- (1.) THIS is a civil regular first appeal by the defendant Nathulal against the judgment of the Sub-Judge First Class, Beawar, dated the 25th of August, 1954 in a suit for money among other reliefs.
(2.) THE plaintiffs' case was that the defendant Nathulal and his father Kundanmal had entered into certain dealings with them and that Kundanmal went into accounts on behalf of himself and his son on Asoj Sudi 1, Svt. 1996, corresponding to 13th Oct. , 1939 as a result of which he found that a sum of Rs. 6,662/13/- was due by these defendants to the plaintiffs. It was further alleged that on the same date the defendants aforesaid in repayment of this debt sold the suit house to the plaintiffs for a sum of Rs. 8,000/- and the sum of Rs. 6,662/13/-mentioned above was agreed to be adjusted in part payment of the sale price, and the balance of Rs. 1,337/3/- was further paid by the plaintiffs to these defendants in cash vide Ex. P. 48 and in furtherance of this agreement between the parties, the plaintiffs gave a credit of Rs. 6,662/13) - in the defendants account, and the former were also put in possession of the suit house. It was further alleged that having got in possession of the house in question, the plaintiffs commenced renting out parts of it and realised rent on that account. It so transpired, later on, that defendant Rai Bahadur Seth Bhag Chand Soni had a decree to execute against the defendants and, [in execution of that decree he got the suit house attached as belonging to that contesting defendants. THE plaintiffs filed an objection under O. 21, R. 58 of Code of Civil Procedure, but that objection was dismissed, and the house was ordered to be put up for sale, which appears to have taken place after the present suit was filed sometime in 1946. In paragraph 7 of the plaint, the plaintiffs clearly mentioned that they were in possession of the suit house, four months prior to the institution of the suit, but that the defendants-appellants had illegally deprived them of it, and consequently the present suit was filed on the 3rd of March, 1945. THE plaintiffs, therefore, prayed for a declaration to the effect that they were the owners of the suit house, that the auction sale carried out in respect of it was null and void and not binding upon them, that they be put in possession of the suit house, and alternatively they also claimed that if the Court did not consider it proper or expedient to award a decree in their favour for specific performance or for possession, then the contesting defendant be directed to pay the sum of Rs. 8,000/- to them. To this suit, as amended, Rai Bahadur Seth Bhag Chand Soni, in execution of whose decree the suit house was attached and later sold, was impleaded as defendant No. 1. THE auction-purchaser Ghisulal was impleaded as defendant No. 4. THE contesting defendants were defendants Nos. 2 and 3 in suit. It may be stated at once that this suit was dismissed against all the defendants except respondents No. 2 and 3 by the trial court by its judgment dated 25th of March, T952. This judgment has become final an|d therefore the only question which is material for the purposes of the present appeal is whether the plaintiffs' suit for recovery of Rs. 8,000/- from the contesting defendants was well-founded and has been rightly decreed by the trial court against them. Kundanmal defendant having died during the pendency of the litigation, Nathulal alone is the appellant before this Court. THE defendants resisted the suit on a number of grounds. THEy admitted that there were certain dealings between them and the plaintiffs, but, according to them, the accounts having been gone into on Asoj Sudi 1, Svt. 1996, they had been cleared and whatever amount was due to the plaintiffs from them had been paid back in cash. As regards the transaction of sale on which the plaintiffs relied, the case of the defendants was that, although there were negotiations between the parties for the sale of the suit house by the defendants in favour of the plaintiffs, these negotiations did not materialize, as the entire amount due from them to the plaintiffs had been paid off as stated above. Curiously enough the defendants admitted that the plaintiffs had been put in possession of the suit property on Asoj Sudhi 1, 1996, being the date on which the accounts had been gone into and cleared off. This the defendants sought to explain by saying that they had borrowed from the plaintiffs a sum of Rs. 1,500/- on that day under a separate khata and that the plaintiffs had been put in possession of the suit property so that this money be recovered by them out of the rent realised for the same. THE case of the defendants further was that it was agreed between the parties that the plaintiffs would remain in possession of the property for a period of five years only, and consequently they got back the possession of the suit house from the plaintiffs, and that the same was in their possession at the date of the suit. THE defendants thus flatly denied that they had ever executed a sale-deed or an agreement for sale or even the receipt Ex. P. 48 in respect of the suit property in favour of the plaintiffs and they also denied that there was any money due by them to the latter as they had made the entire payment in cash on Asoj Sudi 1, 1996, the date on which they had gone into the accounts, and that nothing further had remained to be paid by them. Lastly, the defendants contended that the plaintiffs' suit was barred by limitation. As already stated, the trial court dismissed the plaintiffs' suit in so far as it related to the relief of specific performance against all the other defendants, but it decreed the suit for recovery of Rs. 8,000/- so far as the defendants Nathulal and Kundan Mal are concerned. Kundanmal having died, Nathulal alone has come up in appeal to this Court. At this stage the findings of the learned trial judge may be summarised somewhat like this. The court found that as a result of past dealings a sum of Rs. 6,662/13/- was due by the