Mt. Lakhpat Kuer vs Durga Prasad

Das, J.—In this suit the plaintiffs claim to recover the sum of Rs. 4,200 from the defendant or in the alternative for such damages as the Court may think, proper to award to them. The suit succeeded in the Courts below and the defendant appeals to this Court.

Shortly stated the facts are as follows: On 18th February 1911, the defendant sold a certain property to the plaintiff for the sum of Rs. 4,200. The defendant was the widow of one Bhagmal Sahu and professed to transfer the property in question to the plaintiff in her right as the widow of her deceased husband. It appears that Bhagmal had a stepbrother Ram Charan Sahu and on 22nd November 1917 Ram Charan sold the property in question to one Chakauri Singh It is obvious that Ram Charan claimed a title to the property by right of survivorship to the exclusion of the widow Mt. Lakhpat Kuer.

In 1919 Chakauri instituted a suit, being suit No. 18 of 1919, as against the present plaintiffs and the defendant for recovery of possession of the property in question. Mt. Lakhpat entered appearance in the suit and filed a written statement which was rejected on the ground that it had been filed too late. The suit was, however, contested by the present plaintiffs. On 14th July 1919 the Court of first instance decreed the suit of Chakauri both as against the present plaintiffs and the present defendant. The present defend ant Mt. Lakhpat was apparently satisfied with the decree pronounced by the Court of first instance; but the present plaintiffs presented an appeal to this Court. The appeal did not proceed to a Bearing because the parties, namely the present plaintiffs and Chakauri, compromised the dispute between them. The present plaintiffs paid Rs. 6,800 to Chakauri and obtained a good title to the disputed property. The present suit was instituted on 7th March 1925, by the plaintiffs for recovery of the sum of Rs. 4,200 which was the sum which they had paid to Mt. Lakhpat on the conveyance of 18th February 1911.

There is no question that the plaintiffs are entitled to some sort of decree against the defendant if their suit be within time. It was contended that the present suit does not lie because the plaintiffs were aware of the infirmity of the title of the defendant. But that question does not arise in view of the fact that the conveyance imports a covenant for title u/s 55, Clause (2), T.P. Act. That clause provides as follows:

The seller shall be deemed to contract with the buyer that the interest which that seller professes to transfer to the buyer subsists, and that he has power to transfer the same.

and then follows a proviso with which we are not concerned in this litigation. It will be noticed that the covenant which Section 55, Clause (2), imports has nothing to do with the question whether the buyer has or has not notice of the infirmity of the title of the seller. The question whether the plaintiffs had or had not knowledge of the infirmity of the title of Mt. Lakhpat is, therefore, irrelevant.

But then arises the question whether the suit is within time. It has been contended before us that if the suit be regarded as a suit for damages for breach of covenant u/s 55, Clause (2), then time began to run from the date of the conveyance, namely, 18th February 1911, and the suit must fail on the ground that it is barred by limitation. But that if the suit be regarded as a suit for a refund of the purchase-money then Article 97 would apply and time must run from 14th July 1919, when the consideration must be deemed to have failed and that even on this view the suit must be dismissed as barred by limitation. Now the suit is in substance a suit for refund of the purchase-money but the plaintiffs have alternatively asked for a decree:

If the plaintiffs be not deemed entitled to recover the consideration money a decree for the amount in claim may, by way of damages, be awarded to the plaintiffs against defendant 1.

But in the view which I take it is immaterial to consider whether the suit is a suit for refund of the purchase-money or a suit for damages for breach of the covenant u/s 55, Clause (2), T.P. Act. In Tricomdas Cooverji Bhoja v. Gopinath Jiu Thakur AIR 1916 P.C. 182 it was pointed out by the Judicial Committee that to a suit for royalties due under a registered lease of certain land with the right to dig coal, Article 116, Lim. Act �for compensation for breach of a contract in writing registered "and providing a six years period of limitation, and not Article 110 for" a suit for arrears of rent and giving only three years, must be held to be applicable. It will be noticed that the suit which was before the Privy Council was a suit which directly came within Article 110, Lim. Act. It was undoubtedly a suit for arrears of rent and Article 110 clearly applied giving only three years for the commencement of the suit. But the Judicial Committee pointed out that if Article 116 does apply to a case then it is quite immaterial to consider whether the case does not fall under some other provision of the Limitation Act. It will be useful to cite the following passage from the judgment of the Judicial Committee which appears to me to be directly in point:

