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  • Art. 113 of the Limitation Act, 1963 would be applicable. Art. 113
  • S. 19 of the Limitation Act, 1963. S. 19
  • Art. 63 of the Limitation Act, 1963,
  • S. 10 of the Limitation Act, 1963.
  • S. 10 of the Limitation Act,
  • S. 3 of the Trust Act, 1882.
  • LIMITATION ACT 1963
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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
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Acts
  • Art. 113 of the Limitation Act, 1963 would be applicable. Art. 113
  • S. 19 of the Limitation Act, 1963. S. 19
  • Art. 63 of the Limitation Act, 1963,
  • S. 10 of the Limitation Act, 1963.
  • S. 10 of the Limitation Act,
  • S. 3 of the Trust Act, 1882.
  • LIMITATION ACT 1963
Smart Summary

Concise Analytical Summary of the Opinion (Nainar Sundaram, J.)

Factual and Procedural Background

This appeal arises from O.S. No. 448 of 1974 (Second Assistant Judge, City Civil Court, Madras). The appellants in the appeal were defendants 1, 4, 5 and 11 to 17 in that suit; the first respondent is the plaintiff in the suit.

Facts as stated in the opinion: an extent of 15 acres and 94 cents (Survey No. 311/1 at Kottivakkam village) belonged to A.K. Srivatsan. On 27 February 1962 A.K. Srivatsan entered into an agreement (Ex. A1) to sell the land to the plaintiff for Rs. 31,880 and received an advance of Rs. 3,001. On 4 February 1963 the plaintiff entered into another agreement (Ex. B4) with defendants 1 to 3 under which the plaintiff arranged to procure sale deeds in favour of defendants 1 to 3 (or their nominees); the specific condition in Ex. B4 was that Rs. 2,000 per acre should be paid to A.K. Srivatsan and over and above that Rs. 2,000 per acre should be paid to the plaintiff. The plaintiff alleges he received Rs. 2,000 from defendants 1 to 3 under that agreement.

Thereafter, several sale deeds (twelve in number) were executed by A.K. Srivatsan in favour of various parties (including defendants 3, 4 and 6–17) on 17 May 1963, 31 May 1963 and 4 June 1963. The plaintiff contends that, despite these deeds, he was paid only Rs. 14,070 and that Rs. 17,890 remained unpaid; he sued for recovery of that amount.

The defendants contested the suit, asserting broadly (1) that amounts due to the plaintiff had been paid and relying on receipts (Exs. B1–B3 and B7–B11) aggregating to Rs. 24,100; and (2) that the claim was barred by limitation.

The trial court formulated two issues: (i) Whether the plaintiff is entitled to enforce the agreement? and (ii) To what relief? The trial court rejected the defendants' plea of discharge (finding the receipts unreliable), but treated an endorsement (Ex. B4(a)) as evidence of receipt of a further sum of Rs. 2,000 and awarded the plaintiff Rs. 15,890. The trial court also accepted the plaintiff's account of oral demands and payments in 1967–1970 and used those to avoid the bar of limitation.

The present opinion is the appellate court's decision on the appeal by the defendants (appellants) against the trial court's judgment and decree.

Legal Issues Presented

  1. Whether the plaintiff was entitled to enforce the agreement (Ex. B4) and recover the amounts claimed (i.e., whether the trial court correctly decreed a sum in favour of the plaintiff).
  2. Whether receipts produced by the defendants (Exs. B1–B3, B7–B11) discharged the defendants' liability to the plaintiff.
  3. Whether the plaintiff's claim was barred by limitation and, if so, which provision(s) of the Limitation Act, 1963 applied — specifically the relevance of Art. 63 (suit by vendor), Art. 55 (compensation for breach of contract), S. 10 (suits against trustees), Art. 113 (residuary), and S. 19 (effect of payments/acknowledgments).

Arguments of the Parties

Appellants' Arguments (as presented in the opinion)

  • The amounts due to the plaintiff had been paid and the defendants relied on receipts (Exs. B1–B3 and B7–B11) aggregating Rs. 24,100 as evidence of discharge.
  • The plaintiff's suit was time-barred under the Limitation Act; learned counsel sought to bring the claim within Article 63 (suit by a vendor) of the Limitation Act, 1963.

