- (1.) The plaintiff filed a suit against the defendant for recovery of a sum of Rs. 2 lacs, with the averments that plaintiff-company intended to install a Straw Board Mill at Alwar and for that purpose, it entered into correspondence with the defendant and ultimately the parties entered into a contract on 17 October, 1974. The plaintiff incorporated the terms and conditions of the contract in a letter and handed it over to the defendant. Pursuant to the contract the plaintiff, at the first instance, paid Rs. One lac to the defendant through bank draft dated 6-11-1974. The plaintiff further paid Rs. One lac in two installments of Rs. 50.000/- each through bank drafts dated 1-7-1975 and 2-9-1975. In all, the plaintiff paid Rs. 2 lacs to the defendant as an advance against the cost of plaint. As per the contract, the defendant-company was required to supply machinery within 14 months and/or at the maximum, within 15 months from the date of contract. It is averred that despite repeated requests, the defendant-company did not manufacture the machines. Ultimately, the plaintiff had no option but to terminate the contract and got served a notice dated 8th January, 1979 on the defendant, through their advocate. It was in these circumstances, the plaintiff filed a suit for recovery of Rs. 2 lacs along with interest @ 12% p.a.
(2.) The defendants denied the averments of the plaint by filing written statement. The trial Court, on the basis of pleadings of the parties framed issues and the parties led evidence on all the issues. However, at the conclusion of trial, the trial Court decided the only issue relating to limitation and accordingly dismissed the plaintiffs suit only on the ground of it being barred by limitation in view of the provisions of Article 24 of the Limitation Act, which provides a period of three years from the date the money is received by the defendant, for the plaintiffs use. While applying the provisions of Article 24 of the Limitation Act, the learned trial Court came to a finding that since the last receipt of the advance was of 2-9-1975 and the suit was filed on 16-1-1979. therefore, obviously a period of more than 3 years had already elapsed. The Court below concluded that amount of Rs. 2 lacs as claimed by the plaintiff was only an advance towards the supply of entire machineries and, therefore, the fact remains that the suit is for refund of the money advanced by the plaintiff which is payable by the defendant if a particular portion of the contract is not fulfilled. Since the suit was filed on 16-1-1979 which was obviously a period beyond limitation of three years in view of the last receipt of 2-9-1975, therefore, it was barred by limitation.
(3.) Mr. Kasliwal, appearing for the plaintiff-appellant strenuously contended that the trial Court has committed grave error in applying the provisions of Article 24 of the Limitation Act. In fact, in the facts and circumstances of the case, the provisions of Article 47 of the Limitation Act are attracted in the instant case. Learned counsel argued that no doubt, the period of limitation under Article 4 is also 3 years, but it applies to the suit for recovery of money paid upon an existing consideration, which afterwards fails. In the instant case, money was paid in pursuance of a contract which ultimately failed and, therefore, the date of reckoning the period of limitation is the date of failure of consideration as provided under Article 47 of the Limitation Act. In support of his argument, Mr. Kasliwal has relied upon Haryana State through the Collector v. Babu Singh, (1997) 115 PLR 158) and Nathu Lal v. Sualal. (AIR 1962 Raj 83).;