Mundlur Gangappa and another vs Rajala Hanumanthappa

Satyanarayana Raju, J.—The appeal and the cross-objections arise out of the judgment of the Additional District Judge Anantapur, in O. S. No. 25 of 1956.

The facts which have given rise to this appeal may be stated. By a deed of sale, dated the 19th June. 1936, the plaintiff purchased from one Nagappa an extent of 65 acres of land, specified in the plaint A schedule. Pursuant to the sale in his favour the plaintiff obtained possession of the land. The 1st defendant purchased the very same land in execution of a decree obtained by him against Nagappa in O. S. No. 641 of 1931, on the file of the District Munsif''s Court. Bellary, and obtained possession of the same after disposessing the plaintiff on the 12th August, 1945. Shortly thereafter, the plaintiff filed E. A. No. 336 of 1945 for restoration of possession of the land but his application was dismissed after contest on the 22nd September 1946. He thereupon filed a suit O. S. No. 41 of 1946 on the file of the District Court, Anantapur for setting aside the order in E. A. No. 336 of 1945, which was eventually transferred to the Sub-Court, Anantapur, and numbered as O. S No. 40 of 1946. The 1st defendant resisted tie suit inter alia on the grounds that the sale deed in favour of the plaintiff was a nominal and collusive document and that he had acquired a good title by virtue of the Court sale. By its judgment, dated the 21st July 1947 the Sub Court decreed the suit holding that the sale deed in favour of the plaintiff was supported by consideration and that the purchase by the 1st defendant could not prevail over the title of the Plaintiff.

After the dismissal (disposal?) of the suit the 1st defendant filed I. A. No. 191 of 1947 in the Sub Court for stay of further proceedings. Further proceedings were stayed on condition that the 1st defendant should deposit a sum of Rs. 1,000/-. This amount was deposited by the 1st defendant.

Against the decree granted by the Sub Court in favour of the plaintiff, the 1st defendant filed A. S. No. 139 of 1947 on the file of the District Court Anantapur; and, on an application made by him, the Appellate Court confirmed the stay of further proceedings granted by the trial court. A. S. No. 139 of 1947 was dismissed on the 6th April 1948.

Against the judgment of the Appellate Court, the 1st defendant preferred S. A. N. 1220 of 1948 on the file of the High Court of Madras, and during the pendency of the appeal obtained stay of further proceedings pursuant to the decree granted by the trial Court on condition that the 1st defendant should furnish security for a sum of Rs. 2000/- to the satisfaction of the District Court,. Anantapur. On the 23rd March 1949 the 2nd defendant furnished security for the said sum. On the 10th December, 1951 the High Court of Madras dismissed the second appeal filed by the 1st defendant.

On the 9th April 1952 the plaintiff was restored to possession of the suit land. On the 16th April 1955, he filed the present suit for the recovery of a sum of Rs. 14.400/- towards mesne profits or damages for use and occupation of the suit land by the 1st defendant for a period of six years, from 1946-47 to 1951-52. The case the plaintiff is that during the aforesaid period the 1st defendant enjoyed the suit land and is therefore liable to pay him a sum of Rs. 2,400/- per year towards mesne profits or damages. He also sought the permission of the Court to withdraw the sum of Rs. 1.000/- in Court deposit and also to recover Rs. 2,000/- from the 2nd defendant.

The 2nd defendant remained ex pare while the first defendant resisted the suit, principally on the ground that the suit claim was barred by limitation. The learned Additional District Judge held that there was no plea of limitation with regard to the claim of Rs. 3.000/- and that, therefore, the plaintiff was entitled to recover the said amount but that the rest of the claim was barred by limitation. The decree gave effect to this finding.

In the appeal, the appellant (1st defendant) contends that the decree passed by the lower curt even in regard to the sum of Rs. 3,000/- is unsustainable, while in the cross-objections, the plaintiff contends that his entire claim should have been decreed.

The question which arises in the appeal is whether the plaintiff is entitled to recover the sum of Rs, 1000/- deposited by the 1st defendant in Court and the sum of Rs. 2000/- for which security was furnished by the 2nd defendant.

