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Chaitanya Das Banerjee Vs. Ranjit Pal Chowdhury and ors. - Court Judgment

LegalCrystal Citation
SubjectContract;Limitation
CourtKolkata
Decided On
Reported inAIR1938Cal263
AppellantChaitanya Das Banerjee
RespondentRanjit Pal Chowdhury and ors.
Cases ReferredMoses v. Maoferlan
Excerpt:
- nasim ali, j.1. the facts which are not in dispute now are these : one haripada ghose, husband of defendant 2, held a mokarari tenure under defendant 1. he sold it to defendant 3 by a kobala on 21st agrahayan 1329 b. s. corresponding to 15th november 1922. the kobala was registered on 9th december 1922, and registration fee was paid in the registration office. in the record of eights which was finally published at about this time, the name of haripada ghose appeared as a tenant in respect of this tenure. in 1923 defendant 1 instituted a suit against haripada ghose for recovery of arrears of rent of this tenure for the years 1326.1329 b. s. and obtained a decree on 9th july 1923. in the same year he made an application under section 105, ben. ten. act, for settlement of fair and equitable.....
Judgment:

Nasim Ali, J.

1. The facts which are not in dispute now are these : One Haripada Ghose, husband of defendant 2, held a mokarari tenure under defendant 1. He sold it to defendant 3 by a kobala on 21st Agrahayan 1329 B. S. corresponding to 15th November 1922. The kobala was registered on 9th December 1922, and registration fee was paid in the Registration Office. In the Record of Eights which was finally published at about this time, the name of Haripada Ghose appeared as a tenant in respect of this tenure. In 1923 defendant 1 instituted a suit against Haripada Ghose for recovery of arrears of rent of this tenure for the years 1326.1329 B. S. and obtained a decree on 9th July 1923. In the same year he made an application under Section 105, Ben. Ten. Act, for settlement of fair and equitable rent of this tenure impleading Haripada as the only defendant in the proceeding. On 21st December 1923 defendant 1 put the rent decree into execution. On 29th January 1924 he made an application to the Revenue Officer for substituting defendant 3 in place of Haripada in the proceeding under S.105 on the ground that defendant 3 was in possession of the tenancy by purchase from Haripada. This application was allowed. On the same day the proceeding under Section 105 was compromised between defendant 1 and defendant 3.

2. By this compromise, the tenancy was admitted to be mokarari and defendant 1 gave up his claim for settlement of fair and equitable rent. On 21st June 1924 the application for execution of the rent decree was allowed to be struck off. Thereafter Haripada died leaving defendant 2 as his heir. In May 1926 defendant 1 made another application for execution of the rent decree against defendant 2 first by attachment and sale of her moveable properties and then by attachment and sale of the defaulting tenure. This execution petition contained a statement that the defaulting tenure belonged to defendant % the judgment-debtor, and was verified by the agent of defendant 1 to be true. The sale proclamation under Section 163 (2) (a), Ben. Ten. Act, was issued and published by the executing Court in due time. In the sale proclamation, the defaulting tenure was described as a tenure standing in the name of Dwarika Nath Ghose, the predecessor in interest of the judgment-debtor. The tenure was sold by the executing Court and was purchased by the plaintiff for Rs. 282 on 10th August 1926. The sale was confirmed on 21st September 1926. The plaintiff obtained the sale certificate and in execution of the sale certificate obtained symbolical possession through Court. Defendant 1 then began to realize rent from the plaintiff although he had already recognized defendant 3 as the tenant of the tenure in the proceeding under Section 105 referred to above. After taking symbolical possession, the plaintiff found that some khas lands included within this tenure were in possession of one Indu Ghosh. The latter refused to give up possession. The plaintiff thereupon instituted a suit in the year 1930 to recover possession of these lands from him. This suit however was dismissed on the ground that the plaintiff had acquired no title to the tenure by his auction. purchase, as the sale was, in effect, a sale not under the Bengal Tenancy Act but only a money sale and the judgment-debtor had no saleable interest in the tenure, By this time defendant 1 had realized Rs. 134-8-6 as rent of the tenure from the plaintiff. After the dismissal of the Suit brought by him against Indu Ghose, the plaintiff raised the present suit in the Court of the Munsif at Krishnagar on 1st February 1934 for the refund of the purchase money (Rupees 282) and the rent paid by him to defendant 1 (Rs. 134-8.6) together with interests (Rs. 183-7-6) in all Rs. 600 or in the alternative for recovery of possession of the tenure from defendant 3 on declaration of his title to the same by auction purchase.

