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Marni Veeranna Chowdary and ors. Vs. Kanumuri Lakshminarayana Rao and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtAndhra Pradesh High Court
Decided On
Case NumberAppeal No. 195 of 1975
Judge
Reported inAIR1977AP405
ActsLimitation Act, 1908 - Schedule - Articles 53, 111 and 116; Limitation (Amendment) Act, 1963; Transfer of Property Act - Sections 55(5)
AppellantMarni Veeranna Chowdary and ors.
RespondentKanumuri Lakshminarayana Rao and ors.
Appellant AdvocateK. Raghava Rao and ;V. Ramana Rao, Advs.
Respondent AdvocateC. Poornaiah, Adv.
Excerpt:
limitation - registered sale deed - articles 53, 111 and 116 of schedule to limitation act, 1908, limitation (amendment) act, 1963 and section 55 (5) of transfer of property act - registered sale deed dated 12.06.1962 recited that entire consideration already paid to plaintiff - suit filed on 23.12.1967 for recovery of certain amount on ground that no amount paid under sale deed - whether suit barred by limitation - one of essential recitals in sale deed itself not true - claim of plaintiffs did not flow from and not based upon terms of registered sale deed but independent of it - article 111 applicable prescribing period of three years - held, suit barred by limitation. - - the government, as well as several tenants were asserting their own rights in respect of the said land......jeevan reddy, j. 1. defendant is the appellants. the court below has decreed the respondents' suit for recovery of a sum of rs. 10,000 being the unpaid purchase money with interest @ 12% per annum. 2. according to the plaint averments, the first plaintiff (the suit was originally filed by this plaintiff alone and, on his death pending the suit, his legal representatives were brought on record as plaintiffs 2 to 4) purchased an undivided 1/3 share in an extent of 15,000 acres agency area of orissa state, under a sale deed dated 29-3-1961, from one b. suryanarayana rao. out of the said 1/3 share, he sold half the share to the defendant under a registered sale deed dated 12-6-1962. though the sale-deed recites that the entire consideration was received by the first plaintiff prior to the.....
Judgment:

Jeevan Reddy, J.

1. Defendant is the appellants. The Court below has decreed the respondents' suit for recovery of a sum of Rs. 10,000 being the unpaid purchase money with interest @ 12% per annum.

2. According to the plaint averments, the first plaintiff (The suit was originally filed by this plaintiff alone and, on his death pending the suit, his legal representatives were brought on record as plaintiffs 2 to 4) purchased an undivided 1/3 share in an extent of 15,000 acres agency area of Orissa State, under a sale deed dated 29-3-1961, from one B. Suryanarayana Rao. Out of the said 1/3 share, he sold half the share to the defendant under a registered sale deed dated 12-6-1962. Though the sale-deed recites that the entire consideration was received by the first plaintiff prior to the execution of the said deed, the defendant did not actually pay the said consideration either wholly or partly. According to the first plaintiff his house was mortgaged to the defendant under a mortgage deed dated 31-1-1955, for a sum of Rs. 3,500 and that his son also had obtained a loan of Rs. 1,000 under a promissory note, from the defendant. Both the said debts were to be discharged and the balance amount, if any left, was to be applied towards discharging the miscellaneous debts of the plaintiff. It is in the above circumstances, that the sale-deed dated 12-6-1962, recited that the first plaintiff has already received the consideration. The said arrangement is evidenced by the draft of the sale-deed prepared by the Notary, Sri M. Sitarama Rao. After the execution of the said sale, the first plaintiff and his co-sharers executed a Power of Attorney in favour of the defendant to resolve and settle the several disputes in respect of the said total extent purchased by them. The Government, as well as several tenants were asserting their own rights in respect of the said land. However, the said power of Attorney was later cancelled on the ground that the defendant was not taking active steps as contemplated by the parties. It is then stated that the first mortgagee of the plaintiffs house filed a suit, O. S. No. 115/1959, on the file of the sub-court. Kakinada, and brought the said house, to sale. After discharging his debt, the balance amount of Rs. 11,000 was lying in Court which was withdrawn by the defendant without any authority, taking advantage of the financial difficulties in which the first plaintiff and his family were then placed. Defendant induced the first plaintiff to sign certain papers agreeing to his (defendant's) withdrawing the said amount, which the first plaintiff did in good faith and having regard to the fact that the defendant was a rich and highly influential person, and also because the defendant affirmed on solemn oath that he would make over the amount withdrawn by him from the Court, to the first plaintiff. However, the defendant failed to so hand over the amount, whereupon the first plaintiff was obliged to issue a notice dated 5-10-1967, to which the defendant sent a reply dated 24-10-1967, repudiating the first plaintiff claim. The first plaintiff reiterated that no amount whatsoever was paid to him under the sale-deed dated 12-6-1962, and hence the defendant is liable to pay the same along with interest. The suit was filed in forma pauperis. Schedule A appended to the plaint mentions the names of eight villages wherein the said land is situated.

