Bachawat, J. - (1.) Subramanian Chettiar was the owner of 5 original shares subsequently represented by 1250 shares in the Chop-Leong Watt Hin Rubber Estate in Malacca. On December 9, 1912 Subramanian died leaving behind him his widow and his son plaintiff Shanmugham. In August 1913 the attorney of Subramanian's widow took out letters of administration to his estate. Subramanian, the defendant and certain others were partners in the P. M. S. Firm at Malacca. On July 16, 1915 while both Shanmugham and the defendant were at Malacca they entered into a compromise agreement which is evidenced by Exhibits A-177 and A-178. Under this compromise they agreed that out of the aforesaid original 5 shares in the Chop Leong Watt Hin Rubber Estate 2 1/2 shares would belong to the P. M. S. Firm then represented by the defendant as the managing partner and the remaining 2 1/2 shares would belong to Shanmugham. Under this compromise the defendant agreed and undertook to recover the 5 shares and to account to Shanmugham for the 2 1/2 shares belonging to him and the income and the dividends arising therefrom. On January 7, 1924 while Shanmugham and the defendant were at Malacca they entered into an agreement which is recorded in Exhibit B-2. Under this agreement Shanmugham transferred his remaining 2 1/2 shares in the Rubber Estate to the defendant on receipt of 18000 dollars as consideration. On September 14, 1927 Shanmugham instituted a suit against the defendant in the court of the Subordinate Judge, Devakottai, asking for a declaration that he was entitled to the original 5 shares in the Rubber Estate, that Exhibits A-177, A-178 and B-2 were void and for accounts and consequential relief. Shanmugham alleged that the transactions of July 16, 1915 and January 7, 1924 were vitiated by fraud, and fraudulent concealment. During the pendency of the suit Shanmugham was adjudicated an insolvent and thereupon the Official Receiver of Ramanathapuram was Added as the 2nd plaintiff. After protracted proceedings which is not necessary to mention now, the Subordinate Judge granted the declarations claimed by Shanmugham and passed a preliminary decree for accounts. The Subordinate Judge accepted the plaintiff's contentions and held that both the transactions of July 16, 1915 and January 7, 1924 were vitiated by fraud and were liable to be set aside. The defendant filed en appeal in the High Court of Madras. During the pendency of the appeal the defendant died and his legal representatives were brought on record. The High Court held that the arrangement dated July 16, 1915 was valid and was not vitiated by fraud. With regard to the arrangement dated January 7, 1924 the High Court agreed with the Trial Court and held that the transaction was vitiated by fraud and that the defendant was liable to account for 2 1/2 shares in the Rubber Estate and dividends amounting to 35535 dollars and 50 cents with interest thereon. The High Court also held that the suit was not barred by limitation. The High Court assessed the value of 2 1/2 shares at 31250 dollars and in modification of the decree passed by the Trial Court passed a final decree against the defendant for Rs. 2,35,555 and further interest. The present appeal has been preferred by the defendants after obtaining a certificate from the High Court.
(2.) Mr. M. S. K Sastri attacked the finding that the arrangement dated January 7, 1924 was vitiated by fraud. He argued that the High Court failed to take into account the exceptions to Section 19 of the Indian Contract Act and that assuming that Shanmugham's consent was procured by fraud, nevertheless the agreement was not voidable as he had the means of discovering the truth with ordinary diligence. There is no substance in this contention. The two courts have concurrently found that the agreement was vitiated by fraud. The defendant concealed from Shanmugham that he had collected 35535 dollars and 50 cents on account of dividend in respect of the shares. Had Shanmugham known that this huge amount had been realised by way of dividend he would not have parted with the shares with all their accrued benefits for the sum of 18000 dollars. The defendant was under a fiduciary obligation to Shanmugham to inform him of the true state of affairs. In the High Court it was not suggested that Shanmugham had the means of discovering the truth with ordinary diligence and it is now too late to raise this contention.
(3.) Mr. Shastri next contended that the suit was barred by limitation. The suit is for obtaining relief on the ground of fraud and is governed by Article 95 of the Indian Limitation Act, 1908. The starting point of limitation is the date when the fraud is known to the party wronged. The fraud was committed on January 7, 1924. The Subordinate Judge found that the fraud was discovered on or about April 16, 1924. We accept this finding. It may be noted that this finding was not challenged in the High Court. The defendant was outside India for several months in 1924 and 1926. The suit was instituted on September 14, 1927. It is common case before us that if the period of the defendant's absence from India is excluded under Section 13 of the Indian Limitation Act, 1908, the suit is not barred by limitation. Section 13 reads:- "In computing the period of limitation prescribed for any suit, the time during which the defendant has been absent from India and from the territories beyond India under the administration of the Central Government shall be excluded." ;