Gouri Shankar Prasad v. Ram Kishun Dass — 1973 DIGILAW 215 (PAT)

Judgment Nagendra Prasad Singh, J. 1. This second appeal is by defendant No. 2 against a judgment of the learned Additional Subordinate Judge decreeing the alternative relief of the plaintiffs respondents for repayment of Rs. 2,000 which the plaintiffs respondents had paid to the appellant as a consideration for transfer of a land measuring 26 acre. 2. The plaintiffs filed Title Suit No. 137 of 1960 alleging that plot No. 459 was the nakdi joat land of one Raghunath Sahai who had constructed a house thereon. The said Raghunath Sahai died leaving behind three sons-- Lachhmi Narain, Shambhu Narain (defendant No. 3) and Gouri Shankar (defendant No. 2). It is further the case of the plaintiffs that defendant No. 2 came in exclusive possession of the said plot as owner thereof and he, under a registered sale deed dated 27-9-55, transferred the said plot of land in favour of the plaintiffs for a consideration of Rs. 2,000. The plaintiffs also claimed that after the said purchase they came in possession of the plot in question but defendant No. 1 claiming the said plot under a fictitious hukumnama raised an unfounded dispute and a proceeding under Sec.144 of the Code of Criminal Procedure having been drawn, was decided against the plaintiffs. Ultimately the plaintiffs were dispossessed on 1-11-59 by defendant No. 1. On theabove allegations, the plaintiffs made a prayer for a decree for declaration of their title and recovery of possession. There was an alternative relief prayed for in the said plaint that in case there was anv difficulty in passing a decree for title and possession in favour of the plaintiffs then a decree for the aforesaid amount of Rs. 2,000 with interest, be passed in their (plaintiffs) favour. 3. Defendant No. 1 challenged the assertion of the plaintiffs on the question of title and possession. According to the said defendant, the plot in question had been recorded in name of Lachhmi Narain and Shambhu Narain. But after the last earthquake the plot in question came in possession of the maliks as the recorded tenants abandoned the same and defendant No. 1 took settlement of the said plot under a hukumnama dated 5th Jeth, 1349 fasli and since that day he was in possession of the same. 4. So far as defendant No. 2 is concerned, he, in his written statement, substantially supported the case of the plaintiffs. 5. 4. So far as defendant No. 2 is concerned, he, in his written statement, substantially supported the case of the plaintiffs. 5. The learned munsif, on a consideration of the evidence on record, came to the conclusion that the plaintiffs had failed to prove their subsisting title to and possession over, the suit land. On the question of alternative relief regarding refund of the consideration money, the learned munsif held that defendant No. 2 was liable to refund only if the plaintiffs had been dispossessed from the land in question by defendant No. 2 or any person claiming through him. The learned Munsif also held that the claim of the plaintiffs for refund was barred under Article 97 of the Limitation Act, 1908 (hereinafter to be referred to as the Act). And, on the aforesaid findings, the learned Munsif dismissed the suit of the plaintiffs. 6. On appeal by the plaintiffs, the learned Additional Subordinate Judge affirmed the finding of the learned Munsif on the question of title and possession i.e. the plaintiffs have failed to prove their subsisting title to, and possession over, the plot in question and that the maliks had come in possession and had settled the same in favour of defendant No. 1. On the question of refund of the consideration money, the learned Additional Subordinate Judge, however, held that, on the facts and in the circumstances of the case, the plaintiffs were entitled for refund of the consideration money, as their vendor, defendant No. 2, had neither any title to, nor he was in possession of the plot in question on the date of the execution of the sale deed. He also held that Article 116 of the Act was applicable and not Article 97 of the Act, as had been held by the learned Munsif. In the opinion of the learned Additional Subordinate Judge, the suit of the plaintiffs was within time having been filed within six years from the date of the execution of the sale deed in their favour and as such he set aside the judgment and decree passed by the learned Munsif and decreed the suit of the plaintiffs for refund of the consideration money with interest at the rate of 6 per cent per annum from the date of the decree passed in the appeal. 7. Mr. 7. Mr. Parmanand Sharan Sinha, the learned counsel appearing for the appellant (defendant No. 2), has assailed the finding of the learned Additional Subordinate Judge and the decree for refund of the consideration money. The learned counsel has urged two points--firstly, that, on the facts and in the circumstances of the case, the appropriate Article of the Act, which will be applicable, will be Article 97 and not Article 116 of the Act, as has been held by the learned Additional Subordinate Judge and, secondly, that there was no averment in the plaint of the suit regarding the breach of contract, or a claim for damages, to attract the applicability of Article 116 of the Act and, as such, the learned Additional Subordinate Judge erred in decreeing the suit of the plaintiffs for refund of the consideration money when the. suit was not based on any breach of contract or claim for damages. 8. In my opinion, for the proper decision of this case the moot question to be decided is as to which of the Article out of the three Articles 62, 97 and 116 of the Act is applicable. In support of the contention that Article 97 will apply, the learned counsel has referred to a judgment of the Privy Council in Hanuman Kamut V/s. Hanuman Mandar, (1891). 