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  • Article 62 of the First Schedule to the Indian Limitation Act (Act IX of 1908) or Art. 120
  • Art. 62 of the Schedule to the Limitation Act and not Art. 120
  • Article 62 of the Limitation Act,
  • Art. 62 of the Limitation Act
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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
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  • Article 62 of the First Schedule to the Indian Limitation Act (Act IX of 1908) or Art. 120
  • Art. 62 of the Schedule to the Limitation Act and not Art. 120
  • Article 62 of the Limitation Act,
  • Art. 62 of the Limitation Act
Smart Summary

Concise Analytical Summary of the Opinion

Factual and Procedural Background

The plaintiff, Nirmal Kumar Jain, filed Suit No. 37 of 1952 in the Court of Civil Judge, Sitapur seeking recovery of Rs. 6,750 (comprising Rs. 5,790-15 as principal and the remainder as interest at 3% per annum from 26-8-1946 to the date of suit). The underlying factual matrix involves a 1922 mortgage executed by Amar Singh and Sumer Singh in favour of Madho Ram and others, with distinct portions of the mortgage money belonging to different persons. Madho Ram (now succeeded by the plaintiff) had earlier pursued redemption litigation resulting in a decree on 18-3-1929 and subsequent realizations and deposits with the Imperial Bank of India. After further proceedings, the plaintiff obtained an appellate decree entitling him to a larger share of sums held at the bank, but when the money was withdrawn on about 25-26 August 1946 the plaintiff received only Rs. 19,208-12/-. The present suit, filed on 25-8-1952, sought recovery of the additional sum declared due on appeal.

At trial, various defences were raised by the defendants (not detailed in the opinion). The trial Judge accepted the pleaded facts but held the suit barred by limitation and dismissed the suit by judgment dated 20-12-1952. The plaintiff appealed. On appeal the central question considered by the court was whether Article 62 of the First Schedule to the Limitation Act or Article 120 of the same Schedule governed the plaintiff's claim. The appellate court heard counsel and delivered the judgment summarized herein.