3. The trial Court passed a decree for Rs. 600 against defendant 1 but dismissed the suit) against the other defendants. Defendant 1 appealed to the lower Appellate Court. The learned Judge who heard the appeal has set aside the decree of the trial Court and has dismissed the suit against defendant 1 also. Hence this second appeal by the plaintiff. The first point urged by the learned advocate for the appellant in support of this appeal is that on the facts which are not in dispute now the plaintiff is entitled to recover the amount claimed from defendant 1 as money paid for a consideration which has subsequently failed. In support of this contention, the learned advocate for the appellant relied upon certain observations of their Lordships of the Judicial Committee of the Privy Council in Dorab Ally Khan v. Abdool Azeez (1880) 5 IA 116 at p. 118.

4. The whole group of common law actions in England known as 'implied assumption' or 'implied contract' permits the redress of widely different types of grievances. Of them all the action for money had and received has the greatest variety of application. The implied contract for money had and received has no element of agreement about it; it is implied in law the name being a misnomer. Under the English law, the actions for money had and received may be classified under the following heads: '(1) Money paid in mistake of fact; (2) Money paid for a consideration which has failed; (3) Money paid because it was extorted colore officii, or by duress and the like; (4) Cases where the plaintiff has had an actionable wrong done him by the defendant and 'waiving the tort' sues in assumpsit whether any of his money has actually passed from himself to the defendant or not.' Per Scott L, J. in Morgan v. Ashcroft (1937) 3 All ELR 92 at p. 105.

5. Now what is the unifying principle upon which these different forms of actions rest? There is no doubt the moral principle of 'unjust enrichment' which underlay the famous dictum of Lord Mansfield in Moses v. Maoferlan (1760) 2 Burr 1005 by virtue of which a man must not be allowed to enrich himself unjustly at the expense of another. Sir Wilfrid Greene M.E. in Morgan v. Ashcroft (1937) 3 All ELR 92 cited above has observed that the view of Lord Mansfield, though attractive, cannot now be accepted as laying the true foundation of the claim and the claim must now be based upon an implied promise to pay. Leak on Contract, Edn. 1 (1867) devoted a long chapter to the title 'Contracts Implied in Law' (pp. 38-75). It commenced thus:

Simple contracts arising independently of agreement or contracts implied in law including those transactions affecting the two parties, other than agreement between them, upon which the law operates by imposing a contract, that is, a liability on the one side and correlative right on the other....

The transactions between two parties, other than agreement, which give rise to contracts, may be described generally as importing that some undue pecuniary inequality exists in the one party relatively to the other, which justice and equity require should be compensated and upon which the law operates by creating a debt to the amount of the required compensation.

6. Scott L.J. in Morgan v. Ashcroft (1937) 3 All ELR 92 cited above has observed that such a wide statement of the principle upon which the action for money had and received is founded does not at the present time afford an authoritative criterion by which the Court can decide whether a given claim discloses a cause of action for money had and received. He is however of opinion that the principles upon which the causes of action called 'implied contracts' can be said to rest should not altogether exclude that of 'unjust enrichment'. Sections 68 to 72 Contract Act, provide for certain relations resembling those created by contract. Section 72 lays down that a person to whom money has been paid by mistake or under coercion must repay or return it. [Cases coming under heads (1) and (3) in the classification given by Scott L.J. in Morgan's case (1937) 3 All ELR 92.] Section 65, Contract Act, and Sections 38 and 41, Specific Belief Act, seem to recognize the principle that money paid for a consideration which has failed can be recovered. The next question is, do these principles apply to involuntary sales? In Dorab Ally Khan v. Abdool Azeez (1880) 5 IA 116 the purchaser at a Sheriff's sale under a writ of fi. fa. upon being evicted by the execution debtor brought a suit to recover the purchase money from the execution creditor. In that case Sir James W. Colvile observed:

There is no doubt that the authorities cited in the judgment of the High Court, and relied upon-at the Bar, established the proposition which is thus stated by Lord St. Leonards at p. 549,, Edn. 14, of his work on Vendors and Purchasers: 'If the conveyance has been actually executed by-all the necessary parties, and the purchaser is-evicted by a title to which the covenants do not extend, ho cannot recover the purchase money either at law or in equity', This general rule seems by the law of England to govern all sales by private contract between the parties either of a free-hold or of a lease-hold interest in laud.

