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Kasturchand Okaji Marwadi Vs. Hari Govind Wagle - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtMumbai
Decided On
Case NumberSecond Appeal No. 366 of 1930
Judge
Reported inAIR1934Bom491; (1934)36BOMLR1068
AppellantKasturchand Okaji Marwadi
RespondentHari Govind Wagle
DispositionAppeal allowed
Excerpt:
.....of money only, but also for recovery of their one-half share in the house. - - 393, that the article [article 62], when it speaks of a suit for money received by the defendant for the plaintiff's use, points to the well-known english action in that form; 1005 this form of action lies for money paid by mistake, or upon a consideration, which happens to fail, or for money got through imposition (express or implied) or extortion or oppression or an undue advantage taken of the plaintiff's situation contrary to laws made for the protection of persons under those circumstances, in other words, this form of action would be maintainable in cases in which the defendant at the time of receipt, in fact or by presumption or fiction of law receives the money to the use of the plaintiffs. the..........out by markby j. in raghumoni audhikary v. nilmoni singh deo i.l.r.(1877) cal. 393, that the article [article 62], when it speaks of a suit for money received by the defendant for the plaintiff's use, points to the well-known english action in that form; consequently the article ought to apply wherever the defendant has received money which in justice and equity belongs to the plaintiff under circumstances which in law render the receipt of it, a receipt by the defendant to the use of the plaintiff. as pointed out by lord mansfield, c.j., in moses v. macferlan (1760) 2 burr. 1005 this form of action lies for money paid by mistake, or upon a consideration, which happens to fail, or for money got through imposition (express or implied) or extortion or oppression or an undue advantage.....
Judgment:

N.J. Wadia, J.

1. This appeal arises out of suit No. 315 of 1926 filed by the appellants against the respondent in the Court of the Second Class Subordinate Judge at Alibag. The appellants alleged that the defendant Wagle was till 1921 in the service of their firm as a clerk and that while he was in their service he had entered into an agreement with them by which he and they jointly were to render financial assistance to certain litigants in connection with their suits on condition of their receiving half the profits of the litigation if it was successful, the half share so received to be divided between the plaintiffs' firm and the defendant.

2. On July 28, 1913, the defendant Wagle entered into an agreement with one Vinayak Mukund Deshmukh in connection with a suit filed by one Kelkar against Vinayak. The agreement is exhibit 81. By this agreement Vinayak, in consideration of the defendant's giving him monetary help for the purposes of the litigation, agreed to give the defendant a half share in whatever he might gain from the suit. On October 7, 1914, there was an agreement on similar terms between Vinayak Mukund and one Patkar, another servant of the plaintiffs' firm, relating to the same litigation. The agreement is exhibit 80. While this suit was still going on, a written agreement was entered into by the defendant with the plaintiffs on July 4, 1918, (exhibit 108), by which the plaintiffs and the defendant agreed jointly to finance several transactions of the same kind as the one entered into by the defendant with Vinayak. The agreement included Vinayak's litigation. The conditions with regard to it were as follows:

In the litigation of Vinayak Mukund Deshmukh there is our partnership half and half from the beginning. The whole expense of the litigation is incurred by my hand (i.e. defendant's). Those sums are debited in your book in the name of Vinayak Mukund. Those sums are half yours and half mine. And the profit and loss resulting from this litigation is to be shared by us both. After the termination of the litigation I will give you half the amount (profit).

3. The suit between Kelkar and Vinayak ended in a compromise on January 8, 1919. The defendant called upon Vinayak to carry out the terms of his agreements of 1913 and 1914 and, on Vinayak refusing to do so, filed suit No. 57 of 1920 for specific performance. On April 6, 1921, there was a decree in the defendant's favour which provided that Vinayak should pay to the defendant Rs. 2,500 and costs. Vinayak could not pay this amount in cash and so, on September 29, 1921, he passed to the defendant a sale-deed (exhibit 86) by which he sold to him for Rs. 3,050 the house and compound which are now in suit. Prior to this the defendant had attached certain lands of Vinayak in execution of the decree which he had obtained against him. These lands had been sold and the defendant received Rs. 2,135 as the sale price in 1922. In the meanwhile some time in 1921 the defendant left the plaintiffs' service. Certain notices were exchanged between the parties between 1921 and 1925. On April 1, 1921, the defendant gave a notice to the plaintiffs (exhibit 98) in which he demanded some arrears of pay due to him. To this the plaintiffs replied on May 28, 1921, by exhibit 97, denying their liability to pay and asking the defendant to produce the accounts of their partnership. On June 9, 1921, the defendant gave a reply to the plaintiffs (exhibit 100) asking them to explain what the partnership transactions referred to by them in exhibit 97 were. Finally, on October 2, 1925, the plaintiffs gave a notice to the defendant (exhibit 96) demanding from him accounts of the suit transactions, i.e., the litigation of Vinayak Mukund and all other transactions, and threatening to file a suit if accounts were not furnished. The defendant gave no reply to this, and the plaintiffs thereupon filed a suit on October 27, 1926. The defendant raised various contentions against the plaintiffs' claim, denying that plaintiff No. 3 was a partner in the firm, alleging that the agreement (exhibit 108) sued on had been obtained from him by coercion and denying that there were any partnership transactions between him and the plaintiffs' firm in connection with Vinayak Mukund's litigation.