With regard to these amounts, the 1st defendant stated in paragraph 5 of his written statement as follows:

Regarding allegations in plaint paras 5, 6 and 7, this defendant submit, that the sum Of Rs. 1,000/- deposited by this defendant on 9-9-1947 and die security furnished by the second defendant in the sum of Rs. 2,000/- was intended to cover and does cover all claims of the plaintiff by way of compensation. Plaintiff has no further claim beyond this sum of Rs. 3,000/- and the suit as now filed claiming the higher amount of Rs. 14,000/- is not maintainable".

Again, in paragraph 6, the 1st defendant stated :

As already stated, the plaintiff is not entitled for any higher sum than Rs. 3,000/- which covers completely his claim, if any by way of compensation.

It is clear from the foregoing extracts from the statement of defence that the 1st defendant expressly admitted the plaintiff''s right to claim the sum of Rs. 3,000/-. There was no contest with regard to this amount; and the lower court, there-lore rightly granted a decree for this amount

It is contended by Mr. Sastri, learned counsel for the appellant that the 1st defendant did raise the plea that the entire suit claim was barred by limitation, and he relied upon paragraph 7 of the written statement wherein the first defendant averred that

the suit as it was filed beyond three years from 9-4-1952, the date when plaintiff got possession of the suit lands, is time-barred.

We cannot, however, read this plea as covering the sum of Rs. 3,000/-, which was clearly admitted by the 1st defendant in paragraphs 5 and 6 of the written statement. We consider that there are no merits in this appeal. It must, therefore be dismissed.

The question raised in the cross-objections is whether the rest of the plaintiffs claim is governed by Article 109 or 120 of the Limitation Act.

From a narration of the facts given at the outset, it would be clear that the 1st defendant was in possession of the lands in suit from the 12th August 1945, till the 9th April, 1952, the date on which they were re-delivered to the plaintiff. The present suit was instituted on the 23rd April 1955 for recovery of a sum of Rs. 14,400/- towards mesne profits or damages for use and occupation of the suit lands for a period of six years,

The judgment of the High. Court was on the 10th December 1951, whereas the date of redelivery was on the 9th April 1952. Taking either of the above dates as the starting point, it is clear that the suit was instituted after a period of three years. According to the plaintiff the suit is governed by Art. 120 of the Limitation Act, while according to the 1st (defendant, the Article applicable is Art. 109- Art. 120 is a residuary article which includes all suit not specifically provided for and is to be invoked whenever a specific article in all its bearings is not applicable.

Art. 109 reads thus :

Description of suit

Period of limitation.

Time from which period begins to run.

For the profits of immoveable property belonging to the plaintiff which have been wrongfully received by the defendant.

Three years.

When the profits are recived.

This Article is applicable to cases where the profits have been wrongfully received by the defendant.

Section 2(12) of the CPC defines ''mesne profits as follows:

Mesne profits'' of property means those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received thereform together with interest on such profits...............

A Division Bench of the Madras High court, consisting of Ay ling and Kumaraswamy Sastri J J. have held in Rangaswami Kavundan v. Alagoyamman 2 Mad L. W. 169 :(AIR 1915 Mad 1133) that a suit for mesne profits by a person who was dispossessed of immovable property in execution of a decree but was subsequently restored to possession, is governed by Article 109 and not 120 of the Limitation Act. The decision turned upon the question whether the words ''wrongfully received'' in Art. 109 should be confined to cases where the possession of the defendant against whom profits were claimed originated in a wrongful act. The learned Judges have held that the words ''''wrongfully received'' in Art. 109 include the receipt of profits by a person under a claim or title which cannot be legally substantiated. Learned counsel for the plaintiff sought to distinguish this decision on the ground that that was a case in which a person who was dispossessed in execution of a decree was subsequently restored to possession on the decree being reversed in appeal.

