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Judgment
Raghava Rao, J.—The appellant before me was the plaintiff in the original suit which has been dismissed by the trial Court as well as on
appeal. The suit was for recovery of a certain sum of money said to represent the plaintiff''s share of the sale proceeds of a site in Mambalam
purchased by defendant l and the father of the plaintiff in the name of defendant l only. The properties sold are two items, one sold in August 1938
and the other in February 1939. The suit was laid on 8-12-1944. The Courts be-low have applied Article 62, Limitation Act, to the suit claim and
held it to be beyond time. They have also held that even if Article 120 applied the suit would be in time with reference to the plaintiff''s share of the
proceeds of sale of February 1939 only and not with reference to the share of the proceeds of sale of August 1938, and that the reliance placed
by the plaintiff upon Exs. P-4 and P-4 (a) as saving the bar of limitation with reference to the sale proceeds of August 1938 was of no avail, for the
reasons that the alleged acknowledgments were in the nature of statements addressed not to the plaintiff but to a third party, and that they were not
sufficiently clear as acknowledgments of a subsisting liability within Section 19, Limitation Act.
It is common ground that Article 120, Limitation Act, cannot apply to the case unless the applicability of Article 62 stands excluded. The choice
is between these two articles only, and there is no other article of the Limitation Act for me to consider. Mr. Umamaheswaram contends that the
view of the Court below that Article 62, Limitation Act, applied to the case is erroneous. His point is that this is not the case of a suit for money
had and received at all but for the enforcement of an equitable right which his client has to monies in the hands of a benamidar. If that is the true
jural relation between the parties underlying the suit claim, says counsel, the case falls directly within the ruling of a Full Bench of this Court in
Karna-murthi v. Ramanatha, I. L. R. 1946 Mad. 306 : A. I. R. 1946 Mad. 248 . The argument is sought to be controverted by the learned
counsel for the respondent on the ground that the relationship between the parties here is purely and simply that of co-sharers, and that there is no
fiduciary or quasi-fiduciary relationship on the part of the defendant towards the plaintiff such as would render Article 120, Limitation Act,
applicable.
Mr. Narasaraju contends that the word ""benami"" in relation to a case like the present is a misnomer, because this is not a case of the whole
property belonging to one standing in the name of another but only of property standing in the name of one person on behalf of himself and another.
In itself I do not find anything about the word ""benami"" which renders it apposite to the one case but not to the other. ""Benami"" after all means
nothing more than name lending and there may well be name lending in regard to a part of the property comprised in a deed as well as in regard to
the whole of it. Anyhow, whatever the appropriateness of that label may be in relation to the case on hand, there is no doubt but that this is a case
in substance, within the meaning of Section 82, Trusts Act, occurring in chap. IX headed ""of certain obligations in the nature of trusts"", of property
transferred to one person for a consideration paid or provided by another person as to part of such property undivided though it may be by metes
and bounds between the parties for whose benefit the transfer has taken place. I do not find any adequate reason for restricting the word
property"" which occurs in Section 82 to property as a whole and not holding it to be applicable to property in part. The relationship between the
parties before me is in essence this: that so far as the interests of the other persons who contributed their portions of the consideration for the
purchase of the properties are concerned, these interests are held by defendant l under the sale-deed in his favour as for the benefit of those other
persons. So also the proceeds of sale attributable so far as may be to such interests. The obligation sought to be enforced is, in my opinion,
therefore, obviously an equitable obligation traceable to a resulting trust as it is called in English law, the rule as to which is stated by Eyre C. B. in
Dyer v. Dyer, (1788) 2 Cox. 92 : 30 E. R. 42 and reiterated by Farwell L. J. in his judgment in the Court of Appeal In re Venture, (1908) probate
218 : (77 L. J. p. 105), as follows :
The clear result of all the cases without a single exception is that the trust of a legal estate whether freehold, copyhold, or leasehold; whether taken
in the names of the purchaser and others jointly, or in the names of others without that of the purchaser; whether in one name or several, whether
jointly or successive, results to the man who advances the purchase money; and it goes on a strict analogy to the rule of common law, that where a
feoffment is made without consideration, the use results to the feoffer.