Does it however govern a case like the present In which the sale as regards the owner of the thing sold, is in invitum, and made under colour of legal process? The chief reasons for the rule are that the purchaser by private contract has full means of investigating the title of the vendor, and of either satisfying himself that it is good, or of protecting himself against any apparent or latent defect in it by proper and apt covenants. If he fails to do either, his subsequent eviction is the result of his own negligence. But the purchaser at a Sheriff's sale has at beat very inadequate means of investigating the title of the judgment-debtor; all that is sold and bought is the right, title and interest of the judgment-debtor with all its defects; and the Sheriff who sells, and executes the bill of sale, is never called upon, and, if called upon, would refuse to execute any covenant of title. Therefore the reasons for the rule failing, the rule itself cannot properly be held applicable to Bales by the Sheriff, which are governed by rules peculiar to such sales. Now it is, of course, perfectly clear that when the property has been so sold under a regular execution, and the purchaser is afterwards evicted under a title paramount to that of the judgment-debtor, he has no remedy against either the Sheriff or the judgment creditor.

7. Then follows the following passage:

There is, no doubt, a further question whether the plaintiff has (shown a case which, if proved, would entitle him to recover back the purchase money as money had and received to his use as upon a total failure of consideration. To that their Lordships think the admitted fact of the possession by his testator for nearly two years of the property in question, and his perception, partial at least, of the rents and profits, might be a fatal objection. It could not, in such case, be said that the consideration wholly failed. But it is not quite clear on the record that this objection arises, since if the sale has been treated as a nullity, the purchaser has been accountable, and may have accounted, for what he received; and in any case the Court in India will be competent to mould the relief according to the facts finally established at the hearing. Their Lordships, of course, offer no opinion whether the plaintiff will ultimately succeed in establishing his right to any relief. It may turn out that his testator, who never made any claim for a return of the purchase money in his lifetime bought with knowledge of the defect in the Sheriff's jurisdiction, or has by acquiescence or in some other way, forfeited any right which he might otherwise have had to relief. They only decide that the plaintiff has not wholly failed to disclose a good cause of action on the case of the record.

8. The above observations of the Judicial Committee of the Privy Council establish two propositions: (1) that in this country an action for recovery of money paid for a consideration which has failed is maintainable as in England and (2) that the principle underlying such action can be invoked in cases of involuntary sales. The learned advocate appearing for the respondent did not dispute that the above principle applies to the facts of the present case. He however contended that this principle would not be of much assistance to the plaintiff in the present case as: (1) he is guilty of undue delay and (2) his claim is barred by Article 62, Lim. Act. It is true that the plaintiff had waited for about 3 years after the dismissal of his suit against Indu in 1931. In determining whether the plaintiff is barred by his laches the chief points to be considered are: (1) acquiescence on the plaintiff's part and (2) any change of position that has occurred on the defendant's part. Acquiescence does not simply mean standing by. It does not mean quiescence only. It means assent, after the party has come to know of his right. There is nothing in this case to indicate any such assent on the part of the plaintiff. The learned Judge has observed that it would be hard on the decree-holder to be deprived of the fruit of his decree obtained by him about 10 or 11 years ago. But the right of defendant 1 to execute the decree against defendant 2 was already barred at the time when the plaintiff lost his suit against Indu Ghose in the year 1931. There can-not be therefore any question of any change of position of defendant 1 by the delay of the plaintiff in bringing the present suit.

