JUDGMENT - 1. This is an appeal on behalf of the original plaintiff from the judgment and decree dated November 16, 1966, of Mr. Judge Kapadia of the City Civil Court, Bombay, whereby the learned Judge tried the issue of limitation as preliminary issue and upon finding that the suit was barred by the Law of Limitation dismissed the same with costs. 2.The relevant facts are as follows:- 3.Between October 11, 1957 and January 3, 1958, the plaintiff had sold and delivered to the defendants certain different goods and had also recovered the price thereof. In the letter dated October 11, 1957, the defendants stated : "In respect of the transactions under your invoice x x x x x dated 25th September 1957 we do hereby indemnify you against any amount of sales tax that may be levied by the authorities with or without any guarantee thereof, as the case may be, as and when charged". Similar letter of indemnity was executed by the defendants on January 3, 1958. There is no dispute between the parties that in respect of the goods sold and delivered by the plaintiff to the defendants during the above period a contract of indemnity in the terms contained in the above letters existed. 4.In connection with the sales tax relating to the goods sold by the plaintiff to the defendants as mentioned above, the sales tax authorities issued an order dated February 28, 1963, calling upon the defendants (plaintiff ?) to pay Rs. 3,101.25 by way of sales tax and Rs. 378/- as penalty. The plaintiff called upon the defendants to deposit the amount of tax and penalty, but the defendants failed to do so. An appeal filed by the plaintiff was dismissed on November 12, 1963. The revisional application filed by the plaintiff was dismissed in July 1963. Prior to the institution of the above appeal, between April 27, and July 1, 1963, the plaintiff deposited the aggregate sum of Rs. 3,479.25 with the sales tax authorities. To recover that amount the plaintiff filed the present suit on April 13, 1966. The parties were agreed before the learned Judge below that the claim in suit was governed by the provisions in Article 113 in the Schedule to the Limitation Act of 1963 which runs as follows :- "113. Any suit for which no period of limitation three years. The parties were agreed before the learned Judge below that the claim in suit was governed by the provisions in Article 113 in the Schedule to the Limitation Act of 1963 which runs as follows :- "113. Any suit for which no period of limitation three years. When the right to sue accrues is provided elsewhere in this Schedule." Relying upon certain observations of Chagla J. (as he then was) in the case of Gajanan Moreshwar v. Moreshwar Madan, 44 Bom LR 703, the learned Judge below held that in the present case the right to sue that in the present case the right to sue had accrued in favour of the plaintiff when the order dated February 28, 1963, demanding and / or levying sales tax and penalty was issued. As three years period had expired from that date prior to the date of the institution of the suit, he held that the suit was barred and dismissed the same. 5.Mr. Malkani for the plaintiff has submitted that the above finding of the learned Judge is contrary to the decision of the Supreme Court in the case of Shanti Swarup v. Munshi Singh, AIR 1967 SC 1315 . The effect of the observations of the Supreme Court in this case, according to Mr. Malkani, was such that in the present case the right to sue on the contracts of indemnity between the parties should be held to have accrued to the plaintiff only upon the plaintiff being damnified and suffering loss of the sum of Rs. 3,479.25 by deposit and payment thereof between April 27 and July 1, 1963. He, therefore, submitted that the suit that was filed before expiry of three years from April 27, 1963, was within the prescribed period of three years and was not barred by the Law of Limitation. 6.Mr. Jhaveri for the defendants has submitted that on a true construction of the contracts of indemnity contained in the two letters mentioned above, the plaintiff became entitled to be indemnified immediately upon the levy of the sales tax and penalty. The levy was made by the order dated February 28, 1963. In fact, in accordance with the contracts of indemnity, the plaintiff had called upon the defendants to deposit the amount of the tax and the penalty. The levy was made by the order dated February 28, 1963. In fact, in accordance with the contracts of indemnity, the plaintiff had called upon the defendants to deposit the amount of the tax and the penalty. The true construction of the contracts of indemnity was that the right to sue accrued in favour of the plaintiff immediately upon the plaintiff receiving the order dated February 28, 1963. In this connection, he relied upon the observations of Chagla, J., in the above referred case. 7.Now, in connection, with the phrase "right to sue accrues" that appears in the third column of Art. 113, one may refer to the contents of Sections 22 and 23 of the Act which relate to continuing breaches and torts and suits for compensation for acts not actionable without special damage. Without quoting the contents of these sections it is sufficient