But then, it is contended by Mr. Narasaraju that the law as laid down in Mir Hussain Ali Vs. Mir Baquir Ali, , (Leach C. J. and Rajamannar J.)
directly governs the present case. To reproduce the facts of that ease from the head-note which correctly expresses them ;
The estate of a Mahomedan who died in 1917 included a casuarina plantation which was sold in 1921 in accordance with the wishes of the
majority of the heirs. The person who sold the property acting with the consent of the majority of the heirs handed over the sale proceeds to the
defendant with instructions to distribute the money among the heirs in accordance with their respective interests. The defendant paid some of them
but he did not pay the plaintiff. The plaintiff who stated that he did not become aware until 1940 of the fact that the money was in the hands of the
defendant, sued to recover his share in the sale proceeds.
On those facts, the Court held that the receipt of the sale proceeds by the defendant for the purpose of distribution among the heirs did not
constitute an express trust and that Section 10, Limitation Act, was not applicable to the case. The Court further held, and that is the material part
of the decision for the present case, that the suit was governed by Article 62 and not by Articles 89, 120 or 123, Limitation Act, and that the suit
was barred by limitation. In such a case, it is laid down that the starting point of limitation is the date when the defendant received the money and
that the date of the plaintiff''s knowledge of it is immaterial. That was a case in which the defendant who received the proceeds of the sale from the
heir who sold the property with instructions to pay over the proceeds to the co-heirs could well be regarded as a person who did so for the
plaintiff''s use as well as the use of the other heirs in the parta in which they were entitled to the proceeds. The defendant in the present case does
not occupy such a position, and the proceeds that he holds in the capacity of a co-sharer, pure and simpliciter.
The relevancy of a Full Bench ruling of this Court reported in Yerukola v. Yerukola, 45 Mad. 648 : A. I. R.1922 Mad. 150 , to such a case has
also been debated before me at some length. There, three brothers, members of a joint Hindu family, became separated. Arbitrators were
appointed to divide the properties by metes and bounds, but only some of them were so divided, and the rest remained in the hands of the different
members, who collected outstandinga from debtors and rents from tenants. In a suit brought by one of the brothers against the others for partition
and account, it was held that the properties remaining undivided were held by the brothers as tenants-in-common, that the article of the Limitation
Act governing the claim for an account and share of the moneys and rents and profits collected was not Article 109 or 127, but Article 120, unless
from the facts of the case, it could be inferred that the person receiving the moneys and rents and profits acted as the agent of the others, in which
case Article 89 would apply. It was also further held that Article 62 was not applicable, as a suit, for money had and received would not lie by one
tenant-in-common against another who had received more than his share, the appropriate remedy in such a case being an action for an account, in
which all just allowances could be made.
Dealing with Article 62, Schwabe C. J. observes at p. 659 of the Report :
Article 62 relates to suits for money payable by the defendant to the plaintiff for money received by the defendant for the plaintiffs use. These are
technical terms of the law of England used to cover a great variety of cases in which it can be said that the defendant has received money which
really belongs to the plaintiff. There is, however, one case in which that form of action would not lie in England and that is by one tenant-in-
common against another who has received more than his share.
Then the learned Chief Justice after tracing the history of an action for account as between tenants-in-common in England proceeds td observe
at p. 660 of the report as follows :
This, in my judgment, is in itself a sufficient ground for holding that Article 62 has no application to this case, it being quite impossible to say that
any particular debt or rent or profit, or any part of either, was received for the use of any particular tenant-in-common. Indeed, on partition any of
the debts or rents or profits might be awarded in toto to any of the tenants-in-common, and further, in this case each of the tenants-in-common
was collecting part of the common properties or the income from it and no doubt incurring expenses in so doing. An action for an account would
be appropriate; an action for money had and received would, in my judgment, be quite inappropriate. This view was taken in Subbarao v.