First Respondent / Plaintiff's Arguments (as presented in the opinion)

  • The plaintiff asserted that the receipts were not genuine or complete and that he had been underpaid (only Rs. 14,070 paid), leaving Rs. 17,890 due.
  • To meet limitation, the plaintiff relied on alleged subsequent payments and oral demands in 1967–1970.
  • As an alternate argument, the plaintiff's counsel contended that defendants 1 to 5 constituted themselves as trustees to collect and hold moneys for the plaintiff, thereby invoking S. 10 of the Limitation Act to avoid the bar of limitation.
  • The plaintiff also relied upon residuary Article 113 of the Limitation Act as a possible basis to maintain the suit.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The appellate court reviewed two principal strands of the trial court's approach: (A) the question of discharge on the basis of receipts, and (B) the question of limitation. The court addressed each in turn and applied statutory provisions of the Limitation Act to the facts.

A. Analysis of the plea of discharge (receipts)

  • The court examined Exs. B1–B3 and B7–B11 and the oral testimony of defendants who negotiated the sales (D.Ws 1 and 2). The appellants had produced only a subset of receipts—mainly relating to defendants 10 to 17—and had not produced receipts from other purchasers.
  • The receipts produced were described by the court as "stereo-typed forms, leaving blanks for details to be filled up later." The court found this circumstance supportive of the plaintiff's position that he had merely signed blank forms and that no amounts were in fact paid to him.
  • The court found no convincing explanation for the non-production of other receipts and noted that none of the purchasers themselves came forward to testify as to payments made to the plaintiff.
  • On assessment of the evidence, the appellate court agreed with the trial court's conclusion that the receipts could not reliably be relied upon to discharge the defendants' liability, and therefore found no reason to overturn the trial court on this point.

B. Analysis of limitation

  • Relevant dates: sale deeds were executed on 17 May 1963, 31 May 1963, and 4 June 1963 (the last date being 4 June 1963). The suit was instituted on 26 August 1971.
  • The court rejected the appellants' attempt (apparently urged by the plaintiff's counsel earlier at trial) to treat the plaintiff as an "unpaid vendor" under Article 63 of the Limitation Act. The court held the plaintiff was not a vendor; his rights derived from an independent agreement (Ex. B4), not from vendor status vis-à-vis A.K. Srivatsan.
  • The court identified Article 55 of the Limitation Act as the appropriate provision: it governs "compensation for breach of any contract" and prescribes a three-year period from the time when the contract is broken (or when the relevant breach occurs). The court explained that where the plaintiff's entitlement arose upon execution of individual sale deeds, the cause of action accrued when those deeds were executed.
  • Applying Article 55, the court observed that if the cause of action arose on or before 4 June 1963, the three-year limitation period would have expired by 1966, well before the suit was filed in 1971. Thus, without some valid basis to postpone accrual or to restart limitation, the claim would be time-barred.
  • The plaintiff's attempt to postpone accrual by asserting the defendants agreed to pay after finalisation of land-acquisition proceedings (award dated 25 May 1970) was found vague in pleadings and unsupported in oral evidence; the plaintiff (P.W.1) did not supply convincing details as to when or how such an assurance was made or accepted. The court treated this as an insufficient factual foundation to defer accrual of the cause of action.
  • The plaintiff's alternate contention that defendants 1–5 acted as trustees (so as to attract S. 10 of the Limitation Act and avoid the bar) was considered and rejected. The court set out the three ingredients necessary under S. 10: (1) property vested in a person in trust for a specific purpose; (2) suit against such person (or permitted legal representatives/assigns); and (3) the suit must seek to follow trust property or an account of it. The court held there was no pleaded or proved case that the defendants collected monies and held them for the plaintiff with an obligation to disburse—there was no evidence of moneys coming into the hands of the defendants with a trust obligation.
  • The court further noted the statutory meaning of "vested in trust" is broader than strict trust law, but even under that broader notion the facts did not show the required element of funds held for disbursement to the plaintiff.
  • The court also considered the residuary Article 113 of the Limitation Act (three years from accrual of right to sue) and concluded that, even under that Article, the right to sue accrued when the amounts became payable—i.e., when each sale deed was executed.
  • Finally, the court addressed the plaintiff's attempt to rely on subsequent payments in 1967–1970 to revive limitation by invoking S. 19 (effect of payment on account). It noted that, except for certain historical cases, S. 19 requires an acknowledgment of payment in the handwriting of, or a writing signed by, the person making the payment. No documentary acknowledgment signed by payers was produced; therefore, the alleged payments could not be relied upon to compute a fresh period of limitation.
  • Having considered these statutory provisions and the evidentiary record, the court concluded that the plaintiff's claim against the appellants was barred by limitation.

