John Beaumont, Kt., C.J.
1. This is an appeal from a decision of the First Class Subordinate Judge of Surat. The suit is a suit for mesne profits of certain immoveable property which accrued during the years 1925 to 1928, more than three years before the institution of the suit.
2. The material facts are that in 1925 one Gulabchand was adjudicated insolvent and the plaintiff was appointed receiver of his estate under the Provincial Insolvency Act. The insolvent had within two years prior to his insolvency sold the property from which the mesne profits in suit are derived to the defendants, and on an application made by the plaintiff as receiver in the insolvency under Section 53 of the Provincial Insolvency Act the sale was set aside. That was in March, 1929. This suit was instituted in March, 1931, and the question is whether the claim for mesne profits for the years 1925 to 1928 is barred by limitation.
3. The learned Judge dealt with that point as a preliminary issue and held that the claim was not barred. His view was that the cause of action to recover these mesne profits only arose when the sale to the defendants was set aside, and, that date being within two years before the institution of the suit, he held that the suit was in time. I am not able to agree with that view. Article 109 of the Indian Limitation Act provides that where the suit is for the profits of immoveable property belonging to the plaintiff which have been wrongfully received by the defendants the suit must be brought within three years from the date when the profits were received. We are told that part of the profits for the year 1928 was received within three years from the institution of the suit, and if so the suit is in time as to that part; our judgment only applies to profits received more than three years before suit. The plaintiff cannot say that the profits were not wrongfully received, because if the profits were rightfully received by the defendants the plaintiff has no right to recover them. The effect of the order of the insolvency Court setting aside the sale to the defendants is to render the sale null and void from its inception. It is no doubt perfectly true that the plaintiff could not have sued to recover these mesne profits until he had got the sale set aside. But Article 109 does not provide that the starting point of time for the recovery of mesne profits wrongfully received shall be the date when the cause of action to recover those profits arose; the starting point is the date when the profits were received. It cannot, in my opinion, be said that the profits were received in the first instance rightfully, and that the receipt afterwards became wrongful. In the event which happened of the sale being set aside, the receipt of the profits was always wrongful, and the terms of Article 109 are in my opinion perfectly plain and require the suit to be brought within three years from the date when the profits were received.
4. This view of the Act was taken in Peary Mohan Roy v. Khelaram SarkarI.L.R. (1908) Cal. 996 and I think also by the Privy Council in Kishnanand v. Kunwar PartabNarain Singh I.L.R. (1884) Cal. 785. though there are earlier decisions in an opposite sense. We have been referred to a recent decision of the full bench of the Madras High Court : Muthuswami v. Official Assignee, Madras I.L.R. (1936) Mad. 1020, F.B. In that case a mortgage-deed was set aside in insolvency and the Official Assignee called upon the mortgagee to account for the rents and profits which he had received from the mortgaged property. The Court there held that the Indian Limitation Act applied to such an application and that the mortgagee was liable for mesne profits for the period of three years immediately preceding the Official Assignee's application. So far as I can see, however, the question of the starting point of limitation under Article 109 was not considered by the Court. The Court considered only the question whether the Indian Limitation Act applied to the proceedings in insolvency.
5. In my opinion we are bound to give effect to the words of Article 109 which in my view covers this suit, and we must hold that the suit is barred as to profits received more than three years before the institution of the suit. The appeal must be allowed with costs and the suit dismissed in respect of mesne profits received before March 6, 1928.
6. The case to go back to the lower Court for the plaintiff to prove if he can that any part of the profits was received within three years before suit. The defendants will be allowed costs in the trial Court so far as relates to mesne profits received more than three years before the date of the suit; and the plaintiff will be allowed costs in the trial Court so far as relates to mesne profits received within three years of the date of the suit. Costs to be apportioned if necessary.
7. I Agree.