Legal Issues Presented

  1. Whether Article 62 of the First Schedule to the Indian Limitation Act (Act IX of 1908) applies to the plaintiff's cause of action (i.e., whether the defendants received the money "for the plaintiff's use" so that limitation runs from the date of receipt); or
  2. Whether Article 120 (the residuary Article) applies instead (i.e., limitation running from the date when the right to sue accrues), making the suit timely.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Kundan Lal v. Bansi Dhar, ILR 3 All 170 Held that where defendant had received moneys for the plaintiff's use (receipt given by defendant), Article 62 applied (suit characterised as for money received to plaintiff's use). Cited as an example where Art. 62 was held applicable; used to illustrate the established category of cases where money was expressly received for plaintiff's use.
Thialcur (Tlialcur) Prasad v. Partab, ILR 6 All 442 Referenced in connection with other rulings but the court noted the facts were dissimilar and did not rely on it. Noted to be dissimilar; the court declined to rely upon or discuss it further.
Rajputana Malwa Railway Co-operative Stores Ltd. v. Ajmere Municipal Board, ILR 32 All 491 Expressed that money received by defendant which in justice and equity belonged to the plaintiff falls within the old common law count for money received to the plaintiff's use; Art. 62 was applied in that refund context. Quoted to show the textual and conceptual scope of claims characterised under Art. 62 (refund of octroi duty) and to illustrate situations where Art. 62 was held applicable.
Municipal Board of Ghazipur v. Deokinandan Prasad, ILR 36 All 555; AIR 1914 All 338 Stated that Article 62 applies only "when the money at the time of receipt can be said to have been received by the defendant for the plaintiff's use". Relied upon for the proposition that Art. 62 requires that at the time of receipt the defendant should be admittedly or impliedly receiving the money for the plaintiff's use; the court emphasised this strict temporal test.
Ram Narain v. Brij Banke Lal, ILR 39 All 322; AIR 1917 All 276 Recognised the general rule that money paid under a void authority or void judgment to someone not entitled can be recovered in an action for money had and received. Cited to show that although common-law principles support recovery in some situations, the applicability of a specific Limitation Act Article must still be determined; court noted previous judges did not decide which Article applied in that matter.
Murli Dhar v. Ram Saran Das, AIR 1947 All 256 (Division Bench) Held Art. 62 (and not Art. 120) applied; applied general principles of suspension of limitation so that the suit was within time despite apparent starting point of limitation. Referred to and distinguished: the court acknowledged that suspension principles had been used in that case to avoid hardship but observed those general principles were not necessary if Art. 62 is strictly construed under the words of the Schedule.
Khairul Bashar v. Thannu Lal, AIR 1957 All 553 Emphasised the third column (period/run date) and held Art. 62 inapplicable where defendant was to keep money on deposit until conditions were met and only hand it over on demand (i.e., defendant not immediately liable to pay plaintiff on receipt). Used to illustrate that Art. 62 does not apply where the defendant is not immediately liable to pay the plaintiff upon receipt; applied to the present facts in support of inapplicability of Art. 62.
Mohamed Wahib v. Mahomed Amir, ILR 32 Cal 527 Contains observations on the construction of Article 62 and its application; relied upon by respondents in the present case. The court observed respondent counsel relied on this Calcutta decision but rejected parts of its reasoning; the court expressed inability to accept that decision as correctly stating the law on Article 62's scope.
Nund Lall Bose v. Meer Aboo Mahomed, ILR 5 Cal 597 Earlier Calcutta authority; referred to in debate about whether Art. 62 requires defendant's intention at time of receipt. Cited as an earlier authority whose correctness was questioned by Mohamed Wahib; the appellate court noted the authority of the view in ILR 5 Cal 597 was much shaken by later decisions and commentary.
Anant Ram Bhattacharjee v. Hem Chandra Kar, AIR 1923 Cal 379 Commented on ILR 5 Cal 597 and held in its facts defendant did not receive money for the plaintiff's use. Relied upon to show that the Calcutta decisions do not uniformly support a broad reading of Art. 62; used to undermine respondents' reliance on Mohamed Wahib.
Lingangouda Marigouda v. Lingangouda Fakirgouda, AIR 1953 Bom. 379 Held it is not always safe to follow English decisions in construing Art. 62 and argued for a stricter, narrower construction of Art. 62 in India to avoid unjustly depriving plaintiffs of the longer period under Art. 120. Adopted to support the appellate court's approach that Article 62 should be strictly construed in India and cannot be extended by analogy to a wide range of English common-law cases.

Court's Reasoning and Analysis

The court proceeded by framing the sole contentious legal question as whether Article 62 or Article 120 applied. The court set out the undisputed facts: the plaintiff had sought a larger sum, received a smaller decretal amount, and when sums were withdrawn from the bank on 25/26 August 1946 the plaintiff was paid only the decretal amount (Rs. 19,208-12). The defendants claimed the balances for themselves under the decree and there was no express conduct or admission implying that the defendants received the money for the plaintiff's use.

The court examined the statutory language of Article 62 and the jurisprudence interpreting it. It highlighted a recurring and decisive theme in authorities cited: Article 62 applies only when, at the time the money was received, the defendant could properly be said to have received it for the plaintiff's use (i.e., either admittedly or by necessary implication). The court relied on Municipal Board of Ghazipur v. Deokinandan Prasad and similar rulings to stress the temporal and factual requirement that the defendant must have received the money for the plaintiff's benefit at the moment of receipt.

The court rejected reliance upon English common-law analogies and certain Calcutta decisions to broaden Article 62's reach. It agreed with precedents advocating a stricter construction of Article 62 in the Indian statute to prevent premature commencement of limitation where the plaintiff could not yet claim relief. The court noted the practical absurdity that would follow from starting the limitation period at the moment of receipt by a defendant who, at that time, was not obliged to account to the plaintiff (thus potentially barring claims before they were even litigable).

Applying these principles to the present facts, the court concluded the defendants had not received money for the plaintiff's use (neither expressly nor impliedly), because they had taken the amounts under the claim they were entitled to them and there was no conduct implying agency or trust towards the plaintiff. Consequently, Article 62 did not apply.

Having excluded Article 62, the court held that no other specific Article applied and therefore Article 120 (the residuary Article) governed the limitation period; limitation under Art. 120 runs from the date when the right to sue accrues. The court thus found the plaintiff's suit timely under Article 120.

