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Maneklal Kalidas Sheth Vs. Shivlal Dayaram Luvar - Court Judgment

LegalCrystal Citation
SubjectProperty;Limitation
CourtMumbai
Decided On
Case NumberFirst Appeal No. 138 of 1935
Judge
Reported inAIR1939Bom26; (1938)40BOMLR1169
AppellantManeklal Kalidas Sheth
RespondentShivlal Dayaram Luvar
DispositionAppeal allowed
Excerpt:
.....in good faith another civil proceeding against the same defendant founded on the same cause of action, the time taken up in such proceeding will be excluded.;hem chunder chowdhry v. kali prosunna bhaduri (1903) l. r. 30 i.a. 177, followed.;where the claim of a person is fully satisfied, either by an agreement or by a decree of a court, and if that satisfaction is subsequently annulled by another decree of the court, a fresh cause of action accrues in favour of the claimant.;mussamat ranee suma moyee v. shooshee mokhee burmonia (1868) 12 m.i. a. 244, nrityamom dasee v. lakhan chandra sen (1916) i.l.r. 43 cal. 660 : s.c. 18 bom. l. r. 418, p. c., mussamat basso kuar v. lala dhum singh (1888) l. r. 15 i.a. 211 and narayan v. gurunathgowda (1938) 40 bom. l. r. 1134, followed.;in a suit..........:since the plaintiff has not yet made the refund he cannot be said to have acquired any cause of action. the facts on which this contention is based have already been summarised by me. the argument is that as at the date of the institution of the suit the appellant was in possession of the moneys paid by the respondent, the plaintiff's suit for recovery of the moneys is incompetent. it seems to me that there is no substance in this contention which has been characterized by the learned judge of the court below as technical. the position is this :-after the decision of the high court in the two appeals, the appellant was in wrongful possession of the monies which really then belonged to the respondent, and the fact that for a time the appellant kept the monies, or that he was in.....
Judgment:

Rangnekar J.

