- (1.) THIS is a first appeal by the plaintiff in a suit for recovery of money.
(2.) ACCORDING to the allegations in the plaint, Veerchand, father of Devichand defendant No. 1, and two others, Siremal and Lekhraj, defendants Nos. 2 and 3, advanced a loan of Rs. 16,000/- to Thakur Simrathsinghji of Harji, and while the bond was got executed in the name of Veerchand alone, he had advanced only one-fourth of the loan, three-fourth being contributed by Siremal and Lekhraj. It was alleged that repayments were made by the debtor from time to time and Veerchand paid to Siremal and Lekhraj their proportionate shares out of the realisations. Later on the estate of the debtor was taken over by Haisiat Court and a claim in respect of the outstanding debt was preferred by defendant No. 1. The Haisiat Court accepted the claim to the extent of Rs. 10,900/3/6 which was increased by Rs. 96/- on appeal to the Court of Wards. The plaintiff alleged that Siremal and Lekhraj, who were entitled to three-fourth share in the said debt, assigned their interest to the plaintiff and he, therefore, became entitled to receive Rs. 8,247/2/9 out of the amount of Rs. 10,996/3/6. It was alleged that a suit for declaration of the plaintiff's right to receive three-fourth of the amount had been filed but the defendant No. 1 meanwhile managed to receive the entire amount of Rs. 10,996/3/6 and the declaratory suit was held to be not maintainable. As the defendant Devichand dishonestly received the entire amount on 14th December 1942 from the Haisiat Court, the plaintiff claimed Rs. 8,247/2/9 as principal, and Rs. 3,252/13/3 as interest by way of damages, raising the total claim to Rs. 11,500/ -. This suit was instituted on the 23rd of November, 1948. The defendant Devichand admitted that the defendants Nos. 2 and 3 had 3/4th share in the loan of Rs. 16,000/- advanced to Thakur Simrath Singhji of Harji. The allegation that the Haisiat Court accepted the claim at Rs. 10,996/3/6 in respect of the said loan was admitted but he denied having received that amount from the Haisiat Court. He further denied that Siremal and Lekhraj were entitled to receive Rs. 8,247/2/9 from him. He also did not admit the assignment in favour of the plaintiff. Certain additional pleas were also taken. It was pleaded that Veer-chand and thereafter Devichand defendant was an agent of defendants Nos, 2 and 3, and the business of the agency terminated on 14th December 1942 by which date the whole amount due on the loan had been received and the suit having been filed more than three years after the said date, was barred by limitation. Another plea was taken that the defendant No. 2 Siremal had received Rs. 2,835/10/-which should be adjusted towards the claim. Further, it was pleaded that in getting the claim admitted from the Hasiat Court, a sum of Rs. 1,000/- was spent on Court-fees, remuneration of lawyers, and expenses of witnesses, and a Further sum of Rs. 1,000/- was remitted to the Thikana and the defendant was entitled to an adjustment in respect of these amounts. The claim for interest was denied. The learned District Judge held that the defendant had failed to prove any expenditure in getting the claim admitted by the Haisiat Court, or having remitted a sum of Rs. 1,000/-to the Thakur of Harji with the consent of Siremal. He also held that the defendant had failed to prove payment of Rs. 2,835/10/- to defendant No. 2. On the question of limitation and the right to recover interest, the decision was given against the plaintiff, and the suit was accordingly dismissed. The plaintiff has come up in appeal. It was urged by learned counsel for the appellant that the lower court had erred in applying Art, 89 of the Marwar Limitation Act 1945, and that the correct Article applicable to the present suit was Art. 62 of that Act. These Articles read as under: - Art. Description of suit. Period of Limitaion. Time from which period begins to run. 62. For money payable by the defendant to the plaintiff for money received by the defendant, for the plaintiff's use. 6 Years. When the money is received. 89. By a principal against his agent for movable property received by latter and not accounted for. 3 Years. When the account is, during the continuance of the agency demanded and refused, or where no such demand is made, when the agency terminates. It may be pointed out that these Articles correspond to Arts. 62 and 89 of the Indian Limitation Act except that the period in Marwar was 6 years under Art. 62. The lower court has relied on a Full Bench ruling of the Chief Court of the former State of Jodhpur Mukan Raj vs. Kishan Chand (1929-30 M. L. R. 78 Civil F. B.) in holding that this was a suit to which the provisions of Art. 89 of the Marwar Limitation Act were applicable. It appears that in Marwar, there exists a particular system of advancing loan by which persons join in advancing a loan to a Jagirdar but the bond is got executed only in the name of one of the creditors who, as realisations accrue, distributes the same among the various several persons who join in advancing the loan according to their share. The person in whose name the bond is executed is known as 'agwani' while the other persons who join in advancing the loan are known as 'pantidars'. The question referred to the Full Bench was "whether a suit by a Pantidar against an Agwani is a suit for rendition of partnership accounts or by a co-sharer against another co-sharer and what Article of the Marwar Limitation Act