3. Defendant denied any knowledge of sale-deed under which the first plaintiff and his co-sharers purchased the said extent of 15,000 acres and also of the disputes, if any, between them and the Government and/or tenants. According to him, the first plaintiff offered to sell half the share in his 1/3 undivided interest and that he purchased the same for due consideration which was paid by him to the first plaintiff on 22-5-1962. He denied the truth of the plaintiffs averment that the money due to him under a mortgage and a promissory note executed by the first plaintiff son was agreed to be set off against the said consideration. He also denied the allegation that the draft sale deed contained any recital which evidenced such an arrangement between the parties, or that the said recital was scored out at his instance. He, however, admitted that the first plaintiff and his co-sharers executed a Power of Attorney in his favour with a view to raise huge funds to commence the work of mining the ores from the said land. Since the defendant could not devote proper attention to the said matter on account of his other affairs, there was some delay on his part in arranging the finances, and when he was about to go to Bombay and Delhi to raise the necessary funds, the first plaintiff and his co-sharers revoked the Power of the withdrawal of money lying to the credit of O. S. No. 115/1959, on the file of the Sub-Court, Kakinada, he pleaded that he withdrew the said amount towards the money due to him under the mortgage and that, he did so only after the first plaintiff and his son stated before the Court that the defendant is entitled to receive the said amount. He denied all other allegations made in the plaint. He also raised a plea of limitation.

4. On the above pleadings, the Court below framed appropriate issues and found that the defendant has failed to establish that he paid the consideration of Rs. 10,000 as alleged by him and that, for that reason, the plaintiffs are entitled to recover the said amount along with interest claimed by them. On the question of limitation also the trial Court held in favour of the plaintiffs. Hence this appeal by the defendant.

5. Sri K. V. Ramana Rao, the learned counsel for the defendants-appellant, disputed the findings of the trial Court on both the issues. Learned counsel submitted that the evidence on record is wholly insufficient to establish the first plaintiff averment that he did not receive any consideration under the sale-deed (Ex. B-1). The non-examination of the Notary Sri M. Sitarama Rao, who is said to have prepared the draft of the sale-deed (Ex. A-2) is stated to be fatal to the plaintiffs case. On the question of limitation, the learned counsel submitted that if Article. 62 of the Limitation Act, is said to be the appropriate Article., the suit would have to be filed in the State of Orissa where the property is situate, and could not have been filed in the Kakinada Court. According to him, Article. 53, is the appropriate Article., applicable herein, and since the suit is admittedly filed beyond the three years' period prescribed by the said Article., the suit is `barred.

6. On the other hand, Sri C. Poornaiah, the learned counsel appearing for the respondents- plaintiffs, supported the reasoning and the conclusion of the trial Court on the first issue. With respect to the plea of limitation, however, the learned counsel did not support the reasoning of the trial Court. According to him, Article. 116 of the old Limitation Act, which provides for a period of six years, is applicable to the present suit and, by virtue of Section 30 of the present Limitation Act, the first plaintiff was entitled to file the suit within the period of six years. Inasmuch as the present suit is admittedly filed within six years of the sale-deed, counsel submits, the suit is within limitation. Alternatively it is contended that the withdrawal of the amount by the defendant from the Court in 1966 furnishes the cause of action for the present suit, and even if Article. 55 of the present Limitation Act., is held to be applicable even then the suit is within limitation. The contention of the learned counsel on this aspect has been that, in every case of a registered document, it is Article. 116 of the old Act, which is applicable, and not Article. 11 (which corresponds to Article. 53 of the present Act).

7. We shall first take up for our consideration the question whether the defendant paid the consideration under Ex. B-1, as alleged by him. This aspect is covered by issues 1 to 3 framed by the trial Court. Ex. B-1 recites that the consideration agreed between the parties is Rs. 10,000 and that, the said amount, 'the vendee has already paid'. The vendor also acknowledged the receipt of the said sum in the said document. The said deed however, does not recite the date on which, or the manner in which the said amount of Rs. 10,000 was paid to the 1st. In the written statement, as well as in the reply notice (Ex. A-6) issued by the defendants counsel to the plaintiffs counsel, it is stated that the said amount was paid on 22-5-1962. No receipt or any other writing is forthcoming to evidence the said payment, except the account-books of the defendant (to which we shall make a reference presently). The defendant has also not set out or explained the circumstances in which the said amount was paid on that day. It is not as if an agreement of sale was executed on that date, nor does it appear that there was any other occasion for paying the said amount on that date. It appears unlikely that the defendant would have paid a sum of Rs. 10,000 in cash to the first plaintiff even prior to the execution of a sale-deed without obtaining a receipt or without obtaining an acknowledgment in writing. Another circumstance to be noted in this context is that the first plaintiff was admittedly, owing a substantial sum of money to the defendant under a mortgage executed by the first plaintiff in favour of the defendant. The first plaintiff had mortgaged his only residential house in favour of one K. Nagabhushanam, and the defendant was the second mortgagee of the said house. The amount received by the first plaintiff from the defendant under the said mortgage was Rs. 3,500, which was in the year 1955. By 1962, a substantial amount by way of interest must also have got added to the principal. P. W. 1 too owed a sum of Rs. 1,000 under a promissory note. When the first plaintiff had no other property and was selling his half share in the Orissa land to the defendant, it appears unlikely that the defendant would have paid the entire consideration in cash to the first plaintiff without referring to, or providing for the said mortgage debt. In the context of the above circumstances, we shall now refer to the oral evidence, as well as to the entries in the defendants account-books relevant in this behalf.

