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Kaikhusroo Manekshah Talyarkhan Vs. Gangadas Dwarkadas - Court Judgment

LegalCrystal Citation
SubjectProperty;Limitation
CourtMumbai
Decided On
Case Number O.C.J. Suit No. 262 of 1929
Judge
Reported inAIR1936Bom322; (1936)38BOMLR712; 165Ind.Cas.184
AppellantKaikhusroo Manekshah Talyarkhan
RespondentGangadas Dwarkadas
Excerpt:
.....property was in his possession became known to the plaintiff more than three years prior to the suit.;article 49 must be read along with article 48, and it applies to a suit for recovery of specific moveable property which is other than the specific moveable property described in article 48, that is, property which is not lost to the owner as a result of theft, or dishonest misappropriation or conversion. the starting period of limitation under this article is when the property is wrongfully taken, or injured or when the detainer's possession becomes wrongful.;detention of property, within the meaning of article 49, amounts to conversion only when it is adverse to the owner or other person entitled to possession, that is to say, the defendant must have shown an intention to keep the..........and some other parties in whose possession they were found to be. at that time the three suit bonds were not traced by the police. the suit was heard by my brother crump, who made a decree in 1928 in favour of the court receiver.5. it appears that the suit bonds were not presented for a long time to the port trust for interest, although it had accrued due since august 1, 1925, and it was on july 1, 1927, that for the first time the bonds were sent by the imperial bank of india under a power-of-attorney from the defendants to the port trust for collection of interest. the endorsements on the bonds show that interest due from august 1, 1925, was paid or) july 1, 1927, to the imperial bank on behalf of the defendants. when thost? who were acting on behalf of the executors found.....
Judgment:

Rangnekar, J.

1. The main facts in this suit are not in dispute and raise a short but interesting question under the Indian Limitation Act.

2. One Dubash died in Bombay, in the year 1921, leaving a will of which he appointed five persons to be the executors and trustees. He left considerable moveable and immoveable property including Government Promissory Loan Notes and Port Trust Bonds of the aggregate value of over five lakhs of rupees. The will was proved by some of the executors, and they took charge of the estate. In the course of the administration of the estate, they decided to get the Government Promissory Notes and Port Trust Bonds renewed after recovering the interest due thereon, and then to divide the same among the heirs. For this purpose they handed over these securities and bonds to one Commissariat, who was a sharebroker. The latter from time to time returned to the executors some of these securities of the face value of over Rs. 2,19,000 duly renewed together with the amount of interest due thereon. He failed to return the rest including Port Trust Bonds of the face value of Rs, 37,500 in spite of repeated demands. It is common ground that among the Port Trust Bon(sic) which Commissariat failed to return are the three bonds in this suit.

3. In the meanwhile a suit was brought in this Court by two of the heirs of the deceased for administration of the estate, and a receiver was appointed. By orders made subsequently from time to time, the present Court Receiver was brought on record of that suit in place of the original receiver. In August, 1925, Messrs. Mulla and Mulla on behalf of the executors lodged a complaint with the Commissioner of Police to the effect that they had reason to suspect that Commissariat, who in the meanwhile had absconded from Bombay, had committed breaches of trust after forging the endorsements and signatures on some of the securities entrusted to him by the executors, and the police started an investigation in the matter. There is voluminous correspondence before me between May 13, 1925, and June 20, 1925, which shows that the executors were leaving no stone unturned to discover the existence of the property which they had lost, and it was after they failed that they made this complaint to the police in August, 1925. The executors had some reason to think that some of these properties were lodged by Commissariat in his own account with the P. & 0. Banking Corporation, and they approached the Corporation on September 5, 192,5; and the latter, on September 11, 1925, or thereabouts, informed them that the Port Trust Bonds in suit and some other securities were handed over to them by Commissariat to reduce his personal liability to the Corporation. The police, on this information being supplied to them, obtained a list from the Corporation on September 11, 1925. That list shows that the bonds in suit were handed over by Commissariat to the Corporation, and the Corporation had subsequently made them over to the Bank of India. The Bank of India, when approached, admitted having held these bonds, but informed the plaintiff's attorneys that they had parted with them in favour of Chaganlal Javeri & Co. Enquiries were continued, and Chaganlal Javeri admitted having obtained the bonds in due course of business, but stated that he had sold them to one Ramdas Gangadas. All attempts of the executors to trace the said Ramdas Gangadas were unsuccessful, and all that they could do was to persist in their enquiries and call upon the police to pursue their investigation, which they did.

