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Peria Negamam Sri Lakshmi Vilasa Draviya Sagaya Nidhi Limited by Secretary P.B. Subramania Chettiar Vs. Varalakshmi Ammal - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai
Decided On
Reported inAIR1942Mad386; (1942)1MLJ274
AppellantPeria Negamam Sri Lakshmi Vilasa Draviya Sagaya Nidhi Limited by Secretary P.B. Subramania Chettiar
RespondentVaralakshmi Ammal
Cases ReferredCouncil v. Guru Proshad Dhur I.L.R.
Excerpt:
- - a practice like this cannot but be deprecated and must be discouraged. that they failed to give any notice to the owner of the shares before the sale does not in any way help them. they committed a grave irregularity in having failed to give a notice as required by section 176 of the indian contract act and cannot, by their action, abridge the period of limitation or contend that it should be held to have started on the date of the sale of which the plaintiff had no knowledge as is clear from the notices ex. the suit instituted by the plaintiff must, therefore, be held to be well within time......a suit brought by the plaintiff for taking an account from the defendant bank in respect of the 20 bank shares of the value of rs. 500 which stood in the name of the plaintiff's husband, a. goalakrishna chettiar and to pass a decree against the bank for payment of the balance that may be found due to her after giving her credit for the yearly dividends on those shares on the one side and after debiting her with any liability incurred by her husband touching those shares on- the other.2. the defendant bank denied the claim and contended inter alia that the suit was barred by limitation. it is this plea with which i am concerned in the present second appeal. the suit was decreed by both the lower courts and was held to be within time. the bank appeals.3. although no article of the.....
Judgment:

Abdur Rahman, J.

1. This appeal arises out of a suit brought by the plaintiff for taking an account from the defendant bank in respect of the 20 bank shares of the value of Rs. 500 which stood in the name of the plaintiff's husband, A. Goalakrishna Chettiar and to pass a decree against the bank for payment of the balance that may be found due to her after giving her credit for the yearly dividends on those shares on the one side and after debiting her with any liability incurred by her husband touching those shares on- the other.

2. The defendant bank denied the claim and contended inter alia that the suit was barred by limitation. It is this plea with which I am concerned in the present second appeal. The suit was decreed by both the lower Courts and was held to be within time. The bank appeals.

3. Although no Article of the Limitation Act was referred to by the defendant bank in their written statement as required by the forms of general defences given in the Civil Procedure Code (Sch. I, App. A) and their counsel in the trial and in the lower appellate Courts have been vacillating in consequence from one to the other, their learned Counsel has finally chosen to depend on Articles 62 and 89 in this Court and pleads that the suit is barred by either the one or the other.

4. The provision requiring a party to specify the Article or Articles of the Limitation Act, under which the suit is according to him barred, is salutary and must be complied with as far as possible. The omission to mention the Article may prevent the plaintiff at times from producing such oral or documentary evidence as he might have been capable of doing in answer to the objection raised by the defendant and in so far as the onus of proving limitation, is on the plaintiff invariably, it may put him at a disadvantage if some evidence is led on behalf of the defendant, after the case on the plaintiff's side is closed which he would be ordinarily unable to rebut. At all events, this device enables a party to conceal his hand up to the time of final arguments and to spring a surprise on his opponent in a large number of cases. A practice like this cannot but be deprecated and must be discouraged.

5. In order to appreciate the contentions advanced on behalf of the parties, the facts that have given rise to this litigation may be briefly stated. An application was made by the plaintiff's husband to the bank on the 2nd January, 1931, asking for a loan of Rs. 200 (Ex. VI). This was accepted. The plaintiff's husband got the loan on the next day and executed a promissory note in favour of the bank for Rs. 200 (Ex. V). On that date, he lodged 20 bank shares that he had been holding in the defendant bank and on each of which a. sum of Rs. 25 had been paid by him by way of security for the debt advanced to him under the promissory note Ex. V. The plaintiff's husband died on the 19th August, 1931. The shares were sold by the bank on the 2nd June, 1933 for Rs. 530 inclusive of dividend and the money due to the bank was adjusted--the balance of Rs. 264. being kept by them in the suspense account for payment to the plaintiff's husband or to Ms heirs. It may be mentioned here that before this sale no notice was given by the bank to the plaintiff or to any other claimant. A notice appears to have been sent by them in the name of the plaintiff's husband on the 17th March, 1933, but that was obviously of no use. The plaintiff served the defendant bank with a notice on the 24th April, 1935, (Ex. B), in which she asked them for particulars of the shares standing in the name of her husband in the bank and in regard to the dividends that had been due under those shares. There was no reference in this notice to any loan advanced by the defendant bank to the plaintiff's husband or even to the deposit of the shares by him with the bank. To this notice the bank sent a reply on the 30th April, 1935, (Ex. B-l), in which they agreed that they would pay the amount to her if she produced a succession certificate. The information that the bank shares were sold by the defendant bank on the 2nd June, 1933, in auction under Rule 85 of the bank rules was conveyed by this letter. This led the plaintiff to institute the suit on the 1st October, 1936.

6. I have already referred to the Articles of the Indian Limitation Act on which reliance has been placed on behalf of the appellant bank in this Court? The contention advanced on their behalf is that since the shares deposited by the plaintiff's husband with the bank were sold by them, the present claim must be regarded to be in the nature of a suit for, what will in English law form the basis for an action for money had and received and ought to be therefore governed by Article 62. In the alternative, it was urged that the relationship between the bank and the plaintiff's husband being, with reference to the shares in the custody of the bank, that of a principal and an agent, the suit would be governed by Article 89 and in so far as that relationship came to an end on the death of the plaintiff's husband, this suit would be, having been brought long after three years of the termination of that relationship, barred by time.