8. Defendant as D. W. 1 has deposed that he and the first plaintiff were childhood friends. The talks for the sale of land in his favour took place at Kakinada, where he paid the amount of Rs. 10,000. He says that Sri Sitarama Rao, the Notary, came to Kakinada and that, from here they went to Koraput. He says that the first plaintiff had executed a second mortgage in his favour in respect of his ( first plaintiff) residential house and that P. W. 1, also owed a sum of Rs. 1,000 to him. He denies that the Notary prepared a draft (Ex. A-2), signed by him, shows that he is reasonably well acquainted with the English language. In cross-examination he stated that the talks in respect of the said transactions were finalised 20 days before the sale-deed and that, he purchased the land from the first plaintiff expecting profit in lakhs of rupees. He admits that the first plaintiff got the draft of the sale-deed prepared, but says that the Notary who prepared the draft went away even before the registration of the sale deed. He asserts that he paid the sum of Rs. 10,000 in May, 1962, but he is not able to remember the date. Though charges, his own accounts contain a contrary entry. It is rather strange to note that the defendant does not refer to his accounts in his chief-examination at all; he was questioned about the said accounts in cross-examination. He admits that one Govindu writes his accounts. When it was suggested to him that part of entry. Ex. B-10 and the entry, Ex. B-14, in his Chitta are interpolations, he replied that he does not know. He went to the extent of stating that he does not know as to when the entry (Ex. B-14) was made and that, he did not give instructions to make any such entry. He does not also explain the entry, Ex. B-11, in his Avarja (ledger) which in our opinion, is highly significant in the circumstances of the case.

9. Before referring to the evidence of the plaintiffs witnesses it would be appropriate to refer to the Khata entries in the accounts of the defendant. Ex. B-10 is an entry in the Chitta (day-book) of the defendant, which shows that a payment of Rs. 10,000 was made to the first plaintiff on 22-5-1962. The words 'for the purchase of land', however appear to be in a different ink. Ex. B-14, is another entry (two separate entries) in the same account-book showing that certain expenditure was incurred towards stamp and registration charges of the sale-deed on a later date. Ex. B-14, clearly appears to have been written later and can be said to be an interpolation, since even the accounts mentioned in the appropriate columns are also corrected to correspond with the said interpolation. However, much does not turn upon these entries. They are not signed or acknowledged by the first plaintiff, nor the clerk Govindu, who wrote the said entries, has been examined nor does the defendant prove the said entries while in the witness box. In fact, he has in a sense, disowned the said entries. Ex. B-11, which is an entry in the ledger, however, is significant. The said entry shows that a sum of Rs. 10,000 was paid to the first plaintiff on 22-5-1962, and that, on the same day, an amount of Rs. 10,000 was again received back by the defendant under the entry. In other words the entry shows that a sum of Rs. 10,000 was paid to the first plaintiff, and again received back on the same day. Curiously enough, this entry was put to P. W. 2 by the defendants own counsel. Of course, the defendants counsel wanted to rely upon the first portion of Ex. B-11, which shows that a sum of Rs. 10,000 was paid to the first plaintiff. But, the second half of the laid entry demolishes the defendants case, and yet the defendant has made no attempt whatsoever to explain the said entry nor has he examined his clerk, Govindu, who has written the said entry, to explain the same.

10. The first plaintiff having died prior to the commencement of the trial, his son (the second plaintiff) has been examined as P. W. 1. He has deposed that the defendant knows English and the Ex. A-1, letter is written by him. He has spoken of the sale-deed (Ex. B-1) in favour of the defendant and that, the draft of the sale-deed (Ex. A-2) was prepared by the Notary, Sri M. Sitarama Rao. He claims to have been present when the draft was prepared and later on corrected.

11. He denies having received the consideration of Rs. 10,000 from the defendant. He also speaks to the defendant withdrawing the amount lying to the credit of O. S. No. 115/1959 on the file of the Subordinate Judge's Court, Kakinada, and states that they agreed to the defendants withdrawing the said amount from the Court, out of regard and respect for him and because of the latter's promise that he would make over the said amount to the plaintiffs after withdrawing the same. In cross-examination he deposed that the negotiations leading to Ex. B-1 were held at Kakinada and at Koraput and that himself, his father (1st plaintiff ), and the defendant were present on those occasions. He admitted that he deposed in the Sub-Court, Kakinada, to the effect that the defendant may be paid the amount lying to the credit of O. S. No. 115/59 but, according to him, it was in pursuance to a prior arrangement. He was however unable to give any explanation for not examining the said Notary, Sri M. Sitarama Rao.