1. The only question in this appeal is one of limitation, as we agree with the learned First Class Subordinate Judge of Ahmedabad that on the merits there is no defence. The facts are these : On April 14, 1924, the appellant advanced a sum of Rs. 11,000 to Jamnadas and Ranchhod on a mortgage of their property. The mortgage bond provided that the loan was to be recovered out of the mortgaged property and the deficiency, if any, was to be made good by the mortgagors personally as well as out of their other property. In consideration of the loan made to the mortgagors the respondent stood surety for the repayment of the principal and interest under a shah jog chitti admittedly passed by him in favour of the appellant. The chitti was missing, but there is no doubt, as found by the Court below, that the respondent was to make good the amount which may remain unpaid by the mortgagors to the appellant with interest thereon. To protect himself the respondent obtained a mortgage from Jamnadas and Ranchhod on August 6, 1924 (exhibit 28). After the due date of repayment of the amount had expired, the appellant demanded the amount due from the mortgagors, and in default of their compliance, on April 13, 1927, he brought a suit, being No. 500 of 1927, against the mortgagors and the respondent. It is clear from the plaint that he claimed to recover the whole amount with interest due thereon from the mortgagors by sale of the mortgaged property, and from the respondent under the chitti. The respondent put in a written statement by which he contended that no cause of action had accrued against him. This defence was repelled by the Court and on May 21, 1928, the Court passed the usual preliminary mortgage decree for sale for Rs. 12,999 with interest, and in default of payment the property was ordered to be sold, and if the proceeds of the sale were insufficient to pay the amount in full, it was declared that the plaintiff was entitled to a personal decree against all the defendants, including the respondent. The respondent preferred an appeal from this decree to this Court. During the pendency of the appeal, no payment having been made in accordance with the preliminary decree, on an application of the decree-holder, the trial Court on December 14, 1928, passed a decree absolute for sale. After the decree absolute was made, the appellant filed a darkhast, being darkhast No. 1305 of 1928, for sale of the mortgaged property. The darkhast was executed, the property sold and the sale was confirmed on January 4, 1930. Sale proceeds amounting to Rs. 5,942 were paid to the appellant on January 6, 1930. According to the appellant, after giving credit for that amount to the mortgagors, a sum of Rs. 11,390-8-0 still remained due at the foot of the mortgage, and accordingly, the appellant, on January 18, 1930, applied for a personal decree against the mortgagors and also against the respondent, and a personal decree was made on June 14, 1930. The respondent preferred an appeal from this personal decree to this Court. After the personal decree was made, the appellant filed darkhast No. 400 of 1930 for executing it, process was issued, and the respondent paid Rs. 11,783-8-6, by two payments, the first payment being made on June 18, 1930, and the second on June 25, 1930, and it is clear that on that day, that is, on June 25, 1930, the appellant's claim was fully satisfied by these payments. The two appeals preferred by the respondent came on for hearing in 1934 and were heard together. It was held by this Court that suit No. 500 of 1927, so far as it was directed against the respondent, was premature and that at the date of the suit no liability as against respondent No. 1 had accrued. On that ground both the appeals were allowed and) the plaintiff's suit as against the respondent was dismissed. After the High Court decision, the respondent put in an application on August 16, 1934, under Section 144 of the Civil Procedure Code for restitution, and applied for a warrant against the appellant, and a warrant was issued. The appellant thereupon preferred an appeal from that order to this Court, and with that application brought in the whole amount which he had received from the respondent in June, 1930, into Court. This, we are told, happened some time about August 20, 1934. Immediately after this the appellant, on August 30, 1934, instituted the suit which has given rise to this appeal against the respondent, basing his claim on the fact that he had not received the whole of the amount due at the foot of the mortgage from the mortgagors and also upon the shah jog chitti passed by the respondent in his favour. He also, on September 3, 1934, put in a reply to the application for restitution. The appeal preferred by him against the issue of the warrant was disposed of by this Court on October 5, 1934, when it was held that the lower Court had no jurisdiction to issue the warrant. The warrant was set aside and the monies which were then, as I have stated, deposited in Court were ordered to be paid to the appellant. On January 5, 1935, the appellant put in an application stating that; the respondent's application under Section 144 and this suit, which was then pending, should be heard together. This application was opposed by the respondent and rejected by the Judge. So, on January 23, 1935, the appellant brought in the whole amount into Court along with his application, by which he stated that the amount should be kept in Court till the decision of the dispute raised by him in his reply to the application for: restitution, so that, after the right to recover these monies was determined, the amount may be ordered to be paid over to the proper party. The suit was decided on February 18, 1935, and it was dismissed on the ground that the claim in the suit was extinguished by lapse of time. To complete the narrative it may be stated that the respondent, on March 5, 1935, took away the monies which were lying in Court.

2. It is common ground, and it was so held by this Court, that the cause of action, or rather the right to sue the defendant under the chitti for the deficiency resulting after the sale of the mortgaged property accrued on January 4, 1930. The suit was filed on August 30, 1934. So that, prima facie, the suit would be barred, unless the plaintiff succeeded in establishing the grounds of exemption relied upon by him in his plaint. The learned Judge was of the opinion that any of the three articles, namely, arts. 65, 83 and 115, would be applicable to the facts of this case, and whichever article applied, the suit would be barred by limitation unless the grounds of exemption relied upon in the plaint were established. Two of the material grounds were (1) that Section 14 of the Indian Limitation Act would apply ; and (2) that by reason of the facts, to which I have referred, the plaintiff's case comes within the principle laid down by their Lordships of the Privy Council in several decisions to the effect that where a claim is satisfied and that satisfaction is subsequently annulled by a decree, a fresh cause of action will accrue in favour of the claimant or would entitle him to deduction of the time occupied in the previous litigation. It seems to me that on the facts of this case the question of limitation must be governed by Article 83, and the question in the case is, when did time begin to run against the appellant in the circumstances of this case. The terminus a quo of that article is when the plaintiff is actually damnified.

