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Phool Chand and ors. Vs. Laxmi Narain - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtRajasthan High Court
Decided On
Case NumberSpecial Appeal No. 27 of 1966
Judge
Reported inAIR1972Raj247; 1971(4)WLN484
ActsLimitation Act, 1963 - Schedule - Article 65
AppellantPhool Chand and ors.
RespondentLaxmi Narain
Appellant Advocate S.K.M. Lodha, Adv.
Respondent Advocate L.R. Mehta, Adv.
DispositionAppeal dismissed
Cases ReferredA. C. Mukerji v. Benares Municipality
Excerpt:
.....agency terminated before 3rd december, 1954.;the intention of the parties clearly was that the transactions will be carried out in accordance with the rules and usage of the jodhpur bullion association. consequently the plaintiff was bound by the rules and usage of the association. we accordingly hold that article 65 of the limitation act is applicable and the time specified for the performance of the contract being 3rd december, 1954, limitation began to run from that date. the suit which has instituted on 3rd december, 1957, was within limitation. - - 154-6-0 which was the prevailing rate on 25-11-54 as well as 26-11-54. he stated that this amount was payable on 4th december. --your reply to my telegram is a tissue of lies and speaks well of your ulterior motives. this was clearly..........but did not indicate which article of the limitation act was applicable. the first appellate court held that article 89 of the limitation act was applicable. the learned single judge has held that article 65 is applicable. the sole question which arises for determination by us is as to which article of the limitation act is applicable and whether the suit is within limitaton.6. the learned counsel for the appellants first contended that article 90 of the limitation act was applicable. he referred to the following 3 decisions:--1. devji shivji v. mohanlal, air 1960 pat 223.2. india sugars & refineries ltd. v. estate of v. ramaliugam, air 1953 mad 694.3. a. c. mukerji v. benares municipality, air 1924 all 467. in air 1960 pat 223, it was observed that for a suit based on agency, the.....
Judgment:

Jagat Narayan, C.J.

1. This is a special appeal against the judgment of a learned Single Judge of this Court in second appeal by special leave.

2. Kesrimal, appellant-defendant, deceased, was a member of the Jodhpur Bullion Association. Laxmi Narain, respondent-plaintiff, entered into transactions with him in accordance with the rules and usage of that Association. He sold 51 bars of silver at rates varying between Rupees 159/- and Rs. 159-3-0 on 4 different dates for the Vaida of Migsar Sudi 5, S 2011 corresponding to 30th November, 1954. On 25th November, 1954, the plaintiff went to the shop of the defendant and asked his son Babulal and his Munim who were present at the shop to cover up the sale of 51 bars by purchasing 51 bars for the same Vaida. They told him that the sales had already been covered. The plaintiff had never given any such instructions to the defendant. He accordingly sent a telegram, Ex. A-29, to him on 26-11-54, which runs as follows:--

'Yesterday, I asked you to square up my outstanding sale of fifty one silver bars at the market closing rate, but as the rate substantially fell down you, in order to get undue advantage falsely alleged that you had covered up my sales. I never instructed you to cover my outstanding sales and in fact you never did so. I still hold my outstanding sale standing with you and instruct you to cover up the sale immediately after the receipt of this telegram. Failing this you alone shall be responsible for all costs and consequences.'

3. On the same day the defendant sent a telegram, Ex. A-30, to the plaintiff in which he alleged that the latter had personally squared up the sales on 23-11-54 and 24-11-54- This telegram runs as follows:--

'Your telegram of today absolutely take. No outstanding bars with us. You personally squared up your sales of fifty-one bars by purchasing twenty-five bars at Rs. 159-6-0 on 23-11-54, eighteen bars at 159-1-6, one bar at 159-1-9 and seven bars at 159-2-0 on 24-11-54. You have also taken full copies of all these accounts from us on 24-11-54 and agreed to pay Rs. 1,087-15-6 on 25th morning. But since you want to escape your liability you have sent this false telegram. Pay the outstanding amount within a week else taking legal steps.'

4. The plaintiff then sent telegram, Ex. A-2 on 27-11-54 to the defendant in which he stated that he never squared up the sale as alleged by the defendant. He claimed a sum of Rs. 6,698-2-0 from him at the rate of Rs. 154-6-0 which was the prevailing rate on 25-11-54 as well as 26-11-54. He stated that this amount was payable on 4th December. This telegram runs as follows:--

'Your reply to my telegram is a tissue of lies and speaks well of your ulterior motives. Your allegation that I squared up sale of fifty-one bars absolutely false and invented with a view to escape your liability. Transaction never squared up by me nor I gave any instructions to that effect which will be proved at proper place. You never gave any statement of account and so there was no occasion to settle your account. It is false that I ever received any copies of accounts and agreed to pay any amount. On the contrary I claim from you Rs. 6,698-2-0 at the rate 154-6-0 which was the prevailing rate when you received my telegram. I call upon you to make payment of the aforesaid amount on 4th December, 1954, the due date, otherwise proceeding as may deem proper at your costs and consequences.'