12. P. W. 2 is said to have worked as a clerk under the defendant until about a year prior to his examination as a witness. He signed Ex. B-1 as an attestor and it was he who identified the first plaintiff before the Registrar. He speaks of a Hyderabad advocate preparing the draft of the sale-deed (The notary, Sri M. Sitarama Rao, is an advocate from Hyderabad). Though the sale-deed Ex. B-1, recites that the consideration was paid and received, he asserts that it was not correctly recited. He also deposes, that the money withdrawn from the sub-court, Kakinada was agreed to be paid back to the first plaintiff by the defendant but that, it was not so paid. In cross-examination he deposed that the entries, Exs. B-10, B-11 and B-14, are in the hands of one Govindu, a clerk of the defendant. He admitted that he cannot identify the handwriting either in Ex. A-1, or in Ex. A-2, the draft of the sale-deed. He also expresses his ignorance about the contents of the draft. He further admits that the talks first took place at Velangi but that, he was not present there, nor is he aware whether a sum of Rs. 10,000 was paid to the first plaintiff by the defendant at Velangi.

13. Ex. A-2 is said to be the draft of the sale-deed prepared by the Notary, Sri M. Sitarama Rao who is also an advocate practising at Hyderabad. The second page of the said draft as originally prepared, contains a recital to the effect that the purchaser (defendant) has accepted to pay the consideration in the form of cancelling the registered mortgage of the house property at Kakinada for Rs. 3,500 executed by the vendor (the first plaintiff), his wife and his son in favour of the purchaser, and another promissory note for Rs. 1,000 executed by the son of the vendor in favour of the purchaser, and other miscellaneous debts. The draft contains a note that the other miscellaneous debts were to be specified therein. However, the said recital was cut out and in its place it was written that the vendee has already paid the consideration of Rs. 10,000 receipt of which sum the vendor acknowledged thereunder. Admittedly the Advocate-Notary who prepared the said draft, is available and no explanation has been offered by the plaintiffs for not examining him. Counsel for the respondents- plaintiffs however, contended that the handwriting in Ex. A-2(the entire Ex. A-2 is in handwriting, and not in type) is identical with the handwriting, in Exs. A-10, A-11 and A-16 which are admittedly, in the hands of the said Notary. Learned counsel requested us to compare the handwriting in the said letters with the handwriting in Ex. A-2. According to him it is of the same person. We have looked into the said documents and though prima facie it appears that the writing in Ex. A-2 is by the same person who wrote the said letters, yet we are not in a position to form definite opinion on this aspect. In any event, as we have observed, no valid explanation has been given for not examining the said advocate and, in those circumstances, not much significance can be attached to the said draft.

14. On a consideration of the entire evidence and probabilities referred to above, we are of the opinion, that the defendant has failed to establish that he paid the consideration of Rs. 10,000 or any part thereof to the first plaintiff, as alleged by him. We have already referred to the several probabilities, appearing against the defendants case, and the entry Ex. B-11 in his own ledger. We have also emphasized the reluctance of the defendant to refer to or to affirm the entries, Exs. B-10 and B-14, in his second-books, as well as his failure to examine his clerk, Govindu, who made the said entries. We, therefore, agree with the learned Subordinate Judge that the first plaintiff did not receive the consideration of Rs. 10,000 though it is so recited in Ex. B-1 and that the said recital in Ex. B-1 is not true.

15. The next question that arises for our consideration and which presents quite some difficulty, relates to the plea is limitation raised by the defendant. The sale-deed, (Ex. B-1) recites that the entire consideration was already paid to the vendor. Ex. B-1 is dated 12-6-1962, whereas the present suit has been instituted on 23-12-1967. i.e., beyond a period of three years but within a period of six years. The contention of the defendant, both in the trial Court as well as before us is that it is Article. 53 of the present Limitation Act, (prescribing three years) that is applicable and that the suit is, therefore, barred by limitation. The learned Subordinate Judge, repelled the said contention by holding that it is Article. 62 (prescribing twelve years) which is applicable and that therefore, the suit is within limitation. But, Sri C. Poornaiah, the learned counsel for the plaintiffs- respondents did not and in our opinion rightly, support the said reasoning of the trial Court. If it is Article. 62 that is applicable, then the suit ought to be filed in the Court within whose territorial jurisdiction the lands in question are situate, i.e., in Orissa. Moreover, the present suit is not for enforcing a statutory charge upon the said lands created by Section 55 (4)(b) of the Transfer of Property Act, but it is a simple suit for recovery of unpaid purchase money and a decree is sought against the defendant personally. There are absolutely no words in the plaint referring to any charge, or seeking to enforce any such charge. The reason given by the trial Court on this aspect, therefore, is unsustainable; counsel for the respondents-plaintiffs, however, sought to sustain he suit on two grounds, viz. (i) it is governed by Article. 116 of the Limitation Act 1908, and that, by virtue of Section 30 of the present Limitation Act, the first plaintiff was entitled to institute the present suit within the six years period of limitation provided by the said Article. 116, (ii) alternately, it is argued that since the defendant, having agreed, at the time of the transaction of sale, to give discharge to the mortgage in his favour, failed to do so and, on the contrary, withdrew the amount lying to the credit of the aforementioned suit, O. S. No. 115/59, and since he also failed to make over the said withdrawn amount to the plaintiffs he must be deemed to have committed a breach of the terms of Es. B-1, which gives rise to a cause of action for the plaintiffs to sue for the refund of the said money and inasmuch as the said withdrawal of money from the Court was in 1966, the suit instituted within three years thereof is within limitation. We shall consider the above submissions in their proper order.

