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Devarajulu Naidu (Died) and anr. Vs. Jayalakshmi Ammal and anr. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai
Decided On
Reported inAIR1941Mad767(2); (1941)2MLJ222
AppellantDevarajulu Naidu (Died) and anr.
RespondentJayalakshmi Ammal and anr.
Cases ReferredGurudoss Pyne v. Ram Narain Sahu
Excerpt:
- - on the 5th november, 1931, the first respondent fraudulently endorsed the promissory note to dorai-swami naidu, the father of the second respondent, who was said to have been a friend of the family. doraiswami naidu sympathised with the wife in her quarrel with the husband, and it has been established that the promissory note was endorsed to him without consideration and with the object of defeating the husband and his brother......then in force, but the only difference so far as this case is concerned is in the numbering of the articles. article 62 of the present act corresponds to article 60 of the old act and article 120 to article 118. the privy council rejected the contention and the reason is to be gathered from the following passage in the judgment:the suit is to enforce an equitable claim on the part of the plaintiffs to follow the proceeds of their timber, and, finding them in the hands of the defendant, to make him responsible for the amount. that does not fall either within article no. 60 or no. 48; but comes within article 118, as 'a suit for which no period of limitation is provided elsewhere in the schedule', and for suits of that nature a period of six years is the limitation.8. in the present case.....
Judgment:

Alfred Henry Lionel Leach, C.J.

1. This appeal arises out of a suit filed by the appellants in the City Civil Court to recover a sum of Rs. 2,200 from the first and second respondents. A decree was passed for Rs. 187-12-0 only, the balance of the claim being dismissed on the ground that the suit to that extent was barred by the law of limitation. The question is whether Article 62 or Article 120 of the Limitation Act applies to the case.

2. On the 9th January, 1931, the appellants, who are brothers, sold certain immovable properties to one Krishnaswami Naidu for Rs. 3,000 and in part discharge of the purchase consideration Krishnaswami Naidu executed a promissory note for Rs. 1,560 in favour of the first respondent, who is the wife of the first appellant. The husband and the wife quarrelled and she eventually left him. On the 5th November, 1931, the first respondent fraudulently endorsed the promissory note to Dorai-swami Naidu, the father of the second respondent, who was said to have been a friend of the family. Doraiswami Naidu sympathised with the wife in her quarrel with the husband, and it has been established that the promissory note was endorsed to him without consideration and with the object of defeating the husband and his brother. In 1932 Doraiswami Naidu filed a suit against Krishnaswami Naidu in the City Civil Court to recover the amount due on the promissory note and on the 19th July, 1933, he obtained a decree for Rs. 1,653-8-0. As the result of an appeal to this Court the decree was set aside and the case remanded to the City Civil Court for the taking of evidence. The judgment of this Court remanding the case was delivered on the 9th August, 1934. As the result of the further hearing a new decree for Rs. 1,653-8-0 was passed on the 26th November, 1934.

3. The present suit was filed by the appellants on the 26th November, 1937, to recover from the first respondent and Doraiswami Naidu with interest the Rs. 1,653-8-0 which Doraiswami Naidu had recovered from Krishnaswami Naidu. The decision that the appellants were only entitled to Rs. 187-12-0 was based on a finding that the rest of the money had been paid to Doraiswami Naidu before the 26th November, 1934. The principal Judge of the City Civil Court who tried the case, was of the opinion that this was a suit for money had and received and accordingly held that Article 62 applied.

4. If the suit is to be regarded as a suit for money had and received, as known to the English common law, the Court below was right in limiting the decree to the Rs. 187-12-0, which was paid after the 26th November, 1934, but we consider that the suit cannot be so regarded. The case is not one which falls within the decisions in Mahabala Bhatta v. Kunhanna Bhatta : (1898)8MLJ139 , Subbanna Bhatta v. Kunhanna Bhatta (1907) 17 M.L.J. 224 : I.L.R.1907 Mad. 298 and Shanmugha Pillai v. Minor Govindasami (1907) 17 M.L.J. 452 : I.L.R. Mad. 459 where Article 62 of the Limitation Act was applied to claims against benamidars and therefore it is not necessary to consider whether those cases were rightly decided, but in passing, it may be mentioned that in the unreported case of Narayana Bhatta v. Mahabala Bhatta S.A. No. 1469 of 1901, Benson and Bhashyam Aiyangar, JJ., held that a suit against a benamidar was governed by Article 120, and not by Article 62.