5. The present suit was instituted for the recovery of Rs. 6,694-10-0 on 3-12-57. It was contested by the defendant on the ground that under instructions of the plaintiff the transactions had already been squared up on 23-11-54 and 24-11-54. This allegation has been disbelieved by the Courts below. It has also been held that according to the usage of the Jodhpur Bullion Association payment and delivery were to be made or taken on the 3rd day after the date of Vaida. In this case the payment was to be made on 3rd December, 1954. The trial Court held that the suit was within limitation, but did not indicate which article of the limitation Act was applicable. The first appellate Court held that Article 89 of the Limitation Act was applicable. The learned Single Judge has held that Article 65 is applicable. The sole question which arises for determination by us is as to which article of the Limitation Act is applicable and whether the suit is within limitaton.

6. The learned counsel for the appellants first contended that Article 90 of the Limitation Act was applicable. He referred to the following 3 decisions:--

1. Devji Shivji v. Mohanlal, AIR 1960 Pat 223.

2. India Sugars & Refineries Ltd. v. Estate of V. Ramaliugam, AIR 1953 Mad 694.

3. A. C. Mukerji v. Benares Municipality, AIR 1924 All 467.

In AIR 1960 Pat 223, it was observed that for a suit based on agency, the articles especially provided for in the Limitation. Act are only Articles 89 and 90 with this difference that as between them Article 90 is a residuary article. It was further held that the word 'neglect' or 'misconduct' as used in Article 90 of the Limitation Act contemplates something which is tortious in nature. In that case Article 89 was applied. This authority does not help the appellants. In the present case no tortious act is attributed to the agent. Mere disobedience of the instructions of the principal does not amount to a tortious act.

7. In AIR 1953 Mad 694, also it was held that Article 90 was a residuary article dealing with claims of a principal against an agent. 'We are inclined to hold that the neglect or misconduct contemplated by the article is neglect or misconduct in the course of and intimately connected with the agency duties, 'qua' agent. It is in this view that this article has been applied to cases where a principal sues the agent to recover the secret profits made by the agent.' In that case Article 120 was applied on the ground that the defendant owed a fiduciary duty towards the plaintiff to give up all the moneys he received on his behalf. This case also is of no help to the appellants.

8. In AIR 1924 All 467, funds of the Municipality were embezzled by an employee on account of the negligence of the Executive Officer, who disregarded the rules and instructions. In this case Article 90 was applied. This was clearly a case of a tortious act.

9. No case was cited in which it was held that Article 90 was applicable to a case of a non-tortious nature.

10. Article 65 runs as follows:--

Description. of suit.Period of limitationTime from which period begins to run.65. For compensation for breach of a promise to do anything at a specified time or upon the happening of a specified contingency.Three yearsWhen the time specified arrives or the contingency happens.

11. The learned Single Judge held that the second part of this article was applicable namely 'for compensation, for breach of a promise to do anything...... upon the happening of a specified contingency.' We are of the opinion that this part is only applicable to a contingent contract as defined in Section 31 of the Contract Act. The contract in suit is not a contract of that nature. It is the first part of it which is applicable to the present suit. The transactions in suit were forward contracts, that is, contracts to be performed at a future date. The contracts were for giving or taking delivery or paying differences on a future date namely 8rd December, 1954.

12. The learned counsel for the appellants contended that a breach of contract took place on 25th November. 1954, when the defendant refused to carry out the instructions of the plaintiff. We are Unable to accept this contention. The contract was to be performed on the 3rd December, 1954. Despite the fact that the defendant falsely alleged on 25th November, 1954 that the contract had already been squared up he could have performed the contract on 3rd December, 1954 when it was to be performed. In any case payment under the contract was to be made by the defendant on 3rd December, 1954 and the breach consisted in not making the payment on that date. The breach of contract therefore took place on 3rd December, 1954. In firm Nand Lal v Firm Ramji Das, AIR 1927 Lah 122, the plaintiff entered into an agreement with the defendant to sell to him cotton seeds which were to be delivered in the month of Magh, corresponding to 12th January to 12th February. Before the time for delivery arrived the parties decided that the actual delivery of the cotton seeds would not take place and agreed to Rs. 121-14-0 as the damages due to the plaintiff from the defendant on that account. The plaintiff instituted a suit for the recovery of this amount. It was dismissed by the first appellate Court holding that it was barred by limitation. According to that Court the limitation for the recovery of Rupees 121-14-0 began to run from the date of the settlement of the damages between the parties and not from the date on which the delivery was originally agreed to be given. It was held by the High Court that the cause of action was the breach fay the defendant which happened on the date originally fixed for the delivery of goods. The suit of the plaintiff was accordingly held to be within time. This decision is applicable to the facts of the present case.

13. The learned Single Judge did not decide as to when the agency terminated. He mentioned 3 alternative dates namely 25-11-1954, 30-11-1954 and 3-12-1954 On behalf of the appellants it was contended that the agency terminated on 30-11-54. In our opinion, the agency terminated on 3-12-54. On termination of agency the difference became recoverable from the agent. This difference was only recoverable on 3rd December, 1954. Therefore, it cannot be held that the agency terminated before 3rd December, 1954.

14. Another argument put forward on behalf of the appellants was that the plaintiff was not bound by the usage of the Jodhpur Bullion Association. We are unable to accept this argument. The intention of the parties clearly was that the transactions will be carried out in accordance with the rules and usage of the Jodh-pur Bullion Association. Consequently the plaintiff was bound by the rules and usage of the Association. We accordingly hold that Article 65 of the Limitation Act is applicable and the time specified for the performance of the contract being 3rd December, 1954, limitation began to run from that date. The suit which was instituted on 3rd December, 1957, was within limitation.

15. We accordingly dismiss the appeal with costs.


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