3. The appellant argues that he is entitled to the benefit of Section 14 of the Indian Limitation Act inasmuch as he was prosecuting in good faith suit No. 500 of 1927, which ultimately was decided by the High Court in 1934. He further argues that in any case he is entitled to the benefit of this section inasmuch as he was prosecuting bona Me a civil proceeding, namely, the application for a personal decree from January 18, 1930, and he would be entitled to deduct the time taken up by that proceeding until it was finally decided by the High Court on April 19, 1934. His further contention is that in any event his claim was satisfied by payments made on June 25, 1930, and as that satisfaction was annulled by the decision of the High Court on April 19, 1934, he could not have brought any suit to enforce the chitti against the respondent till then.

4. On the other hand, the argument on behalf of the respondent is that the present suit is not based upon the same cause of action as that in suit No. 500 of 1927, and that as at the date of the institution of that suit there was no cause of action in favour of the appellant, all the proceedings which ensued after the institution of that suit were null and void and it is not open, to the appellant to claim the benefit of that section. It is further contended that the second condition laid down in Section 14 is clearly wanting in this case and that there was no defect of jurisdiction nor was there any defect of a like nature so as to prevent the present suit from being instituted. As to the second point, the respondent's argument is that on the facts this case is distinguishable from the case of Mussumat Ranee Sumo Moyee v. Shooshee Mokhee Burmonia (1868) 12 M.I. A. 244 and the other cases on which the appellant relies.

5. Before dealing with the respondent's contentions, it would be convenient to discuss another contention raised on behalf of the respondent. The learned Counsel for the respondent says that the suit was misconceived and it was incompetent and therefore it ought to have been dismissed on that ground alone. That contention formed the subject-matter of issue No. 2 which is in these words :

Whether it is proved that the plaintiff has not acquired any cause of action for such a suit

The finding of the learned Judge is :

Since the plaintiff has not yet made the refund he cannot be said to have acquired any cause of action.

The facts on which this contention is based have already been summarised by me. The argument is that as at the date of the institution of the suit the appellant was in possession of the moneys paid by the respondent, the plaintiff's suit for recovery of the moneys is incompetent. It seems to me that there is no substance in this contention which has been characterized by the learned Judge of the Court below as technical. The position is this :-After the decision of the High Court in the two appeals, the appellant was in wrongful possession of the monies which really then belonged to the respondent, and the fact that for a time the appellant kept the monies, or that he was in possession of the monies until the institution of the present suit, or the fact that he subsequently brought in the monies and applied to the Court for the same being retained, makes no difference. As the monies belonged to the respondent, it was open to the respondent to take proper proceedings, which he subsequently did, to recover them. I am unable to hold that there was no cause of action in the appellant to institute the present suit when he did institute it. The cause of action, as I have stated, was under the chitti, as the amount due by the mortgagors was not satisfied out of the sale of the property, and although the payments were made in execution of the personal decree by the respondent, in the circumstances to which I have referred, it cannot be said that the monies belonged to the appellant.

6. The contention that the appellant is entitled to deduct the time occupied by the main suit up to the final decision by the High Court is not seriously pressed. But the real contention is that when the appellant applied for a personal decree after January 4, 1930, when the cause of action accrued, he instituted a civil proceeding and he prosecuted it bona fide and that proceeding failed because it was held that the cause of action against the respondent in the suit had not accrued and therefore the suit against him under the chitti was premature. In our opinion, that contention is well founded. Mr. Amin for the respondent contends that where a cause of action is held to be premature in the prior litigation or prior civil proceeding, the case would not come within the phrase ' or defect of a like nature ' within the meaning of Section 14 of the Indian Limitation Act. I am unable to accept the contention. What is a ' defect of a like nature ' within the meaning of that section must depend upon the facts of each case. One thing is clear that these words must mean and connote something which is quite distinct from defect of jurisdiction. Defects as to wrong plaintiffs or wrong defendants are also provided for in the Indian Limitation Act. The principle is well settled that Section 14 must be liberally1 construed, and if on the facts of a particular case the Court finds that the plaintiff was prosecuting in good faith another civil proceeding against the same defendant founded on the same cause of action, the time taken up in such proceeding will be excluded, and because it was held that the cause of action was premature, I cannot see why Section 14 cannot apply. It is not disputed that if Section 14 applies the present suit is well within time. The cases to which Mr. Amin referred are clearly distinguishable on their facts, but I think the question is beyond controversy having regard to the observations of their Lordships of the Privyi Council in the case of Hem Chunder Chowdhry v. Kali Prosunno Bhaduri . This was a peculiar case and the facts shortly were that in 1890 a suit was brought against certain talukdars claiming to enhance the rent and to recover rent at an enhanced rate for a particular year. The first claim was allowed but the second claim was rejected upon the ground that it was premature. Five years thereafter the plaintiff brought a suit to recover, inter alia, rent at the enhanced rate for the same year. The Subordinate Judge held that this claim was barred by res judicata. In appeal, the High Court did not accept this view but held that it was barred by limitation. Their Lordships of the Privy Council held that there was no bar of limitation. They observed as follows (p. 181) :-

