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Mylavaram Nagayya Vs. the Penukonda Co-operative Town Bank Ltd., by Its President - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai
Decided On
Reported inAIR1947Mad90; (1946)2MLJ231
AppellantMylavaram Nagayya
RespondentThe Penukonda Co-operative Town Bank Ltd., by Its President
Cases ReferredMartand Mahadev v. Dhondo Moreshwar I.L.R.
Excerpt:
.....with the question of failure of consideration, but with the condition of the plaintiff's mind. 582. although that case was rather different from the privy council case, in that the court was considering a question of mistake and not failure of consideration, yet the learned judges followed the privy council decision, saying:.....council case, in that the court was considering a question of mistake and not failure of consideration, yet the learned judges followed the privy council decision, saying:here the plaintiffs' suit was dismissed and they then discovered by the decision of the court that the mortgage had been paid off. it was open to them of course to appeal and to endeavour to get the decision of the first court reversed....but it seems to me quite clear that the discovery of the mistake, dated certainly from not later than the first court's decree and time then began to run against the plaintiffs.applying the reasoning of the above cases, it would therefore seem that when the first court passed its decree, the plaintiff was informed and had knowledge that a mistake had been made. although there was.....
Judgment:

Horwill, J.

1. A member of a Co-operative Society, by name Narasimha Sastri borrowed a sum of money from the Society and purported to mortgage to it the house in which he was living. In fact, he was a tenant of that house and had no right whatsoever; but the fraud he played on the Society was not detected and his mortgage was accepted. When he did not pay the debt, an application was filed before the Deputy Registrar of Co-operative Societies in Claim No. 7/33-34 for the amount due. An award was passed and in due course E.P. No. 693 of 1933-34 was filed by the Co-operative Society and the property brought to sale. The reversioner of the last male owner of the house during the course of these proceedings put in a claim petition. His petition was dismissed; but he filed a claim suit, O.S. No. 41 of 1937, in the Court of the District Munsiff of Penukonda and succeeded on 31st March, 1938. An appeal was preferred to the District Court which was dismissed on 4th April, 1941. The widow of the last male holder on 22nd March, 1943, issued a notice to the plaintiff to give her possession; and in accordance with that request possession was given to her by the plaintiff on 7th April, 1943. Nine months later, on 23rd January, 1944, the plaintiff filed S. C. No. 25 of 1944, out of which this petition arises, for the return of the purchase money. The suit was dismissed on the ground that it was barred by time, being more than three years from the date on which he knew that a mistake had been made in selling him the house that he had purchased in Court auction.

2. The lower Court applied Article 96 of the Limitation Act, which relates to a relief based on the ground of mistake. The time for filing such a suit is three years from the date when the mistake becomes known to the plaintiff. The learned advocate for the petitioner argues here, as he did in the lower Court, that the proper Article to apply is not Article 96 but Article 97, the suit being, he says, one for money paid upon existing consideration which afterwards failed. The learned advocate has referred to many decisions--which it is unnecessary to quote here--where sales were not void ab initio, because they were good until avoided by some other person, for example, by a reversioner disputing an alienation made by a widow. In such cases, it is obvious that the sale was originally good and the consideration failed only when a person entitled to avoid the transaction actually did so. The only decision in the petitioner's favour which related to a bona fide sale--such as is the case here--in which a mistake was made by all concerned is Narsing Shivbakas v. Pachu Rambakas I.L.R.(1913)37 Bom. 538. The learned Judges who decided that case did not consider the applicability of Article 96. They were concerned with the question whether Article 97 applied or Article 62; and as between these two Articles they had no doubt that Article 97 was the appropriate Article. The learned advocate for the petitioner relies on a dictum of the learned Judges that possession is all the consideration that the vendee is entitled to. With great respect, I cannot agree that when a person pays money for property, the only thing to which he is entitled is possession. He certainly has a right to a good title also, and if he is not given a good title as well as possession the consideration fails. All the decisions bearing on this question were very carefully considered by King, J., in Jayanthi Rudrayya v. Jayanthi Subbarayappa : AIR1941Mad742 and it is unnecessary for me to repeat his arguments, with which I am in complete agreement. He had to consider the very question that is before me here, whether Article 96 applied or Article 97; and he gave reasons; based on earlier authorities that Article 96 and not Article 97 applied. That case is sought to be distinguished by Mr. Narasimhachari on the ground that no possession was there given, whereas in the present case possession was given. But the possession that the petitioner got was from a man who, although in possession himself, knew that he had no title to the property whatsoever. When a person who knows he has no title puts another person into possession he is not giving him anything at all as consideration for the money paid. I am unable, therefore, to draw any distinction between this case and Jayanthi Rudrayya v. Jayanthi Subbarayappa 2. ''

3. Another question that arises in this petition is whether time began to run from 31st March, 1938, the date when the decree of the trial Court was passed, or 4th April, 1941, the date of the appellate Court decree. The learned advocate for the petitioner very reasonably argued that the matter was uncertain at the time when the first decree was passed, because there was always the possibility that that decision might be reversed in appeal. Unfortunately for the petitioner, their Lordships of the Privy Council in Juscurn Bold v. Pirthichand Lal Chowdhury (1918) 36 M.LJ. 557 : L.R. 46 IndAp 52 I.L.R. 46 Cal. 670 , in dealing with a question of failure of consideration, had to consider whether consideration must be deemed to have failed when the trial Court found that there was no consideration or whether it failed only when the appellate Court determined the matter. Their Lordships said:

Both Courts have held that the failure of consideration was at the date of the first Court's 'decree. Their Lordships feel no doubt that as between these two decrees this is the correct view, for whatever may be the theory under other systems of law, under the Indian law and procedure an original decree is not suspended by presentation of an appeal nor is its operation interrupted where the decree on appeal is one of dismissal.

This decision was followed in Nadukandee Pakuran v. Kuyattil Kandan Kutty (1922) M.W.N. 561. The learned advocate for the petitioner seeks to distinguish those cases from the one now under consideration by pointing out that we are not here concerned with the question of failure of consideration, but with the condition of the plaintiff's mind. It is argued, not without reason, that the petitioner could, not have known at the date of the trial Court's decree that a mistake had been made; because there was a possibility that the appellate Court might hold that no mistake had been made. This very question was considered in Martand Mahadev v. Dhondo Moreshwar I.L.R.(1920)45 Bom. 582. Although that case was rather different from the Privy Council case, in that the Court was considering a question of mistake and not failure of consideration, yet the learned Judges followed the Privy Council decision, saying:

Here the plaintiffs' suit was dismissed and they then discovered by the decision of the Court that the mortgage had been paid off. It was open to them of course to appeal and to endeavour to get the decision of the first Court reversed....But it seems to me quite clear that the discovery of the mistake, dated certainly from not later than the first Court's decree and time then began to run against the plaintiffs.

Applying the reasoning of the above cases, it would therefore seem that when the first Court passed its decree, the plaintiff was informed and had knowledge that a mistake had been made. Although there was still the possibility that the appellate Court might reverse the decree of the first Court, yet the plaintiff continued to have knowledge and, since the appeal was dismissed, the plaintiff's knowledge continued uninterrupted from the date of the decree of the trial Court.

4. The petition is dismissed with costs.


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