4. In 1926 some of the securities were traced and the receiver in 1926 filed a suit against Commissariat and some other parties in whose possession they were found to be. At that time the three suit bonds were not traced by the police. The suit was heard by my brother Crump, who made a decree in 1928 in favour of the Court Receiver.

5. It appears that the suit bonds were not presented for a long time to the Port Trust for interest, although it had accrued due since August 1, 1925, and it was on July 1, 1927, that for the first time the bonds were sent by the Imperial Bank of India under a power-of-attorney from the defendants to the Port Trust for collection of interest. The endorsements on the bonds show that interest due from August 1, 1925, was paid or) July 1, 1927, to the Imperial Bank on behalf of the defendants. When thost? who were acting on behalf of the executors found this, they wrote to the Imperial Bank of India, and on August 16, 1928, the Imperial Bank of India forwarded to them the names of the defendants and their addresses. It is under these circumstances that the Court Receiver under proper authority has filed the present suit for the return of the bonds against the defendants.

6. On the merits there is no defence.

7. In the correspondence before suit the defendants when called upon to return the bonds to the plaintiff at one time contended that the endorsements and signatures on the bonds were not forged and that the executors were negligent in leaving the bonds with Commissariat for a long time. These contentions were subsequently given up. But it was pleaded that the executors could in the year 1925 have by exercise of reasonable diligence ascertained with whom the bonds were lying, and that therefore limitation began to run from 1925, and the suit was barred by reason of the knowledge which the executors ought to have had in 1925.

8. In the written statement this contention is put in a somewhat different way. In paragraph 6 of the written statement the defendants say that the plaintiff ' could have easily learnt' in 1925 that the bonds were in the defendants' possession and without prejudice to their other contentions-which seem to me to be imaginary-that ' the plaintiff was negligent and indifferent and that but for his own laches, indifference and negligence the plaintiff could have learnt in 1925 that the defendants were in possession of the bonds.' I have often had to remark upon the looseness of language and vagueness of statements in pleadings in this Court, but as a loosely worded and vague pleading para. 6 of this written statement would take a high rank.

9. On behalf of the defendants Mr. Bahadurji, who had not drafted the written statement, put forward a definite contention on which he proposed the following issue :

Whether the plaintiff could have with reasonable diligence discovered that the bonds were lying with the defendant in the year 1925

10. Apart from the fact that want of reasonable diligence was not specially pleaded, it seemed to me that the issue was irrelevant and did not arise under Article 48 of the Indian Limitation Act, which it was common ground applied to the facts of the case. In my opinion, it is impossible upon the plain language of Article 48 to hold that any question arises as to whether the owner of the property of the kind mentioned in that article was or was not reasonably diligent to discover in whose possession the property he is seeking to recover is. There are a good many articles in the Indian Limitation Act in which time begins to run from the date of the plaintiff's knowledge of a particular fact or act or when certain relevant facts first became or become known to him, but in none of them has legislature imposed a condition as to the plaintiff being reasonably diligent in discovering those facts or acquiring that particular knowledge. It is not that the condition as to reasonable diligence was not known to legislature. Thus under the Civil Procedure Code, Act X of 1877, a subsequent application to execute the same decree could not be allowed unless the decree-holder satisfied the Court that on the last preceding application the decree-holder had used ' due diligence ' to obtain satisfaction of the decree. But this was amended by Act XII of 1879 and these words were repealed. (See Ashootosh Dutt v. Doorga Churn Chatterjee I.L.R. (1880) Cal. 504). Section 14 of the Indian Limitation Act is the only provision in that Act that I know of in which the condition as to diligence is inserted. To accept Mr. Bahadurji's contention one would have to read into the words in the third column of the schedule under Article 48 some such words as ' When the plaintiff might with reasonable diligence have first discovered in whose possession the suit property is.' These words are not there, and in y opinion there is no warrant for reading them into the article. The tendency to read something; in a statute which is not there has led to a good deal of confusion and it is high time it was abandoned. I, therefore, disallowed the issue.