In the opinion of their Lordships the proceedings in the earlier suit, stayed the operation of the law of limitation, and as the appellant claimed the arrears of 1298 in that suit, but his claim was then disallowed as premature, he is now entitled to the benefit of the decree for enhancement and to recover the arrears at the enhanced rate.

But assuming that that view is not correct, I have no doubt in my mind that the present case falls entirely within the principle of the decisions of the Privy Council which we have had occasion to review lately in the case of Narayan v. Gurunathgouda : AIR1939Bom1 . The principle we gathered from the decisions of the Privy Council is that if a claim of a person is fully satisfied, either by an agreement or by a decree of a Court, and if that satisfaction is subsequently annulled by another decree of the Court, a fresh cause of action would accrue in favour of the claimant, and I need only refer to the cases of Mussumat Ranee Sumo Moyee v. Shooshee Mokhee Burmonia (1868) 12 M.I. A. 244, Nrityamoni Dassi v. Lakhan Chandra Sen I.L.R. (1916) Cal. 660 : 18 Bom. L. R. 418. and Mussamat Basso Kuar v. Lala Dhum Singh . That seems to us to be the position in this case. The facts to which I have referred clearly show that the claim of the appellant against the respondent was fully satisfied on June 25, 1930, and that satisfaction was effected by a decree in his favour, which was not reversed till April 19, 1934. The cause of action accrued on January 4, 1930, and time began to run. But it is difficult to see how, whilst the decree of May 2, 1928, and the subsequent decree of December 14, 1928, and June 14, 1930, and the order made in execution proceedings thereafter under which moneys were paid by the respondent remained in force, he could file the present suit. Apart from this, if Article 83 applies in this case, as we think it does, time would not begin to run until ' the plaintiff is actually damnified.' In the circumstances of the case, it is difficult to see how the plaintiff can be said to have been actually damnified until April 19, 1934, when the suit No. 500 of 1927 was dismissed by this Court. The ratio decidendi of the decisions in Venkatadri Appa Rao v. Parthasarathi Appa Rao , Nagendra Nath Dey v. Suresh Chandra Dey , Baijnath Sahai v. Ramgut Singh and Chandramani v. Sreemati Anarjan Bibi : (1934)36BOMLR717 , seems to support this view. We think, therefore, that the decree made by the learned Judge must be set aside and the appeal must be allowed.

7. The only remaining question is as to interest. The appellant claims interest at twelve per cent. That was the rate agreed upon in the mortgage-deed and it is his contention that that was the rate fixed upon between the respondent and himself under the chitti. As I have stated, the chitti is missing, and there is no clear evidence before us which would justify us in granting interest at twelve per cent. On the other hand the fact remains that the High Court has allowed interest at six per cent. in favour of the appellant against the mortgagors after the date of redemption. In these circumstances, we are of the opinion that interest should run at six per cent. There is no practical difference between the parties as to the date from which interest should run, and I think the position there is very simple.

8. Therefore, there will be a decree for the appellant for the sum of Rs. 14,545-11-0 with six per cent. interest from date of suit till realization and costs throughout in proportion.

9. Having regard to the importance of the case, the appellant will be entitled to the fees of two pleaders.

N.J. Wadia, J.

10. I agree.


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