No 37 of 1950
Appeal from a judgment of the Bombay High Court Chagla CJ and Dixit J in Appeal No 281 of 1947
K section Krishnaswami Aiyangar K Narasimha Aiyangar with him for the appellant
MC Setalvad Attorney General for India B Sen with him for the respondent
December 1
The Judgment of the court was deliv ered by CHANDRASEKHARA AIYAR J
This appeal preferred ch from the decree of the Bombay High Court in Appeal No 281 of 1947 raises the question whether an execution application seeking to execute a final decree passed by the let Class Subordinate Judge s Court at Poona on 6th December 1932 for a sum of Rs 124215 and odd is barred by limitation
The decree was made in a suit for dissolution of a partner ship and the taking of accounts
854 The execution application was filed on 4th October 1946 and the amount stated to be due under the decree on that date was Rs 230986 and odd
The previous execution application No 946 of 1940 filed in the Court of the 1st Class Sub Judge Sholapur to which the decree had been transferred for execution was made on 24th June 1940
It was dismissed on 9th September 1940 for non prosecution
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 contentionsfirstly that the final decree which provided that the plaintiff should pay the deficit court fees on the decretal amount before the execution of the decree was a conditional decree and that time began to run from the date when the condition was fulfilled on 5th Decem ber 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 third ly 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 applica tion was not barred agreeing with every one of these con tentions
On appeal to the High Court Chagla CJ and Dixit J reversed this decision holding that it was not a condi tional decree that the steps taken by Tendulkar to execute this decree were of no avail and that the insolvency pro ceedings were for a 855 different relief altogether so that section 14 2 of the Limitation Act could not be invoked
They concurred with the finding of the Subordinate Judge that the judgment debtor prevented the execution of the decree within 12 years by fraudulent concealment of his ownership of the Prabhat  newspaper and that the twelve years  bar of limi tation did not apply but they held that the application was barred under article 182 of the Limitation Act as more than three years had run from 9th September 1940 the date of the dismissal 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 appel lant
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 execu tion 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 differ ent 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 856 present decree was on 3rd April 1940 and for execution of the present decree was on 1st February 1944 more than 3 years from 9th September 1940 which is the date of the dismissal of the appellant s prior execution petition
The learned Advocate for the appellant therefore devot ed most of his argument to the fourth contention set forth above
That the judgment debtor respondent suppressed his ownership of the Prabhat  newspaper and fraudulently pre vented 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 previ ous 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 flied 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 April944 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  I think on the whole that the evidence establish es beyond doubt that the judgment debtor had concealed his proprietary interest in his newspaper called 857 Prabhat  from June 1938 to April 1944
The only purpose for which the property could have been concealed in this way was probably the fear that the decree holder would pounce upon it if he came to know about it
The decree holder came to know of this fraud after April 1944 for thereafter the judgment debtor made an open declaration that the newspaper belonged to him
I think therefore that this fraud has prevented the decree holder from executing the decree against some 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 vs Malick Bawasaheb1 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 benamidar 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 Krish naswami 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 theimita tion 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 execu tion 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 agriclu turist within the meaning of the Deccan 1 ILR 110 858 Agriculturists  Relief Act
alleging falsely that he was not in receipt of any income by way of salary or remuneration from the newspaper concerned and that he was mainly depend ent on the income of his family lands for his maintenance
There can be no question that the conduct of the re spondent was fraudulent within the meaning of section 48 2 of the Civil Procedure Code
Though benami transactions 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 find ing 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 in ferred
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  news paper Which he had purchased
Other persons were shown as the printer and the publisher of the newspaper while Abhy ankar was mentioned as the proprietor The judgement 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 sale 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 that there 859 was no benami purchase and that the holding out of Abhyankar as the proprietor of the  Prabhat  did not amount to any false representation or misrepresentation to the judgment creditor as the accounts on which reliance was placed were accounts opened in the banks and were not ordinarily avail able for inspection by third parties
This line of reasoning is hardly convincing when we have to consider whether what is attributed to the judgment debtor does not amount to 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 sec tion 48 Civil Procedure Code and section 18 of the Limita tion 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 of 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 executior of a decree upon an application presented after the expiration of the said term of twelve years where the 860 judgment debtor has by fraud or force prevented the execu tion of the decree at some time within twelve years immedi ately before the date of the application or b to limit or otherwise affect the operation of arti cle 183 of the first Schedule to the Indian Limitation Act 1908
 Section 18 of the Limitation Act 1908 runs thus  18
Where 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 accessory thereto or b against any person claiming through him other wise 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 esulting in actual prevention is a question on which there has been some diver gence of opinion in the decided cases
The former view was taken in an early Madras case Kannu Pillay vs Chellathammal and  Others1 and receives support from the decision reported in Sri Raja Venkata Lingama Nayanim Bahadur Varu and Another vs Raja Inuganti Rajaopala Venkata Narasimha Rayanim Bahadur Varu and five Others2to which our learned brother Mr Justice Patanjali Sastri was a party
The latter view  1 1898 MIJ Mad
861 is indicated in MRMASP Ramathan Chefliar vs Mahalingam Chetti1 by a Bench of which Sir Madhavan Nair J was a member
It is not necessary to determine which view is correct as we have here definite findings of both the Courts below that there was fraud preventing the execution of the decree within the meaning of Section 48 of the Civil Procedure Code
The appellant thus escapes the bar of the 12 years  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 Limita tion 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 section 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 obser vations of Lord Watson in Connecticut Fire Insurance Co vs Kavanagh 2 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 1 1LR 2 862 adopting that course may be doubted when the plea cannot be disposed of without deciding nice questions of fact in considering which the court of ultimate review is placed in a much less advantageous position than the courts below Mr Setalvad however urged that the appellant should not be allowed to rely on section 18 now for the first time and that even if fraud within the meaning of that section had been pleaded the respondent might have adduced counter evidence by himself going into the witness box or otherwise