5. The relationship between a benamidar and the real owner is a relationship of trust. In Gur Narayan v. Sheolal Singh the Privy Council held that although he has no beneficial interest in the property or business standing in his name the benami-dar represents the real owner and is in the position of a trustee, A trust of this nature is not an express trust within the meaning of Section 10 of the Limitation Act, as the Privy Council pointed out in Annamalai Chettiar v. Muthukaruppan Chettiar (1930) 60 M.L.J. 1 : 1930 L.R. 58 I.A 1 : I.L.R. 8 Rang. 645 (P.C.). It cannot be, as Section 2 (11) expressly states that the word 'trustee' as used in the Act does not include a benamidar. Although there is no express trust in a benami transaction there is a trust and a person receiving the property with the knowledge of the true position will take it subject to the trust.

6. The appeal in Annamalai Chettiar v. Muthukaruppan Chettiar (1930) 60 M.L.J. 1 : L.R. 58 IndAp 1 : I.L.R. 8 Rang. 645 (P.C.) arose out of a suit for an account against the representative of a benamidar and the appellants contended that Article 62 applied to the case, but in delivering the judgment of the judicial Committee Lord Thankerton said that Article 62 did not apply to an equitable claim against a trustee, liable to account, for an account and ascertainment of what might be due. The Board held that the proper article was Article 120 and referred to an earlier decision, that in Gurudoss Pyne v. Ram Narain Sahu .

7. We consider that the judgment in Gurudoss Pyne v. Ram Narain Sahu really governs the present case. There certain timber had been entrusted by the plaintiffs to one Modhoosoodan who wrongly converted it to his own use. As the result the plaintiffs brought an action against him and obtained a decree for Rs. 25,200. Modhoosoodan died without satisfying the decree and the plaintiffs instituted against the agent of his widow the suit out of which the appeal to the Privy Council arose. The widow had sold through the defendant certain timber which Modhoosoodan had not disposed of and the proceeds of this sale were in the hands of the defendant. It was contended that the suit was barred by the law of limitation because it was a suit for money had and received and had been instituted more than three years after the defendant had obtained the money. The Limitation Act of 1871 was then in force, but the only difference so far as this case is concerned is in the numbering of the articles. Article 62 of the present Act corresponds to Article 60 of the old Act and Article 120 to Article 118. The Privy Council rejected the contention and the reason is to be gathered from the following passage in the judgment:

The suit is to enforce an equitable claim on the part of the plaintiffs to follow the proceeds of their timber, and, finding them in the hands of the defendant, to make him responsible for the amount. That does not fall either within Article No. 60 or No. 48; but comes within Article 118, as 'a suit for which no period of limitation is provided elsewhere in the schedule', and for suits of that nature a period of six years is the limitation.

8. In the present case the real claim is against the second respondent in whose hands are the moneys paid by Krishnaswami Naidu in discharge of the promissory note. In endorsing the promissory note over to Doraiswami Naidu the first respondent wrongly converted it and as Doraiswami Naidu took it with full knowledge of the facts he acquired no title to it. Therefore he had no right to the moneys paid by Krishnaswami Naidu in respect of it. As the legal title to the promissory note was in the first respondent, Doraiswami Naidu must, if legal fiction is to be recognised, be deemed to have received the moneys for her use, not for the use of the appellants. The position is analogous to the position in Gurudoss Pyne v. Ram Narain Sahu (1884) L.R. 11 IndAp S9 : I.L.R. 10 Cal. 860 (P.C). There is here, as there was in that case, an equitable claim and the Privy Council has held that equitable claims do not come within Article 62, but within Article 120. The first respondent is a trustee for the appellants and she has converted the trust property. Therefore the appellants are entitled to trace the proceeds of the property in the hands of the second respondent. The second respondent represents Doraiswami Naidu who realised the promissory note with full knowledge of the facts.

9. As the suit falls within Article 120 it is in time. Consequently the appeal succeeds and the suit will be decreed with costs here and below. The appeal was filed in forma pauperis and the second respondent will be directed to pay the court-fee to Government.


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