to state that the Law of Limitation has recognized that liabilities for payments of damages and / or compensation may continue to accrue from day to day newly in respect of continuing breaches of contracts and torts. One illustration of a cause of action which may continue to come into existence under a contract from time to time and day to day will be a negative covenant agreed to between purchasers and sellers in deeds of conveyances and between lessors and lessees in the deeds of leases. But this is not the subject in which it is necessary to indulge too deep. It is sufficient to state that a contract of indemnity may be such as may give rise to two and different sorts of claims which may be enforceable in a Court of law. The ordinary common law cause of action on a contract of indemnity did not arise at any date prior to damnification and / or loss that the plaintiff suffered. In other words the cause of action arose only if and when the plaintiff was damnified and suffered losses. Now, it is true that this view of the nature of contracts of indemnity was by the Chancery and / or Equity Courts considered very harsh and not sufficient to carry out the entire and true purpose of such contracts. In other words the cause of action arose only if and when the plaintiff was damnified and suffered losses. Now, it is true that this view of the nature of contracts of indemnity was by the Chancery and / or Equity Courts considered very harsh and not sufficient to carry out the entire and true purpose of such contracts. The common law was by rulings of Chancery and Equity Courts amended and it was held that the promisee in a contract of indemnity was entitled to additional and extra cause of action vesting him with a right to call upon the promisor to carry out his obligations by payments to the creditors and third parties and / or by deposits made in Court in anticipation of the actions and proceedings which such creditors and third parties may take against the promisee in the indemnity contract. The effect of the findings made by the learned Judge below is that the above additional relief which is afforded to a promisee in an indemnity contract by Law established under rulings of the Chancery and Equity Courts was sufficient to make a finding that a cause of action which would have accrued to such promisee only upon being damnified and suffering loss as originally at common law was not a separate cause of action. It appears to me that in spite of the discussion contained in the case of 44 Bom LR 703 there is no justification in holding against the plaintiff-indemnified promisee that a fresh cause of action does not accrue to him under the same contract of indemnity when he is in fact damnified and / or suffers loss. It is true that by the law of indemnity as amended by the rulings of the Chancery and Equity Courts, promisee in an indemnity contract would have a cause of action to claim relief of directions that the promisor do make payment to the third party creditor so that in fact the promisor (promisee ? ) is never damnified. It is true that in this very connection the promisee may claim relief of deposit of the relevant amount in a Court of law so that the promisee can have the deposited money in hand for payment to the third party creditor. This is a new cause of action created by the rulings of the Chancery Courts. It is true that in this very connection the promisee may claim relief of deposit of the relevant amount in a Court of law so that the promisee can have the deposited money in hand for payment to the third party creditor. This is a new cause of action created by the rulings of the Chancery Courts. This has not wiped off the common law cause of action vested in a promisee under an indemnity contract for enforcement of obligation on the indemnity contract itself by seeking a direct decree against the promisee (promisor?). To such decree he was entitled at common law only upon damnification and sufferance of loss. This cause of action arises only upon damnification and sufferance of loss. The observations made above are in consonance with the observations of the Supreme Court in the case of AIR 1967 SC 1315 where in paragraph 5, Their Lordships observed:- "The vendees, in the present case, covenanted to the vendors not only to purchase the property mentioned in the sale deed but also to relieve the vendors from the liability of the mortgages, and in that sense there was an implied contract to indemnify the vendors. The cause of action in such a case arises when the plaintiff-vendors are actually damnified. The mere fact that a mortgage decree has been obtained against the plaintiff is not sufficient to put the statute in motion. In other words, the statute runs not when the event happens which caused the loss but on the actual damnification". 