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1965 DIGILAW 132 (ALL)

Panna Lal Misra v. Ram Charan

1965-03-25

D.P.UNIYAL

body1965
JUDGMENT D.P. Uniyal, J. - On 6-6-1953 Lala Misri Lal deceased, who is now represented by his sons and wife, sold an electric motor of 10 H. P., together with starter, switch, ampere and the machine, along with electric connection No. 3848, under a registered sale deed of that date to Panna Lal Misra for Rs. 2,000/-. The vendee executed a pronote of Rs. 2,000/- in lieu of the price of the above and obtained possession over the property sold to him. The vendee failed to pay the sale consideration in spite of repeated demands, whereupon suit No. 555 of 1954 was instituted by Lala Misri Lal, vendor, against Panna Lal, the vendee, for recovery of sale consideration on the basis of the pronote aforesaid. The suit of Lala 'Misri Lal was dismissed by the appellate court on the finding that the transfer of the machine with electric connection was void. Having failed to recover the money from the vendee Lala Misri Lal brought the present suit for recovery of articles sold by him to the defendant vendee and, in the alternative, for recovery of Rs. 1,500/- as being the price of the articles. 2. The defendant vendee contested the suit inter alia on the ground that it was barred by limitation. The suit was dismissed by the Munsif on the ground that the agreement being void, limitation began to run against the plaintiff from the date on which the agreement was executed. The Munsif held that Article 49 of the Limitation Act was applicable to the case and the suit was barred. The learned Civil Judge disagreed with the view of the Munsif on the question of limitation. He was of the opinion that limitation for the suit began on the date when possession of the defendant vendee over the property became unlawful; and that possession became unlawful when the suit of the plaintiff-vendor for recovery of money on foot of the pronote was dismissed. He accordingly decreed the plaintiff's suit. 3. The defendant-vendee has come up in appeal to this Court and challenges the legality of the .decree passed by the learned Civil Judge. 4. He accordingly decreed the plaintiff's suit. 3. The defendant-vendee has come up in appeal to this Court and challenges the legality of the .decree passed by the learned Civil Judge. 4. The main contention of the learned counsel for the appellant was that sale of the electric connection being prohibited by law, the time when the agreement of sale was discovered to be void was the date of the agreement, and, therefore, time began to run against the plaintiff on the date when the agreement was executed. It was said that in a case where contract is void ab initio the date of its execution is the date on which it is discovered to be void. The agreement in question was of 1953 and the present suit was filed in 1959. If time began to run against the plaintiff from the date on which the sale deed was executed, then the suit would be hopelessly time-barred as the period of limitation for such a suit is 3 years whether Article 49 or Article 97 is applicable to the case. 5. The learned counsel invited my attention to the case of Hansraj Gupta v. Dehra Dun Electric Tramway Co. Ltd., A.I.R. 1933 P. C. 63. In that case the liquidators claimed that under Section 65, Contract Act they only became entitled to recover money when the agreement under which it was paid was discovered to be void, and that this discovery was not made until the court declared the contract to be void. The Judicial Committee repelled the contention and observed: "the time at which an agreement is discovered to be void within the meaning of Section 65 is the date of the agreement." Their Lordships affirmed the view expressed by them in the case of Annada Mohun Roy v. Gouri Mohun Mullick, I.L.R. 50 Cal. 929 (P.C.). 6. In Sanaullah v. Jai Narain Singh A.I.R. 1942 Alld. 409 the facts were that a usufructuary mortgagee of occupancy rights instituted a suit for return of the mortgage money on the ground that he had been wrongfully dispossessed by the mortgagor. The defendant raised the plea of limitation and contended that the agreement being void ab initio the suit having been filed more than three years after the execution of the mortgage in question was barred by time. The defendant raised the plea of limitation and contended that the agreement being void ab initio the suit having been filed more than three years after the execution of the mortgage in question was barred by time. The learned Judges who constituted the bench upheld the objection of the defendant in these words: "In the present case it seems clear to us that the plaintiff could have no claim against the defendant except under the provisions of Section 65 Contract Act. The provisions of that section come into play when an agreement is discovered to be void or when a contract becomes void. In the case before us there is no question of any contract having become void because there never was a contract. The question is when it was discovered that the agreement was void. Now in accordance with the decision of their Lordships of the Privy Council in 50 Calcutta, 929, an agreement which is void from its inception is ordinarily to be considered to have been discovered to be void at the time when the parties entered into it." 7. The same view has been expressed in Ardesir v. Vejesing, I.L.R. 25 Bom. 593. In that case the sale deed was held to be unenforceable in law and, therefore, void ab initio. The point that arose for consideration was whether the limitation started on the date of the execution of the sale deed or on the date when it was declared void by the judgment of court. It was ruled that the sale deed being void ab initio, limitation began to run from the date on which the sale was executed. 