A.N. Marudachalam Chettiar vs S.A. Veera Boyan

Anantanarayanan, J.—In this appeal by the first defendant, the primary question involved is one of limitation. In order to appreciate the

background against which that issue arises, the following facts are essential.

The second defendant executed a simple mortgage with regard to certain properties in favour of the first defendant (appellant) for a sum of Rs.

4500 on 26-3-1930. The suit of the first defendant (O.S. No. 213 of 1945) was instituted to enforce that mortgage not merely against the

mortgagor, but also two others who claimed to be irepossession of the suit properties under an independent title. The preliminary mortgage decree

exonerated those two persons. The matter came up to this Court in appeal in A. S. No. 125 of 194T before Satyanarayana Rao and Chandra

Reddi, JJ. and the following passage from that judgment of"" the Bench is of some interest upon the history of the title.

It appears that Ramaswami''s wife, after death of Ramaswami, instituted a suit in which it was. decided that the release deed executed by her did?

not convey any interest to the first defendant and that was valid only to convey the rights of management of the estate of Ramaswami to the first

defendant From this decision, it is possible to argue that the first defendant had no interest in the suit property and that he had no right to mortgage:

it. There were subsequent complications adverted'' to by the learned trial Judge in paragraph 10 of his judgment; but with reference to those facts

there is no evidence, there is no pleading, there is no issue and there is no proof. It is therefore unnecessary to go into the question whether the first

defendant had any interest in the suit property when be hypothecated it, or whether he had subsequently acquired any interest in it by any valid

transaction."" At one stage of the arguments before us. Sri Gopalaswami Aiyangar for the first defendant (appellant) sought to argue that the

mortgagor (the first defendant referred to in the above passage from the judgment in A. S. No. 125 of 1947) subsequently acquired rights to the

property, and that by some analogous application of the doctrine of feeding the estoppel, it must be held that there was a right title and interest in

the judgment-debtor which could have passed by the sale in favour of the auction purchaser. But this point is purely academic, since the

subsequent events have rendered'' it clear that no such plea is now open to the mortgagee-decree-holder (appellant). For, what happened was

that, after the final decree, the properties were brought to sale and sold in favour of the plaintiff (respondent) for over Rs. 22,000, which sale was

confirmed in November 1952.

When the plaintiff attempted to take delivery through Court, he could not obtain delivery because of the obstruction of the lessees in posses-

1sion, the third parties who were exonerated in O.S. No. 216 of 1945, earlier referred to. His application (E. A. No. 1420 of 1952) for removal

of obstruction was also dismissed. A revision was unsuccessful, and the plaintiff (respondent) filed O.S. No. 213 of 1955 to set aside the summary

order in E. A. No. 1420 of 1952 as provided for by the processual law. That suit was dismissed, and there was a definite finding, which has

become final, that the second defendant (mortgagor) had no right, title or interest in the property, and no possessory interest even, so that the

auction purchaser (plaintiff) acquired no rights at all under the Court sale.

In the meantime, what had happened was that the mortgagee-decree-holder (first defendant) applied for cheque and drew a sum of over Rs.

10,000 in full satisfaction of his decree. The plaintiff (respondent) in the present suit claims a refund of the amount, on the ground that the

judgment-debtor had no right, title or interest of any kind in the properties, that no such right or title passed by virtue of the Court sale, even to the

most minute degree, and that the common law permitted the institution of such a suit for refund of the amounts taken away by the mortgagee

decreeholder (first defendant).

To this action, several defences were raised by the appellant. The chief among them were that the plaintiff cannot file a suit of this description

after confirmation of the sale, but should have attempted under the processual law to set aside ho sale itself as provided for in Order XXI, Rule 92,

C. P. C. that the suit was also barred u/s 47 of the C. P. C, and on the aspect of limitation. Of these defences, the one seriously pressed by

learned counsel for the appellant (Sri Gopalaswami Aiyangar) is that the suit is barred by limitation, first of all upon the principle that the relevant

Article is Article 62 and not Article 96 of the Indian Limitation Act, and secondly, upon the contention that even if Article 96 applied, the suit was

barred with reference to the date of knowledge of the plaintiff (respondent) of the mistake. Learned counsel relies upon the observations of a Full

Bench of this Court in Macha Koundan v. Kotiara Koundan, ILR 59 Mad 202 : AIR 1936 Mad 50 and this argument certainly requires serious

consideration at our hands.

The very authority relied upon by learned counsel for the appellant had laid it down, in the most clear and unambiguous terms, that where a third

party subsequent to the confirmation of the sale finds that no right, title or interest has passed, and he loses possession of the property, he has a

right to recover back the purchase money from the decree-holder by a separate suit under the Common law. Such a suit is not. barred because of

the remedies provided for under the processual law, or because of any provisions of Order XXI or Section 47 of the C. P. C.

