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G.S. Abdul Rahiman Vs. H.R. Venkatakrishnaiya - Court Judgment

LegalCrystal Citation
SubjectCommercial;Limitation
CourtKarnataka High Court
Decided On
Case NumberRegular Second Appeal No. 392 of 1975
Judge
Reported inAIR1983Kant98; 1982(2)KarLJ338
ActsLimitation Act, 1963 - Schedule - Article 113
AppellantG.S. Abdul Rahiman
RespondentH.R. Venkatakrishnaiya
Appellant AdvocateH.R. Venkataramaniah, Adv.
Respondent AdvocateM.R. Narasimha Murthy, Adv.
Excerpt:
.....the judicial committee as well as by the high courts of various states. shamlal singh .the further question is, if there are successive invasions or denials of a right, when it can be held that a person's right has been clearly and unequivocally threatened so as to compel him to institute a suit to establish that right. '.(paras 31 and 32) further at para-34, in the end, the court observes thus from the aforesaid facts, it is manifest that the plaintiff's right to the property was not effectively threatened by the appellant till the commissioner came to divide the property......is a residuary article providing for cases not covered by the other articles under the act. any suit filed under art. 113 will have to be filed within three years from the date when the right to sue accrued.10. when did the right to sue accrue in this case is the question. the view of the civil judge is that the plaintiff had come to know in the year 1965 itself that the defendant had not paid the money payable to m/s. m.c.m. ltd., and that at least within three years from that time he should have filed the suit. that was not the way in which the courts below should have approached this question. there was no time limit within which the defendant had to make payment to m/s. m.c.m. ltd. at any rate, that is not his case counsel for the appellant-plaintiff made a submission that he was.....
Judgment:

1. This is plaintiff's second appeal.

2. He had filed an original suit - O.S.No.2 of 1971 in the Court of the Principal Munisff, Chickmagalur, against the respondent (defendant therein). The suit was to recover a sum of Rs.4,000/- consisting of the principal sum of Rs.3,519.50 and interest of Rs.480.50 from the defendant. On the said suit having been dismissed he preferred an appeal to the Civil Judge, Chickagalur, in R.A.No.100 of 1973 challenging therein unsuccessfully the judgment and decree dt.23-7-73 of the learned Munsiff. This appeal is directed against the Judgment and decree of the Civil Judge dated 19-10-1974.

2A. Facts in brief are as follows :

The plaintiff's case has been that he had entered into an arrangement with the defendant, who is the owner of a Coffee Curing Works, in respect of his (plaintiffs coffee crop of 1962-63 that under that agreement he had to send the coffee to Coffee Board through the defendant's curing works; that the defendant should have a lien over the coffee dividends and other pool payments payable by the Coffee Board re. that crop; and that out of the moneys to be received thus by the defendant he, the defendant had to pay certain loan amounts payable by the plaintiff to others including Messrs Mysore Chemical ., (MCM Ltd.); and that after deducting the amounts borrowed by the plaintiff with the defendant and the payments or adjustments made as aforesaid by the defendant towards loans etc., of the plaintiff, the balance had to be paid to the plaintiff. It is his further case that the defendant had received all pool payments payable to him from the Coffee Board for the coffee of 1962-63 season and was bound to pay, out of that sum, the price of fertilisers supplied by M.C.M. Ltd., to him (the plaintiff). He further pleaded that the defendant having not paid the said sum Messrs. M.C.M. Ltd. had filed a suit against him in O.S.No.311 of 1965 on the file of the Munisff, Chickmagalur, for recovery of a sum of Rs.2504-96 and the said suit, having been subsequently tried by the Civil Judge, Chickmagalur, in O.S.No. 109 of 1967, had been decreed and in execution of the said decree he had paid to that concern a sum of Rs.3519.90 on 30.8.1969 in satisfaction of the entire decretal amount including court costs etc. According to the plaintiff that though the defendant had received the money from the Coffee Board and was bound to discharge this loan payable to M/s. M.C.M. Ltd., (he) had not done so, and that, on the other hand, he himself had to discharge the said sum, and that in view of the fact that the defendant had retained that sum with him (he) was liable to pay the same to him (the plaintiff). It is to recover that money and the interest accruing thereunder at 12 per cent that he had brought the suit.