On remedies, the court accepted the plaintiff's claim for simple interest at 3% per annum from 26-8-1946 to date of suit (as not an unfair demand, per respondent counsel). The court awarded interest pendente lite and future interest at simple 6% per annum.

Holding and Implications

Holding: The appellate court allowed the appeal. The trial court's dismissal on limitation grounds was reversed. The plaintiff's suit was decreed against all defendants for the amount claimed by him (to the extent authorised by the appellate decree) with interest as specified, and the plaintiff was awarded costs in both courts. The opinion concludes with the formal statement: "Appeal allowed."

Implications:

  • Direct effect on the parties: The plaintiff succeeds — he recovers the additional sum declared due by the appellate decree, receives simple interest at 3% from 26-8-1946 to the date of suit, and receives simple interest at 6% per annum pendente lite and in future; costs are awarded to the plaintiff in both courts.
  • On limitation law: The court emphasised a strict construction of Article 62, reaffirming that Art. 62 applies only where the defendant received money for the plaintiff's use at the time of receipt; where that condition is not satisfied, the residuary Article 120 governs. This approach counteracts a broader common-law-inspired application of Art. 62 that might prematurely start limitation when the plaintiff could not yet claim relief.
  • No assertion of a newly created precedent was made in the opinion; the court grounded its conclusion on interpretation of the Schedule's language and on existing authorities it cited.

End of summary (based exclusively on the provided opinion).

    Nirmal Kumar Jain v. Satya Prakash Jain And Others

    1.Nirmal Kumar Jain filed suit No. 37 of 1952 in the Court of Civil Judge, Sitapur claiming recovery of a sum of Rs. 6,750/-, i.e, a sum of Rs. 5,790/15/- on account of principal and the balance on account of interest at 3 per cent per annum from 26-8-1946 up to the date of the suit. The facts alleged were that Amar Singh and Sumer Singh had in 1922 executed a mortgage for Rs. 1,17,400/- in favour of Madho Ram and others. Out of this mortgage money Rs. 69,200/- belonged to Madho Ram, and Rs. 26,778/- were advanced by Raghubar Dayal now succeeded by defendants 1 to 3, Satya Prakash, Smt. Indra Kumari and Smt. Rajul Mani.

    2. The balance of Rs. 21,422/- was advanced by Salik Chand defendant No. 5 and Misri Lal defendant No. 6. Madho Ram is now succeeded by his son, Nirmal Kumar Jain, the plaintiff. After Madho Ram's death, a suit for redemption of the mortgage was filed and was decreed on 18th March, 1929. Certain amounts were realised. These are not in dispute. After 1939 a sum of Rs. 38,789/- was deposited by the mortgagors towards the decree. For certain reasons which do not concern us, the amount was deposited with the Imperial Bank of India, Sitapur in a fixed deposit account renewed from time to time. In September, 1944 the parties wanted to withdraw the amount but there was no agreement. Thereupon, the plaintiff Nirmal Kumar filed a suit for declaration that he was entitled to a sum of Rs. 24,630/- out of Rs. 41,786/- held by the bank. This suit was decreed only for Rs. 19,208/12/-. The plaintiff took an appeal to the Chief Court of Avadh and his whole claim was decreed on appeal. In the meantime on 25th or 26th August, 1946 the plaintiff and the four defendants of that suit withdrew the amount from the bank and the plaintiff was paid only a sum of Rs. 19,208/12/-.

    3. The present suit was filed on 25th August, 1952. The plaintiff sought to recover from the defendants the additional sum to which he was held entitled by the appellate decree. Various pleas were raised in the trial court. These defences were not accepted by the learned trial Judge. He was, however, of opinion that the suit was barred by limitation. In that view the learned Civil Judge dismissed the plaintiff's suit by judgment dated 20th December, 1952 and directed the parties to bear their own costs. Against that judgment and decree, Nirmal Kumar Jain, the plaintiff has come up in appeal. I have heard the learned counsel for the parties.

    4. The only question agitated before me is as to whether Article 62 of the First Schedule to the Indian Limitation Act (Act IX of 1908) or Art. 120 of the same Schedule is applicable to the facts of the case.

