Sivaramakrishna Iyer v. Chella Kumara Kounder — 1961 DIGILAW 412 (KER)

Judgment :- 1. The only question for decision is whether the suit is barred by limitation. The facts necessary for the decision of this Second Appeal may be stated: The properties described in the plaint schedule belonged to Kumaraswamy Kounden. He mortgaged the same with possession to Anjoora Kounden for Rs. 2,500/- in 1102. After the mortgagee's death, his heirs, the plaintiffs in this suit, assigned the mortgage right to the first defendant on 9-6-1113 stipulating that the properties were to be conveyed back to the plaintiffs on payment of Rs. 1,650/- with interest at 9 per cent per annum within one year. The first defendant leased the properties to one Narayana-swamy Kounden on 14-6-1113. Before the expiry of the period of one year, the plaintiffs assigned their right to one Anthonyswamy Pillai and two others, directing them to recover possession of the properties from the first defendant. Anthonyswamy Pillai sent a notice to the first defendant offering to pay him the amount due. Soon after this an insolvency petition was filed against the first defendant in the District Court of Trichur and an interim receiver was appointed to manage his assets. While the insolvency petition was pending, Anthonyswamy Pillai deposited a sum of Rs.247-5-9 in the insolvency court on 6-5-1114 stating that this was the sum due to the first defendant after setting off the amount due to him from the 1st defendant. He also filed M.P. No. 796 of 1114 in the insolvency court praying for reconveyance of the properties to him. The first defendant was adjudicated insolvent on 27-3-1116 but on appeal the High Court annulled the order of adjudication on 23-5-1117. The first defendant had executed a trust deed in 1115 in favour of defendants 2 to 6 authorising them to manage his properties and discharge his debts. Anthonyswamy Pillai and others later assigned the mortgage right back to the plaintiffs under Ext. B dated 1-4-1120. In the meanwhile M.P. No. 796 had been dismissed by the insolvency court on 23-1-1120 directing Anthonyswamy Pillai to file a regular suit. In 1120 the original owner's legal representatives filed O.S. No. 21 of 1120 in the Trichur District court for redemption of the mortgage to Anjoora Kounden. Anthonyswamy Pillai, the lessee Narayanaswamy Kounden and all the parties to this suit were defendants in O.S. No. 21. In 1120 the original owner's legal representatives filed O.S. No. 21 of 1120 in the Trichur District court for redemption of the mortgage to Anjoora Kounden. Anthonyswamy Pillai, the lessee Narayanaswamy Kounden and all the parties to this suit were defendants in O.S. No. 21. The defendants in the present suit were defendants 2 to 6 in O.S. No. 21 and they claimed the mortgage money on the ground that they had become entitled to the same under the assignment deed. The plaintiffs who were defendants 10 to 12 in that suit also claimed the same alleging that the condition in the assignment deed to the first defendant had been complied with. Though the trial court held that the defendants in this suit were entitled to the mortgage money, the High Court in A. S. No. 81 of 1122 (39 Cochin 420) upheld the claim of the plaintiffs finding that the deposit of Rs. 247-5-9 by Anthonyswamy Pillai in the insolvency proceeding was proper and that the same effected a valid discharge of the first defendant's claim. As regards the deed executed by Anthonyswamy Pillai in favour of the first defendant, it was held that it was not a mortgage of conditional sale by an assignment with a condition for reconveyance. Ext. L is copy of the judgment in A.S. No. 81 of 1122. The present suit was instituted by the plaintiffs on 2-3-1951 (18-7-1126) claiming the profits of the property collected by defendants 2 to 6 in the years 1114 to 1119. The claim was later limited to the profits for the years 1114 to 1118. As limitation is the sole point pressed by the defendants it is unnecessary to deal with the other contentions raised by them. They contended that the suit was barred under Art.109 of the Limitation Act which provided a term of only three years from the date on which the profits were received. The plaintiffs' case was that the suit was governed by Art.120 of the Limitation Act under which they were entitled to sue within six years from the date on which the right to sue arose which date, according to them, was 2-2-1948,19-7-1123, when the High Court held that the deposit by Anthonyswamy Pillai was valid. The trial court upheld the plaintiffs' case and decreed the suit. The trial court upheld the plaintiffs' case and decreed the suit. The decree was confirmed by the lower appellate court with the modification that defendants 2 to 6 were not personally liable for the claim and that the plaintiffs were to recover the amount from the trust properties. Defendants 2, 3, 5 and 6 have therefore preferred this Second Appeal. Articles 109 and 120 of the Limitation Act may he extracted: 4. The appellants' ease is that the claim in the plaint is one for recovery of profits wrongfully received by the defendants and that the period of limitation is only three years from the date on which the profits were received. They have a further contention that the starting point of limitation cannot be shifted to the date on which A.S. No. 81 of 1122 was decided by the High Court as it was open for Anthonyswamy Pillai or the plaintiffs to institute the suit earlier. 