3. In his written statement the defendant admitted all the averments made in para-2 of the plaint except the averment made therein that he, the defendant, was a money lender. He admitted about the plaintiff having created a lien in his favour over the coffee dividends and pool payments are the plaintiff's coffee crop of the season 1962-63. But he further pleaded that he had not retained the lien, and that in the circumstances as narrated by him in his written statement at para-2, he had not retained the lien, and that in the circumstances as narrated by him in his written statement at para-2, he had surrendered the lien in favour of the Syndicate Bank Re. the plaintiff's claim to obtain the discharging of M.C.M. Ltd.'s loan the defendant stated thus at para-4 of his written statement.

'It is also true that the defendant recommended to the Mysore Chemical ., to supply Copper Sulphate and manure to the plaintiff. But the allegations in para-3 of the plaint that the defendant undertook to pay the amount and that he guaranteed the payment to the Mysore Chemical ., are all false and untrue. It is specifically mentioned in the letter addressed by the defendant to the Mysore Chemical ., that the planter (plaintiff) would pay the cost of supplies'.

Having stated so at para-4, at para-5 of his written statement he further states thus :

'The plaintiff in his application for the crop hypothecation loan had given an estimate of the yield at four tonnes of Arabica parchment and the defendant acted on this information and agreed to pay out 'of the coffee pool payments of the defendant the value of supplies made by M/s. Mysore Chemical ., and to pay the excess to M/s. Himmathlal Gulabchand and Co., after adjusting any amounts that were due to the defendant from the plaintiff'.

His further case is that the plaintiff had not supplied the quantity of coffee that he was supposed to supply during that season and the money he had obtained on his behalf from the Coffee Board was a far lesser sum and, therefore, the said money was not sufficient to cover all the outstanding loans payable by the plaintiff and he the defendant could not discharge the amount payable by the plaintiff to the M.C.M. Ltd., In these circumstances he disclaimed his liability to the plaintiff's claim in the suit. Besides, it was also his case that the claim was barred by time.

4. The learned Munsiff framed three issues as follows :

1. Whether the plaintiff proves that the defendant is liable to pay the suit amount to him?

2. Whether the suit is in time?

3. What reliefs?

5. The plaintiff examined himself as P.W.3 besides examining two witnesses on his behalf. The defendant did not enter the witness box. No oral evidence was adduced on his behalf. The Munsiff found in favour of the plaintiff on the 1st issue, but against him on the 2nd issue, with the result he dismissed the suit as barred by time. The Civil Judge as stated above has confirmed these findings.

6. The concurrent findings of both the courts below on the 1st issue to be upheld. In this connection I would like to refer to what the Munsiff has stated in his judgment at para-10 with which the Civil Judge has concurred :

'It is, however, proved that the defendant had undertaken with the plaintiff that he would pay the value of the fertilizers to the M.C.M. Limited and that he had retained the said amount with him as could be seen from Exs. P-10 and P-11. It is admitted and proved that the defendant has not paid the said amount to M.C.M. Limited. Therefore, now that the plaintiff has paid and discharged the value of fertilisers to M.C.M. Limited under the aforesaid decree, the plaintiff is entitled to the said money from the defendant. The defendant is liable to pay the sum which he had withheld and retained from out of the coffee estate for 1962-63 season for payment towards the value of the fertilisers supplied to the plaintiff by the M.C.M. Limited. I, therefore, answer the first issue accordingly in favour of the plaintiff in the affirmative.'

I am satisfied that the learned Munsiff has arrived at that finding on a proper assessment of the evidence let in before him. The Civil Judge has rightly concurred with the same.

7. The question that survives for consideration in this appeal is as to whether the suit was barred by time?

8. According to the plaintiff the cause of action to file the suit had arisen since 30-8-1969 on which day he had been forced to pay the amount payable to m/s. M.C.M. Ltd. In addition to this he alternately pleaded that in so far as the claim in question is concerned the defendant stood to him as a trustee and therefore the suit was not barred by time. The suit was filed on 4-1-1971. Both the courts below are of the view that the suit was governed by Article 113 of the Limitation Act, 1963 (the Act). Both the learned Counsel are also of the view that it is Article 113 that applies to the claim.