18 Ind App 158 (PC). A bare reference to the aforesaid decision will show that in that case a member of the joint family had sold 2 1/2 annas out of 8 annas of certain property to the appellant before the Privy Council. Latar the other members of the family objected to the purchaser taking possession. Thereafter the purchaser filed a suit on the basis of the sale deed in his favour and in the said suit it was held that one member of the joint family could not convey right, title and interest to the said purchaser and he was not entitled to any relief, as prayed for. Thereafter the said purchaser filed a suit for recovery of the purchase money and interest. In the second suit the question arose as to whether Article 62 of the Limitation Act, 1877, which was similar to Article 62 of the Act, was applicable or Article 97 of that Act, which was similar to Article 97 of the Act. was applicable. Thereafter the said purchaser filed a suit for recovery of the purchase money and interest. In the second suit the question arose as to whether Article 62 of the Limitation Act, 1877, which was similar to Article 62 of the Act, was applicable or Article 97 of that Act, which was similar to Article 97 of the Act. was applicable. Their Lordships held that the sale was voidable and not void and in that view of the matter, the appropriate Article was Article 97 of that Act and the suit of the plaintiffs having been filed beyond 3 years was barred by limitation. In my opinion, this case is not of much held to the appellant, because the case related to a transaction which had taken place in 1879. Thereafter the Transfer of Property Act, 1882 (Act IV of 1882} came in force. Sec. 55 (2) of the Transfer of Property Act is as follows:- - "55. In the absence of a contract to the contrary, the buyer and the seller of immovable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following or such of them as are applicable to the property sold : XXXXXX (2) The seller shall be deemed to contract with the buyer that the interest which the. seller professes to transfer to the buyer subsists and that he has power to transfer the same: Provided that where the sale is made by a person in a fiduciary character, he shall be deemed to contract with the buyer that the seller has done no act whereby the property is incumbered or wherebv he is hindered from transferring it. The benefits of the contract mentioned in this rule shall be annexed to, and shall go with, the interest of the transferee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested". This sub-section has been subject-matter of judicial pronouncements from time to time and on all counts now it is settled that Sub-section (2) of Sec. 55 contemplates an implied covenant of title on the part of the seller in favour of the buyer. The said sub-section imports an absolute warranty of the title professed to be transferred, and of the sellers power to deal with it. The said sub-section imports an absolute warranty of the title professed to be transferred, and of the sellers power to deal with it. It is also settled that it is immaterial whether the purchaser has notice of the defect of title of the vendor or not [vide Sheokumar Tewari V/s. Central Co-operative Bank, Dinapur, (AIR 1947 Pat 477), Mt. Lakhpat Kuer V/s. Durga Prasad, (AIR 1929 Pat 388) and Nawal Kishore V/s. Sarju, (AIR 1932 All 546)]. The warranty of Hood title and quiet possession has to be read in every registered sale deed executed by a seller, in favour of a buyer, and whenever there is .any defect in title or in possession, the buyer can file his suit for damages on the basis of the breach of contract. It cannot be disputed that if the seller is found not holding title or possession of the property in question on the day he executes a sale deed, there is a breach of contract giving a cause of action to the purchaser to file a suit. Article 116 of the Act is applicable to such suits. Article 116 of the Act is as follows:- - Description of suit.Period of Limitation.Time from which period begins to run. 116.For compensation for the breach of a contract in writing registered.Six years.When the period of limitation would begin to run against a suit brought on a similar contract not registered. In this connection reference can be made to Arunachala Aiyar V/s. T. Ramaswami Aiyar, ILR 38 Mad 1171 = (AIR 1915 Mad 742) and Mt. Lakhpat Kuer V/s. Durga Prasad, (AIR 1929 Pat 388). In the aforesaid Madras case the aforesaid judgment of the Privy Council in (1891) 18 Ind App 158 (PC) was distinguished and it was pomted out that, that judgment is no more an authority, in view of Sec. 55 (2) of the Transfer of Property Act, by virtue of which an implied covenant of valid title and quiet possession is to be read in every registered sale deed. The learned counsel for the appellant has also relied on Juscurn Boid V/s. Pirthichand Lal Choudhary (AIR 1918 PC 151) and Dhani Sahu V/s. Bishun Prasad Singh (AIR 1942 Pat 247). But these cases are not relevant in the facts and circumstances of the present case. The learned counsel for the appellant has also relied on Juscurn Boid V/s. Pirthichand Lal Choudhary (AIR 1918 PC 151) and Dhani Sahu V/s. Bishun Prasad Singh (AIR 1942 Pat 247). But these cases are not relevant in the facts and circumstances of the present case. Article 97 of the Act is applicable where "money is paid upon an existing consideration which afterwards fails". According to the finding of the courts below, neither any title was conveyed nor possession was ever delivered to the plaintiffs; as such