Ramarao, 40 Mad. 291 : A. I. R.1917 Mad. 948, in which it was held that Article 120 and not Article 62 applied in similar circumstances.
Referring to Subbarao v. Ramarao, 40 Mad. 291 : A. I. R. 1917 Mad. 948 again and to Venkata Reddi v. Kuppu Reddi, 13 M.L.W. 260 : A.
I. R. 1921 Mad. 553 of the Report the learned Chief Justice further observes that it was held there
that Article 62 does not apply to transactions in which the defendant is not under a mere duty to hand over the moneys which he has received bat
has other duties as well in respect of it.
Of the passage quoted above the learned advocate for the appellant stresses the first as in his favour while the learned advocate for the respondent
emphasises the second and the third.
Then again in Kumaragwami Sastri J.''s judgment in the Full Bench case there are two passages in immediate succession to each other to be
found at p. 674 of the Report on the first of which reliance is placed by the learned counsel for the appellant, while on the second reliance is placed
by the learned advocate for the respondent. The first passage is as follows :
In Umardaras Ali Khan v. Wilayat Ali Khan, 19 All. 169 : 1897 A. W. N. 34 it was held that a suit brought by some of the heirs to recover from
the widow of a deceased Muhammadan a sum of money realised by her on account of a mortgage debt due to the deceased was governed by
Article 120 of the Second Schedule to the Indian Limitation Act.
The second passage runs as follows :
In Venkata Reddi v. Kuppu Reddi, 13 M. L. W. 260: A. I. R. 1921 Mad. 553, Article 120 was applied to a suit for partition as regards the
income derived from the joint properties. Wallis C. J. observed : ''The next question is with regard to the period of limitation, within which the
plaintiff is entitled to recover the income from the defendants, in respect of the portions of the properties which ought to have fallen to his share, but
which were enjoyed by them. It has been contended that the case is governed by Article 62 which applies to a suit, i.e., for money payable by the
defendant to the plaintiff for money received by the defendant for the plaintiff''s use. The scope of this article in cases like the present has been
considered in Subbarao v. Ramarao, 40 Mad. 291 : AIR 1917 Mad. 948 where it has been pointed out that it does not apply to transactions in
which the defendant is not under a mere duty to hand over the money which he had received, but has other duties as well in respect of it''.
I have carefully considered the argument on either side in this particular, and I have further looked into the case in Subbarao v. Rama Rao, 40
Mad. 291 : A. I. R. 1917 Mad. 948 myself. That was a case in which the facts as stated in the head-note were as follows :
The plaintiff and the defendant were co-sharers in a Jaghir of which the latter was appointed by the Government as manager. The former sued the
latter in the District Munsif''s Court for his share of the net income due for the year 1912, but the plaint was returned for presentation to the proper
Court as the valuation of the suit exceeded the pecuniary limits of the jurisdiction of the said Court; the plaintiff did not re-present the plaint in any
Court, but subsequently instituted the present suit in 1913 in the District Court for an account and recovery of his share of income due from the
years 1906 to 1907. The defendant pleaded that the suit was barred by limitation and by Order 2, Rule 2, Civil P. C.