4. The trial Court found that plaintiff No. 3 was not a partner in the firm and was not, therefore, entitled to file a suit on its behalf, that the litigation of Vinayak Mukund was not the subject of the agreement (exhibit 108), and that the plaintiffs' suit was not in time under Articles 62 and 113 of the Indian Limitation Act. On appeal to the District Court, that Court held that plaintiff No. 3 was a partner in the firm, and, therefore, entitled to sue in its name, and that Vinayak Mukund's litigation was the subject of the agreement (exhibit 108) between the plaintiffs and the defendant. It held, however, that the suit was barred under Article 106 of the Indian Limitation Act. Against this finding the plaintiffs have now come in second appeal to this Court.

5. There has been no appearance on behalf of the respondent though he has been duly served.

6. The lower appellate Court has found in favour of the plaintiffs-appellants on all points except the question of limitation. That, therefore, is the only question which arises in this appeal. The learned trial Judge thought that the plaintiffs' claim fell under Article 62 or Article 113 of the Indian Limitation Act, and that it was barred under both. In my opinion Article 62 cannot apply to a suit of this nature. The Article applies to suits for money payable by the defendant to the plaintiff for money received by the defendant for the plaintiffs' use. In the first place the plaintiffs' suit was not merely for the recovery of money but also for the recovery of his one-half share in certain immoveable property. The question of the nature of the suits to which Article 62 is intended to apply was considered in Mahomed Wahib v. Mahomed Ameer I.L.R.(1905) Cal. 527, and the remarks of Mookerjee J. appear to me to be very pertinent (p. 533):

It seems to me to be clear, as pointed out by Markby J. in Raghumoni Audhikary v. Nilmoni Singh Deo I.L.R.(1877) Cal. 393, that the Article [Article 62], when it speaks of a suit for money received by the defendant for the plaintiff's use, points to the well-known English action in that form; consequently the Article ought to apply wherever the defendant has received money which in justice and equity belongs to the plaintiff under circumstances which in law render the receipt of it, a receipt by the defendant to the use of the plaintiff. As pointed out by Lord Mansfield, C.J., in Moses v. Macferlan (1760) 2 Burr. 1005 this form of action lies for money paid by mistake, or upon a consideration, which happens to fail, or for money got through imposition (express or implied) or extortion or oppression or an undue advantage taken of the plaintiff's situation contrary to laws made for the protection of persons under those circumstances, in other words, this form of action would be maintainable in cases in which the defendant at the time of receipt, in fact or by presumption or fiction of law receives the money to the use of the plaintiffs.

7. There are other Articles of the Indian Limitation Act which appear to me to apply more appropriately to the plaintiffs' claim, and these are Articles 113 and 120. Before I consider these, however, it is desirable to consider the application of Article 106 which the lower appellate Court has held to be applicable and under which it has found the plaintiffs' claim to be barred. Article 106 deals with suits for an account and a share of the profits of a dissolved partnership. It is clear from the very wording of the Article that it can apply only to a case in which a partnership has been dissolved. The view taken by the lower appellate Court is that each of the undertakings between the plaintiffs and the defendant (exhibit 108) was a distinct partnership and that such partnership ipso facto terminated, i.e., became dissolved on the completion of the undertaking. It may be conceded that each undertaking was a distinct partnership. But I am unable to agree with the view that this particular partnership with reference to the litigation of Vinayak Mukund had become dissolved by the completion of the undertaking. The object of the undertaking could only be said of be accomplished after Vinayak Mukund had won his litigation and had given to the defendant the half share agreed upon by exhibit 81 and after the defendant had furnished the plaintiffs with accounts of the transaction and had given to them their half share. The defendant obtained immoveable property from Vinayak Mukund in September, 1921, and the cash amount of Rs. 2,135 in 1922. But in 1922 one Chavarkar filed a suit against the defendant in connection with this very property claiming a share in it. This suit was not decided till 1927. Even if it were held that Chavarkar's suit had nothing to do with the agreements between Vinayak Mukund and the defendant and between the defendant and the plaintiffs, and that the defendant got the property and money in 1921 and 1922, he did not settle accounts with the plaintiffs. Till that was done it could not be said that the object of the undertaking had been completed and the partnership was dissolved. In my view, therefore, the partnership between the plaintiffs and the defendant with regard to Vinayak Mukund's litigation was not dissolved at least till October 2, 1925, on which date the plaintiffs gave a notice to the defendant demanding accounts of this and other transactions and threatening to sue them. Even if it were held that the partnership was by implication dissolved from that date, the suit would, under Article 106 of the Indian Limitation Act, be in time.