In the present case the 1st defendant pursuant to a decree obtained by him, brought the suit lands to sale and obtained possession of the same after dispossessing the plaintiff. The plaintiff on foot of his title and possession, filed an application for restoration of possession but his application was dismissed. He, thereupon filed a suit for setting aside the order rejecting his application for restoration to possession. That suit was decreed in his favour and the decree was affirmed in appeal and second appeal. On these facts, it is clear that the 1st defendant had obtained possession under an order which was eventually set aside. There is, therefore, no ground of distinction between the decision between the decision in 2 Mad LW 169: (AIR 1915 Mad 1133).

The learned counsel for the plaintiff reli upon the decision of the Calcutta High Court in Holloway v. Guneshwar Singh 3 Cal. L. J. 182 where it was held that so long as the defendant remained in possession by virtue of a decree of the court the receipt of profits during the period of his possession could not be said to be wrongful, even though the decree was afterwards set aside and therefore, a suit for profits received by the defendant during that period was governed not by Art. 109 but by Art. 120.

In Saraj Ranjan v. Premchand Chowdhury 22 Cal WN 263 : (AIR 1918 Cal 360) it was pointed out that as the words in column 3 of Art. 109 stood before 1908. even if the possession had been obtained under a decree of Court which was afterwards set aside on appeal, Article 109, would apply as the profits had been wrongfully received. It is, no doubt, true that Art 109, as it stood in Act 25 of 1877, contained a clause to the effect that where the plaintiff had been dispossessed by a decree which was afterwards set aside on appeal, time was to run from the date when he recovered possession. This clause does not find a place in the Act of 1908, which fixes the starting period in all cases to run from the date "when the profits are received".

The omission from column 3 of certain words in 1908 was due to the provisions of S. 144 of the Code of Civil Procedure. Subs.(2) of S. 144 of the CPC provides that no suit shall be instituted for the purpose of obtaining any restitution or other relief which could be obtained by application under sub-sec. (1). As pointed out by the learned Judges of the Division Bench in 2 Mad LW 169: (AIR 1915 Mad 1133), S. 144 of the Code of Civil Procedure, which deals with restitution empowers the Court to grant damages, compensation Or mesne profits consequent on the variation or reversal of a decree. The use of the worls, ''''damages, compensation or mesne profits'''', supports the view taken by the Division Bench as they indicate that possession is wrongful even though taken in execution of a decree Or Order.

In AIR 1939 178 (Privy Council) their Lordships of the Privy Council approved the decision of the Calcutta High Court in 22 Cal WN 263 : (AIR 1918 Cal 360) which dissented from the view taken by the Court in 3 Cal LJ 182.

Learned counsel for the plaintiff, however, relied upon the decision of the Privy Council in Suryaprakasa Rao v. Maharaja of Pithapuram . There the facts were these: In 3923 there was a pending litigation between the Maharaja and the plaintiff in which the Maharaja claimed that he was the nearest reversioner entitled to succeed to the estate of Gollaprolu. The Maharaja obtained a decree from the District Court of Rajahmundry but the plaintiffs appealed against it to the Madras High Court. While that appeal was pending, the Maharaja applied to the Collector of Godavari to be recognized as the landholder of the estate for the purpose of the Madras Estates Land Act subject to the ultimate result of the litigation then pending. The Collector made an order on the 12th January, 1924 under S. 3 (5) of the Madras Estates Land Act, by which he recognized the Maharaja as the landholder for the purposes of the Act. The Maharaja accordingly entered into possession of the estate and collected the rents and profits. The litigation pending between him and the plaintiffs was protracted and was not brought to an end till the Order in Council of I5th July, 1935. the effect of which was to find that the plaintiffs were entitled to the Estate.

On the 7th September, 1935. the Collector of Godavari cancelled his previous order and recognised the plaintiffs as the landholders of the estate. The plaintiffs thereupon brought a suit in October, 1935, for recovery of the rents and profits received by the Maharaja during the period of his possession and management of the estate. The Maharaja pleaded that he had been in wrongful possession of the estate during the whole period and that the suit for mesne profits for more than three years from the date when the profits were received was barred by Art. 109 of the Limitation Act. The trial Judge held that the Maharaja''s possession of the estate under the order of 12th January, 1924, had not been wrongful and that he had collected the rents and profits as a quasi trustee for the benefit of the plaintiffs and was bound to account to them for the rents and profits received in the full period of his possession.