would apply to such a case. " The answer was "we are of opinion that a suit by a Pantidar against an Agwani is not a suit for rendition of partnership accounts but is a suit by a co-sharer against an agent and is governed by Art. 89 of the Marwar Limitation Act". In coming to that decision, the learned Judges relied on Chandra Madhab Barua vs. Nobin Chandra Barua (I. L. R. XL Calcutta 108) and Nobin Chandra Barua vs. Chandra Madhab Barua (36, Indian Cases 1 ). The two decisions, are, however, in the same case which went up in appeal to the Privy Council. It was a suit for accounts by co-proprietors of an estate against a proprietor who had been appointed as manager of the estate for the purpose of realizing its profits and to pay off their joint debts gradually. The relationship was held to be one of principal and agent and the suit being one for rendition of accounts was held to be governed by Art, 89 of the Limitation Act. Unless, therefore, the relationship between Pantidar and Agwani was of principal and agent, and the suit was for rendition of accounts, the principal enunciated in the Privy Council case was not applicable. It was contended by learned counsel for the appellant that the case is governed by Art. 62 of the Limitation Act and reliance was placed on Mahamed Wahib vs. Mahomed Ameer (I. L. R. XXXII Calcutta 527 ). In that case, a loan was advanced by the plaintiffs and defendants first party to the defendants second party although the documents were executed in the name of the defendants first party alone. The defendants first party received from the defendants second party the whole of the sum due under the bond and the plaintiffs, therefore, claimed their proportionate share of money. The plaintiffs contended that Art. 120 of the Limitation Act was applicable but the learned Judges decided that Art. 62 was applicable and the suit was dismissed as being barred by time under that Article. Learned counsel also relied upon certain observations in Motilal vs. Radheylal and others (A I. R. 1933 Allahabad 642), and Sardarni Vidhya Wanti Kaur vs. Sardar Shahdev Singh (A. I. R, 1938 Lahore 139 ). Both these cases were, however, suits for accounts against agents and the contention that Art; 62 was applicable was repelled, and a distinction was drawn where the suit may be for recovery of a definite sum of money received by the defendant for the plaintiff's use. It is argued by learned counsel for the respondent that the suit even if framed for recovery of money, if brought by a principal against his agent, would be governed by Art. 89 of the Limitation Act. He relied on Asghar Ali Khan vs. Khurshed Ali Khan and another (I. L. R. XXIV Allahabad 27 P. C.), Mst. Kishen Devi vs. Bhanwari Lal (A. I. R. 1928 Lahore 688), Gabu vs. Zipru (A. I. R. 1921 Bombay 384), and Muhammad Amirul Islam vs. Muhammad Abdul Hamid (A. I. R. 1934 Calcutta 238 ). In the Allahabad case, the appellant and the respondent, two brothers, were agents the one for the other in dealing with their joint estate. The respondent Khurshed brought a suit for money due on a balance of account and the suit was held to be governed by Art. 89 of the Limitation Act. This suit was not merely for recovery of money, but for recovery of money on balance of account and their Lordships only purported to hold that the words "movable property" appearing in Art. 89 would include money. That authority did not lay down that a suit for money in which the accounts were not required to be gone into would be governed by this Article. The Lahore case was for partition of joint immovable property and for recovery of rents realized by the defendants who were co-sharers. On behalf of the defendants it was contended that so far as the rents were concerned, Art. 62 of the Limitation Act was applicable. It was held that the defendants realized the income of the joint property as agents of the plaintiff and were accountable to her and that Art. 89 was applicable. This was not a suit for a specific sum but for such share of the rents as the defendants may have realized. There is an observation by their Lordships, "there can be no manner of doubt that the rent of the joint property was actually realized by the defendants. What was the actual amount so realised by them was a matter which was specially within their knowledge and they should have been directed to render proper accounts after the preliminary decree (had been passed. " In the Bombay case, the suit was for an account and for recovery of share in the proceeds of certain securities realized by a brother who was the manager of the joint estate. In Calcutta case, the defendant as Karinda (agent) of the plaintiff, realised various sums by sale of the produce of the plaintiff and did not submit any account. On a suit by the principal for recovery of specific items realized by the defendant, it was held that Art. 89 was not limited to suits for accounts but would apply to a case where money, which is included in the term 'movable property*, is received by the agent and not accounted for. It is not clear whether it was necessary to go into accounts in this case in order to determine the liability of the defendant, but it is clear that the defendant was under no liability to pay over the money to the plaintiff as soon as it was received by him and what the plaintiff could require was that the defendant should have accounted for the sums realized by him in the accounts which he was to maintain and submit to his principal.