8.In view of the above observations of the Supreme Court, I do not deem it necessary to discuss the observations of Chagla, J., in the case of 44 Bom LR 703 mentioned above as also the contrary statements of law contained in the judgment of Lokur, J. in the case of Shankar Nimbaji v. Laxman Supdu, 42 Bom LR 175, which both cases are referred to in the judgment of the learned Judge. In my view, on a true construction of the contracts of indemnity admitted between the parties, it was permissible for the plaintiff to call upon the defendants to pay the amounts claimed in the order dated February 28, 1963, directly to the sales tax authorities. That was because of the additional cause of action afforded by rulings of Courts of Equity. That was because of the additional cause of action afforded by rulings of Courts of Equity. It was, however, permissible for the plaintiff to wait and institute the present suit on the basis of the original cause of action arising at common law upon damnification and sufferance of loss. The plaintiff was for the first time damnified and suffered losses for which he was entitled to be indemnified when he made payments between April 27 and July 1, 1963. The plaintiffs suit was within three years from the date of the above period and accordingly within the time prescribed by Article 113. 9.In the result, the finding of the learned Judge on the question of limitation is set aside. The decree dismissing the suit is set aside. The decree dismissing the suit is set aside. The suit is referred back to the trial Court for further disposal according to law. The defendants will pay costs of this appeal. 10. Order accordingly. BCI 1972(0) Honble Judges: K.K. Desai, J. Appellants: Aiyasha Begum and Ors. Vs. Respondent: Kapurchand Rahmal K.K. Desai, J. Counsels: For Appellant/Petitioner/Plaintiff: M.J. Rajani, Adv. For Respondents/Defendant: K.K. Vyas, Adv. for N.N. Vaishnawa, Adv 1. This is an appeal on behalf of the original defendants 1 - A, 1 - B and 1 - C against the judgment and decree dated June 22, 1967, made by the Principal Judge of the City Civil Court declaring that the gala No. 10 mentioned in the plaint had been validly assigned to the plaintiff under the deed of assignment dated September, 19, 1958, and further declaring that these appellants were trespassers and not entitled to remain in possession of a portion of the above gala No. 10 and granting a decree in ejectment as against these appellants and further granting compensation at the rate of Rs. 20/- per month as from April 19, 1958, till delivery of possession and costs of the suit. 2. The plaintiffs case was that defendants 2 and 3 i.e., Chhotu Balu and Hansu Murat were joint tenants of the above gala No. 10. These two persons resided at and in a portion of the above gala and also carried on their business of gas welding in the gala. 2. The plaintiffs case was that defendants 2 and 3 i.e., Chhotu Balu and Hansu Murat were joint tenants of the above gala No. 10. These two persons resided at and in a portion of the above gala and also carried on their business of gas welding in the gala. These two persons sold to the plaintiff under a deed of assignment dated April 19, 1958, their business of gas welding together with all stocks - in - trade, fixtures, furniture and goodwill thereof along with the tenancy rights of the business premises as incidental to the said running concern for the price of Rs. 2,500/-. 3. One Zainullah, the original defendant, was occupying a portion of this gala even prior to the date of the above assignment as licensee of Chhotu Balu and Hansu Murat. The plaintiff granted leave and licence and permission to Zainullah to continue in occupation of the portion already occupied by him in consideration of Rs. 20/- per month payable by Zainullah as licence fee to the plaintiff. In the correspondence that had taken place Zainullah falsely contended that the portion in his occupation had been obtained by him under a deed of assignment dated July 10, 1957, whereby a running business was sold as a going concern to Zainullah by Chhotu Balu. The plaintiff had duly revoked the licence granted by him to Zainullah and he accordingly claimed that Zainullah was a trespasser by reason of the termination of the licence. That was one part of the cause of action mentioned in the suit. The other part was that the assignment relied upon by Zainullah was illegal and in violation of law. For this reason, the plaintiff claimed that Zainullah was a trespasser. The plaintiff claimed compensation at the rate of Rs. 20/- per month aggregating to Rs. 120/- for the period April 19 to October 18, 1958. The plaintiff craved leave to file a further suit against Zainullah for damages for wrongful occupation from and after October 18, 1958. He accordingly, claimed declaration about the validity of his assignment and that Zainullah was a trespasser and for a decree in ejectment and for money decree for Rs. 120/- and a further sum of Rs. 1320/- and interest and costs. 4. Zainullah had filed his written statement dated February 2, 1959. Before the trial could take place, Zainullah died on October 15, 1965. 120/- and a further sum of Rs. 1320/- and interest and costs. 