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1945 DIGILAW 429 (MAD)

Karanamurthi Thevar v. Ramanatha Thevar

1945-12-03

KUPPUSWAMI AYYAR, LAKSHMANA RAO, SIR ALFRED HENRY LIONEL LEACH

body1945
Order of Reference to a Full Bench (7-9-1945).-In this case the question left undecided in Devarajulu Naidu v. Jayalakshmi Ammal,1 namely, whether Article 62 of the Limitation Act applies to a claim by the real owner against a benamidar as decided in Mahabhala Bhatta v. Kunhanna Bhatta2, Subbanna Bhatta v. Kunhanna Bhatta3, and Shanmugha Pillai v. Minor Govindaswami4 directly arises. Their Lordships say that it is not necessary to consider whether those cases were rightly decided. They also refer to an unreported case Narayana Bhatta v. Mahabala Bhatta5, where Benson and Bhashyam Ayyangar, JJ., hold that a suit against a benamidar was governed by Article 120 and not by Article 62. The Privy Council in Gur Narain v. Sheolal Singh1 point out that a benamidar is in the position of a trustee though he would not be in the position of an express trustee to attract the application of section 10 of the Limitation Act. On the allegations in the plaint and on the concurrent findings of both the Courts the position in this case is this: One Kandaswami Thevar, the father of the plaintiff, executed a conveyance of the property in suit in favour of the defendant nominally, but the title continued in him and the defendant was only a benamidar. The defendant sold the property to one Arunachalam Pillai in 1937 for a sum of Rs. 750 and received the consideration himself. The plaintiff’s father died in 1938 and the plaintiff brings the present suit as the heir of his father for the recovery of this amount. In effect, this is a claim by the real owner against a benamidar for the recovery of amounts received by the benamidar for and on behalf of the real owner. The case would appear to fall directly within the scope of the rulings above referred to, namely, Mahabala Bhatta v. Kunhanna Bhatta2, Subbanna Bhatta v. Kunhanna Bhatta3 and Shanmugha Pillai v. Minor Govindaswami4. Apart from the conflict between these decisions and the unreported decision referred to, Narayana Bhatta v. Mahabala Bhatta5 the position may have to be considered whether they were rightly decided in view of the decision of the Judicial Committee in Annamalai Chettiar v. Muthukaruppan Chettiar6, In the circumstances, I think it is desirable that the papers should be placed before my Lord the Chief Justice for orders. In pursuance of the aforesaid Order of Reference, the judgment of the Court was delivered by The Chief Justice.-This Full Bench has been constituted to consider whether the Court rightly applied Article 62 of the Limitation Act in Mahabala Bhatta v. Kunhanna Bhatta 2 , Subbanna Bhatta v. Kunhanna Bhatta3 and Narayanan v. Rangaswami Chetti7. These cases are in conflict with the decision of a Division Bench of the Court in an unreported case to which reference will be made later and it is said that two decisions of the Privy Council show clearly that they were wrongly decided in this respect. We will first state the facts of the present case as the whole appeal is before us. On the 29th September, 1933, Kandaswami Thevar, father of the plaintiff, conveyed immoveable property to the defendant benami. On the 25th January, 1937, the defendant sold the property to one Arunachalam Pillai for Rs. 750. On the 30th December, 1938, Kandaswami Thevar died. On the 5th October, 1942, the present suit was instituted to recover from the defendant the Rs. 750 which he had received from Arunachalam Pillai. The District Munsiff of Periyakulam in whose Court the suit was instituted held that the defendant was a benamidar for the plaintiff’s father and that the suit was not time-barred as Article 120 of the Limitation Act applied, but he considered that the plaintiff was only entitled to recover Rs. 375 as the other half of Rs. 750 belonged to his mother. The defendant appealed to the Subordinate Judge of Dindigul, who agreed with the District Munsiff. The defendant then appealed to this Court on the ground that the suit is governed by Article 62 of the Limitation Act and therefore was filed out of time. In Mahabala Bhatta v. Kunhanna Bhatta2, A and B jointly advanced moneys on the security of a usufructuary mortgage in the name of B, their benamidar. Later in 1884 A advanced moneys on the security of other usufructuary mortgages. Here again B acted as his benamidar. A died leaving three sons, two of whom were the plaintiffs. They had separated from their brother and in 1894 they sued B and the mortgagors for a declaration of their rights in the mortgages. No rent had been collected by B for several years before the suit. Here again B acted as his benamidar. A