11. I may here remark that neither party has led any oral evidence. Both rely on the correspondence which was read by Mr. Vakeel and practically reread by Mr. Bahadurji. Part of this correspondence bears on the question of the alleged want of due diligence. If I had considered that the issue disallowed was relevant, I would unhesitatingly have recorded a finding on it in the negative.

12. The question then is whether the suit is barred by the law of limitation.

13. I shall first set out what exactly is the contention of the defendants on the facts. The defendants contend that in 1925 the executors admittedly knew that Commissariat had by means of forged endorsements and signatures dealt with the bonds and utilised them for his own purposes, contrary to the purpose for which they were entrusted to him; that the executors knew that he was guilty of breach of trust and forgery, and as a result of their enquiries learnt in 1925 that the bonds were at first in the possession of the P. & O. Banking Corporation, thereafter in the possession of the Bank of India, from whom they came into the possession of Chhaganlal Javeri, and from them into the hands of the said Ramdas Gangadas. The contention then is, that as the plaintiff had this knowledge in 1925, and had then for the first time come to know that the Bank of India was in possession, the suit which is filed on February 12, 1929, is barred.

14. The first question is, which is the article which is applicable to the suit as it is framed Mr. Bahadurji contends that the suit would fall under either Article 48, or Article 49, or Article 95. I have no difficulty in holding that the suit does not fall within Article 95. Article 95 applies to a suit to set aside a decree obtained by fraud, or for other relief on the ground of fraud. This, it is clear, applies and must apply to a case where the plaintiff has sustained loss or damage on account of the fraud of the defendant and that is not the present suit.

15. Does it then fall within Article 49 Article 49, I do not think it would be disputed, must be read along with Article 48. Article 48 applies to a suit to> recover 'specific moveable property lost, or acquired by theft, or dishonest misappropriation or conversion, or for compensation for wrongfully taking or detaining the same', and the period from which limitation begins to run is, ' when the person having the right to the possession of the property first learns in whose possession it is.' Article 49, on the other hand, applies to a suit to recover ' other specific moveable. property, or for compensation for wrongfully taking or injuring or wrongfully detaining the same,' and the period from which limitation begins to run is, ' when the property is wrongfully taken or injured, or when the detainer's possession becomes unlawful.' The word ' other' in Article 49, in my opinion, is a significant word. Reading the two articles together, it is clear that Article 49 would apply to a suit for recovery of specific moveable property which is other than the specific moveable property described in Article 48; and if the property in suit falls within the description under Article 48, it is clear, it would be excluded from the operation of Article 49, which seems to me to be a residuary article. In other words, specific moveable property in Article 49 must be the property which is not lost to the owner as a result of theft, or dishonest misappropriation, or conversion. I must, therefore, hold that the only article which would apply to the facts of this case is Article 48.

16. Assuming, however, that Article 49 applies, the suit is in time. The starting period of limitation under this article is, when the property is wrongfully taken or injured or when the detainer's possession becomes unlawful. The cause of action in this case is conversion. The detention of property amounts to conversion only when it is adverse to the owner or other person entitled to possession, that is to say, the defendant must have shown an intention to keep the property in fraud of the plaintiff. (See Clayton v. Le Roy [1911] 2 K. B. 1031). The usual method of proving that a detention is adverse within the meaning of this rule is to show that the plaintiff demanded the delivery of the property and that the defendant refused or neglected to comply with the demand. The demand for the delivery of the bonds in this case was made in August, 1928, and as the demand was not complied with, the suit was filed in February, 1929, and is clearly in time.

17. Mr. Bahadurji says that all that is necessary to be shown to defeat the plaintiff's claim is that the plaintiff first knew that the property which he had lost was in the possession of some person, and that a suit brought for recovery of the property more than three years after the date of such knowledge would be barred under this article, even though long before the suit the property may have been bona fide and legally transferred by such person to another. That is, as I understand it, the contention.