16. For a proper appreciation of the said contentions it would be appropriate to set out the relevant Article. of the present Limitation Act, as well as of the Limitation Act, 1908. Article. 53, Article. 55 and Article. 62 of the present Limitation Act, read as follows :-

'53 By a Vendor of Three Years. The time fixed forimmovable property completing the sale,for personal payment or (where the titleof unpaid purchase- is accepted after themoney. time fixed for completion)the date of the acceptance.''55 For compensation Three Years. When the contract isfor the breach of any broken or (where therecontract, express or are successive breaches)implied not herein when the breach in respectspecially provided for. of which the suit isinstituted occurs or wherethe breach is continuing when it ceases.''62 To enforce payment Twelve Years. When the money suedof money secured by a for becomes due',mortgage or otherwise charged upon immovable property.

Article. 53 of the present Limitation Act, corresponds to Article. 111 of the 1908 Act, while the present Article. 55, corresponds to Article. 115 and Article.116 of the said previous Act. Article. 62 in turn corresponds to old Article. 132. There is absolutely no change in the language of Article. 53. It is absolutely the same as in the old Article. 111. For the purpose of this case, however, it is necessary to set out Article. 115 and Article. 116 of the 1908 Act, since the language of the present Article. 55 is totally at variance. They read as follows:

'115. for compensation Three years. When the contract isfor the breach of any broken, or (wherecontract express or there are successive implied not in writing breaches) when theregistered and not breach in respect of herein specially which the suit isprovided for. instituted occurs, orwhere the breach is continuing when it ceases'.116. For compensation Six Years. When the period of for the breach of a limitation would begincontract in writing to run against a suitregistered. brought on a similar contract not registered.'

17. Though the language of the previous Article. 132, is different from that of the present Article. 62, it is not necessary to refer to the same for the purpose of this case. We may now set out Section 30 of the present Act :-

'Section 30. Provision for suits, etc., for which the prescribed period is shorter than the period prescribed by the Indian Limitation Act, 1908. Notwithstanding anything contained in this Act :-

(a) any suit for which the period of limitation is shorter than the period of limitation prescribed by the Indian Limitation Act, 1908, may be instituted within a period of five years next after the commencement of this Act, or within the period prescribed for such suit by the Indian Limitation Act, 1908, whichever period expires earlier;

(b) any appeal or application for which the period of limitation is shorter than the period of limitation prescribed by the Indian Limitation Act, 1908 may be preferred or made within a period of ninety days next after the commencement of this Act, or within the period prescribed for such appeal or application by the Indian Limitation Act, 1908, whichever period expires earlier.'

18. It is not in dispute that if Article 116 of the 1908 Act applies to this case, the suit would be within limitation by virtue of the saving clause contained in S. 30, referred to above. The question, however is whether Article. 116 applies? On the basis of certain decisions (which we shall presently refer to), it is contended by Sri C. Poornaiah that wherever there is a breach of a contract which is in writing and registered, it is Article. 116 alone that applies, and not Article. 11 (present Article. 53). Counsel for the appellant however, submits that even if it is so, there is no breach of contract in this case and that, what the plaintiffs are really complaining of is not that the defendant has committed a breach of the contract in writing and registered, but that one of the recitals in the said contract is itself false and that, the defendant-vendee is under an obligation to pay the purchase-money to the vendors. In other words, the contention is that the plaintiffs are really seeking to enforce the statutory obligation case upon the vendee (by S. 55 (5)(b) of the Transfer of Property Act) to pay the purchase money to the seller. He, therefore contends that Article. 116 which is applicable only to cases where compensation for breach of contract is sought to be recovered has no application to the facts of this case. After giving our earnest consideration to the above contentions, we are inclined to agree with the learned counsel for the defendant appellant. We cannot agree with Sri C. Poornaiah, the learned counsel for the plaintiffs- respondents, that this is a case where the plaintiffs are seeking to recover, compensation (even if that expression is understood in a wider sense) for the breach of any contract. Had this been a case where the document created an obligation upon the vendee to pay the purchase money, either wholly or partly, on a future date, either to the vendor or to his nominee, or had it been a case where the vendee had undertaken to apply a part of, or the whole of the purchase-money for discharging certain encumbrances, or other obligations attaching to the property in question, on behalf of the vendor, and if he failed to live up to his undertaking it could then be said that there is a breach of the contract, and in such a case limitation, obviously, commences to run from the date of breach. For understanding the expression, 'breach of contract' we have to take the contract, as it stands, we have to take the contract, as it stands. In other words, we must treat the recitals contained in the contract, as good and then find out whether there has been any breach. But, that is not the case here. In this the vendee had not undertaken to pay the consideration at a future date, or to apply it for some specified purposes on behalf of the vendor, but this is a case where the document recites falsely according to the plaintiffs, that the entire consideration was already to and received by the vendor. The plaintiffs' allegation that the said recital itself is untrue does not amount to an averment of breach of contract on the part of the defendant. The question in such a case would be whether the recital itself is true or not. In a given case the proof of such assertion would have the effect of invalidating the very sale transaction. If we keep this distinction in our mind, then there would be no difficulty in appreciating the principle the decisions cited at the Bar.