Holding and Implications

Holding:

APPEAL ALLOWED — the appellate court set aside the judgment and decree of the trial court insofar as the appellants (defendants 1, 4, 5 and 11–17) are concerned, and the plaintiff's suit against those appellants is dismissed.

Implications and direct consequences:

  • The plaintiff's decree against the appellants is overturned and the suit as against the appellants is dismissed on the ground of limitation.
  • The appellate court did not disturb the trial court's decree as against other defendants who did not appeal; those parts of the decree, including the award of costs against the non-appealing defendants, remain in force.
  • Costs: in the particular circumstances, the appellants and the first respondent (plaintiff) are directed to bear their respective costs throughout the proceedings.
  • The appellate court also preserved the trial court's direction regarding payment of court-fee due to the State by the plaintiff (that direction was not altered).
  • The opinion did not purport to lay down any novel precedent; it resolved the appeal by applying existing statutory provisions (Articles and Sections of the Limitation Act, 1963) to the facts before the court.

Judge: Nainar Sundaram, J. — the opinion presents the appellate court's decision based on the materials and arguments expressly recorded in the provided text.

    K.P Subramanian And 9 Others v. Elumalal Gramani And 3 Others

    Nainar Sundaram, J.

    1. In this appeal, the appellants are defendants 1, 4, 5 and 11 to 17 in O.S No. 448 of 1974 on the file of the Second Assistant Judge, City Civil Court, Madras. The first respondent is the plaintiff in the suit and respondents 2, 3 and 4 are defendants 3, 9 and 10 respectively. The plaintiff laid the suit for recovery of Rs. 17,890 stated to be the amount due to him from the defendants under the following circumstances. An extent of 15 acres and 94 cents comprised in Survey No. 311/1 and situated at Kottivakkam village near Tiruvanmiyur, Saidapet Taluk, belonged to one A.K Srivatsan. A.K Srivatsan entered into an agreement with the plaintiff on 27th February, 1962 as per Ex. A1, agreeing to sell the land to the plaintiff for a sum of Rs. 31,880 and received an advance of Rs. 3,001 from the plaintiff. As per this agreement, A.K Srivatsan agreed to convey plots of land as per the requirements of the plaintiff. On 4th February, 1963 as per Ex. B4, the plaintiff entered into an agreement with defendants 1 to 3, under which the plaintiff arranged to get sale deeds in favour of defendants 1 to 3 or their nominees and the specific condition was that Rs. 2,000 per acre should be paid to A.K Srivatsan, and over and above that, Rs. 2,000 per acre should be paid to the plaintiff. Under this agreement, Ex. B4, the plaintiff received a sum of Rs. 2,000 from defendants 1 to 3. Thereafter, defendants 1 to 3 by themselves and through defendants 4 and 5 negotiated for the sale of land in convenient plots in favour of several purchasers and twelve sale deeds were got executed by A.K Srivatsan in favour of defendants 3, 4 and 6 to 17 on three dates, namely, 17th May, 1963 31st May, 1963 and 4th June, 1963. The purchasers were fully apprised of the agreements, Exs. A1 and B4. The amounts due to the owner A.K Srivatsan under the sale deeds were admittedly settled and discharged but, according to the plaintiff, the sum of Rs. 2,000 per acre due to him as per Ex. B4 was not fully paid and he was paid only Rs. 14,070 and the balance of Rs. 17,890 was not paid. That was how he came to lay the suit for the recovery of the said amount. The suit was contested. The defence of the defendants was broadly two-fold. They would state that the amounts due to the plaintiff were paid and they would rely on the receipts, Exs. B1 to B3 and B7 to B11 for amounts aggregating to Rs. 24,100. They would also put forth a plea of bar of limitation. The first court formulated two issues as follows:—

    (i) Whether the plaintiff is entitled to enforce the agreement?

