April 19, 1949, written by the second defendant to the trustees, constituted an acknowledgment of liability under Section 19 of the Limitation Act. The court examined the letter and concluded that it did not acknowledge the liability under the decrees. The letter referred to the liability of the trustees under the composition scheme, not the personal liability of the defendants under the decrees. The court emphasized that an acknowledgment must relate to a subsisting liability and indicate the existence of a jural relationship, which was not the case here.ConclusionThe Supreme Court upheld the decision of the High Court, dismissing the appeals and holding that the execution applications were barred by time. The court found that the principles underlying Section 15(1) of the Limitation Act were not applicable and that the letter dated April 19, 1949, did not constitute an acknowledgment of liability under Section 19 of the Limitation Act. The appeals were dismissed with costs, with only one hearing fee.