aforesaid defendants to the plaintiffs on the basis of the accounting which had been done on Asoj Sudi 1, Svt. 1996. It further found that it is agreed between the parties that, in lieu of the repayment of this amount, the defendants had sold the suit house to the plaintiffs for Rs. 8,000/- and towards the balance of the purchase price, they paid a sum of Rs. 13 37/3/-in cash to the defendants and that to evidence this arrangement the receipt Ex. P. 48 had been executed by Kundanmal on behalf of himself and his son Nathulal. The court further found that the defendants' version that they had repaid the sum of Rs. 6662/13/-in cash on Asoj Sudi 1, Svt. 1996 and that there was never any occasion for them to have executed the writing Ex. P. 48 was altogether false. It also found that the defendants' version that they had handed over possession of the suit house to the plaintiffs in connection with a further loan of Rs. 1500/- which they had taken from the plaintiffs and that in accordance with the alleged agreement the plaintiffs were to remain in possession of the suit house for a period of five years at the end of which they were to restore back the suit house to the defendants was also not proved and no reliance could be put on that story. The position, according to the trial court, thus was that the plaintiffs had proved that they had advanced Rs. 8,000/- to the defendants, but as there was no valid sale-deed executed by the defendants in favour of the plaintiffs with respect to the suit house by way of repayment of this amount, the sale on which the plaintiffs relied could not be given effect to, and it actually fell through when defendant Rai Bahadur Seth Bhagchand Soni was successfully able to have the suit property sold, and therefore the plaintiffs were entitled to a refund of Rs. 8,000/-either on the contract as envisaged in Ex. P. 48 or under the principle enshrined under sec. 65 of the Contract Act. On the question of limitation, the trial court held that this case was governed by Art. 97 and, therefore, the suit was within limitation having been brought within three years of the date of the failure of the arrangement as envisaged in Ex. P. 48. In this view of the matter, the trial court decreed the plaintiffs' suit for a refund of Rs. 8,000/- against the contesting defendants. The only question, which has been seriously argued before me in this appeal, is that the plaintiffs' suit was barred by limitation, and it was contended in this connection that the trial court had fallen into error in applying Art. 97 of the Indian Limitation Act, while the correct Article, according to the submission of the learned counsel for the defendant-appellant was Art. 62. Having heard learned counsel at some length, I have no hesitation in coming to the conclusion that the plea of limitation has no force. Art. 97 reads an follows : Description of suit. Period of limitation Time from which the period begins For money paid under an existing consideration which afterwards fails. 3 years The date of the failure. Now in order to attract the application of this Article, the following ingredients must be established. In the first place, the suit must be for money, which has been paid by the plaintiff to the defendant. In the second place, such money must have been paid upon a consideration which was in existence at the time of the payment. In the third place, this consideration would have afterwards failed. If all these ingredients are established, then, in my considered opinion, the application of this Article cannot be resisted and the starting point for limitation should be not the date when the money was paid but when the consideration should have failed. Now let us see whether these ingredients are fulfilled in this case. As to the first ingredient, I should like to point out that payment by adjustment of an earlier debt due by the defendant to the plaintiff would fall within the meaning of the phrase "for money paid", for such an adjustment would be as good as payment of money by the plaintiff to the defendant. See in this connection Bassu Kuar V. Dhumsingh (1) and Hanmant Narsinha V. Govind Pandurang Kamat (2 ). In this view of the matter, I am definitely of opinion that the arrangement agreed to between the parties that the outstanding sum of Rs. 6662/13/-was to be considered as part consideration for the sale of the suit house would be money paid within the meaning of Art. 97. The next element, which requires to be fulfilled, is that such money must have been paid on an existing consideration. There is authority for holding that money paid even under a void agreement is paid for "existing consideration". Thus where A pays money to B and in repayment thereof B sells property to A, and the transfer happens to be void for one reason or another, but A has been given possession of the property by B in pursuance of the contract of sale, the position is that there was "existing consideration" within the meaning of this phrase. See Nar Singh Shiv Bakas Vs. Pachu Ram Bakas (3 ). I am, therefore, clearly of opinion that the present case amply fulfills this qualification also inasmuch as, on the defendants' own showing, the plaintiffs had been given possession of the suit house by them, although the case of the latter was slightly different, inasmuch as, according to them, the plaintiffs had been given possession thereof in connection with another loan of Rs. 1500/which had been agreed to be repaid by recovery of rent from the suit house for a period of 5 years which story has not been believed by the trial court and in my opinion perfectly rightly. Then there remains to be seen whether it can be predicated of the present case that the consideration for which the money had been paid had afterwards failed. I have no hesitation in holding in the circumstances of the present case that it has failed. There was an outstanding debt. This debt was sought to be repaid partly by sale of the defendants' house to the plaintiffs by a document which in the eye of law was