there is no question of failure of an existing consideration. In my opinion, it has to be held that if the suit is based on a breach of contract and for refund of the consideration money as damages, then the appropriate Article will be 116 of the Act and not Article 97, nor Article 62 of the Act 9. It was also urged by the learned counsel appearing for the appellant that in the sale deed there was no indemnity clause and in this connection the learned counsel referred to the relevant Clause 6 quoted in paragraph 29 of the judgment of the court of appeal below. According to the learned counsel for the appellant, defendant No. 2 would have been liable for refund of the consideration money received by him, only if the plaintiffs had been dispossessed at the instance of defendant No, 2 or any person or persons claiming under him; in the instant case admittedly, according to the case of the plaintiffs, they have been dispossessed by defendant No. 1; as such, no decree for refund of the consideration money should have been passed against the appellant. In my view, there is no substance in this argument. As I have already pointed out, after the Transfer of Property Act came in force, the provision of Sub-section (2) of Sec. 55 has to be read in every registered sale deed and cause of action for damages will not depend on the existence of the indemnity clause in the sale deed. 10. But the question is: whether the present suit is based on breach of contract and for damages? 10. But the question is: whether the present suit is based on breach of contract and for damages? A bare reference to the plaint of the present suit will show that the plaintiffs have pleaded the title and possession of their vendor, defendant No. 2, and thereafter they have alleged that after the execution of the aforesaid registered sale deed the plaintiff came in possession of the plot in question and they were dispossessed by defendant No. 1 after the decision in the proceeding under Sec.144 of the Code of Criminal Procedure. On the aforesaid averments the plaintiffs filed the suit for declaration of their title and recovery of possession. In the body of plaint, not a word has been mentioned regarding any breach of contract or any of the covenants. In the relief portion only a relief for refund of the consideration money of Rs. 2,000 has been sought for in case there was any difficulty in passing a decree for recovery of possession of the plot in question. Now the question, falling for decision is as to whether in the suit, as has been framed by the plaintiffs, they are entitled for a decree for damages on the basis that there has been a breach of contract on the part of defendant No. 2. The findings of the court below are that defendant No. 2 had neither any title to, nor possession over, the plot in question on the day the sale deed in question was executed in favour of the plaintiffs; as such there was no question of plaintiffs coming in possession of the plot in question. If the plaintiffs failed to get possession after execution of the sale deed, they should have filed the suit for damages on the ground of breach of contract. They, however, waited far about five years since the date of the execution of the sale deed and then filed the present suit for declaration of title and for recovery of possession and in alternative for refund of the money paid to defendant No. 2. In my opinion, Article 116 of the Act is not applicable to such a suit. 11. The difference between the frame of a suit which will be governed by Article 62 and the one which will attract Article 116 of the Act seems to be clear though subtle. Jt can be explained by giving an example. In my opinion, Article 116 of the Act is not applicable to such a suit. 11. The difference between the frame of a suit which will be governed by Article 62 and the one which will attract Article 116 of the Act seems to be clear though subtle. Jt can be explained by giving an example. If the vendee purchases the property from the vendor knowing full well that the vendor had no title, he may take a risk in purchasing this property and of recovering it from the person in possession. If in such a document the indemnity clause provides that the vendor will not be liable to return the consideration money even if the vendee fails to get possession of the property then the suit will fail on that ground. In absence of such an indemnity clause, the question for consideration will be that if the vendee wants return of the money without pleading that there was a breach of contract on the part of! the vendor then in terms as interpreted by the various authorities Article 62 will be applicable. Whether the case is covered by one kind of fact or ike other is a question of fact to be applied in every case. It is for t!"e vendee to decide as to what is a correct fact and how he is to frame his suit. In the instant case on the concurrent findings recorded by the two courts below, the plaintiffs did not ever get possession of the property. Therefore, immediately after the sale ii must have been known to them, if not before, that the vendor had no interest to transfer. If it wis a case of a breach on the part of the vendor, facts to that effect ought to have been pleaded. But in absence of pleading of such fact, on the language of the alternative relief added in the plaint, it is clear that the suit by the vendee against the vendor is merely for realisation of money received by the vendor. 