On those facts it was held by the Court (Abdur Rahim and Srinivasa Ayyangar JJ.) that the suit was not harred either way, and so far as the
bar of limitation is concerned, the learned Judges held that the suit was one for an account which was governed by Article 120 and not Article 62,
Limitation Act. It will be seen from a careful study of the judgment of Abdur Kahim J. in that case that the learned Judge, referring to Article 62,
observes that the action contemplated thereby is a well known form of action and that the article applies in cases where a definite sum of money
has been received by the defendant, which the law says he must hold for the use of the plaintiff. Then again, it will be seen from the judgment of
Srinivasa Aiyangar J. in that case that the learned Judge first defines the jural relationship between the parties as follows :
The jural relationship between the plaintiff and the defendant is not disputed. Both of them are beneficially interested and are owners beneficially of
a certain jaghir. But the defendant is the person who is constituted the manager. As manager he is entitled to collect the rents and revenue of the
jaghir and bound to account finally for the collections and disbursements. The plaintiff cannot claim a share in each individual collection nor can he
claim any particular sum fit the time of collection from the defendant. All that he is entitled to is an account technically so-called. Whether that
account is to be rendered once a year or when demanded makes no difference.
Then again referring to Muhammad Habibullah Khan v. Safdar Husain Khan, 1 ALL. 25 : 1884 A. W. N. 219 it is said by the learned Judge
that that case seems to be precisely in point and that he would follow it, although he thought the jugal relationship between the plaintiff and the
defendant was scarcely that of a resulting trust.
From the questions made by me from that case it seems to me perfectly clear that while where an account is asked for which is itself the
essence of an equitable action the case must undoubtedly be treated as falling within Article 120 and as being outside Article 62 it does not follow
that where an account is not called for the suit must necessarily be treated as one falling within Article 62 and therefore not being within Article
The essence of the matter to my mind appears to be the precise jural relationship between the parties. Where, as here, on account of the
relationship a resulting trust can be postulated it follows that any claim based upon such relationship must be treated as excluded from Article 62
and must be brought under Article 120. It is true as pointed out for the respondent that where there are not many items of collection by the
defendant which constitute the subject-matter of the action, the term ""account"" may not seem to be quite so fit and necessary an expression to
employ in relation to the relief asked for as otherwise it may be. The inapplicability or applicability of Article 120 in my opinion cannot and does
not, however, depend upon whether there is only one item or there are more items than one constituting the subject-matter of the relief asked for.
Nor can it be said that in every case in which after the collection is made nothing more need be done by the defendant than to pay up the share of
the amount to which the plaintiff is entitled, the action for such share stands necessarily attracted by Article 62. As I have already observed, the
obligation sought to be enforced in the present action is obviously an equitable obligation traceable to a resulting trust as it is known to English law,
and the case must be treated as governed by Article 120. The fact that Subba Rao v. Rama Rao, 40 Mad. 291 : A. I. R. 1917 Mad. 948 has
been referred to in terms of approval by the learned Judges of the Full Bench who decided Yerukola v. Yerukola, 45 Mad. 648: AIR 1922 Mad.
150 or that it has been distinguished in the manner in which it has been done by Wallis C. J. in the case in Venkatareddi v. Kuppu-reddi, 13
M.L.W. 260: AIR 1921 Mad. 553 does not, in my opinion, justify the contention on behalf of the respondent that the present case is governed by
Article 62. In addition to the case of Muhammad Habibullah v. Safdar Hussain, 7 ALL. 25 : 1884 A.W.N. 219 discussed by Srinivasa Aiyangar J.
in Subba Rao v. Rama Rao, 40 Mad. 291 : AIR 1917 Mad. 948, I may also, draw attention to the case in Umar-daraz Ali Khan v. Wiliat Ali
Khan, 19 ALL. 169: 1897 A. W. N. 34 already referred to in the passage quoted from Kumaraswami Sastri J.''s judgment in the Pull Bench case
in Yerulcola v. Yerukola, 45 Mad. 648 : AIR 1922 Mad. 150 .
Article 120 being the article therefore applicable to the case on hand, I am next to consider the argument of Mr. Umamaheswaram that the
claim is in time in respect of the pro-ceeds of sale of August 1938 as well as of February 1939, because the suit is within six years from the date of
his client''s knowledge of the sales which according to learned counsel gives his client the right to sue and is therefore the terminus a quo of col. 3
of Article 120. In support of this, reliance is placed by learned counsel upon the ruling of the Privy Council in O. Rm. O.M. Sp. Firm vs.
