C. Balasubramanyam vs M.A. Wahab and another

Abdul Hadi, J.—This appeal by the plaintiff against the dismissal of the suit O.S. No. 161 of 1979 on the file of the District Court,

Tirunelveli, which prayed for refund, with interest, of the advance paid, to the defendants, who are brothers, on 16.3.1975 under the sale

agreement of the same date, whereby the defendants agreed to sell the suit agricultural land to the plaintiff for a sum of Rs. 91,000/-. Under the

said sale agreement, the sale deed has to be executed within 16.11.1975. Admittedly possession of the land was given to the plaintiff on the

16.3.1975 itself. But the plea of the plaintiff was that he was defrauded by misrepresentation with reference to the property and that on 29.2.1976,

the 1st defendant agreed to take back the property and pay back the advance money with interest in a year''s time and that accordingly the 1st

defendant took possession of the suit land, but that since the defendants did not pay back the advance as promised, the suit was filed on

16.11.1978. The defendants denied misrepresentation and also contended inter alia that the suit was barred by limitation. The trial court concurred

with the plea of the defendants, holding that the plaintiff was not so defrauded by any misrepresentation by the defendants and that the suit was also

barred by limitation under the residuary Article 113 of the Limitation Act. It negatived the contention of the plaintiff that the suit came under Article

47 of the Limitation Act and that it was within time.

The Learned Counsel for the plaintiff/appellant mainly pressed the limitation question before me and argued that whether Article 47 or Article

113 applied, the suit was within time. Article 113 runs as follows:-

Any suit for which no period Three years When the right to sue

of limitation is provided accrues.

elsewhere in this Schedule

Article 47 runs as follows: -

For money paid upon in Three years The date of the failure

existing consideration which

afterwards fails

It is needless to observe that Article 113 of the Limitation Act, being a residuary Article, would apply only if Article 47 does not apply. I am

holding later in this judgment that Article 47 would apply to the present case. So Article 113 will not apply. However assuming that Article 47

does not apply, I shall first deal with the question of applicability of Article 113, particularly because the court below has held that Article 113

would apply. The learned counsel for appellant pointed out that the trial court erred in holding that the ""right to sue"" as mentioned in Article 113,

accrued in the present case, from the date when the plaintiff had knowledge of the fraud, i.e. in May, 1975, while it itself held that the case of fraud

had not been established in the present case. I think this contention is correct. When the court has found that the alleged fraud was not established,

the right to sue cannot be said to have accrued from the alleged discovery of the fraud, which did not exist. According to the learned counsel for

the appellant, the right to sue accrued only by the end of three years from 16.11.1975, the date within which the sale had to be completed by

execution of the sale deed, under the above said sale agreement. This is so because as per Article 54 of the Limitation Act, the defendants had the

right to sue for specific performance of the said agreement upto the expiry of the above said three years from the said date 16.11.1975. But the

defendants had not filed such a suit for specific performance on or before 16.11.1978 and their remedy to secure specific performance had

become barred after 16.11.78. So only after 16.11.1978, the plaintiff''s right to get back the above said advance paid to the defendants, accrued.

So from the suit date, the plaintiff will have another three years'' time, as per Article 113 for filing the suit for recovery of the said sum advanced.

So, till 16.11.1981, he could have filed such a suit. So, the suit having been filed on 16.11.1978 itself, was within the time, according to the learned

counsel for the appellant. In my view, this argument of the learned counsel is correct, applying Article 113 of the Act to the present suit, and so the

suit would be well within time.

No doubt the other alternative argument of the learned counsel for the appellant is that Article 47 would apply to the present case. Article 47

runs as follows:-

For money paid upon anThree years The date of the

existing consideration failure.

which afterwards Fails

According to the learned counsel for the appellant, the above said advance money was paid upon an ""existing consideration which afterwards

failed"" as per Article 47. In other words, according to him, the existing consideration was the possession of the suit property that was delivered to

the plaintiff pursuant to the sale agreement on 16.3.75, and, when the possession was given back as stated above on 29.2.1976 when the

defendants themselves decided not to sell the property and agreed to take back the property and pay back the advance money, with interest, in a

year''s time, there was a failure of the said consideration and hence the time began to run under (sic) Article 47, from the date of failure of

consideration, viz., 29.2.1976, and if so, there was time for filing the suit till 29.2.1979 while the suit was filed on 16.11.1978 itself and hence the

suit was within time. In this connection, the learned counsel pointed out the plea in paragraph 8 of the plaint which reads as follows:-

