Bhagwati Saran Singh vs Bai Kishunji

Wort, J.—The defendant is the appellant in this appeal which arises out of an action in which the plaintiff sought to recover the sum of Rs. 1,890-14-6, principal and interest amounting in all to a sum of Rs. 2,468-4-6. This amount was the surplus sale proceeds of a revenue sale of certain property of which the defendant was the recorded proprietor. The property however had been sold to the plaintiff prior to the date upon which the revenue sale was held resulting in the surplus sale proceeds here claimed. The defendant having been paid by the Collector u/s 31, Act 11 of 1859, this action was brought by the plaintiff. It was contended by Mr. Khurshed Husnain appearing on behalf of the defendant-appellant that, as the Collector was bound to pay his client u/s 31, Act 11 of 1859, he was in law entitled to the sum, and that there was nothing either in contract or quasi contract under which the plaintiff could recover. In my judgment the contention cannot be supported. Section 31, Act 11 of 1859, is a section which merely directs payment by the Revenue Officer to a certain person, that person being the person whose name is entered as proprietor and there is nothing in that section which in any way governs the right of a person who is in fact entitled to the surplus sale proceeds recovering them from the person paid by the Collector under the section.

The learned Judge in the Court below relied upon certain decisions. The first was the decision of this Court in Harihar Misser v. Syed Mohamed 1916 Pat 54. The second was the decision of the Calcutta High Court in Bejoy Lal Seal v. Noyunmanjory Dasi 1920 Cal 885, In neither of the cases was the question before us in this appeal decided. In the Calcutta case, in circumstances exactly similar to those which are present in this case, there was no contest as regards the liability of the defendant, the only question for determination being the question of limitation. In the Patna case Roe, J., delivering the judgment of the Court as to whether Article 62 or Article 120, Limitation Act, applied, made this observation:

It is not a question of the defendant''s intention in taking the money. He undoubtedly intended to rob the plaintiff and intended to keep the money for his own use. But this is not the point. The point is, for whose use did the party making the payment intend the money?

The learned Judge then proceeded to make certain observations as regards the knowledge of the Collector as to whom the money really belonged. In so far as the Judge purported to decide that it was the question of the knowledge of the Collector, I would respectfully disagree. It seems to me that the real test in the case is, not the knowledge of the Collector, not the question as suggested by Mr. Husnain as to whether he had rightfully received the money from the Collector, but to whom the money rightfully belonged. It is not suggested in this case that the money rightfully belonged to the defendant excepting in the sense that u/s 31 of the Act of 1859 the Collector was bound to pay the defendant. That in my opinion in no sense concludes the matter. Mr. Husnain has further advanced the argument that under no specific provision of law is the plaintiff entitled to recover the sum, and his action must fail. In connexion with that argument he has referred us to Section 72, Contract Act, which provides:

A person to whom money has been paid, or anything delivered by mistake or under coercion, must repay or return it;

and rightfully contends that this section does not apply to the facts of this case. He then advances an argument with which I cannot agree, namely that the cause of action not coming within the provision of Section 72, and, as there is no other definite provision of law, the plaintiff has no cause of action. But in this case the cause of action is for money had and received to the plaintiff''s, use and in considering that cause of action we are applying no specific provision of the law of India as there is none, but the rule of justice, equity and good conscience: in other words, in the absence of any rule in India, the Law of England as pointed out by Lord Hobhouse in the case reported in Vol. 14 of Indian Appeals, to which repeated reference has been made by me in this Court. Mr. Husnain in this connexion contends that unless it could be shown that there was a contract or quasi contract, the action must fail. The history of an action for money had and received is discussed in Sinclair v. Brougham (1914) AC 398. Lord Haldane, in the course of his speech referring to certain authorities made this statement:

In its origin an action of tort, it was soon transformed into an action of contract, becoming afterwards a remedy where there was neither tort nor contract. Based at first only upon an express promise, it was afterwards supported upon an implied promise, and even upon a fictitious promise. Introduced as a special manifestation of the action on the case, it soon acquired the dignity of a distinct form of action, which superseded debt, became concurrent with account, with case upon a bailment, a warrantee and bills of exchange and competed with equity in the case of the essentially equitable quasi contracts growing out of the principle of unjust enrichment.

It is clear from that statement and from the judgments of the other learned Judges with regard to this matter that it is neither a case of contract nor is it a case of tort, but, as described in the English authority, as an action on the case in which the form of relief granted is to meet the circumstances of the case. Mr. Husnain''s argument therefore that unless it can be shown that the action was either in contract or in tort it must fail, obviously fails. It seems to me however, that the matter is quite beyond argument. All the High Courts in India have recognized the right impliedly and no case has been called to our intention in which it has ever been suggested that the action in the circumstances of this case would not lie, and indeed the very authorities, upon which by implication Mr. Husnain relies, are cases which are distinctly against the contention which he advances. In my judgment the decision of the learned Judge in this regard was correct and his judgment must be affirmed.

There is one matter however in which the appellant is to some extent entitled to succeed. There was a demand made by the plaintiff for this sum on 13th September 1929, the money having been withdrawn on 30th January 1928. It was from 30th January 1928 that interest has been allowed by the Court below. It is clear not only on the authority of this Court in which this matter has been discussed, but also on a reading of the statute itself, that is to say Section 31, Act 11 of 1859, that the plaintiff is entitled to interest only from the date upon which the demand was made, that is to say from 13th September 1929. A question was mentioned in the argument as regards the rate of interest but this is not found in the grounds of appeal, and in any event the interest allowed by the Judge up to the date of the suit is interest which is customary in India. For those reasons, with the modification as regards interest indicated above, I think the appeal fails, and it must be dismissed with costs. It is said that the name of the plaintiff as given in the memorandum of appeal is not in accordance with that given in the plaint. Let the memorandum be corrected in accordance with the plaint.

Rowland, J.

I entirely agree. Indeed it was somewhat difficult to find any basis, either in principle or in authority, on which Mr. Khurshed Husnain''s argument could hope to be acceptable. But the underlying idea was perhaps that the provisions of Section 31, Revenue Sales Act, which gave directions that the sale proceeds of an estate are to be applied in a certain manner and paid to certain persons, would operate to create title in those persons; that is to say after satisfaction of the Government dues, in the registered proprietors. Certainly the Act does not say so, and in a somewhat analogous matter there is a different special provision made. I refer to Section 60, Ben. Ten. Act, which contains a special provision regarding the registered proprietor of an estate. Section 60 enacts that the registered proprietor is authorized to give a receipt which shall be a sufficient discharge for any rent payable to the proprietor, and if he sues for the rent the person liable to pay cannot plead that the rent is due to any third person. But it is well settled that mere entry of one''s name in the registers of the Collectorate does not either create or prove title; and Section 60 has the express saving that

nothing in this section shall affect any remedy which any third person entitled to the property may have against the registered proprietor.

Now it is true that Section 31, Land Revenue Sales Act 11 of 1859, has no express saving similar to that in Section 60; but I am entirely satisfied that the Courts cannot introduce a new principle and, merely because of the absence of such a saving, hold that for the purpose of Section 31 an entry in the Land Registration Register creates ownership in the registered proprietor. Therefore the suit has to be decided on the simple question, in whom the ownership of the property was, when it was sold? The result can only be that which my learned brother has stated in his judgment.