4. Zainullah had filed his written statement dated February 2, 1959. Before the trial could take place, Zainullah died on October 15, 1965. fresh writs of summonses were issued and served on the present defendants 1 - A, 1 - B and 1 - C. They were the heirs and legal representatives of Zainullah. These defendants filed their own written statement dated June 22, 1967, and without prejudice to the pleas and defences raised in the written statement of Zainullah further pleaded that "the deceased defendant was deemed to be the sub - tenant in respect of the suit premises and that these defendants are protected under the provisions of the Bombay Rent Act. * * * * * there had been no privity of contract between the plaintiff and the deceased defendant and the present defendants and that there is no cause of action against these defendants". The pleas taken in the written statement of Zainullah which were adopted by the present defendants were as follows :- 5. That Chhotu Balu and Hansu Murat had executed a valid and legal agreement in favour of the plaintiff for sale of business of gas welding with tenancy rights was denied. The assignment was not registered and had been executed to defraud Zainullah of his rights in the portion of the gala occupied by him. The assignment did not create any right, title and interest in the tenancy rights. Zainullah was not occupying the suit portion of the gala as a licensee and in that connection the allegations of facts made in the plaint were denied. He denied any privity of contract with the plaintiff. He denied that the plaintiff had the ownership of and title to the gala No. 10. He denied that the plaintiff was entitled to eject him from the suit premises. He contended that the assignment in which he relied was a valid assignment and it was binding on the plaintiff. He denied that he was a trespasser. He denied that plaintiffs right to the reliefs claimed in the suit. 6. Hearing of the suit reached before the learned Judge below from June 22, 1967. Advocate Mr. Rajani then appeared for the present defendants and submitted draft issues. The learned Judge appears to have brushed aside the draft as not raising proper issues. He denied that plaintiffs right to the reliefs claimed in the suit. 6. Hearing of the suit reached before the learned Judge below from June 22, 1967. Advocate Mr. Rajani then appeared for the present defendants and submitted draft issues. The learned Judge appears to have brushed aside the draft as not raising proper issues. He raised the following six issues :- 1. Whether there is nay privity of contract between the plaintiff and the original 1st defendant ? 2. Whether the original 1st defendant is the licensee of the plaintiff in respect of the suit premises as alleged ? 3. If the answer to issue No. 2 is in affirmative, whether defendants Nos. 1A, 1B and 1C are liable to hand over possession to the plaintiff ? 4. Whether the plaintiff is entitled to any compensation and/or damages as claimed ? 5. Whether the plaintiff is entitled to any relief ? If so, what ? 6. Generally ? 7. It may be at once be stated that it appears from the discussion contained in paragraph 3 of his judgment that during the hearing of the suit and whilst he was delivering his judgment, the learned Judge completely failed to notice that in the written statement filed by the present defendants the plea that Zainullah had become sub - tenant in respect of the suit premises and that accordingly the present defendants were protected under the provisions of the Bombay Rent Act had been raised. He did not formulate any issue in connection with the above plea. He indulged into discussion on the question of Zainullah having become sub - tenant of the suit premises on the footing that the question of sub - tenancy had been orally discussed by Mr. Rajani from the Bar. He observed : "In the absence of any such plea having been made in the written statement (of Zainullah), I am unable to accept the argument of Mr. Rajani that Zainullah was a lawful sub - tenant by reason of the Ordinance promulgated under the Rent Act." The learned Judge was in error in discussing and deciding this question without raising any issue in that connection in not referring to the written statement filed by the present defendants. The plea had been raised in the written statement of the present defendants and an issue in that connection was liable to be formulated. 8. Mr. The plea had been raised in the written statement of the present defendants and an issue in that connection was liable to be formulated. 8. Mr. Vyas for the plaintiff attempted to content that since a portion of the tenement consisting of gala No. 10 only had been in occupation of Zainullah and the defendants, it was patent that in law sub - tenancy could not exist. The argument was that sub - tenancies could only be created in respect of an entire tenement. As at present advised, I am not aware that such is the law but I do not find it necessary to decide that question at this stage. Mr. Vyas further submitted that the plea of sub - tenancy was not raised by Zainullah in his written statement. It was, therefore, not permissible for the present defendants to raise such a plea in their written statement. The submission was that legal representatives of Zainullah could not raise this new plea by their written statement. Now, it is quite patent that the declaration, the ejectment and the monetary claim for which decree was claimed in the suit were personal reliefs claimed against the present defendants. It is true that these defendants have been