1. This is a reference from the Small Cause Court. The question arises upon a contract for the sale of a certain house in Chowringhee No. 34 Chowringhee Road, which was entered into between Saheb Zadi Mamoodi Begam as vendor on the one part and John Caropiat Galstaun as purchaser on the other part on 9th September 1919. It appears that the premises in question were subject to a certain wakf and they were also subject to a renewal clause in a certain indenture of lease. No period for completion was fixed by the contract and it was a term of the contract that the vendor should use due diligence to apply to the proper Court in the matter of the waif for an order for sale thereof and that she should take advice of counsel with a view to nullify, if possible, the clause in the lease to which I have referred. The contract provided that within one week from the date on which the purchaser should be satisfied in respect of the above two clauses being fully complied with by the vendor, the vendor would send all the title deeds. There were further provisions as regards what would happen thereafter in the matter of the completion of the contract. It appears that, in 1921, the vendor mortgaged this property to another and, in 1927, the property was sold in satisfaction of that mortgage.
2. The present suit was brought for the return of the deposit money, namely, Rs. 501 with reference to which there was a clause in the contract that, if for any laches of the vendor or failure on the part of the vendor to comply with the conditions of these presents and on her part to be observed and performed the said purchase cannot be completed, then and in such event the vendor should forthwith return on demand to the purchaser the said sum of Rs. 501.
3. Now, the question which arose and upon which the two Judges of the Small Cause Court composing the Full Bench disagreed has been stated as follows:
(1) Whether Article 60 or Article 115 applies to the claim in suit ?
(2) Whether the claim is barred ?
4. The view taken by the trial Judge is that the question for decision is whether the plaintiff, that is, the purchaser can be allowed to keep the agreement in force for an indefinite period. He thinks that, when the defendant mortgaged the property, it became impossible for her to convey it to the plaintiff and that the plaintiff immediately on becoming aware of this should have called upon her either to convey or to put an end to the contract. He is of opinion that the case comes under Article 115, Schedule 1, Lim Act. The Chief Judge is of opinion that the case comes under Article 60 Lim. Act, as money deposited under an agreement that it shall be payable on demand.
5. In my opinion, Article 60 is not applicable to this case at all. This money at the time it was deposited was not deposited on the term that it should be repayable on demand but it was deposited as part of the purchase money of the property and also as a deposit in the sense that it was capable of being forfeited if the purchaser did not fulfil his part of the contract. I have no doubt that the view taken of Article 60 being applicable is incorrect. I am very doubt-full whether, in any view, Article 115 can be said to be the article applicable. Article 115 is for compensation for the breach of any contract express or implied and the period of limitation is three years from the time when the contract is broken.
6. It appears to me that the Article applicable is Article 97 for money paid upon an existing consideration which afterwards fails, the period of limitation being three years from the date of the failure. It is quite clear that in a case of this sort, the purchaser has three years from the time at which the contract comes to an end either by reason of impossibility of performance or by reason of refusal to perform or because the contract is abandoned or because the contract is rescinded by one party for the default of the other. In this case, the position is that notice was fixed for completion. The vendor bad two things to do which might take a very substantial time. The purchaser never made time of the essence of the contract by giving notice that he should require performance within a definite time. It is erroneous to say that such a contract as this became impossible of performance, because the vendor mortgaged the subject-matter. This is a mere matter of conveyance. It is for the vendor to pay off the mortgagee at or before the time! of completion. This contract certainly came to an end at the latest for impossibility of performance in 1927 when the mortgaged property was sold. After that the vendor was unable to perform the contract. The question is whether the contract came to an end earlier. It is erroneous to say that it was the duty of the purchaser to sue the vendor at the expiry of a reasonable time. It might have been within his rights so to do, but there is no law which prevents a purchaser from extending the time for his vendor. The object of the limitation Act is to make people bring their suit promptly when their cause of action has arisen. It is not to make people bring their cause of action into existence before they want to do so. In the present case, it appears, so far as one can gather from the judgment, that there are very few facts indeed which can be relied upon on one side or the other. It does not appear that the time was extended by express arrangement. It does not appear that either party purported to rescind the contract. It is a question on which there seem to be very few materials whether there is any proof that the parties had abandoned the contract before 1927. It does not appear that until 1927 the vendor became unable to perform the contract. This contract remained in existence for the present purpose until either by arrangement or rescission or impossibility of performance or refusal, the plaintiff's right to sue for the return of the money arose. It will be for the Small Cause Court to apply these principles to the facts of this case. Let the case be returned to the Small Cause Court with this expression of opinion.
B.B. Ghose, J.
7. I agree.