9. As regards the contention of the learned advocate for the respondent that the plaintiff's claim is barred under Article 62, Lim. Act, the position is this: after the auction purchase by the plaintiff, defendant I went on receiving rent from the plaintiff for the tenure on the footing that the plaintiff has acquired good title to the tenure by his auction purchase. Ha suppressed from the plaintiff the fact that before the execution was started by him defendant 2 had lost her right to the tenure and that defendant 3 was the real tenant of the tenure. Assuming that Art, 62, Lim. Act, applies to this case, from the facts of this case it is clear that the plaintiff is entitled to the benefit of Section 18, Lim. Act. It was argued on behalf of the respondent that the fraud of defendant 1, if any, became known to the plaintiff when the written statement in the suit was filed by the plaintiff. The learned Munsif has rightly pointed out that the plaintiff had then no definite and clear knowledge of the facts constituting the fraud and that the mere fact that some hints and clues reached the plaintiff which, if followed up, might have led to a complete knowledge of the fraud was not enough. It does not appear that this finding of the trial Judge has been expressly reversed by the lower Appellate Court. From the facts and circumstances disclosed in the present case there cannot be any doubt that the plain, tiff is entitled to have the period of limitation extended in view of the provisions of Section 18, Lim. Act.

10. The next contention raised by the learn, ed advocate for the appellant is this : The plaintiff was induced to purchase this tenure on account of certain fraudulent misrepresentation in the petition for execution as well as in the sale proclamation and consequently the plaintiff is entitled to get a refund of the amount which he has paid to the plaintiff by way of damages for this fraudulent misrepresentation by which he was induced to purchase this tenure. In view of my conclusion on the first point, it is not necessary to express any opinion on this point. The result therefore is that this appeal is allowed, the judgment and decree of the lower Appellate Court are set aside and those of the trial Court are restored with costs in this Court as well as in the lower Appellate Court.

B.K. Mukherjea, J.

11. This appeal is on behalf of the plaintiff and it arises out of a suit commenced by him to recover a sum Rs. 600 only from defendant 1, or in the alternative for recovery of possession of the lands described in the Schedule to the plaint as against defendant 3 under the following circumstances : The disputed lands were admittedly held by one Hari Pada Ghose, predecessor in-interest of defendant 2, as a mukarari tenant under defendant 1. On 8th December 1922 Hari Pada transferred his interest in the entire lands to defendant 3, and in April 1923 defendant 1 instituted a rent suit against Hari Pada, for recovery of arrears of rent due in respect of the holding for the years 1326 -1329 B. S. Defendant 3 was not made a party to the rent suit, even though a portion of the rent claimed, accrued due after the transfer. A decree was passed in the rent suit against Hari Pada on 9th July 1923. It appears that the settle-meet records were finally published some time before and in the year 1923, the landlord started a proceeding for enhancement of rent under Section 105, Ben, Ten. Act. On 29th January 1924, defendant 3 was made a party to the said proceeding on his own application, as the old tenant Hari Pada had no longer any interest, and on the very same date a compromise was put in on behalf of both parties, by which the landlord (defendant l) recognized the mokarari character of the holding, as described in the C. S. records, and recognized defendant 3 as the tenant in respect of the same. In 1926 the rent decree was put in execution, an earlier application for execution being dismissed for non prosecution, without joining defendant 3 as a party, and on 10th August 1926 the holding in arrears was put up to sale, the sale proclamation describing it as the property of the judgment-debtor. The plaintiff purchased the property at the auction sale for a sum of Rs. 282 only, and after he obtained sale certificate, he paid rent to defendant 1 in respect of the same, and a sum of Rs. 134-8-6 was paid in all as the rents due for the years 1333-1336 B. S. The plaintiff alleges that he was resisted in his attempt to get possession of the lands by one Indu Ghosh, who set up the title of defendant 1, and he was obliged to institute a Title Suit against Indu in the year 1930. This suit was dismissed in 1931, it being held that the plaintiff did not acquire any title by his purchase, and it was in course of this litigation, that the plaintiff says, he came to be acquainted with all the facts in connexion with the rent suit and subsequent proceedings.