9. Article 113 of the Act corresponds to Article 120 of the Limitation Act, 1908. This Article is a residuary Article providing for cases not covered by the other Articles under the Act. Any suit filed under Art. 113 will have to be filed within three years from the date when the right to sue accrued.

10. When did the right to sue accrue in this case is the question. The view of the Civil Judge is that the plaintiff had come to know in the year 1965 itself that the defendant had not paid the money payable to M/s. M.C.M. Ltd., and that at least within three years from that time he should have filed the suit. That was not the way in which the courts below should have approached this question. There was no time limit within which the defendant had to make payment to M/s. M.C.M. Ltd. At any rate, that is not his case Counsel for the appellant-plaintiff made a submission that he was all the while expecting that better sense would dawn on the defendant and he would pay for the manure supplied by the said concern to him (the plaintiff). It is true that the defendant could have paid the amount even when the suit against the plaintiff filed by that concern was pending. That suit having been decreed the plaintiff was forced to pay and he says that only thereafter the cause of action had arisen for him to recover the amount equivalent to the sum he had paid to M/s. M.C.M. Ltd.

11. As observed by the High Court of Patna in State of Bihar v. Motilal Chamaria (AIR 1964 Pat 127) that under Art.120 (old), 'the question as to when a 'right to sue' arises depends mostly on the facts and circumstances of each case'. In the instant case we have to take into consideration not merely what the plaintiff says but also the stand taken by the defendant on this question.

12. The Supreme Court had occasion to consider the ambit and scope of Article 120 (old) on the question as to when the right to sue accrues to the plaintiff under that Article the Court observes in Mst. Rukhmabai v. Lala Laxminarayan : [1960]2SCR253 as follows at para 33 :

'The legal position may be briefly states thus : The right to sue under Art.120 of the Limitation Act accrues when the defendant has clearly and unequivocally threatened to infringe the right asserted by the plaintiff in the suit. Every threat by a party to such a right, however, ineffective and innocuous it may be, cannot be considered to be a clear and unequivocal threat so as to compel him to file a suit. Whether a particular threat gives rise to a compulsory cause of action depends upon the question whether that threat effectively invades or jeopardizes the said right.'

In Rakhmabai's case (supra) the plaintiff in the suit had claimed a declaration that a certain trust deed said to have been executed in the year 1916 was a sham document and that under that deed the contesting defendant had not secured any right or interest over the suit house. It may be noted that the plaintiff, who was in possession of the suit house knew about a certain litigation concerning this very house between this defendant and another person. Though he was aware of that fact and knew that a decision in that suit, one way or the other, may affect the house property of which he was in possession, he had not taken any steps to intervene in the suit, nor any other action to vindicate his right in the house in question. When the party, who was successful in that litigation, proceeded to evict this plaintiff from the house he filed a suit for a declaration as stated above. In that case 9supra), while pleading on behalf of the contesting defendant that the suit was barred by time, it was argued that the plaintiff had knowledge of the fraudulent character of the trust deed as early as 1916, or, at any rate, during the pendency of the partition suit between Rukhmabai and Chandanlala instituted in the year 1929, and that the suit filed in 1940, admittedly after six years of the said knowledge, was barred by limitation under Art.120 (old). Repelling that contention and relying on three decisions of the Privy Council, and one of the Madras High Court, this is what was stated by the Supreme Court in that case :

'This Article was subject to judicial scrutiny both by the Judicial Committee as well as by the High Courts of various States. The leading decision on the subject is that of the Judicial Committee in Mt. Bolo v Mt. Koklan . Therein Sri Benod Mitter observed : 'There can be no right to sue until there is an accrual of the right asserted in the suit and its infringement, or at least a clear and unequivocal threat to infringe that right, by the defendant against whom the suit is instituted'.