12. This brings the next question as to whether on the facts and in the circumstances of the case the appropriate Article to be applied is Article 62 of the Act. Article 62 of the Act is as follows :- - Description of suit.Period of limitation.Time from which periodbegins to run. 12. This brings the next question as to whether on the facts and in the circumstances of the case the appropriate Article to be applied is Article 62 of the Act. Article 62 of the Act is as follows :- - Description of suit.Period of limitation.Time from which periodbegins to run. 62.For money payable by defendant to theplaintiff for money received by the defendant for the plaintiffs use.Three years.When the money is received. This Article has been subject-matter of different judicial pronouncements of different courts. But the Supreme Court in A. Venkata Subbarao V/s. State of Andhra Pradesh, ( AIR 1965 SC 1773 ) has settled the controversy as to what is meant by the expression for money received by the defendant for the plaintiffs use. On that point their Lordships have posed certain questions and held as follows at page 1791 :- - "Does Article 62 embody the essential elements of the action known in English Law and pleading as the action for money had and received to the plaintiffs use? (2) Does the fact that at the moment of receipt the defendant intended to receive the money for his own benefit and not for the use of the plaintiff render the Article inapplicable? Stated in other terms, is a literal compliance with the words that the money must have been received by the defendant for the plaintiffs use necessary before the Article applies, or is it sufficient that the circumstances of the case are such that the plaintiff being entitled in equity to the money, the law would impute to the defendant the intention to hold it for the plaintiffs use and compel a refund of it to the plaintiff." At page 1792 the Supreme Court approved the view of Mookerjee, J., in Mohomed Wahib V/s. Mohomed Ameer. ((1905) ILR 32 Cal 527) by quoting a pasage from page 533, which runs as follows :- - "The Article, when it speaks of a suit for money received by the defendant for the plaintiffs use, points to the well-known English action in that form; consequently the Article ought to apply wherever the defendant has received money which in justice and equity belongs to the plaintiff under circumstances which in law render the receipt of it, a receipt by the defendant to the use of the plaintiff." Generally it used to be urged that when the contract is void then the money lying with the defendant cannot be said to be money received by the defendant for the plaintiffs use. But in the aforesaid judgment of the Supreme Court, it has been held that once that contract is held to be void, in eye of law the defendant does hold the money paid to him by the plaintiff and the plaintiff is entitled to file a suit within 3 years of the payment of the money in question for refund of the same under the said Article. The said Article 62 came up for consideration before a Bench of this Court in Smt. Ambikii Bhawani Devi V/s. Chandrika Singh fl.xt.tcrs Patent Appeal No. 8 of 1968 decided on 21-9-1973) = ( AIR 1974 Pat 264 ). The learned Chief Justice of this Court, on consideration of the different authorities including the aforesaid Supreme Court judgment, came to the conclusion that when the contract is void, and money paid to the defendant is money received by the defendant for the plaintiffs use and a suit, within 3 years from the date when the money was received, has to be filed. Tn a contract for sale of land if the vendor has neither title nor possession of the land in question, the contract is void and the vendor will be deemed to hold the consideration money, since the date of the receipt, for the plaintiffs use. It is for the purchaser to file a suit for refund of the money or for damages on the basis of the breach of contract. It is for the purchaser to file a suit for refund of the money or for damages on the basis of the breach of contract. In this connection, reference can be made to the following commentaries in Mullas Transfer of Property Act (Fifth Edition) at page 331 :- - "A suit for return of the purchase money may or may not be based on the implied covenant for title. If it is not based on the covenant, limitation is under Article 97 or Article 62. If it is based on the covenant, limitation is under Article 116." Even in AIR 1929 Pat 388 at pace 390 their Lordships while referring to a decision of the Judicial Committee observed as follows :- --- "I regard the decision of the Judicial Committee as establishing that where the suit is in substance a suit based on a registered document and where such a suit can be regarded as a suit for compensation for breach of a contract then Article 115 must apply although such a suit may fail under some other provision of the Limitation Act." In my opinion, the present suit, as framed, cannot be regarded as a suit for compensation for breach of contract to which Article lift of the Act is applicable. The appropriate Article which is applicable in the case is Article 62 of the Act. Under that Article the suit should have been filed within three years from the date of the payment of the consideration money to defendant No. 13 Admittedly !he present suit was filed much later since that date. In that view of the matter, it has to be held that the suit of the plaintiffs was barred by limitation and the plaintiffs were not entitled to any relief whatsoever. As such, the judgment and decree passed by the learned Additional Subordinate Judge decreeing the alternative relief of the plaintiffs has to be set aside. 14. In the result, the appeal is allowed only against plaintiffs respondents 1 and 2 and the judgment and decree of the court of appeal below are set aside and the suit is dismissed. In the circumstances of the case, there will be no order as to cost. N.L.Untwalia, J. 15 I agree.