8. In my opinion, however, the partnership was not dissolved at all and the plaintiffs' suit is really a suit for the dissolution of an existing partnership. There is no specific Article in the Indian Limitation Act which deals with such suits and the suit would appear to fall under Article 120 which deals with suits for which no period of limitation is provided elsewhere. The period of limitation provided is six years when the right to sue accrues. Prior to October 2, 1925, the defendant had not at any time either denied the partnership or alleged that it had been dissolved. When the plaintiff by his notice (exhibit 97) of May 28, 1921, called upon the defendant to furnish accounts the defendant in his reply (exhibit 100) of June 9, 1921, did not deny that there was any partnership or that he was liable to render accounts but merely asked the plaintiffs to explain what the partnership transactions were. The plaintiffs' right to sue must, therefore, be held to have accrued when they gave the notice (exhibit 96) on October 2, 1925, and the defendant failed to reply to it. On this view of the case the plaintiffs' suit would be in time.

9. Even if Article 113 of the Indian Limitation Act were held to apply, the suit appears to be in time. The Article deals with suits for specific performance of contracts, and provides a limitation of three years from the date fixed for the performance of the contract, or, if no such date is fixed, when the plaintiffs have notice that performance is refused. The trial Court expressed the view that Article 113 applied, but held that limitation would run from September 29, 1921, the date on which the defendant obtained possession of the immoveable property, and from some time in 1922 when he received the cash. The agreement between the plaintiffs and the defendant with regard to Vinayak Mukund's litigation did not, however, provide any fixed date for the performance of the contract. It did not say that the plaintiffs were to be given their share on the very date on which the defendant received his share from Vinayak Mukund. It appears from the language of the agreement that the intention of the parties was that after the termination of the litigation accounts were to be settled and then the plaintiffs' share paid. That this was so appears more clearly from the agreement with regard to the other transaction which forms the subject-matter of appeal No. 367 of 1930. Both these transactions were dealt with together both in the trial Court and in the lower appellate Court. In that case the agreement with regard to the litigation of Balya Kamlya alias Mahadu Vithu expressly provided that after the litigation had ended accounts were to be taken and out of whatever was left over the plaintiffs were to give the defendant one-half share and the defendant would set off against it whatever sum he may have taken from the plaintiffs' shop. If it could have been said that under the agreement there was a fixed date by which the contract between the parties was to be carried out, the case would have fallen under the first half of column 3 of Article 113 of the Indian Limitation Act. But it is clear from the nature and terms of the agreement that the date on which the defendant received the property and money from Vinayak Mukund could not be the date on which he was to hand over the plaintiffs' share to them. Accounts would necessarily have to be made up after that date. Nor does the agreement provide that the contract between the plaintiffs and the defendant was to be carried out within a fixed period from the receipt of the property and money by the defendant. Under these circumstances, the first part of column 3 of Article 113 would have no application. The second portion would apply, and according to it time would begin to run when the plaintiffs had given notice and when the performance of the contract was refused. This could only be from October 2, 1925, when the plaintiffs demanded accounts, and the defendant failed to reply. If limitation under Article 113 is reckoned from October, 1925, the plaintiffs' suit is clearly in time.

10. It is an accepted principle that in giving effect to a statute of limitation, if two Articles limiting the period for bringing a suit are wide enough to include the same cause of action, and neither of them can be said to apply more specifically than the other, that which keeps alive rather than that which bars the right to sue should, generally, and apart from other equitable considerations, be preferred : Tofa Lal Das v. Syed Moinuddin Mirza I.L.R.(1924) Pat. 448. In my opinion Article 62 of the Indian Limitation Act does not apply to the present case. Article 113 or 120 could both apply, and under either of them the plaintiffs' suit would be in time.

11. The appeal must, therefore, be allowed and the decree of the lower appellate Court set aside. The appellants' suit was for accounts being taken of the partnership and for possession of their share in certain immoveable property which was included in the partnership transaction. The suit will, therefore, have to be sent down to the trial Court to take accounts and to ascertain what amount and what share of the property the plaintiffs will be entitled to recover from the defendant under the terms of the agreement.

12. The finding to be certified within four months through the lower appellate Court.

13. The appellants will be entitled to their costs throughout.


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