Modern Builders vs B.G. Narayanan

Somasundaram, J.—The defendant in O.S. No. 9438 of 1978 on the file of the 13th Assistant City Civil Judge, Madras is the appellant in this second appeal. The plaintiff in the said suit is the respondent herein. For the sake of convenience the parties are referred to by the nomenclature given to them in the suit. The plaintiff''s suit is for recovery of a sum of Rs. 18,003 with interest at 10% per annum from toe date of decree till date of realisation. The case of the plaintiff is as follows:

The defendant was carrying on business of buying and constructing houses under the name and style of ''Modern Builders''. The plaintiff approached the defendant for a plot in the City of Madras for the purpose of constructing a house for himself. The defendant agreed and requested the plaintiff to make some advance payment. The plaintiff paid an advance of Rs. 501 on 6-5-1973 towards the plot to be procured by the defendant for the plaintiff in Sri Padmanabha Nagar, Madras-20. Subsequently the plaintiff further advanced a sum of Rs. 11,501 towards the above account on 12-8-1973. On 12-9-1974 the plaintiff received a letter from the defendant stating that the plot in Padmanabha Nagar which was intended to be allotted to the plaintiff was given to somebody else and that the defendant was not in a position to allot that particular plot in Padmanaba Nagar to the plaintiff. On 21-9-1974 the plaintiff wrote a letter to the defendant asking him to return the amount advanced viz., Rs. 12,002 with interest inasmuch as the plot that should have been allotted to him was not given to him. On receipt of the said letter the defendant wrote to the plaintiff on 6-1-1975 asking the plaintiff whether he would be willing to take up plot Nos. 36 and 37 in Chandrasekarapuram in Ambattur and if he were willing, the sale in respect of those two plots would be registered in the month of January itself. On 6-6-1977 the plaintiff wrote a letter to the defendant informing the defendant that he was not interested in the allotment of the plots in Ambattur and required the defendant to refund the advance amount with interest within 15 days from the receipt of that letter. On (15-6-1977?) the defendant replied stating that the advance made by the plaintiff had already been forfeited. The defendant is liable to return the advance amount of Rs. 12,002 paid by the plaintiff with interest.

The defendant resisted the suit contending as follows: The plaintiff is not entitled to the return of the advance paid by him as the same was forfeited by the letter dated 15-6-1977. The suit filed by the plaintiff is barred by limitation originally the suit was tiled in October, 1978 against a wrong person. Even on the date of filing of the suit the claim was barred by limitation. The defendant was added only in December, 1982 and, therefore, in any event, the suit is barred by limitation against the present defendant.

The trial court held that the plaintiff committed default and, therefore, he is not entitled to return of the advance amount. The trial court further found that the suit is barred by time. Consequently the trial court dismissed the suit. As against the judgment of the trial court the plaintiff preferred an appeal, A.S. No. 599 of 1984 before the 7th Additional Judge, City Civil Court, Madras. On a consideration of the entire facts and circumstances of the case and the evidence on record the appellate court held that the plaintiff committed default and committed breach of contract relating to plot Nos. 36 and 37 in Chandrasekarapuram Ambattur. But, however, the appellate court found that the advance amount of Rs. 12,002 is not liable to be forfeited because there is no condition in the agreement for the sale of the plots 36 and 37 in Chandrasekarapuram, Ambattur, dt. 6-1-1975, marked as Ex.A8 in this case that the said sum of Rs. 12,002 was to be considered as earnest deposit or amount to be forfeited in the event of a breach committed by the plaintiff. The appellate court further found that the suit is not barred by limitation. Consequently the appellate court allowed the appeal and granted a decree directing the defendant to pay a sum of Rs. 12,002 with interest at 10% per annum from the date of plaint till date of realisation. As against the judgment of the appellate court, the defendant has filed this present second appeal.

Mr. Ali Hussain, learned counsel for the defendant confined his submissions only with regard to the question of limitation. According to the learned counsel for the defendant, the plaintiff made an advance of Rs. 501 on 6-5-1973 under Ex.A1; Rs. 11,501 on 12-8-1973 under Ex. A2, there is an acknowledgment of liability on 6-1-1975 under Ex.A8; the suit for the return of the advance amount should have been filed within three years from 6-1-1975 i.e., on or before 6-1-1978 ; the suit was actually filed by the plaintiff on 7-10-1978 and, therefore, it is barred by limitation. There is no merit in the contention of the learned counsel for the defendant. The relevant Article of the Limitation Act, 1963, hereinafter referred to as the Act, is Art.47. Art.47 of the Act runs as follows:

For money paid upon an existing consideration which afterwards fails.

Three years

The data of failure.