19. The first decision cited by Sri C. Poornaiah, the learned counsel for the plaintiff- respondents is of the Privy Council, reported in Tricomdas Cooverji Bhoja v. Gopinath Tiu Thakur , (1917) ILR 44 Cal 759 : (AIR 1916 PC 182). That was a suit for recovery of royalties due under a registered lease, and the question was whether Article. 116 of the Lim. Act, 1877, applied or Article. 110 thereof (Both Arts. 116 and 110 of the 1877 Act, are the same as Arts. 116 and 110 respectively of the 1908 Act. Article 110 provides for a three year period of limitation and is applicable to suits for recovery of arrear of rent). Their Lordships of the Privy Council referred to the above Articles and to the corresponding Articles in the previous enactments, and observed:- (at page 184 of AIR)

'............. Both these acts, (Acts of 1877 and 1871) draw, as the Act of 1859, had drawn, a broad distinction between unregistered and registered instruments much to the advantage of the latter. The question eventually arose whether a suit for rent on a registered contract in writing came under the longer or the shorter period. On the one hand it has been contended that the provision as to rent is plain and ambiguous, and ought to be applied, for the breach of a contract' points rather to a claim for liquidated damages than to a claim for payment of sum certain. On the other hand it has been pointed out that 'compensation' is used in the Indian Contract Act in a very wide sense, and that the omission from Article. 116 of the words, which occur in Article. 115, ' and not herein specially provided for' is critical. Article 116 is such a special provision and is not limited and therefore especially in view of the distinction long established by these acts in favour of registered instruments, it must prevail. There is a series of Indian decisions on the point several of them in suits for rent though most of them are in suits on bonds. They begin in 1880, and are to be found in all the Indian High Courts. In spite of some doubts once only was it held in 1903 (Ram Narain v. Kamta Singh, (1903) ILR 26 All 138), that in such a suit Article. 110 and Not Article. 116 applied. Then in 1908 and in this state of decisions , Act IX of 1908, replaced Lim. Act of 1877, without altering the language or arrangement of the articles and in 1913, in Lalchand v. Narayan, (1913) ILR 37 Bom 656 the High Court of Bombay held that especially in view of this enactment, the current of decisions must be followed and Ramnarain's case (1903) ILR 26 All 138 must be disapproved. In the present case, the High Court treated the matter as settled law in the same sense ......................................'

20. It will immediately be seen that this was a case where the lessee having undertaken to pay royalties on or before a specified date, failed to do so and thus there was a breach of the contract, as it stood. Though the recovery of arrears of rent could not strictly be called 'compensation' yet the Privy Council pointed out that the expression 'compensation' is used in the Indian Contract Act in a very wide sense, and because (which words have been emphasized by the Privy Council in the extract given above) it was held that even such a claim can broadly be brought under the category of 'compensation'. The Privy Council however, placed more emphasis upon the established line of decisions rendered by the Indian Courts applying the longer period of limitation in the case of registered instruments, and expressed their reluctance to depart from the said line of authorities.

21. The next case cited by Sri C. Poornaiah, is Shanti Swarup v. Munshi Singh, : [1967]2SCR312 . In this case, the conveyance contained a covenant obliging the purchaser to pay an encumbrance on the property sold, and the purchaser failed to pay off the same. Accordingly it was held that Article. 116 is attracted. The Supreme Court again emphasised the well established distinction maintained by the Indian Courts between registered and unregistered documents and further held that, in the case of such breach on the part of the purchaser as took place in that case, the vendor has two remedies, viz., either to bring an action to have himself put in a position to meet the liability which the purchaser has failed to discharge (in which case Article. 116 would be applicable) or to bring a suit on the contract of indemnity ( in which case Article. 83 would be attracted). The case before the Supreme Court was, however, a clear case of a breach of contract, and there can obviously be no difficulty in applying Article. 116 to such a case.

22. Counsel then relied upon Navamani v. Vedamanicka , AIR 1933 Mad 424 a decision of a learned single Judge of the Madras High Court. That again was a case where the conveyance obliged the vendee to discharge a mortgage debt out of the consideration payable, and the vendee failed to do so. On such a failure the mortgagor filed a suit and brought to sale not only the mortgaged property but also the other property in possession of the mortgagor. The mortgagor then filed a suit against the defaulting vendee for the mortgage debt, which the latter had undertaken to pay. An issue having arisen out whether Article. 116 or Article. 111 of the 1908 Act, applied to the facts of the said case, it was held that the former applied. This again is a clear case of breach of a covenant expressly undertaken by the vendee under the deed of conveyance.