5. This is to the effect that the profits were wrongfully collected by the defendants. It was urged on behalf of the respondents that the plaint read as a whole would show that the claim was not one for mesne profits. We do not see how the respondents' case can be accepted. They are claiming the profits on the ground that the properties had to be reconveyed when the deposit was made in 1114 by Anthonyswamy Pillai which means that the defendants were retaining possession of the property and taking the profits wrongfully from that date. According to the High Court of Madras, profits "wrongfully received" includes receipt of profits under a claim or title which cannot be legally sustained (see Rangaswami Kavundan v. Alagayamman (1915-2 L.W-169). This decision was followed by the High Court of Andhra Pradesh in Gangappa v. Hanumanthappa, (1961) 1 An. W.R. 346. 6. Reference was made by counsel for the respondents to decisions in which the claim was for recovery of profits withheld by a co-owner or an agent or a person entrusted with possession pending decision of the question as to who was the rightful claimants. These decisions do not apply to the facts of this case. The argument advanced on behalf of the respondents was that until it was held that the deposit made in 1114 was proper and valid, the possession of the defendants could not be said to be wrongful. These decisions do not apply to the facts of this case. The argument advanced on behalf of the respondents was that until it was held that the deposit made in 1114 was proper and valid, the possession of the defendants could not be said to be wrongful. It was pointed out that the insolvency court could not grant the relief prayed for and that it was only when the High Court decided the question in A.S. No. 81 of 1122 that the plaintiffs became entitled to the properties. This argument is not correct because what the High Court decided was that by reason of the deposit in 1114 the first defendant's claim was satisfied. The mere fact that the right to the properties was the subject matter of dispute in a separate proceeding cannot be a satisfactory answer for not filing the suit for recovery of possession or profits earlier. There is no substance in the argument that a suit for recovery of profits would have been futile before the question of title was decided. As pointed out by the Privy Council in Narayan Patil v. Puttabai (AIR 1945 PC 5), "the institution of a suit can never be said to be futile, if it would thereby prevent the running of limitation". The decisions in Ram Charan Sahu v. Goga (AIR 1927 All. 446), Pasheshar Das v. Diwan Chand (AIR 1933 Lah. 615), Gangappa v. Hanumanthappa 1961-1 An. W. R.346), and Chintalapati Varahalamma v. Gavva Nallayya (1961-1 An. W. R.372) support the appellants. As pointed out in the first of these cases, the plaintiff in such a case must sue for mesne profits before the time expires and let the suit be stayed pending the decision of the suit for establishing title. We therefore hold that the suit was barred by limitation under Art.109. 7. Even assuming that the profits were not wrongfully received by the defendants and Art.120 applies, the plaintiffs cannot succeed. The starting point of limitation under that Article is "when the right to sue accrues". The right to sue for possession accrued when Anthonyswamy Pillai deposited the amount in the insolvency court and not when the validity of the deposit was decided in A.S. No. 81 of 1122. So far as the profits for the years 1114 to 1118 are concerned, the right to sue accrued at the end of each year. The right to sue for possession accrued when Anthonyswamy Pillai deposited the amount in the insolvency court and not when the validity of the deposit was decided in A.S. No. 81 of 1122. So far as the profits for the years 1114 to 1118 are concerned, the right to sue accrued at the end of each year. The suit instituted 8 years after 1118 is barred by limitation even under Art.120. M.P. No. 796 of 114 was dismissed as early as 23-1-1120 and the plaintiffs could have filed the suit at least immediately thereafter. The present suit was filed six years after that date. Thus in any view of the case the suit must be held to be barred by limitation. It follows that the decrees passed by the courts below must be set aside and the suit dismissed. We do so and allow the Second Appeal, but in the circumstances without costs.