8. On the admitted facts of the present case the agreement in question was void from its inception inasmuch as the sale of the electric connection was prohibited by law and constituted an offence. There could, therefore, be no question of the agreement having become void by reason of the decision of the court in the earlier suit. The agreement of sale was unlawful from the very start in the sense that no valid contract came into existence. This being so, time began to run against the plaintiff on the date when the agreement of sale was executed. I am, therefore of the view that the present suit was barred by time. 9. The agreement of sale was unlawful from the very start in the sense that no valid contract came into existence. This being so, time began to run against the plaintiff on the date when the agreement of sale was executed. I am, therefore of the view that the present suit was barred by time. 9. On behalf of the respondent reliance was placed on the case of Thakurain Harnath Kunzar v. Thakur Inder Singh, A.I.R. 1922 P. C. 403. The facts of that case were these. One Rajpal Singh, husband of the plaintiff, advanced Rs. 20,000/- for expenses of litigation to one Inder Singh, who executed the instrument of transfer on which the suit was brought. The courts held that the transfer was inoperative as Inder Singh at its date had no interest capable of transfer but merely an expectancy. Their Lordships of the Privy Council observed as follows: "The agreement here was manifestly void from its inception, and it was void because its subject matter was incapable of being found in the manner stipulated. Though this aspect of the case has not been satisfactorily stated or developed in the pleadings and in the proceedings before the lower courts, their Lordships think there are materials on the record from which it may be fairly inferred in the peculiar circumstances of this case that there was a misapprehension as to the private rights of Inder Singh in the villages which he purported to sell by the instrument of the 2nd January 1880, and that the true nature of those rights was not discovered by the plaintiff or her husband Rajpal Singh earlier than the time at which his demand for possession was resisted, and that was well within the period of limitation." 10. In that case the decision turned on what their Lordships described as 'the peculiar circumstances of this case.' Both the parties in the case last cited seem to have regarded the transaction as valid and acted throughout on that assumption. It was, therefore, held by the Privy Council that having regard to the conduct of the parties it was a case where the transaction was not discovered to be void until the demand for possession was resisted by the defendant. 11. It was, therefore, held by the Privy Council that having regard to the conduct of the parties it was a case where the transaction was not discovered to be void until the demand for possession was resisted by the defendant. 11. In the present case there were no such peculiar facts from which it could be said that the parties had not become aware of the invalidity of the transaction earlier than the date on which the plaintiff's suit for recovery of money on the promissory note was dismissed. The facts, on the other hand, point to the conclusion that the respondent was aware of the illegality of the sale. The plea raised by the defendant in the earlier suit was that the contract of sale was void and could not be enforced. The plaintiff-respondent had no misapprehensions about the invalidity of the contract. Indeed, when the defendant-appellant contested the suit on the plea that the contract was void the plaintiff had no justification to postpone the recovery of the sale consideration. He should have got the plaint of the earlier suit amended by adding a relief for the return of the sale consideration. If he had done that the suit might well have been within time. 12. The learned Civil Judge was clearly in error in holding that the possession of the defendant-appellant over the property sold to him was permissive and not unlawful. If the sale of the electric connection was void, which indeed it was, the possession of the goods by the defendants was also unauthorised and without any right, and therefore, the cause of action for the return of the goods or their price arose immediately. It follows from what I have said above that the agreement of sale being void the suit for return of the sale consideration was unenforceable after the expiry of three years of the date of execution of the agreement. 13. I, therefore, allow this appeal, set aside the judgment and decree of the lower appellate court and restore that of the court of first instance, and dismiss the plaintiff's suit. In the peculiar . circumstances of this case, I order that the parties will bear their own costs throughout.