23. The last case cited by Sri C. Poornaiah, is the one reported in Ram Raghubir v. United Refineries Ltd., AIR 1931 Rang 139. The facts of this case are: the plaintiff entered into an agreement with the defendants to sell a complete oil refinery for a total price of Rupees 5,50,000/-. A certain amount was paid by way of earnest money, and the agreement recited the manner in which the balance was payable. Subsequently , a registered sale deed was executed, and one of its terms was that the purchaser shall pay the balance of consideration (in the sum of Rs.2,00,000/-) within three months from the date of registration of the said sale deed. The purchaser also executed a promissory note in that amount in favour of the vendor, and though the possession of the refinery was given to the purchaser, the title deeds were kept with the vendor as a security for the balance amount. The purchaser sold the said refinery to a third party without paying the balance of consideration to the plaintiff, who then brought an action for its recovery. The purchaser pleaded the bar of limitation based upon Article. 111, which was repelled. It was observed by the Court :(at p. 144 of AIR)

'....................... It is now well settled law that Article. 116 applies, not merely to a suit for compensation for breach of contract in the narrower sense of the word compensation, but also to a suit for money payable under the terms of the contract, and that it is applicable in all cases in which the contract is in writing and registered, notwithstanding that there may be an article directly applicable to the class of contract in question. For example, although Article. 66 provides three years as the term of limitation for a suit on a bond, yet Article. 116 is applicable if the bond is registered. Again Article. 110 fixes the terms for a suit for arrears of rent, but if the rent falls due under a registered lease then Article. 116 applies................'

24. Though the above observations are rather widely worded, they have to be understood, in our opinion, in the light of the facts of that case, which disclose a clear breach of contract. They then referred to the decision of the Privy Council in Tricomdas Cooverji Bhoja v. Gopinath Tiu Thakur, (1917) ILR 44 Cal 759: (AIR 1916 PC 182), and the other decisions of the Indian Courts in support of the above preposition. It is however, unnecessary for us to refer to those various decisions.

25. On the other hand, the learned counsel for the defendant appellant brought to our notice the decision of a Division Bench of the Patna High Court in Ramparikha Pandey v. Ramjhari Kuer, AIR 1937 Pat 44. In this case, the respondent sold certain property to the appellant for a consideration of Rupees 6,000/- and in the Kabala there was a recital to the effect that full consideration had been paid. The respondent first brought an action claiming for a declaration that the sale deed was fraudulent and that he was not paid the consideration recited therein. The said suit was dismissed and it was held that the transaction was a completed one, though a particular portion of the consideration remained unpaid. The respondent then instituted another suit for enforcement of the statutory charge for the unpaid purchase money and obtained a decree for sale of the property; but he could recover only a part of the amount due to him by the sale of property. He then sought to realize the balance due by proceeding against the person of the purchaser. This was sought to be done by filing an application under Order. XXXIV, Rule. 6 Civil Procedure Code. It is unnecessary to refer to the several other circumstances arising and contentions raised in the said case. It is sufficient to mention that the Court held Article. 111 of the Lim. Act, to be applicable to the fact of the case, and not Article. 116, inasmuch as the suit was not one for 'compensation' for breach of a registered contract, but for enforcing the statutory obligation under Section 55(5)(b) of the T. P. Act. This decision clearly supports the distinction pointed out by us hereinbefore.

26. To the same effect is the decision of a Division Bench of the Madras High Court in Avuthala v. Dayumma, (1901) ILR 24 Mad 233. This decision decides two points. Firstly, it decides that to a suit for recovery of unpaid purchase-money due in respect of a sale of a land and to enforce and vendor's lies, Article. 111 of the Lim. Act is applicable; and secondly, that where a registered sale-deed recited that the price had been paid while, in fact it was not so paid a suit for recovery thereof, would not be governed by Article. 116. The said decision was however, overruled in Ramakrishna Ayyar v. Subrahmania Ayyar, (1906) ILR 29 Mad 305, in so far as the first point referred to above is concerned. But, in so far as the second point decided by it is concerned, it is still a good authority. In this connection we may notice a decision of a learned single Judge of the Nagpur High Court, in Shankar Rao v. Bhujangarao, AIR 1937 Nag 246. He refers to the points decided in Avuthala v. Dayumma, (supra) and then observes that the said decision has been overruled in Ramakrishna Ayyar (supra). The learned Judge, unfortunately, failed to notice that the decision in Avuthala v. Dayumma, (supra), was overruled only on one point, and not on both the points. The facts of the Nagpur case are: a property was sold for a consideration of Rs. 5,000/-. The recital in the sale deed with respect to consideration, read as follows :- (at p. 247 of AIR).

'................................................... I have received 5000 consideration of this sale as follows : I have mortgaged the above field to Govindrao Gopalrao.................(illegible) Deshmukh of Karkheda, for 1000. You have undertaken liability for 1200 including interest due on the mortgage deed without possession. Pay this amount and redeem the field from the mortgage, 3800 (three thousand and eight hundred rupees) has to be taken in cash before the Sub-Registrar Basim, I have thus received the total consideration of 5000 .........................................................................................................'