Both these Acts draw, as the Act of 1859 had drawn, a broad distinction between unregistered and registered instruments much to the advantage of the latter. The question eventually arose whether a suit for rent on a registered contract in writing came under the longer or the shorter period. On the one hand it has been contended that the provision as to rent is plain and unambiguous, and ought to be applied, and that in any case ''compensation for the breach of a contract'' points rather to a claim for unliquidated damages than to a claim for payment of a certain sum. On the other it has bean pointed out that ''compensation'' is used in the Contract Act in a very wide sense, and that the omission from Article 116 of the words, which occur in Article 115, and not herein specially provided for, is critical,

and then their Lordships proceed to make these observations:

Article 116 is such a special provision, and is not limited, and, therefore, especially in view of the distinction long established by these Acts in favour of registered instruments it must prevail. There is a series of Indian decisions on the point, several of them in suits for rent, though most of them are in suits on bonds,

and then their Lordships proceed to discuss the decisions of the Indian Courts. I regard the decision of the Judicial Committee as establishing that where the suit is in substance a suit based on a registered document and where such a suit can be regarded as a suit for compensation for breach of a contract then Article 116 must apply although such a suit may fail under some other provision of the Limitation Act.

But then arises the interesting question what is the starting point from which limitation would begin to run? Mr. S.N. Rai appearing on behalf of the appellant contends that limitation would begin to run from the date of the contract, namely, 18th February 1911. Mr. S.M. Mullick contends that limitation would run from 14th July 1919 when the, claim of Chakauri was established as against the parties to this litigation. In my opinion the decision of Macleod, C.T., in Multanmal Jayaram Vs. Budhumal Kevalchand, is conclusive of this question. The facts were as follows: In 1911 the plaintiffs bought two lands tinder a registered sale-deed, and went into possession. One of the lands was let to a tenant. The tenant claimed the land as his own; and established his title to the land in 1913; the decree was confirmed by the High Court in 1916. In 1917 the plaintiffs sued their vendors for cancellation of the sale of 1911, and to recover the consideration money together with the amount spent by them in improving the land and the costs incurred by them in defending the suit brought by the tenant.

The trial Court held that the consideration for the sale failed in 1913 when the tenant established his claim in a Court of law and that the suit was barred by Article 97, Lim. Act. On plaintiffs'' appeal it was held by the Bombay High Court that Article 116, applied and that time began to run from the date when the tenant established his title to the land in 1913. The learned Chief Justice in deciding the case prominently referred to a decision of the Madras High Court in Subbaroya Reddiar v. Rajagopala Reddiar [1914] 38 Mad. 887. That was a suit by purchasers to recover the amount paid by them to the defendants or their predecessors for a certain property on the ground that the consideration for the sale failed when the plaintiffs were deprived of possession. In deciding the case the learned Judge in the Madras High Court said as follows:

In the present case, the conveyance was prima facie unimpeachable, and I do not think the construction to which the release of Gnanammal lent itself in the eye of law, can be said to amount to a knowledge of the defect of title. On the second question as to when the; cause of action for damages arose, a very large number of cases were quoted before me. These cases can roughly speaking be classified under three heads: (a) where from the inception the vendor had no title to convey and the vendee has not been put in possession of the property; (b) where the sale is only voidable on the objection of third parties and possession is taken under the voidable sale; and (c) where though the title is known to be imperfect, the contract is in part carried out by giving possession of the properties.

Now stopping here for a moment it will be noticed that the present case fall under head (b) where the sale is only voidable on the objection of third parties and possession is taken under the voidable sale. It was contended before us that the sale was not voidable but void ab initio since it has been found that Mt. Lakhpat had no title whatever to convey. But this point was very completely dealt with in the judgment of the High Court, where it was pointed out that a transaction cannot be regarded as void ab initio where both the parties consider that the vendor has a good title so convey. This being so, as between the parties to this litigation it cannot; be regarded that the sale was void ab initio and there is no doubt that possession was taken under the voidable sale. Now proceeding the learned Judge continued to say as follows:

In the second class of oases the cause of action can arise only when it is found that there is no good title. The party is in possession and that is what at the out sit under a, contract of sale a purchaser is entitled to, and so long as his possession is not disturbed, he is not dandified.

The learned Chief Justice of the Bombay High Court adopted the reasoning of this case and held that in the case before him time began to run only when the tenant established his claim as against the vendor and the vendee. This case in my judgment applies to the facts of this case. It must, therefore, be held that time began to run from 14th July 1919, and as the suit has been brought within six years from that date the suit is well within time.

I would dismiss this appeal with costs.

James, J.

I agree.