not effective to pass title, but possession nevertheless had been delivered under it to the plaintiffs. The plaintiffs then were deprived of the possession of this house. The conclusion in these circumstances is inescapable that the consideration for which the money had been paid eventually fell through. Thus it will be seen that all the three requirements of Art. 97 are amply fulfilled in the present case, and, that being so, the limitation, for the plaintiffs' suit would rightly start from the date of the failure of the consideration and not from the date of the payment of the money. In these circumstances, I am definitely of opinion that the plaintiffs' suit falls squarely within the four walls of Art. 97 of the Indian Limitation Act and this suit would be within time having been brought within three years of the date of failure of the consideration. As already pointed out, the consideration in this case could be said to have failed only when the plaintiffs were deprived of the possession of the property which had been made over to them. There is a clear allegation in the plaint that the plaintiffs were deprived of their possession of the suit property about four months previous to the institution of the suit. The defendants in their written statement have clearly admitted that they were in possession of the suit property at the date of the suit and they have not dared to say clearly when they got the possession back, but it does appear from the general tenor; of the written statement that they must have got it back sometime after five years of the execution of the writing Ex. P. 48, i. e. , in 1945. The present suit was brought on 3rd April, 1945. In these circumstances, I am definitely of the opinion that the plea of limitation has no force and must be overruled. In support of the view, which I have felt persuaded to adopt, reference may be made to the following: - Dharamchand Vs. Gorelal Mukandlal (4), Bapu Shivaji Naik Vs. Kashiram Hanmantrao Ghag (5), Kashirao Vs. Zabu (6), Bhagwati Prasad Vs. Badri Prasad (7), Dhani Sahu Vs. Bishun Prasad Singh (8), Punjab Government through Collector, Ambala Vs. L. Baij Nath (9) and Murugappa Chettiar Vs. Arunachala Goundan (10 ). Learned counsel for the defendant, however, submits that there is a divergence of judicial opinion on the point as to the starting point of limitation in such cases, and, according to his submission, the limitation where the contract happens to be a void one, as in the present case, should really start from the date when the money is paid and not later, and he referred me in support of this submission to a few cases, but I consider it unnecessary to cite or deal with them in detail. The reason is this. It clearly seems to me that there can be hardly any occasion for the plaintiff in a case like the present to file his suit for money so long as he is in possession of the property which has been sold to him, though the mode of sale is altogether defective; and, in fact, if he brought such a suit, he would in all probability fail on the ground that he cannot approbate and reprobate, and that he can have no grievance so long as he remains in undisturbed possession of his property and his right to bring a suit in a case like the present can properly and legitimately arise only if and when he stands deprived of possession of such property and not before. In this view of the matter, I am clearly of opinion that the view, which I have felt persuaded to accept, is the better view. It only remains for me to add-that) Art. 62 cannot be appropriately applied to this class of cases. The argument in favour of the applicability of Art. 62 in the case of void contracts appears to be based on the consideration that in case of such contracts neither the purchaser becomes the owner of the property nor the latter becomes the owner of the money, and that the money, which is received by the seller, therefore, should be held to have been received by him for the use of the purchaser. This distinction, however, between a void and voidable contract seems to me, with all respect, of doubtful validity, for, at the time of the contract (which turns Out to be void later on) when the purchaser pays the price and the seller hands over the property to the purchaser, the purchaser is fully entitled to the use of the property, even though he has no title in it, while the seller receives the money on his own use, and not for the use of the purchaser who happens to be in actual enjoyment of the property sold. Therefore, even in cases of void contracts, actual possession of the property sold is handed over by the seller to the purchaser, it cannot be rightly postulated that the purchaser is not in effective enjoyment of the property sold, or, that the money, which the seller has had from the purchaser in respect thereof, is held by him not on his own account but for the use of the plaintiff within the meaning of Art. 62 of the Indian Limitation Act. In this view of the correct legal position, I am inclined to think that the appropriate Article tp apply is, not Art. 62 of the Limitation Act, but Art. 97, and, if this is the correct conclusion to come to in the circumstances of this case, as I think it is, the present suit is clearly within limitation, and I hold accordingly.
(3.) LASTLY, I should like to invite attention to that well settled principle of the Law of Limitation that where two articles of such law may be wide enough to cover a given right or suit and it can be postulated of neither of them that the one applies more specifically than the other, then the Court should lean in favour of the application of the provision which would keep the right of suit alive in preference to that which would destroy it. Judging from this angle also, I feel strongly persuaded to think that the appropriate article, which should be applied in this case, is Art. 97 and not 62, and I hold accordingly. For the reasons mentioned above, this appeal fails and is hereby dismissed with costs to the plaintiffs-respondents. .;