died leaving three sons, two of whom were the plaintiffs. They had separated from their brother and in 1894 they sued B and the mortgagors for a declaration of their rights in the mortgages. No rent had been collected by B for several years before the suit. The Division Bench which heard the appeal held that the plaintiffs were entitled to a declaration of their right to the mortgages, but dismissed their claim for rent as being barred by limitation. Although there is no reference in the judgment to Article 62, the Court apparently applied it. In Subbanna Bhatta v. Kunhanna Bhatta3 another Division Bench held that the period of limitation for an action by the real owner against a benamidar to recover money received by the latter for the use of the former was that prescribed in Article 62. The Court followed the decision in Mahabala Bhatta v. Kunhanna Bhatta1. The decision in Narayanan v. Rangaswami Chetti2, was to the same effect; but here the later case of Subbanna Bhatta v. Kunhanna Bhatta3 was relied on. The unreported case is Narayana Bhatta v. Mahabala Bhatta4 in which Benson and Bhashyam Ayyangar, JJ., held that in such a case the appropriate article was Article 120. There the first defendant held a mortgage and a reversion in a lease as the benamidar of the plaintiff’s father. It was pointed out that by reason of section 95 of the Indian Trusts Act he was bound to perform the same duties and was subject to the same liabilities as if he were a trustee of the property for the plaintiff’s father. Therefore Article 62 did not apply and the case fell within the residuary Article 120. In Annamalai Chettiar v. A.M.K.C.T. Muthukaruppan Chettiar5, the Privy Council held that the benamidar is not an express trustee, but he occupies a fiduciary position. In Gur Narayan v. Sheolal Singh6 the Judicial Committee said that the benamidar represents the real owner and that so far as their relative legal positions are concerned., the benamidar is a trustee for the real owner. Annamalai Chettiar v. A.M.K.C.T. Muthukaruppan Chettiar5, related to a suit for an account of moneys in the hands of benamidars. The question was whether it had been brought in time. Annamalai Chettiar v. A.M.K.C.T. Muthukaruppan Chettiar5, related to a suit for an account of moneys in the hands of benamidars. The question was whether it had been brought in time. Their Lordships expressly held 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. In such a case the period of limitation was governed by Article 120. Therefore it is now settled law that Article 62 cannot be applied where the claim is on an equitable basis. The two decisions of the Judicial Committee just referred to were applied by this Court in the recent case of Devarajulu Naidu v. Jayalakshmi Ammal7. There two brothers A and B sold immoveable property to K for Rs. 3,000 and in part discharge of the purchase consideration K executed a promissory note for Rs. 1,560 in favour of C, the wife of A. C quarrelled with her husband and left him. She then fraudulently indorsed the promissory note to D without consideration, her object being to defeat her husband and his brother. D sued the maker of the note and obtained a decree for Rs. 1,653-8-0. The suit which gave rise to the appeal was filed by A and B to recover this amount from D. If Article 62 applied, the suit was out of time but within time if Article 120 applied. It was held that in indorsing the promissory note to D, C wrongly converted it and that D took it with full knowledge of the facts. In these circumstances he acquired no title to it. A and B had obviously an equitable claim against D and it was held that by reason of the pronouncements of the Privy Council in Annamalai Chettiar v. A.M.K.C.T. Muthukaruppan Chettiar5 and Gur Narain v. Sheolal Singh6 Article 62 could not be applied and that the period of limitation was six years under Article 120. The plaintiff’s claim against the defendant is certainly an equitable one, being claim against a benamidar, a person in the position of a trustee, in respect of moneys received and held by him for the benefit of the real owner. This being the position the Courts below rightly held that the case fell within Article 120 of the Limitation Act. The appeal must be dismissed with costs. This being the position the Courts below rightly held that the case fell within Article 120 of the Limitation Act. The appeal must be dismissed with costs. It follows that the decision of this Court in Mahabala Bhatta v. Kunhanna Bhatta1 Subbanna Bhatta v. Kunhanna Bhatta3, and Narayanan v. Rangaswami Chetti2, in so far as they relate to the application of Article 62 to a claim against a benamidar in respect of money held by him on behalf of the true owner, are overruled. V.S. ----- Appeal dismissed.