Karanamurthi Thevar vs Ramanatha Thevar

Alfred Henry Lionel Leach, C.J.—This Full Bench has been constituted to consider whether the Court rightly applied Article 62 of the

Limitation Act in Mahabala Bhatta and Another Vs. Kunhanna Banta and Others and Subbanna Bhatta and Others, Subbanna Bhatta v. Kunhanna

Bhatta (1907) 17 M.L.J. 224 : ILR 30 Mad. 298. R. 8 Rang. 645 and Narayanan v. Rangaswami Chetti 1915 M.W.N. 215. These cases are in

conflict with the decision of a Division Bench of the Court in an unreported case to which reference will be made later and it is said that two

decisions of the Privy Council show clearly that they were wrongly decided in this respect.

We will first state the facts of the present case as the whole appeal is before us. On the 29th September, 1933, Kandaswami Thevar, father of

the plaintiff, conveyed Immovable property to the defendant benami. On the 25th January, 1937, the defendant sold the property to one

Arunachalam Pillai for Rs. 750. On the 30th December, 1938, Kandaswami Thevar died. On the 5th October, 1942, the present suit was

instituted to recover from the defendant the Rs. 750 which he had received from Arunachalam Pillai. The District Munsiff of Periyakulam in whose

Court the suit was instituted, held that the defendant was a benamidar for the plaintiff''s father and that the suit was not time-barred as Article 120

of the Limitation Act applied, but he considered that the plaintiff was only entitled to recover Rs. 375 as the other half of Rs. 750 belonged to his

mother. The defendant appealed to the Subordinate Judge of Dindigul, who agreed with the District Munsiff. The defendant then appealed to this

Court on the ground that the suit is governed by Article 62 of the Limitation Act and therefore was filed out of time.

In Mahabala Bhatta and Another Vs. Kunhanna Banta and Others and Subbanna Bhatta and Others, A and B jointly advanced moneys on the

security of a usufructuary mortgage in the name of B, their benamidar. Later in 1884 A advanced moneys on the security of other usufructuary

mortgages. Here again B acted as his benamidar. A died leaving three sons, two of whom were the plaintiffs. They had separated from their

brother and in 1894 they sued B and the mortgagors for a declaration of their rights in the mortgages. No rent had been collected by B for several

years before the suit. The Division Bench which heard the appeal held that the plaintiffs were entitled to a declaration of their right to the

mortgages, but dismissed their claim for rent as being barred by limitation. Although there is no reference in the judgment to Article 62, the Court

apparently applied it.

In Subbanna Bhatta v. Kunhanna Bhatta (1907) 17 M.L.J. 224 : ILR 30 Mad. 298. R. 8 Rang. 645 another Division Bench held that the

period of limitation for an action by the real owner against a benamidar to recover money received by the latter for the use of the former was that

prescribed in Article 62. The Court followed the decision in Mahabala Bhatta and Another Vs. Kunhanna Banta and Others and Subbanna Bhatta

and Others, . The decision in Narayanan v. Rangaswami Cketti (1915) M.W.N. 215 was to the same effect; buth ere the later case of Subbanna

Bhatta v. Kunhanna Bhatta (1907) 17 M.L.J. 224 : ILR 30 Mad. 298 was relied on.

The unreported case is Narqyana Bhatta v. Mahabala Bhatta S.A.No. 1469 of 1901 in which Benson and Bhashyam Ayyangar, JJ., held that in

such a case the appropriate article was Article 120. There the first defendant held a mortgage and a reversion in a lease as the benamidar of the

plaintiff''s father. It was pointed out that by reason of Section 95 of the Indian Trusts Act he was bound to perform the same duties and was

subject to the same liabilities as if he were a trustee of the property for the plaintiff''s father. Therefore Article 62 did not apply and the case fell

within the residuary Article 120.

In Annamalai Chettiar v. A.M.K.C.T. Muthukaruppan Chettiar (1930) 60 M.L.J. 1 : L.R. 58 IndAp 1 : ILR 8 Rang. 645 the Privy Council

held that the benamidar is not an express trustee, but he occupies a fiduciary position. In Gur Narqyan v. Sheolal Singh (1918) 36 M.L.J. 68; L.R.

46 IndAp 1 : ILR 46 Cal. 566 the Judicial Committee said that the benamidar represents the real owner and that so far as their relative legal

positions are concerned, the benamidar is a trustee for the real owner. Annamalai Chettiar v. A.M.K.C.T. Muthukaruppan Chettiar(1930) 60

M.L.J. 1 : L.R. 58 IndAp 1 : ILR 8 Rang. 645 related to a suit for an account of moneys in the hands of benamidars. The question was whether it

had been brought in time. Their Lordships expressly held that Article 62 did not apply to an equitable claim against a trustee liable to account for

an account and ascertainment of what might be due. In such a case the period of limitation was governed by Article 120. Therefore it is now

settled law that Article 62 cannot be applied where the claim is on an equitable basis.

The two decisions of the Judicial Committee just referred to were applied by this Court in the recent case of Devarajulu Naidu (died) and

Another Vs. Jayalakshmi Ammal and Another, . There two brothers A and B sold Immovable property to K for Rs. 3,000 and in part discharge

of the purchase consideration K executed a promissory note for Rs. 1,560 in favour of C, the wife of A. C quarrelled with her husband and left

him. She then fraudulently indorsed the promissory note to D without consideration, her object being to defeat her husband and his brother. D sued

the maker of the note and obtained a decree for Rs. 1,653-8-0. The suit which gave rise to the appeal was filed by A and B to recover this

amount from D. If Article 62 applied, the suit was out of time but within time if Article 120 applied. It was held that in indorsing the promissory

note to D, C wrongly converted it and that D took it with full knowledge of the facts. In these circumstances he acquired no title to it. A and B had

obviously an equitable claim against D and it was held that by reason of the pronouncements of the Privy Council in Annamalai Chettiar v.

A.M.K.C.T. Muthukaruppan Chettiar (1930) 60 M.L.J. 1 : L.R. 58 IndAp 1 : ILR 8 Rang. 645 and Gur Narain v. Sheolal Singh (1918) 36

M.L.J. 68; L.R. 46 IndAp 1 : ILR 46 Cal. 566 Article 62 could not be applied and that the period of limitation was six years under Article 120.

The plaintiff''s claim against the defendant is certainly an equitable one, being claim against a benamidar, a person in the position of a trustee, in

respect of moneys received and held by him for the benefit of the real owner. This being the position the Courts below rightly held that the case fell

within Article 120 of the Limitation Act. The appeal must be dismissed with costs.

It follows that the decision of this Court in Mahabala Bhatta and Another Vs. Kunhanna Banta and Others and Subbanna Bhatta and Others,

Subbanna Bhatta v. Kunhanna Bhatta (1907) 17 M.L.J. 224 : ILR 30 Mad. 298 and Narayanan v. Rangaswami Chetti (1915) M.W.N. 215 in so

far as they relate to the application of Article 62 to a claim against a benamidar in respect of money held by him on behalf of the true owner, are

overruled.