The said principle was restated and followed by the Judicial Committee in Annamalai Chettiar v. A.M.K. C.T. Muthukaruppan Chettiar , and in Govinda Narayan Singh v. Shamlal Singh . The further question is, if there are successive invasions or denials of a right, when it can be held that a person's right has been clearly and unequivocally threatened so as to compel him to institute a suit to establish that right. In Pothukutchi Apparao v. Secy. of State (AIR 1938 Mad 193 at p.198), a Division Bench of the Madras High Court had to consider the said question. In that case, Venkatasubba Rao.J., after considering the relevant decisions, expressed his view thus :

'There is nothing in law which says that the moment a person's right is denied, he is bound at his peril to bring a suit for declaration. The Government beyond passing the order did nothing to disturb the plaintiff's possession. It would be most unreasonable to hold that a bare repudiation of a person's title, without even an over act, would make it incumbent on him to bring a declaratory suit'.

He adds at p.199 :

'It is more difficult question, what is the extent of the injury or infringement that gives rise to, what may be termed a compulsory cause of action?'.

(Paras 31 and 32)

Further at para-34, in the end, the Court observes thus

'From the aforesaid facts, it is manifest that the plaintiff's right to the property was not effectively threatened by the appellant till the Commissioner came to divide the property. It was only then there was an effectual threat to his right to the suit property and the suit was filed within six years thereafter. We therefore, hold that the suit was within time'.

13. Now, in the instant case no doubt the plaintiff was aware that the defendant had not paid the money payable by him to M/s. M.C.M. Ltd., to that concern. But, we do not find anything on record to show of the defendant having completely disclaimed his responsibility to discharge that debt. On the question of limitation the defendant makes a very bold statement in his written statement merely stating that the suit was barred by time. He has not stepped into the witness box nor has he adduced any evidence in this connection. there was no time limit within which he had to discharge the said debt. The plaintiff says that the defendant could have paid the said sum at any time before he, the plaintiff, had paid in satisfaction of the decree. Both the courts below are of the view that the plaintiff having come to know soon after 1962-63 that the defendant had not discharged the debt of M/s. M.C.M. Ltd., should have filed the suit within three years from the date of that knowledge. As already stated there is nothing on record to show of the defendant having denied his liability to make that payment. he was evading to reply and perhaps, was not responding to the repeated request made by the plaintiff to pay the money that was retained by him to M/s. M.C.M. Ltd. As observed by the Madras High Court in Pothu Kutchi Appa Rao v. Secy of State (AIR 1938 Mad 193 at 198) (which has been referred to with approval by the Supreme Court in Rukhmabai's case : [1960]2SCR253 , that there is nothing in law which says that the moment a person's right is denied, he is bound to rush to the Court or that cause of action would arise to approach the court. As stated in Rukhmabai's case that the right to sue accrues only when there is a clear and unequivocal threat to the party's right. In order to understand this position as to whether there was such a threat or infringement to the plaintiff's right what the contesting defendant says in the cause assumes importance. This aspect was taken into consideration while examining the scope of Art. 120 (old) by the Privy Council in Annamalai Chettiar v. A.M.K.C.T. Muthukaruppan Chettiar also a decision cited with approval by the Supreme Court in Rukhmabai's case. After examining the rival contentions and while considering the relative merit of the same on the question of limitation their Lordships of the Privy Council stated : 'Counsel for the appellants admitted that he was unable to specify any date at which the claim to an account here in suit was denied by the appellants. Accordingly this contention fails' (page-12).

14. After the plaintiff paid the amount due to M/s. M.C.M. Ltd., the defendant had no occasion and could not have paid the said debt to that concern. The plaintiff's claim that the fact was a clear indication to him that the defendant did not want to make that payment and desired to unjustly enrich himself by retaining that money with him without accounting for the same to him and that therefore cause of action to file the suit against him had arisen thereafter, has certainly some force. In the circumstances of the case and for the reasons stated above it cannot be said that the suit filed as it is within three years from the date on which the plaintiff had paid the money to M/s. M.C.M. Ltd., is barred by time. The contrary view taken by both the courts below is liable to be rejected.

15. Therefore, this appeal is allowed and the judgment and decree dated 19-10-1974 of the Civil Judge, Chickmagalur, in R.A.No.100 of 1973 and the judgment and decree dated 23-7-73 of the Munsiff, Chickmagalur, in O.S.No.2 of 1971, are hereby set aside. The plaintiff's suit is decreed as prayed for with costs throughout.

16. Appeal allowed.


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