27. In other words, the document did not say that the entire consideration was paid. The sub-Registrar's endorsement and other evidence established that only a sum of Rs. 3,300/- was paid and not Rs. 3,800/- as contemplated by the parties. The suit was thus for recovery of the said balance of Rs. 500/- along with interest. In the above circumstances, it was held that Article. 116 is applicable, and not Article. 111 on the ground that Article. 116 applies even in the case of an implied covenant. But, in so far as the case before us is concerned we cannot imply a covenant inconsistent with the express stipulation in the sale-deed. Here, the sale-deed recites that the entire consideration has already been paid. The facts of the case before us are not like those as in the Nagpur's case, where the deed only recited that the consideration shall be paid before the Registrar, but the Registrar's endorsement itself showed that the consideration was not wholly paid, as contemplated. We are, therefore, unable to import in implied obligation as the one employed in the Nagpur's case.

28. On a review of the above decisions, we are of the opinion that Sri C. Poornaiah, is not right in submitting that wherever there is a registered document Article. 116 alone is applicable notwithstanding the nature of the claim. We are of the opinion, that to attract Article. 116 there must not only be a registered document, but the claim also must pertain to the breach of such registered contract. For finding out whether there is a breach of contract or not, we have to take the contract as it stands. If, however, it is sought to be established that the very recital in the contract is not true, and the money is sought to be recovered on the basis of an obligation defendant hors the contract, as in the present case, it cannot be said to be a claim arising on account of a breach of contract. The case of the plaintiffs herein is not that the defendant has committed the breach of any of the terms of the contract; but, their case, is that one of the essential recitals in the contract itself, is not true. The claim of the plaintiffs, therefore, does not flow from, and is not based upon the terms of the registered contract but is independent of it. The plaintiffs, in reality, are seeking to enforce the obligation of the vendee to pay the purchase-money as consideration, which obligation is given a statutory recognition, by Section 55(5)(b) of the T. P. Act. To such a case we are of the opinion, Article. 116 has no application. If that is so, the only other Article. which is applicable (where the vendor asks for a personal decree against the vendee) is Article. 111 (corresponding to Article. 53 of the present Act).

29. We may now deal with the alternative submission of Sri C. Poornaiah, the learned counsel for the plaintiff-respondents, viz., that the limitation, commenced to run on and from the date on which the defendant withdrew the money from the Court, because, according to the learned counsel it is on that day that the defendant withdrew the money unauthorisedly, instead of discharging the mortgage deed and the promissory note as agreed to by him at the time of Ex. B-1. We are unable to accede to this line of reasoning, which in fact seeks to give a new twist to the plaintiffs case, and to provide a basis not put forward by the first plaintiff himself. The plaintiffs case, as set out in the plaint is a simple one. They are asking for a decree in a sum of Rs. 10,000/- being the consideration under Ex. B-1, along with interest. They are not seeking to recover the amount of Rs. 11,000/- (which was unauthorisedly withdrawn by the defendant) from the Subordinate Judge's Court, at Kakinada. Moreover, Ex. B-1, recites that the consideration has already been received by the vendor, which means that the mortgage and the promissory note already stood discharged. There is no question of the defendant agreeing to give discharge thereafter. The plaintiffs case is not that the mortgage deed and the promissory note having been so discharged, the withdrawal of the amount from the Court, on the part of the defendant, is unauthorised, because in such a case they would have to sue not for recovery of the consideration of Rs. 10,000/-, but for recovery of the money unauthorisedly withdrawn from the Court by the defendant. That is not the basis of this suit. Counsel for the plaintiff-respondents, however, referred to para 11 in the plaint relating to cause of action, and contended that the present suit is also based upon the said unauthorised withdrawal. Para 11 reads as follows :-

' The plaintiff submits that the cause of action for the suit arose on 12-6-1962, the date of the sale deed and also sometime earlier, when the said terms were settled and draft prepared by the notary Sri. M. Sitharamarao, and in or about 31-3-1965 when, I. A. 135 of 1965, was filed and defendant has taken solemn oath on God and children for securing the co-operation of the plaintiff and in March, 1966, when he withdrew the amount from Court and at Velangi where the defendant resides within the jurisdiction of your. Honourable Court .............................................................'

30. We are, however, not satisfied that merely because the said withdrawal in March 1966, is also referred to as one of the facts giving rise to cause of action, this suit can be said to be one for recovery of the said unauthorisedly withdrawn money. The suit remains, in substance and in essence, a suit for recovery of the consideration, under Exhibit B-1, which is evident from the fact that the first plaintiff asked for a decree in a sum of Rs. 16,633/- which is made up of Rs. 10,000/- the sale consideration, and Rs. 6,633/- being interest from 12-6-1962 to the date of suit. It may be rather unfortunate that the 1st, having succeeded in establishing his claim, has to fail on the ground of limitation; but, we cannot certainly make out a new case for him at this stage, to sustain his claim.

31. With the result, the appeal is allowed but, having regard to the circumstances of the case, we direct both the parties to bear their own costs throughout.

32. Appeal allowed.


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