12. It is alleged in the plaint that the plain-tiff was induced to purchase the property solely by reason of fraudulent misrepresentation made by defendant 1, who being a party to the compromise in the Section 105 proceeding, and being fully cognisant of the fact that the old tenant had no vestige of interest in the holding put it up to sale, describing it falsely as the property of Hari Pada. It is said also, that even apart from fraud, it would be against reason and conscience to allow defendant 1 under the circumstances of the case to retain the purchase money or the rents paid by the plaintiff. The latter was entitled therefore to recover the amounts, as money had and received by, defendant 1 to the use of the plaintiff, on failure of consideration. In the alternative the plaintiff claimed recovery of possession of the property purchased by him from defendant 3. The suit was contested by defendants 1 and 3. The contention of defendant 1 was that a suit of such description was not maintain-able in law, that it was barred by limitation, that there was no fraud or misrepresentation made by defendant 1 himself or his agent, and that the plaintiff himself was aware of everything in connexion with the execution sale and purchased the property with his eyes open.

13. The trial Court gave the plaintiff a decree against defendant 1. It held inter alia that defendant 1 was guilty of fraud in putting up to sale the disputed property as the property of Hari Pada, although he knew full well that Hari Pada had no interest in it. Defendant 1 was guilty of greater fraud, according to the Munsif, in realizing rents from the plaintiff, although he was aware that somebody else was the tenant in respect of the lands. As the decree had the effect of a money decree, no relief was given against defendant 3 whose interest remained unaffected by the sale. Against this decision, an appeal was taken by defendant 1 to the Court of Appeal below. The learned Sub-Judge who heard the appeal reversed the decision of the Munsif and dismissed the plaintiff's suit, on the finding that there was no fraud committed by defendant 1 or his agents and unless a case of fraud was made out this suit for refund of purchase money on the ground that the judgment-debtor bad no saleable interest in the property sold was not maintainable in law. It is against this decision that the present second appeal has been preferred.

14. Now the lower Appellate Court is undoubtedly right in saying that as the law stands at present a suit for refund of purchase money on the ground that there is no saleable interest of the judgment-debtor in the property sold, does not lie at the instance of the auction purchaser. Under Section 315, Civil P.C. of 1882, the purchaser at an execution sale was entitled to receive back his purchase money from the person to whom the money was paid, not only when the sale was set aside under Sections 310(A), 312 and 313 [which correspond to Order 21, Rule 91], Civil P.C. but even when it was found in a separate suit that the judgment-debtor had no saleable interest in the property, and it was optional with the auction purchaser, to enforce payment of this money, either in execution proceedings or by suit, which could be instituted within six years after the date of the accrual of the cause of action: vide Ram Kumar Shaha v. Ram Gour Sana (1910) 37 Cal 67, Nityanund Roy v. Juggat Chandra Guha (1903) 7 CWN 105, Munna Singh v. Gajadhar Singh (1883) 5 All 577 and Gurshidawa v. Gangaya (1898) 22 Bom 783. In the present Civil Procedure Code, the words 'or when it is found that the judgment-debtor had no saleable interest in the property' have been omitted from Order 21, Rule 93; and the clause, laying down that

the repayment of the said purchase money may be enforced against such person under the Rule provided by this Code for the execution of a decree for money