18. The plaintiff answers this contention by relying on the facts. These are; that until the executors had inspection of the bonds in question, they could not know whether the bonds bore forged endorsements. The evidence shows that some of the securities and bonds were endorsed and signed by the executors at the request of Commissariat and for the purpose of renewals, and the executors could hardly be in a position to know that the three bonds traced to the P. & O. Banking Corporation and then to the Bank of India bore genuine endorsements or not. It was in 1928. that the bonds were seized by tht police and the executors then discovered that their signatures were forged This seems to me to be a good answer, but I am willing to consider the contention raised upon the plain meaning of the article, apart from the peculiar facts of this case.

19. Now I am dealing with the statute of limitation, the object of which is to prevent stale demands. The statute, it is clear, must be construed strictly What then is the meaning of the language used by legislation when prescribing the terminus a quo under Article 48.

20. In my opinion, the plain meaning of the article is that time begins to run against the owner of the property lost, from the time when he first discovered that it is in the possession of the defendant. The words ' whose possession' mean the possession of some definite person who can be identified and against whom effective relief for restoration of the property in question can be obtained. This view, I think, is supported by the words ' whose possession it is ' and not it was. To accept Mr. Bahadurji's contention and to hold that 'if the owner of the property which he has, say, lost by theft, comes to know that the property was in the possession of A at some time but at the date of the suit is in the posession of B must sue A within three years even though before the suit he has to the knowledge of the owner transferred it bona fide and in the ordinary course of business to B, would lead to absurd results, particularly in the case of negotiable securities which pass from hand to hand almost hourly in the market. The owner in such a case has two remedies. He may sue for recovery of the specific property or he may sue for compensation, that is, for the value of it. But he is not bound to sue for both. He may confine his claim to recovery in specie. It would then be futile for him to sue A within three years of the date of his knowledge when at date of suit he knows the property is in possession of B. Obviously, this may result in considerable injury to the owner. The property may not have any value in the commercial sense or in the market and yet in his eyes it may be very precious, say an heirloom. Is he then to have no remedy of the kind he requires when he knows that although A was in possession at one time, he had parted with it and transferred it to B ?

21. The onus is on the plaintiff to prove that he first learnt within three years of the suit that the property which he is seeking to recover was in the possession of the defendant. In other words, he has to prove that he obtained the knowledge of the defendant's possession of the property within three years of the suit, and that is all. If he proves this, then to succeed in the plea of limitation the defendant has to prove that the fact that the property was in his possession became known to the plaintiff more than three years prior to the suit. A failure to deliver up goods on demand is not a conversion if at the time of the demand they are no longer in the power or possession of the defendant, as for instance, when they are already destroyed or consumed or have already got into the possession of some other person. No one can convert a chattel by refusing to give it up when he no longer has it. He may be liable in trover and to pay compensation, but it is difficult to see how an action for recovery of specific property can lie against him.

22. There is just one other point which has not been discussed before me, to which I may now turn. It is true that the executors learnt that three bonds were forged and were in possession of the Bank of India, and that later they went into possession of other persons. As I have pointed out, the executors could not be said to know definitely that they were their bonds which were forged and misappropriated by Commissariat until they had inspection thereof. Assuming, however, that the plaintiff knew in 1925 and thereafter within three years of the suit that the bonds had passed into the possession of several persons, what is the position Now, the principle is clear that when there have been successive conversions of the same property by different persons, each of these conversions is an independent cause of action, and the barring of one of them by the statute of limitation has no effect on the others. After all, the effect of the law of limitation in respect of injuries to moveable property is merely to destroy the plaintiff's right of action but not to divest his ownership of property. Therefore, if A converts goods belonging to B, it is no defence that formerly and more than three years before suit was brought they were converted by C also. (See Miller v. Dell [1891] 1 Q.B. 468).

23. The correspondence, in this case, in my opinion, clearly shows that the plaintiff never knew of the existence of the defendants, or of the fact that they were in possession of the bonds, or even for the matter of that, of the existence of Ramdas Gangadas till 1928. That being the case, I think the plea of limitation must be rejected.

24. I find the issue in the negative.

25. In the result, there will be a decree in favour of the plaintiff in terms of prayers (a), (b) and (d).

26. The Prothonotary to and make over the bonds in suit to the plaintiff.


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