added in the suit in consequence of the death of Zainullah and as his heirs and legal representatives. Even so, it is not true that the reliefs claimed against them are only in the character of their being legal representatives. It requires to be emphasised and repeated that all the reliefs claimed in the suit are claimed personally as against these defendants. I have no doubt that these defendants were entitled to raise by their written statement pleas contrary to and inconsistent with case made by Zainullah in his written statement. It is well established law that defendants who are brought on the record as legal representatives of one of the defendants before any decree is passed in the suit must have a right to raise such pleas as they desire in defence to the reliefs claimed against them. The decree claimed against them must be personal. Possibly, where decree is not claimed against them personally and relief can only be granted to the extent of the estate come to their hands, there can be an argument that inconsistent defence may not be allowed to be raised. The decree claimed against them must be personal. Possibly, where decree is not claimed against them personally and relief can only be granted to the extent of the estate come to their hands, there can be an argument that inconsistent defence may not be allowed to be raised. However, of this also I am not quite sure. 9. Now, it is abundantly clear that the learned Judge failed in his ordinary duty to frame an appropriate issue on this plea about sub - tenancy of the portion occupied by Zainullah and the defendants as raised in the written statement of these defendants. 10. As regards the question of licence and a contract having been made between Zainullah and the plaintiff for a licence and Zainullah being the licensee, the learned Judge proceeded to deliver his judgment by totally disregarding the oral evidence tendered on behalf of the parties. It is somewhat abnormal and extraordinary that the learned Judge proceeded to decide the question of existence of the alleged contract of licence without reference to the evidence tendered on behalf of the parties. The learned Judge has made findings in the affirmative on these questions in favour of the plaintiff by proceedings in a manner in which no Court of law should proceed. The findings made on these questions in the above manner are liable to be set aside in this appeal by my discussing the whole of the oral evidence tendered on behalf of the parties. I have, however, not thought it appropriate to do so, because, after formulating appropriate issues as arose for decision. I propose to restore the suit for a fresh hearing before the trial Court. This has become necessary because on the issues which arose the parties should be entitled to lead such further evidence as they desire. The issues framed can thus be finally disposed of only after the parties have the benefit of the opportunity of leading fresh evidence. 11. The learned Judge proceeded to make a finding that Zainullah must be a licensee and must have made a contract to remain in the suit premises as licensee merely on the ground that since the assignment on which Zainullah relied was not a valid and/or sufficient assignment and since the assignment on which the plaintiff relied was valid assignment. 11. The learned Judge proceeded to make a finding that Zainullah must be a licensee and must have made a contract to remain in the suit premises as licensee merely on the ground that since the assignment on which Zainullah relied was not a valid and/or sufficient assignment and since the assignment on which the plaintiff relied was valid assignment. Zainullah could not be in occupation of the suit premises except as under a contract of licence made between the plaintiff and Zainullah. It is sufficient to state that the learned Judge has proceeded to decide this question in extremely improper manner and the method adopted by the learned Judge was such as the findings made by him must be set aside. I would have decided this question myself if I was not making an order of remand as already stated above. The learned Judge failed to formulate any issue as regards the defendants being trespassers on the suit premises. Even, so, he proceeded to make a finding that the defendants were trespassers. In spite of the fact that compensation was not claimed in the suit for occupation of the suit premises from and after October 18, 1958, and in that connection leave was claimed, the learned Judge made a decree in favour of the plaintiff for such compensation for the period ending with delivery of possession of the suit premises to the plaintiff. It is difficult to imagine how the learned Judge could proceed to pass such a decree when the claim was in fact not made in the plaint. For the simple reason that the claim was not made in the suit that decree is liable to be set aside. 12. At this stage, Mr. Vyas has intervened and applied that the plaintiff should be allowed to amend his plaint for making claims for further compensation. I have informed him that he must make such an application to the trial Court. 13. The issues which arose for decision in the suit were as follows :-