has also been dropped. The result of the, changes has been in the first place that the auction-purchaser, has now got to set aside the sale under Order 21, Rule 91, Civil P.C., by an application made within 30 days from the date of sale, before he can apply for refund under Order 21, Rule 93; and secondly, the right to recover the purchase money by a suit instituted with-in six years from the date of the accrual of the cause of action has been taken away. This is the interpretation that has now been accepted by all the High Courts-in India, with the exception of the Lahore High Court: Ram Sarup v. Dalpat Rai AIR 1921 All 377, Tirumalaisami v. Subramaniyam Chettiar AIR 1918 Mad 353, Balavant Ranganath v. Bala Halu AIR 1922 Bom 205, Juranu v. Jathi AIR 1918 Cal 148, Banka Behari Das v. Gurudas Dhar : AIR1924Cal172 , Rishikesh Law v. Manik Molla AIR 1926 Cal 971 and Kameawar Singh v. Bensidhar Marwari AIR 1937 Pat 532. A dissentient; opinion was expressed by this-Court in Prasanna Kumar v. Ibrahim Mirza AIR 1918 Cal 505 but that was based on the view taken by the Bombay High Court in Rustomji Ardeahir v. Vinayak (1911) 35 Bom 29 and the lase decision was explained away by Macleod C. J. in a still later decision of the Bombay High Court, which is referred to above, e. g. Balavant Ranganath v. Bala Halu AIR 1922 Bom 205. Mr. Chakravarty does not seriously dispute this proposition but what ha contends is this: that as the sale purported to have been held under Ch. 14, Ben. Ten. Act, the remedy by way of an application under Order 21, Rule 91 was not open to his client. His right of suit therefore remains untrammelled by any provision of Order 21, Rule 93, Civil P.C. In my opinion this contention is untenable. Mr. Chakarvarty himself has taken up the position throughout that the sale was a money sale under the Civil Procedure Code, inasmuch as the decree could not rank as a rent decree under the Bengal Tenancy Act. If that is so, a remedy by way of an application under Order 21, Rule 91 was available to his client and was not taken away, even if the procedure laid down in Ch. 14, Ben. Ten. Act, was followed. Mr. Chakravarty's second contention is that even apart from fraud, upon which the finding of the lower Appellate Court is against his client, he can recover the purchase money from defendant 1, when there was a total failure of consideration, and when it would be against reason and conscience to allow defendant 1 to retain it. This principle, which has been referred to in several oases, is said to furnish a cause of action to the plaintiff, for recovery of the purchase money, which existed apart from the old Civil Procedure Code, and which is hence untouched by any provisions of the new Code. The case in Dorab Ally Khan v. Abdool Azeez (1880) 5 IA 116 is the earliest case where this question was discussed by the Judicial Committee. That was a case before the Civil Procedure Code of 1882, and the action was brought by an auction- purchaser for recovery of purchase money on the ground that the Sheriff had attached and sold certain property which belonged to the judgment-debtor but which was outside his jurisdiction, and which sale was subsequently set aside on this ground by the Court within whose jurisdiction the property was situated. Phear J. sitting in Original Side dismissed the suit, as not maintainable and this view was affirmed by the Appeal Court. The Privy Council set aside the decision and sent back the case for further investigation on merits. Sir James W. Colvile, who delivered the judgment, observed that when property was sold under a regular execution and the purchaser was afterwards evicted by a title paramount, he would have no remedy either against the Sheriff or the judgment-debtor. It would be a different case however if the Sheriff had no jurisdiction to sell, and acted ultra vires. Then occurs a passage which is relevant to the present question. The passage runs as follows:

There is no doubt a further question whether the plaintiff has shown a case, which if proved, would entitle him to recover from the purchaser, the purchase money, as money had and received to his use, as upon a total failure of consideration.

15. Their Lordships did not say expressly what the circumstances are which would entitle the auction purchaser to have this remedy, but left it possibly to be decided on general principles which would sustain an action for money had and received to the use of the plaintiff in English law. Refer-ring to this decision of the Judicial Committee, Sir Arthur Page in 53 Cal 75813 expressed his view that

The law does not leave the auction-purchaser defenceless, and he may recover the purchase price which he has paid if he can bring himself within the equitable principles which justify a suit for money had and received upon the ground that it is unconscionable that the defendant should retain the money as against the plaintiff.