On the next Sunday 29.2.1976 the plaintiff at the request of the first defendant conveyed through messenger met the first defendant at his residence

to discuss the consequences of the cancellation of the contract and the payment of the amounts demanded by the plaintiff. Plaintiff was

accompanied by Thiru, Rajagopal who was present throughout these discussions. The defendant at the end of the talks accepted the cancellation

of the contract by the plaintiff for the reasons stated by him and also agreed to take back the properties from the plaintiff but the first defendant

however informed the plaintiff that he would not be able to refund the moneys immediately and wanted an year''s time. The first defendant also

agreed to pay interest at 12 per cent per annum on the said amounts. The first defendant has in conformity with this agreement between the parties

taken possession of the properties from that date. . .

To these specific allegations, the 1st defendant, in his written statement (which has been adopted by 2nd defendant) in paragraph 8 only stated as

follows:-

The alleged happenings after the issue of his reply notice dated 21.2.1976 as narrated in para 8 of the plaint are whimsical fanciful and pure

products of imagination. This defendants does not even know who the alleged Rajagopal is. The other details of the said Rajagopal are deliberately

suppressed with ulterior motives.

It should be noted that as against the abovesaid specific pleas made by the plaintiff in the plaint, the denial in the written statement is only general

and superficial. Further, it is also not known what is meant by the statement ""the other details of the said Rajagopal are deliberately suppressed

with ulterior motive"". The alleged suppression has also not been stated. Further, this later statement only makes one to disbelieve his former

statement that he does not know who the alleged Rajagopal is. However, it is significant to note that the defendants themselves admit in para. 7 of

their written statement as follows:-

This defendant approached the plaintiff to receive back his advance amount and to snow him to sell it to third parties. The plaintiff bluntly refused.

Further, even though D.W.1 , the defendant deposed in cross-examination that after taking back possession, he sent Ex.A-2 (dated 21.10.1975)

to plaintiff there is absolutely no reference regarding possession, in Ex.A-2 in which the 1st defendant demanded the plaintiff to make necessary

arrangements to complete the sale and pay the balance consideration. So, I do not think I can believe the version of the defendants that possession

was taken back prior to Ex.A-2 (21.10.1975). Further, while the plaintiff, as P.W.1, deposed to the facts pleaded in the above said paragraph 8

of the plaint, I do not find any cross-examination to contradict those facts. That apart, the above said Rajagopal also was examined as P.W.2 who

also deposed to the same effect and I do not think there was anything in the cross-examination which would shatter the above said deposition of

P.W.2; what was elicited from P.W.2 was only as follows:-

So, I conclude (.hat possession was given back to the defendants only on 29.2.1976.

Regarding the applicability of Article 47 of the Limitation Act, the learned counsel also relied on Nathulal Vs. Sualal and Others, It was a case in

which an outstanding debt was sought to be repaid particularly by sale of the defendant''s house to the plaintiff therein by a document which in the

eye of law was not effective to pass title. But possession of the house never the less was delivered under the said document to the plaintiffs and the

plaintiffs then were deprived of the said possession. The suit therein was by the purchasers-plaintiff therein for recovery of the said debt and the

court held that the suit fell under old Article 97 of the Limitation Act, 1908 (corresponding to the present Article 47 of Limitation Act 1963). In

that context the Rajasthan High Court held that in order to attract the application of the said Article, the following ingredients must be established:-

In the first place, the suit must be for money which has been paid by the plaintiff to the defendant. In the second place such money must have been

paid upon a consideration which was in existence at the time of payment. In the third place, this consideration should have afterwards failed."" With

reference to the above said second requirement, the court therein observed that there was authority for holding the money raid even under a void

agreement was paid for ""existing consideration"". Thus, according to the said decision, where A paid money to B in repayment thereof, B sold the

property to A and the transfer happened to be void for one reason or another, but A had been given possession of the property by B in pursuance

of the contract of sale, the position was that there was ''existing consideration'' within the meaning of the said phrase. (See also Narsing Shiv Bakas

v. Pachu Ram Bakar ILR 37 Bom 538). Then, ""in the"" said Rajasthan decision it was also found as a fact that the plaintiffs were deprived of the

said possession subsequently and that hence the consideration for which the money had been paid consequently felt through. So, the court held that

the time began to run only from the date when the plaintiffs therein were deprived of the said possession and not from the date of payment of the

money.