    5. There is no dispute as regards the facts. The plaintiff had initially claimed a larger amount of Rs. 24,630/4/-. He was granted a decree only for Rs. 19,208/12/-. It was in terms of this decree that the parties withdrew the various sums from the Imperial Bank of India, Sitapur Branch. It does not, therefore, appear possible to hold that the defendants have taken the amount from the bank accepting the position that they were holding the money for and on behalf of the plaintiff. The question of fact to be determined in the present case is whether in the circumstances of the case the defendants must be taken impliedly to have received the money for the use of the plaintiff and thus to have brought about circumstances to which Article 62 of the Schedule referred to will apply.

    6. I have been referred to several rulings of this Court. In Kundan Lal v. Bansi Dhar, ILR 3 All 170, certain moneys had been received from a trustee by the defendant who had given a receipt. It was then held that the suit was for money payable by the defendant to the plaintiff for money received by the defendant for plaintiff's use and that therefore Art. 62 was applicable to the facts of the case. It is not necessary for me to refer to the case of Tlialcur Prasad v. Partab, ILR 6 All 442, as the learned counsel for the respondents agrees that the facts are dissimilar. In Rajputana Malwa Railway Co-operative Stores Ltd. v. Ajmere Municipal Board, ILR 32 All 491, it was held at page 496:

    “The most comprehensive of the old common law counts was that for money received by the defendant for the use of the plaintiff. This count was applicable where a defendant received money which in justice and equity belonged to the plaintiff under circumstances which rendered the receipt by the defendant to the use of the plaintiff.”

    The particular case related to a refund of octroi duty and it was held that Art. 62 was applicable. In the case of Municipal Board of Ghazipur v. Deokinandan Prasad, ILR 36 All 555 : (AIR 1914 All 338), it was however clearly stated that Art. 62 applies only

    “when the money at the time of receipt can be said to have been received by the defendant for the plaintiff's use”.

    Thus it was clearly stressed that at the time of the receipt of the money the defendant should be either admittedly or impliedly receiving the money for the use of the plaintiff Asain, in Ram Narain v. Brij Banke Lal, ILR 39 All 322 : (AIR 1917 All 276) at page 331 (of ILR All): (at p. 279 of AIR), it was held:

    “The general rule undoubtedly is that money paid under a void authority or under a void judgment to a person really not entided to receive it can be recovered from him by the rightful owner in an action for money had and received”.

    Walsh, J. pointed out a little earlier:

    “T agree that we are not deciding and it is not necessary to decide, either whether the plaintiff has any cause of action at all, or what article is applicable to it.”

    Thus the applicability of any particular Article was not before the learned Judges.

    7. The next Allahabad case to which I have been referred is the Division Bench case of Murli Dhar v. Ram Saran Das, AIR 1947 All 256. In that case money had been received under a decree which was sub-sequently reversed in appeal with the result that ‘S’ was declared to be a purchases of us half share in the decree. ‘S’ then filed a suit. It was held that Art. 62 of the Schedule to the Limitation Act and not Art. 120 applied. However, applying the general principles of suspension of limitation or right of action, the Bench held that the suit was within time. It was stated:

    “The plaintiffs could not possibly institute the suit for recovery of their share in the decretal amount…………. Undoubtedly it is true that there was no specific order of the Civil Court debarring them from bringing their action but till the decision of the High Court in appeal I given on 2nd October, 1935 the position was that the very basis on which they could claim a moiety share in the decree………had been declared to be non-existent at the instance of the defendants themselves……. It must, therefore be held that the suit as instituted was not barred by time.”

    The last Allahabad case to which I have been referred to is the case of Khairul Bashar v. Thannu Lal, AIR 1957 All 553. In this case emphasis was laid on the entry in the third column. It was stated:

    “In order, therefore, to attract the application of Art. 62, the facts should be such as to enable the plaintiff to claim receipt of the money forthwith from the defendant. In other words, the defendant should be liable to pay the money to the plaintiff as soon as it is received……. In the present case the defendant No. 1 was to keep the money in deposit with him until the entire amount of goods were sold off and to hand it over to the plaintiffs only on demand. Under these circumstances, Art. 62 of the Limitation Act also has no application.”