The High Court of Madras on appeal, held that the Maharaja''s possession had not been wrongful and consequently that Art. 109 of the Limitation Act did not apply. But, differing from the trial judge the High Court held that a right to Sue the Maharaja had accrued to the plaintiffs each time he hid received the rents and profits. On this conclusion, the High Court disallowed the plaintiff''s claim to recover rents and profits received more than six years before the commencement of the suit, as being barred by Art. 120 of the Limitation Act. On a further appeal to the Privy Council, their Lordships agreed with the trial Judge and with the High Court that as the Maharaja had statutory authority for collecting the rents and profits during the whole period of his possession, it was impossible to hold that his receipt of them was wrongful and that, therefore, Art. 109 was inapplicable. But their Lordships held that it was not necessary for the true owner to sue the landholder as often as he collected rents or profits before the final determination of his rights, as one of the purposes of S. 3 of the Madras Estates Land Act was to regulate possession pendente lite, and to prevent multiplication of unnecessary suits.

The decision of their Lordships was rested on the provisions of the Madras Estates Land Act. The person who is recognized by the Collector as ''landholder '' under S. 3 (5) of the Madras Estates Land Act for all or any of the purposes of the Act becomes thereby clothed with full authority to do all acts required to be done for such purpose or purposes and such acts are made binding upon whichever party is ultimately held by the Civil Court to be entitled to the possession of the estate. Therefore, the person recognized as the landholder by the Collector had legal authority for collecting rents and profits of the estates during the whole period of his possession. On this conclusion, their Lordships held that the receipt of the rents and profits could not be held to be wrongful under Art. 109 of the Limitation Act. This decision has clearly no application to the facts of the present case.

Nor is the decision of the Madras High Court in Radhakrishna Chettiar v. Ramaswami Ayyar, 1954-2 Mad LJ 610 relied upon by the counsel for the plaintiff of much help. There it was held that during the period between the date of the Court sale and the date of the confirmation of sale, the only person who was entitled to be in possession of the land sold and who was entitled to collect or enjoy the rents and profits was the judgment-debtor and that till the date of the confirmation of sale the auction-purchaser could not have a claim for possession or mesne profits, and that the receipt of the rents and profits during the period by the judgment debtor could not be held to be wrongful. At page 613 the learned Judges observed as follows :

An auction-purchaser has a right of possession not from the date of sale but from the date of confirmation of the sale because he can only get into possession after a sale certificate has been issued as provided by Order 21 rule 94, and not a moment Earlier ............That is why Art. 138 prescribes the starting point for a suit for possession by a purchaser at a sale in execution of a decree as ''the date when the sale becomes absolute.''..............It follows as the result of this position of an auction-purchaser that the payment of rent by the lessee of the property to the judgment-debtor after the sale and before the date of the confirmation of the sale is quite proper in spite of the fact that Sec. 65. CPC provides for a notional relation back so far as vesting of the title is concerned.''''

This decision is clearly distinguishable and does not apply to the facts of this case.

According to the decision of the Madras High Court in 2 Mad LW 169 : (AIR 1915 Mad 1133), the words ''wrongfully received'' include the receipt of profits by a person under a claim or title which cannot be legally substantiated. Learned counsel for the plaintiff has conceded that this decision has not been dissented from. If so much is conceded the claim of the plaintiff is for profits wrongfully received by the 1st defendant during the period he was out of possession as a result of the order of the Court and is governed by Art. 109 and not Art. 120 of the Limitation Act.

In this view, the conclusion reached by the Court below is correct. The cross-objections must therefore fail and are dismissed.

Having regard to all the circumstances of the case. we direct that the parties shall bear their costs both in the appeal and the cross-objections.