Learned counsel argues that a. Court sale, per se, does not carry with it any guarantee in respect of title or any covenant of title; the right, title and

interest of the judgment-debtor alone are proclaimed for sale, and sold, and the risk is that of the auction purchaser. This may no doubt be true, as

a general proposition. But where that right, title and interest are not merely minutely insignificant or restricted, but actually equivalent to nothing, the

auction purchaser has a right, by virtue of a separate action, to recover back the purchase money from the decree-holder. The decision of the Full

Bench is authority for this view. Hence, the inability of the claim under law cannot be disputed. But on the aspect that it is Article 62 of the

Limitation Act, namely, for money had and received, which applies to such an action, which would render this suit time barred, the learned counsel

relies upon the following passage in the judgment of the Full Bench :

Forgetting for a moment all technicalities and the Code of Procedure, one would think on the facts that the auction purchaser should have a right

of action for money had and received. The facts are that a decree-holder brings a certain property to sale bona fide believing it to belong to his

judgment-debtor. The Court also under the same belief orders the sale of the property. The auction purchaser also under the same bona fide belief

purchases it Afterwards it turns out that the property does not belong to the judgment-debtor at all. Thus, the auction purchaser purchases nothing

though ho paid consideration for it under a mistake. The decreeholder gets a certain amount without really having brought any of the properties of

the judgment-debtor to sale, i.e. under a similar mistake. Under the circumstances it is unconscionable that the decreeholder should retain the

benefit of the money so obtained and the auction purchaser should lose it, and one would think that the auction purchaser would have a right of

action for money had and received under the general law and not under any code of procedure.

There is another passage in the judgment, to the same effect, and it is not, necessary for us to extract it here, since it ''conveys the same

significance. The learned Judges were not considering the aspect of limitation in respect of such a suit, or the relevant Article of the Limitation Act

which should apply. If the language of the above passage warrants any inference of the Article of the Limitation Act, that might have been in the

minds of the learned Judges, by implication, it is equally permissible to argue that Article 96 was kept in mind, because in more than one context it

is stressed that what had occurred was a ""mistake"". It is clear enough that the learned Judges were really concerned with the tenability of such an

action under the Common Law. notwithstanding the rigours of the procedure, and, in order to canvass that proposition, they had necessarily to

consider the character of the suit brought by the auction purchaser. But it was not the category of the Limitation Act which would apply to such a

suit that was either considered or decided, even by remote or indirect implication.

That this is the proper view of the Full Bench, and that Article 96 really applies to such a suit and, no1 Art 62 will be clear from the decision of

King, J. in Rudrayya v. Subbarayappa, AIR I941 Mad 742. Learned counsel for the appellant (Sri Gopalaswami Aiyangar) does not dispute this.

But he desires to press the argument that the learned Judge (King, J.) did not rightly interpret the decision of the Full Bench, and that this decision

of King. J has to be reconsidered. Actually, it is a decision precisely in point, for the case before the learned Judge was one of an auction

purchaser filing a suit for refund of money paid to the decree-holder, on the basis of the discovery that there was no right, title or interest of the

judgment debtor in the property which could pass by virtue of the Court sale. The learned Judge (King, J.) referred to the very Full Bench decision

in ILR 59 Mad 202 : AIR 1936 Mad 501 and he has extracted a passage from that decision. After extracting the passage, King. J. goes on to

observe that it was clear to him that this is a case of recovery of monies paid under a mistake. and that Article 96 is the relevant Article The

learned Judge adds:

If Art 96 applies, the time begins to run only when the mistake becomes known to the plaintiff.

We might here add that Horwill. J. had occasion to consider the very same question of law in Mylavaram Nagayya Vs. The Penukonda Co-

operative Town Bank Ltd., , and the learned Judge followed Jayanthi Rudrayya Vs. Jayanthi Subbarayappa and Others, , and held that Article 96

applied to such a suit, and that time begins to run when the plaintiff has knowledge that a mistake has been made.

We have carefully considered these two decisions of Single Judges of this Court, in the context of the argument pressed before us that the Full

Bench decision warrants a different inference with regard to the Article of the Limitation Act which should apply. We are quite certain that the Full

Bench never intended that Article 62 should be held applicable to such an action, and there is Nothing in any part of the judgment of the Full Bench

to warrant the inference that the question of limitation was ever considered. We are of the view, with respect, that the decisions of King, J. in

Jayanthi Rudrayya Vs. Jayanthi Subbarayappa and Others, . and Horwill, J. in Mylavaram Nagayya Vs. The Penukonda Co-operative Town

Bank Ltd., , set forth the correct position of law with regard to such a suit and the manner in which limitation should be ascertained. We therefore

conclude that Article 96 applies to the suit, and that the starting point for limitation would be the knowledge on the part of the plaintiff that he had

purchased property under a mistake that the judgment-debtor had some right, title or interest in the property which could be sold by Court.

The next argument is that, even so, the starting point for limitation should be the dismissal of the petition to remove obstruction. E. A No. 1420

of 1952, and that the suit is hence, timebarred. This argument patently lacks substance The summary order was under the processual law which

provides for the specific remedy of a regular suit to set aside the summary order by the aggrieved party. The plaintiff could not have then known

that the judgment-debtor had no right, title or interest; his sole consciousness must have been that certain person claiming under some independent

title were able successfully to obstruct, and to obtain an order of Court in their favour, which itself was subject . to being canvassed by virtue of a

regular suit.

Such a regular suit was filed, and it is the decree in that suit alone which makes it finally and explicitly clear that the judgment-debtor had really no

right, title or interest in the property sold. Since the plaintiff chose to abide by that judgment and decree, he became fixed with knowledge from the

date of that decree. From that date, the suit is perfectly within time.

Hence we are of the view that the appeal has no merits upon any of the aspects of which it was pressed and argued before us. Learned

counsel desires us to observe that it is open to the appellant to go back to the mortgage-decree itself, and to enforce it, the sale being ipso facto

void, but we do not think that we are called upon to express any opinion on this matter.

The appeal fails and is dismissed with costs.