As per Art.47 of the Act the suit ought to have been laid within three years from the date of ''failure''. In the present case, by the agreement Ex.A8 dated 6-1-1975 the defendant has stated as follows :

With reference to your advance amount of Rs. 12,002 and discussion we had with you, we now allot you plot Nos. 36 and 37 in Sri Chandiasekarapuram, Ambattur, and the same will be registered and handed over to you in this month.

You have to pay the balance of Rs. 1,398 as detailed below:

Rs.

Land cost for 2 plots

12,000

Stamp and registration charges

1,400

13,400

Less amount paid

12,002

Balance to be paid

1,398

By the agreement, Ex. A8 dated 6-1-1975 the defendant in consideration of the advance amount of Rs. 12,002 already made, allotted plots 36 and 37 in Sri Chandrasekarapuram, Ambattur and agreed to register the document and hand over the same to the plain tiff in that month itself. On 6-6-1977 under Ex.A9 the plaintiff wrote a letter to the defendant and Ex.A9 runs as follows :

From W.C B.G. Narayanan c/o. Sri B.G. Barathan D-102/E, HIG Flat, Ashok Pillar Road, K.K. Nagar, Madras-600078. To�The Modern Builders, 1A, Rama Rao Street, Madras-17. Dear Sir, I write with reference to the correspondence resting with your letter Ref. T.M.B./75 dated 6th January, 1975.

As I am not interested in the allotment of the plot in Ambattur and as I have already expressed in my letter dated the 21st September 1974 to refund the advance paid, you must repay the amount due to me with interest within fifteen days from the receipt of this letter. Awaiting to receive the cheque for the advance of Rs. 12,002 plus interest immediately.

6th June 1977

Yours faithfully.

After receiving Ex.A9 the defendant sent a reply under Ex.A10 dated 15-6-1977 which runs as follows :

As you have failed to register the plot within the time given to you and as your cheque has been dishonoured advance given by you has already been forfeited

A perusal of Ex.A9 show''s that on 6-6-1977 the plaintiff committed the breach of contract by not paying the balance of Rs. 1,398 mentioned in Ex.A8 and by demanding return of the advance amount on the ground that he was not interested in the allotment of the plots in Ambattur. From this it follows that the breach of contract takes place in this case only on 6-6-1977 when the plaintiff sent the letter Ex.A9. Therefore, the plaintiff is entitled to claim the return of the advance within three years from 6-6-1977. Art.47 of the Act uses the phrase ''date of failure�. ''The date of failure'' means the date of failure of the contract between the parties. In the present case the failure of the contract has taken place on 6-6-1977 on which date the plaintiff (sic) (defendant?) committed breach of contract. In these circumstances the suit filed on 7-10-1978 is within three years from the date of failure of the contract and, therefore, the suit is not barred by limitation.

Learned counsel further contended that the present defendant in the suit was added as a party only in 1982. Even if 6-6-1977 is taken as the starting point of limitation, the suit is barred by time against the present defendant because it was added as a party only in 1982. The contention of the defendant that the suit was originally filed against P. Ganesan in his individual capacity and that it was subsequently amended as a suit against the partnership firm cannot be accepted because a perusal of the body of the plaint in this case clearly shows that the suit is against the firm and that the said Ganesan is only representing the partnership firm as a partner and that there is only a mistake in the description of the cause title of the suit. The documents filed along with the plaint also shows that the plaintiff had dealings only with the partnership firm and the plaintiff in substance sued the party to the agreement, viz., the firm and the plaintiff made a bonafide mistake in giving the cause title in the original plaint. In this context it is pertinent to refer to S.21(1) of the Limitation Act. S.21(1) runs as follows :

Effect of substituting or adding new plaintiff or defendant: (1) Where after the institution of a suit, a new plaintiff or defendant is substituted or added the suit shall, as regards him, be deemed to have been instituted when he was so made a party.

Provided that where the court is satisfied that the omission to include a new plaintiff or defendant was due to mistake made in good faith it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date

The proviso S.21 says that if the court is satisfied that the omission to include a new plaintiff or defendant was due to mistake made in good faith it may direct that the suit as regards such defendant or plaintiff shall be deemed to have been instituted on any earlier date. Taking into consideration all the facts and circumstances and the averments in the plaint the lower appellate court rightly exercised the discretion as contemplated in S. 21 of the Act, and held that the suit as against the defendant firm must be held to have been instituted as on the original date of the presentation of the plaint, i.e., on 7-10-1978. There is no infirmity in the reasoning of the tower appellate court for holding that the suit is not barred by time. Learned counsel for the plaintiff did not advance argument on any other aspect. There are no merits in the second appeal and the same is liable to be dismissed. Accordingly, the second appeal is dismissed, but, in the circumstances, there is no order as to costs.