    8. The learned counsel for the respondents has in the main relied upon the Calcutta case Mohamed Wahib v. Mahomed Amir, ILR 32 Cal 527. The passage relied upon occurs at page 533. It was then stated:

    “But I am unable to hold that the view taken by the learned Judges who decided the case of Nund Lall Bose v. Meer Aboo Mahomed, ILR 5 Cal. 597, is well founded, if they intended to rule that money is not received to the plaintiff's use in any case where, at the time of receipt, the defendant does not so intend to receive it.”

    I am unable to accept the view as the correct view. The authority of this view is much shaken by the earlier case of ILR 5 Cal 597, to which reference has been made in the passage cited above and also the later case of the same High Court in Anant Ram Bhattacharjee v. Hem Chandra Kar, AIR 1923 Cal. 379, in which the decision in this case was commented upon in the following words:

    “It cannot, therefore, be said by any process of reasoning that the defendant No. 1 received the money for the use of the plaintiff….. The principal case on which he relies is the case of ILR 32 Cal. 527. The facts of that case by themselves do not raise much difficulty, because in that case one comortgagee received the entire sum of money due to himself and another co-mortgagee from the mortgagor, …….. But certain observations in the judgments of that case appear to support the contentions of the appellant. The real difficulty seems to be that, in construing the words of Article 62 of the Limitation Act, the Courts in some of the cases have considered that Article refers to all cases where an action for money had and received would lie at Common Law in England.”

    9. In Lingangouda Marigouda v. Lingangouda Fakirgouda, AIR 1953 Bom. 379, it was held that it was not always safe to follow English decisions in construing Art. 62. If anything in India, Article 62 should be more strictly construed, because a liberal construction would result in more plaintiffs losing in a large number of cases on the ground of limitation because if Art. 62 is strictly construed, then the suit would fall under Article 120 which gives to the plaintiff a longer period of limitation. In this case the two parties had paid certain sums to the State. Subsequently the State refunded the whole amount to one of them and that person had received the whole amount contending that he alone was entitled to it. It was then held that the transaction was one where the payer paid a certain amount to the payee as the sum due by the payer to payee and to none else. Therefore Article 62 on its strict construction was not applicable.

    10. In the present case as stated earlier the defendant received the amount under decree claiming themselves to be entitled to that amount. It was not even remotely suggested by them or could be held to be implied in their conduct that they were receiving any money for and on behalf of the plaintiff or for his use. I am of opinion that considerations of the English law are completely out of place. I have to interpret a statute and there is no reason why I should travel beyond the words. The first column of the Schedule against entry No. 62 clearly requires that the defendant should have received the money for the plaintiff's use.

    11. I am of opinion that in the particular facts of the case it cannot be said that the defendants had received any money for the use of the plaintiff. I have another difficulty in the matter. Column 3 indicates that the period of limitation is to run from the date the money is received. Thus in the present case and similar cases since civil litigation in India takes a pretty long time to be finally decided, all such claims would become time barred. It is incomprehensible to me that the period of limitation should start to ran at a time when tbs relief is not even claimable by the plaintiff.

    12. It was in regard to this difficulty that in AIR 1947 All 256 (Supra), the general principles of suspension of limitation were applied. In my humble opinion it is not necessary to apply any of these general principles. Once the terms of the first column in the schedule are strictly interpreted, there will be no difficulty and no occasion for using, these general principles. On the words used for the description of the suit, it is clear that the money was not received by the defendants for the plaintiff's use, and as such Art. 62 has, in my opinion no application to the facts of the case.

    13. It is not suggested that any other Article is applicable. Thus Art. 120 being the residuary Article will apply. It may also be noticed that the period of limitation in Art. 120 runs from the date-when the right to sue accrues.

    14. As regards interest, the plaintiff had claimed interest at only three per cent per annum simple from the date the defendants received money, i.e 26-8-1946 up to the date of the suit. The learned counsel for the respondents agrees that this is not an unfair demand. I, therefore, allow this amount. As regards interest pendente lite and future, I ant of opinion that the plaintiff is entitled to simple interest at six per cent per annum.

    15. No other point has been pressed before me in appeal.

    16. The plaintiff's suit will stand decreed against all the defendants for the amount claimed by him and the interest as allowed above.

    17. The plaintiff will get his costs in both the courts.

    ID/D.R.R

    18. Appeal allowed.

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    Nirmal Kumar Jain v. Satya Prakash Jain And Others
    (Jul 26, 1960)