16. The learned Judge did not deal with grounds which would sustain such an action exhaustively, but pointed out that 'the plaintiff might have relief, if there was fraud, misrepresentation or privity of contract.' In the case itself, as the plaintiff was found guilty of undue delay, which resulted in the decree-holder's losing his remedy in law, no relief was allowed to him. The Patna High Court has approved of the principle in its entirety in Kameawar Singh v. Bensidhar Marwari AIR 1937 Pat 532, which however was a case of fraud. In Parvathi Ammal v. Gobindasami Pillai AIR 1916 Mad 290, it was held by the Madras High Court that where the invalidity of the proceeding was due to fraud, carelessness, or neglect of duty on the part of the decree-holder, the auction-purchaser, could sue to recover the purchase money on the ground of failure of consideration and such right was unaffected by any provision of the Civil Procedure Code. The matter was elaborately considered by the Lahore High Court in a recent Full Bench decision in Mehar Chand v. Milkhi Ram AIR 1932 Lah 401. It was held that though the Court does not guarantee any title in an execution sale, it does proclaim and communicate to the intending purchaser that according to the representation of the decree-holder the judgment-debtor has some interest in the property to be sold. The extent of the interest is neither investigated nor guaranteed by the Court but the existence of some interest is affirmed by the decree-bolder. On such representation of the decree-holder being found to be entirely absent and the auction purchaser being deprived of the property purchased by him, the latter would have a perfectly good house of action for money had and received as on a total failure of consideration. The Foundation for action for money had and received was investigated in many oases, of which the case in Sinclair v. Brougham (1914) AC 398 may be cited by way of illustration. It did not rest on an actual promise to pay, but arose when a promise was imputed by law, though the circumstances would totally exclude the idea of an actual con-tract. 'If the defendant' says Lord Mans Said

is under an obligation from the ties of natural justice to refund, the law implies a debt and gives the action founded on the equity of the plaintiff's case as it were upon a contract : Moses v. Maoferlan (1760) 2 Burr 1005.

17. In the words of Lord Dunedin, 'it was the putting of an equitable doctrine under a legal form, a contrivance introduced to meet an equitable idea.' The familiar case was of the paying of money by A to B under the mistaken impression that in fact the debt was due, when in truth there was no debt due. It was to fit cases of this sort that the common law evolved the action for money had and received. I agree with the opinion expressed by the Lahore High Court that though there is no guarantee in a Court sale, there is some duty which is imposed by law upon the decree holder in this connexion. Under Order 21, R 13, Civil P.C., when an application for attachment is made by the decree-bolder the application must contain a specification of the judgment-debtor's share or interest in such property to the best of the belief of the applicant and so far as he has been able to ascertain the same, and under R, 14 when lands are registered in the Collectorate, a certified extract from the register may be called for. If the decree-holder states something which is false, and makes that statement knowing it to be false, with a view to mislead the bidders, there would be obviously a case of fraud. But even when the misrepresentation was innocent, or there was mistake or ignorance of facts, under which the parties were labouring, which led to the invalidity of the whole proceeding, a fiction of a promise to pay, can in my opinion be justly imputed to the decree-holder, and it would be against natural justice to allow him to retain the money which he got possession of under such, ignorance or mistake. It would be open of course to the defendant to take all equitable defences, e. g. laches, delay or acquiescence on the part of the plaintiff or] his knowledge of all material facts in connexion with the affair. In my opinion, there is no reason why the plaintiff should not be able to invoke the principle in his favour, and claim refund of the money paid under an honest mistake of facts.

18. Mr. Bose has pointed out that it would be inequitable to allow the plaintiff to get the refund as there has been undue delay on his part resulting in loss of all rights of the decree-holder as against the judgment-debtor. He has further contended that the plaintiff's suit is barred by limitation under Article 62, Lim. Act. In my opinion, the delay in instituting the suit has been sufficiently explained by the plaintiff and it would not be a proper ground for throwing out the plaintiff's suit. After the plaintiff got the sale certificate, the landlord did realize rents from him for about three years knowing full well that he had no right to receive the same. It was an act of fraud on the part of the landlord which lulled him into security and led him to believe that it was only a third party who was obstructing him in getting possession. He did institute a suit against this third party who set up the title of the real tenant and it was in course of this litigation that he came to know the real state of affairs. Assuming that Article 62, Lim Act, applies for recovery of money had and; received to the plaintiff's use, I hold that the plaintiff can get extension of time under Section 18, Lim, Act, as against defendant 1 who by fraudulent misrepresentation and suppression of truth subsequent to the sale kept the plaintiff out of knowledge of his right to institute the suit within the proper period. In this view of the case it is not necessary to consider the other part of Mr. Chakravarty's contention as to whether there was any fraud on the part of defendant 1 in the matter of description of the property in the sale proclamation. The result is that I agree with my learned brother that the appeal should be allowed, the judgment and decree of the lower Appellate Court should be set aside and that of the trial Court restored.


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