According 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 contem plated 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 neces sarily of a different nature from the fraud which prevents the decree holder from making an application for execution
Conceding 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 863 execution of a decree like the one before us is a single and indivisible right and not a composite right consisting of different smaller rights and based on the decree holder s remedies to proceed against the person of the judgment debtor or his properties moveable and immoveable
Togive such a meaning would be to split up the single right into parcels and to enable the decree holder to contend that while his right to proceed against a particular item of property is barred it is not barred in respect of other items
We would then be face to face with different periods of limitation as regards one and the same decree
An inter pretation which leads to this result is prima facie un sound
Both sides agreed 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 48 864 Civil Procedure Code should be read together
The articles expressly refer to the section
But they are independent or parallel provisions different in their scope and object
As held in Kalyanasundaram Pillai vs Vaithilinga Vanniar 1 section 48 2 extends the 12 years  period of closure by a further period of similar duration but the necessity of resort to article 182 is not thereby obviated
The decree holder must have been taking steps to keep the decree alive and the only circumstance that could relieve him of this obligation 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 owner ship of the Prabhat  newspaper did not conceal from him his right to make an application for execution of the de cree
Indeed the suppression which began in 1938 did not prevent the decree holder from applying for execution in 19 10 and in his answers in cross examination he has adimitted 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 stand ing in his wife s or daughter s names life insurance poli cies 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 1 ILR 1939 Mad611 865 knowledge of the ownership
To quote two sentences from his deposition I had suspected that defendant No 1 was the real owner of the business all the while
But I had no posi tive knowledge or information till 1946   I could not take any step for attaching the defendant s business till 1946 as I had no evidence to prove the defendant s fraud till then
 There is no obligation on the judgment debtor to post the decree holder with all details of his properties it is the 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 lyengar relied on the Privy Council decision Rahimbhoy vs Turner in 20 IA 1 and referred to the following observation of Lord Hobhouse at page 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 482 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 111 866 and therefore the starting point contemplated in the third column of the schedule to the Limitation Act relating to applications for execution should be the date when the fraud was discovered by the appellant
In other words it was argued that the effect of section 48 was not merely to make the 12 years  period start from the discovery of fraud for the purpose of section 482 of the Civil Procedure Code but also to give a fresh starting point for the schedule to the Limitation Act
This argument cannot be accepted
If a man is prevented from making an application because of the fraud of the debtor he is 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 judg mentdebtor
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 con tingency is made in section 18
Affirmatively by the inclu sion 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 867 decree holder under section 18 on the ground of the fraud of the judgment debtor fraud does not give any other relief under the Limitation Act
This scheme of the Legislature is not inconsistent with section 48 of the Civil Procedure Code
The two provisions in the two Acts have to be read as related to the same subject but dealing with two differents aspects
Without section 48 of the Civil Procedure Code a decree holder if he made applications as required by arti cle 181 or 182 of the Limitation Act could keep his decree alive 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 482 for enlarging the 12 years period prescribed under section 48
For defeating the plea of the bar of limitation 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 particu lar case of fraud set up and proved is not covered by those words there is no protection against the same in the Limi tation Act
Read in that way the two legislative provi sions are neither conflicting nor overlapping and they are capable of operating harmoniously as they deal with different situations and circumstances
The argument ad vanced 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 182 868 fraud is not mentioned the case is covered by article 181 does not also appear to be sound
The third column in article 182 prescribes the starting point of limitation under different specified circumstances
It does not and indeed need not mention the ground of fraud because if fraud of the kind against which the Limitation Act contem plates relief as prescribed in section 18 of the Limitation Act is established the time is automatically altered by operation of that section
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 conten tion that because of the fraud established in the present case under section 482 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 juris prudence 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


Summary:
The appellant was the managing agent of a company which was at the relevant time carrying on the business of transporting cargo in boats which touched ports in British India and in the Indian State of Cochin and other States
Under the managing agency contract the remuneration payable to the appellant was expressed in the following terms  That the managing agent shall as and by way of remuneration for its services receive a commission of ten per cent
of the gross freight charged to the shippers
Such remuneration shall be payable to the managing agents at the place where the same is earned by the company unless other wise requested by the managing agent
 The Income tax Officer and the Excess Profits Tax Officer assessed the appellant to tax in respect of the whole of the managing commission received by it on the footing that the entire commission accrued or arose in British India
The appellant claimed that a part of the managing agency commission accrued in the Indian States and not in British India and that it would be entitled to an apportionment of the managing agency commission and to claim exemption from tax in respect of the commission which accrued outside British India under section 142c of the Indian Income tax Act 1922 and the third proviso to section 5 of the Excess Profits Tax Act 1940
The Appellate Tribunal found that except booking and collecting some freight at Cochin all other important and responsible work of managing the company was done from the head office at Bombay and not from Cochin Held that normally the commission payable to the managing agent of a company accrues at the place where the business is actually done that is where the services of the managing agent are performed and as on the finding in the present case the appellant practically performed all the services at Bombay the commission which it earned though computed on the percentage of freight accrued or arose in British India
Commissioner of Income tax Madras vs K R M T T Thia garaja Chetty and Co  followed
Commissioner of Income tax Bombay vs Ahmedbhai Umarbhai and Co Bombay  and Commissioner of Income tax Bombay Presidency and Aden vs Chunilal B Mehta  distinguished 73 558 Sall and industries Agencies Ltd Bombay vs Commissioner of Income tax Bombay City  considered