P.L.N.K.M. Nagappa Chettiar . The first para. of the head-note to the report of the Privy Council decision no doubt points out that the decisions
in India have established a rule of limitation under Article 120 by which the plaintiff in cases to which the rule applies cannot be debarred of his
remedy unless with the knowledge of his rights he has been guilty of delay. The true spirit of this part of the head-note is liable to be misunderstood
unless attention is also directed to what is said in the second para. namely :
Therefore where an action is brought on the ground of fraud, misconduct or mistake on the part of the defendant, the right to sue is deemed to
accrue under that article at the time when the plaintiff comes to know of the fraud, misconduct or mistake in question and time will begin to run
against him only from the date of knowledge.
Here we are not concerned with any case of fraud, misconduct or mistake on the part of the defendant. The proposition in its generality which
is sought to be extracted by the learned counsel for the appellant from that part of the judgment which has reference to the first para. of the head-
note cannot be countenanced, as the judgment of Sir George Rankin has to be read and appreciated as a whole in connection with the facts of the
case which have reference to the second para. of the head-note. The proposition relied on has to be taken in conjunction with and cannot at all be
divorced from the facts and circumstanced of the case which led to the observation of his Lordship at p. 405 which alone enters into the first para.
of the head-note to the ruling.
Reliance is next placed by the learned advocate for the appellant on the ruling of a Full Bench of this Court reported in Rama-seshayya v. Sri
Tripurasundari Cotton Press, Bezwada, 49 Mad: 468 : A. I. R. 1926 Mad. 615 , which contains the observation at p. 479 that :
It is quite true that in eases where the party aggrieved is ignorant of the facts the time will only begin to run, not when the money was in fact
received by the defendant, but when the plaintiff first became aware of it.
The soundness of the observation has been discussed in Hussain Ali v. Baquir Ali 1946-2-M. L. J. 422 : A. I. R. 1946 Mad. 116 to which
reference has already been made by me in the foregoing. Leach C. J. in delivering the judgment of the Court in this latter case observes thus at p.
425 of the Report :
That case was decided by a Full Bench and the other members of the Court concurred in the judgment delivered by the learned Chief Justice. If
for the purposes of that ease it was necessary for the Court to consider and decide the question whether knowledge was a factor we should be
bound be follow the judgment of Coutts-Trottet C. J. but it is obvious that it was not necessary for the Court to consider this question, and the
passage in the judgment on which the plaintiff relies can only be regarded as constituting an obiter dictum. The judgment gives no indication on
what the assertion was made and nothing has been said in the course of the arguments which convinces us that it is right. As the Privy Council has
on more than one occasion had to point out, the Court is not concerned with the hardship of the case. It must have regard only to the wording of
the statute.
I respectfully agree with these observations, and although in the case in which they were made Article 62 was the article held to be applicable
which is not the one that can apply to the present case. I am of opinion that the same considerations cannot but enter into the application of Article
120, which is the relevant article here, to the case on hand.
Nor am I impressed by the argument that the bar of limitation in regard to the claim for the plaintiff''s share of the proceeds of sale of August
1938 stands saved by the acknowledgment to be found in Exs. P-4 and P-4 (a). I have carefully considered the language of the alleged
acknowledgment, and I have come to the conclusion that although the Courts below may have been wrong in the view taken by them that an
acknowledgment addressed to a third party is of no avail to save limitation, they are right in their view that the language does not contain anything
so unequivocal as ia requisite for an effective acknowledgment under the Limitation Act.
The result is that the decrees of the Courts below must be modified by decreeing to the plaintiff a half of the suit claim with interest being his
share of the proceeds of sale of February 1939, with reference to which alone the present suit must without doubt be treated as in time if Article
120 is to be applied, as I have held that it must be, to the present case. The parties will pay and receive proportionate costs right through. No
leave.