I think that this alternative argument of the learned counsel for the appellant is correct. Further, I find that in Ram Lal v. Gokalnagar Sugar Mills

AIR 1967 Del 91 D.B. also it was held that only the above referred to old Article 97 applied to the suit for recovery of advance money paid

towards sale price under an incomplete sale, (though it was also held therein that for recovery of earnest money, the said Article would not apply,

but only the residuary old Article 120, corresponding to the present Article 113 would apply.)

Further, in V. Kanjeevaram v. Devendriya Kaveri Ammal 1983 T.L.N.J. 339 also I find that Article 47 of the Limitation Act has been applied

in a similar situation. There too the suit was for recovery of the advance amount paid under the sale agreement and one of the questions decided

was whether the suit was within time. The sale agreement in the said case was dated 25.8.1970 and the time fixed for the performance was upto

31.8.1971. However, since time was not the essence of the contract, it was observed that either party was entitled to have reasonable extension of

time and that however, till either of the parties to the contract intimated the other party that the contract had been determined by virtue of the

default of the other, it was reasonable to presume that the contract was allowed to subsist. It was further found as a fact that the breach of the

contract was brought to the notice of the appellant therein only on 25.11.1974. So it was held that only on and from 25.11.1974 the appellant was

entitled to claim return of the advance. In that context, the said judgment held that the terms the ""date of failure"" as used in Article 47, meant the

date of failure of the contract between the parties and that the breach of the contract should have taken place only on 25.11.1974. Therefore, it

was held that the suit therein which was instituted on 16.1.1975 was well within time.

Relying on the above referred to decisions and applying them to the facts of the present case, I hold that Article 47 of the Limitation Act applies

to the present case. The existing consideration spoken to in Article 47 in the present case, is the very promise of the defendants under the sale

agreement to sell the property to the plaintiff and the failure of the said consideration has taken place only on 29.2.1976 when the defendants

themselves decided not sell the property and agreed to take back the property, promising to pay the advance amount within a year from the said

date. Therefore, there was time till 29.2.1979 for filing the present suit. Since the suit has been filed on 16.11.1978 itself, it is within time.

But, the learned counsel for respondents contended that in case the defendants had to repay the advance paid to the plaintiff-appellant, it should

be paid only after deducting the value of the damage suffered by the defendants due to the breach of the contract by the plaintiff. He further

contended that in regard to the extent of the said damage suffered by the defendants, the defendants did not focus attention in the suit very much

since the plea of the plaintiff was that he was defrauded by the misrepresentation of the defendants, and that hence the suit should be remanded

back to the trial court for the defendants to lead all necessary evidence to prove the extent of damage suffered by them due to the breach

committed by the plaintiff, or at least, this Court should call for a finding in that regard from the trial court and then pass a final judgment on report

from the trial court regarding the same. This contention of the respondents was strongly opposed by the learned counsel for the appellant, who

pointed out that it was clear from the evidence recorded that no damage was suffered by the defendants. Though the defendants pleaded that the

plaintiff, after taking possession of the suit properties under the sale agreement had cut and removed trees on the suit land, D.W.1 admitted in his

evidence as follows:-

Further, as I pointed out earlier, even in his written statement, the 1st defendant has stated that he approached the plaintiff to receive back his

advance amount and to allow him to sell it to third parties. So, this would clearly show that the defendants did not suffer any damage in view of the

breach of the contract committed by the plaintiff and so, there is absolutely no necessity for any remand or calling for a finding.

In the result, the appeal is allowed, the judgment and decree or the trial court are set aside and the suit is decreed as prayed for. However, in the

circumstances of the case, no order as to costs.