7. As to the first contention, Article 62, is applicable to cases where the defendant has received money which in justice and equity belongs to the plaintiff but in circumstances where the receipt by the defendant would be regarded in law as a receipt to the plaintiff's use. Where the receipt by the defendant is on his own account and is not or cannot be regarded to be on behalf of the plaintiff, this article would have no application. Reliance was placed in this connection on the decision in Tarachand v. M. & S.M. Railway Co. Ltd. : AIR1921Mad362 . But the defence raised by the railway in that case was that the suit would be governed by Article 30 or Article 31 of the Limitation Act and was barred by time. The plaintiff denied the applicability of those Articles and urged that it would be governed by the three years rule under Article 62 of the Limitation Act. It would be noticed that the applicability of Article 62, was not denied although the contention was that Article 30 or 31 would apply in preference. The learned Judges repelled the defendant's contention and held that the case was not governed by Article 30 or 31 of the Limitation Act. It is true that they agreed with the plaintiff's contention, which was not denied on behalf of the defendant company that the suit would fall under Article 62; but in doing so, they did not consider the question whether the railway company were selling the goods for their own benefit or for the benefit of the plaintiff consignor or partly for their own benefit and partly for the benefit of the consignor. There is no discussion in that ease in regard to the type of cases to which Article 62, would apply and in the absence of any discussion, the judgment cannot be of any great value. The defendant company were apparently acting as carrying agents on behalf of the plaintiff and since the decision turned on the effect of the direction as to the disposal of the sale proceeds in Section 56 of the Indian Railways Act, that case can have no application to the present one. Learned Counsel for the appellant also relied on Bank of Bombay v. Fazulbhoy Ebrahim : AIR1923Bom155 but in that case the learned Judges were of opinion that the suit was governed by Article 48 of the Limitation Act, although they added that if that Article was not held to apply, it might be governed by Article 62--under either of which the suit was within time. Had the present suit been for the recovery of the bank shares in specie from the bank or from the person to whom they had been sold by the bank, Article 145 or 48-A would have been applicable--as the plaintiff's husband was undoubtedly, as I would try to show later, a pawnor and the shares were lodged with the bank as security for the debt. But the suit is not for the recovery of the bank shares or for compensation for wrongful taking or detaining the same--although the allegations in para. 7 of the plaint tend to bring it very much within the ambit of the latter portion of Article 48. In a suit brought for the residue of the sale proceeds of an estate sold under the provisions of the Revenue Sale Law, Act XI of 1859, against the Secretary of State for India in Council the defence was raised that it was barred under Article 62 of the Limitation Act; but the objection was overruled by the Pull Bench of five learned Judges and the case was held to be governed by Article 120 of the Act, The Secretary of State for India in Council v. Guru Proshad Dhur I.L.R.(1892) Cal. 51 (F.B.). The present suit is, however, for accounts and not for recovery of money merely. If a suit for accounts is maintainable as this has been found to be and does not fall within Article 64 or Article 89 or 106 of the Limitation Act, it would have to be governed by Article 120 of that Act. That it is governed by Article 64 or 106 has not been contended. The question is whether it is governed by Article 89 of the Act. Now, in order to ascertain whether this Article in the Limitation Act applies, the relationship of the parties to the suit or rather of the plaintiff's husband by whom these shares were given in security and of the bank must be ascertained. The plaintiff's husband had gone to the bank to take a loan. The bank had agreed to advance it. When the loan was advanced, the bank became a creditor and the plaintiff's husband a debtor. When the shares were being placed with the bank by way of security, the plaintiff's husband's position could not have been of a principal and the bank's position that of an agent as urged by learned Counsel for the appellant. The bank was not being asked to do anything by the plaintiff's husband on his behalf. He was depositing the shares with the bank by way of security. He was, therefore, a pawnor and the bank a pawnee. When the bank sold the shares to realise their debt, they were not acting in the capacity of an agent but in that of a creditor entitled to recover his money by sale of the security under the terms of his contract. That they failed to give any notice to the owner of the shares before the sale does not in any way help them. They committed a grave irregularity in having failed to give a notice as required by Section 176 of the Indian Contract Act and cannot, by their action, abridge the period of limitation or contend that it should be held to have started on the date of the sale of which the plaintiff had no knowledge as is clear from the notices Ex. B and Ex. B-l that passed between the parties in April, 1935. The contract of pledge cannot be, in the absence of a reasonable notice to sell, held to terminate the pledge or the relationship of pawnor and pawnee with the consequence that the money in the hands of the bank cannot be held to have been received for the plaintiff's use-at any rate when the sale was not recognised to be valid by the owner of the articles pledged by him. Article 89 can thus have no application. The defendant bank may not have been trustees for a specific purpose and Section 10 of the Limitation Act may not apply but in their capacity as bailees they were liable to render account to the plaintiff for the shares delivered to them by her husband. A suit for accounts must be in such circumstances, not being provided for by any other Article, held to be governed by Article 120 of the Limitation Act. The suit instituted by the plaintiff must, therefore, be held to be well within time.

8. For the above reasons, the appeal fails and is dismissed with costs.

9. Leave refused.


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