(3.) IN this connection reference may also be made to two other cases Rajendra Nath Mitra vs. Nagendra Kumar Bone (A. I. R. 1927 Calcutta 917), and Kishen Sahai and another vs. Shamlal Badri Parshad (A. I. R. 1929 Lahore 94 ). In the first case, a zamindar employed a naib and an under-naib for collecting amounts due to him. The under-naib's duty was to collect the amounts and hand them over to the naib. The zamindar sued the under-naib to recover the amounts received by him but which were not handed over to the naib and it was held that in law he received the money for the use of the plaintiff and as he failed satisfactorily to account for the manner in which he disposed of these moneys, the plaintiff's suit must succeed. In the second case, it was held that a principal can sue an agent for a sum of money had and received on his behalf and may also bring a suit for accounts, and in support of the view taken, reliance was placed on Hals-bury's Laws of England (Hailsham Edition, Vol. I, para 422 at p. 248 ). In our opinion, the ratio decidendi of the cases is that Art. 89 would apply where the suit is by the principal against his agent not only for accounts but also for recovery of money based on the accounts. If no accounts are to be taken or the accounts have already been taken and a specific sum has been found to be due, a suit for the recovery of such sum would not be governed by that Article. The suit, in any case, in order to be governed by Art. 89 must be by the principal against his agent, and we have to see whether the relationship between Siremal Lekhraj and their assignee the plaintiff on the one hand, and Veerchand or his son Devichand defendant on the other, in this case was of principal and agent. Under sec. 182 of the Contract Act, an 'agent' is defined as a person employed to do any act for another or to represent another in dealings with third persons. In the present case, the loan was not advanced by Veerchand on behalf of Siremal and Lekhraj, but the latter made their own contributions to the loan, and Siremal Lekhraj or their assignee the plaintiff on the one hand and Veerchand or his son Devichand defendant were co-creditors of the Jagirdar It is not alleged that there were any further dealings between the debtor and the creditor except that certain payments were made by the debtor from time to time. The proceedings which were taken up by Veerchand or Devichand for admission of his loan by the Haisiat Court were to safeguard his own interest although that action incidentally safeguarded the interest of the plaintiff as well. In our opinion, the position between the parties was that an obligation in the nature of trust was created when Devichand representing himself and the other co-creditors got money from the Haisiat Court in full satisfaction of the bond. Sec. 90 of the Indian Trusts Act lays down - "where a tenant for life, co-owner, mortgagee or other qualified owner of any property, by availing himself of his position as such, gains an advantage in derogation of the rights of the other persons interested in the property, or where any such owner, as representing all persons interested in such property, gains any advantage, he must hold, for the benefit of all persons so interested, the advantage so gained, but subject to repayment by such persons of their due share of the expenses properly incurred, and to an indemnity by the same persons against liabilities properly contracted, in gaining such advantage. " Section 94 of the Indian Trusts Act lays down that - "in any case not coming within the scope of any of the preceding sections, where there is no trust, but the person having possession of property has not the whole beneficial interest therein, he must hold the property for the benefit of the persons having such interest, or the residue thereof (as the case may be), to the extent necessary to satisfy their just demands. " In Palaniappa Chettiar and others vs. Ramanathan Chettiar and others (A. I. R. 1939 Madras 671), A and B were joint creditors of C and C executed a promissory note in favour of B and gave certain securities out of which B was to collect the joint debt and pay over to A his portion of the debt. It was held that B was not an agent of A and a suit by A against B for accounts in respect of collections made by B and for payment of proportionate share was governed by Art. 120 and not by Art. 89 of the Limitation Act. In that case, reliance was placed on certain observations of the Privy Council in Annamalai Chettiar and others vs. Muthukaruppan Chettiar and another (A. I. R. 1931 P. C. 9 ). In the Privy Council case, one V was indebted to S and the advance was secured by a mortgage-deed dated 22nd September 1902. As a matter of fact, the money for the advance was provided jointly by S and R. Their Lordships held that there was not a partnership between S and R, but R having provided a share of the money necessary to make the advance had an equitable right to call S to account for his share of the advance when recovered. In the Madras case cited above, it was contended by the defendant that the defendant's firm was the agent of the plaintiff with respect to the collection of the amount due under the promissory notes. Their Lordships, however, held that the gist of the arrangement was that the defendant firm was entrusted with the promissory notes by the debtor which involved on the part of that firm an obligation to make the collections under the notes and pay the plaintiff its share of whatever they had received though there was no specific trust created for that purpose; or in other words, the defendant firm took the promissory notes subject to the equitable right of the plaintiff to claim an account. Under the circumstances, the relationship of the defendant firm to the plaintiff could be described only as a fiduciary one involving liability to account and not as that of agent and principal though that relationship clothed the plaintiff with the right to call for an account. The relationship was more akin to that of a trustee liable to account though no specific trust was created for the purpose. Under sec. 90 of the Indian Trusts Act, Devichand was libable to pay the proportionate share of the receipts to the plaintiff subject to repayment of the due share of expenses properly incurred in recovery of the amount. As the suit was for recovery of specific sum, Article 62 of the Act was applicable because the defendant in receiving the whole amount had received the plaintiff's share of money for the plaintiff's use. As the limitation in Marwar, when the suit was filed, was six years, the suit was within limitation. ;