    (ii) To what relief?”

    The plea of discharge was tested by the first court on the materials placed by the parties and it came to the conclusion that no reliance could be placed on the receipts referred to above and rejected this case of the defendants. However, it found that in the agreement, there is a further endorsement, marked in the case as Ex. B4(a) which evidenced the receipt of a further sum of Rs. 2,000 and giving credit to the same, the first court held that the plaintiff is entitled to claim Rs. 15,890. The court below also adverted to the question of limitation and accepted the case of the plaintiff that he was making oral demands and was receiving payments in 1967, 1968, 1969 and 1970 and these payments would come to the rescue of the plaintiff to save limitation. As a result, the suit of the plaintiff was decreed for Rs. 15,890, with proportionate costs.

    2. The attempt by Mr. S.V Jayaram, learned counsel appearing for the appellants, was to get rid of the judgment and decree of the first court by projecting the very same pleas which have found no countenance by the first court. On the question of discharge, as per Exs. B1 to B3 and B7 to B11, we find that the reasonings of the court below are tenable on the evidence placed in the case. Defendants 4 and 5 are the persons who negotiated for the sales and they, having been examined as D.Ws 2 and 1 respectively, spoke about the payments to the plaintiff. But, the payments were only by the other purchasers. None of the other purchasers have chosen to come before the Court below to speak to the payment of the amounts to the plaintiff. Defendants 4 and 5 have not produced all the receipts and the receipts produced only relate to defendants 10 to 17. No convincing explanation is available for the non-production of the other receipts. Even the receipts produced are stereo-typed forms, leaving blanks for details to be filled up later and hence, they do lend support to the case of the plaintiff that he affixed his signature only in blank forms and, in fact, no amounts were paid to him. On an analysis and assessment of the evidence in this behalf, we are unable to take a view different from that of the court below on the plea of discharge.

    3. Mr. S.V Jayaram, learned counsel for the appellants, was more vehement on the question of limitation. The sale deeds got executed admittedly on 17th May, 1963, 31st May, 1963 and 4th June, 1963, the last of the sale deeds being of the date 4th June, 1963. The stipulation as per Ex. B4 was only that for the sales, the plaintiff should be paid Rs. 2,000 per acre, over and above Rs. 2,000 per acre to be paid to the owner, A.K Srivatsan. The plaintiff would legitimately be entitled to be paid the sum of Rs. 2,000 per acre as and when the individual sale deeds get executed in favour of the purchasers. Yet, the plaintiff would state that the defendants did not pay the entirety of the amounts due to him and they agreed to pay the balance due to the plaintiff after the finalisation of the sales. The plaintiff also averred that three of of the purchasers, namely, defendants 3, 4 and 17 agreed to pay the amounts due to the plaintiff after they, in their turn, sell the land to third parties. The plaintiff would further state that land acquisition proceedings get initiated subsequently and on account of this, the defendants represented that they had taken steps to have the land acquisition proceedings quashed and if they did not succeed in these steps, they would pay the amounts due to the plaintiff from and out of the compensation amount in the land acquisition proceedings. The award in the land acquisition proceedings is stated to have been passed on 25th May, 1970. The plaintiff also states that all the defendants constituted themselves as trustees for the due payment of the moneys to the plaintiff. The plaintiff, in paragraph 10 of the plaint, refers to the various payments stated to have been made for and on behalf of the defendants. The suit came to be instituted on 26th August, 1971. Subsequent payments after the sale deeds are stated to be made in the years 1965, 1967, 1968, 1969 and 1970. Mr. S.V Jayaram, learned counsel for the appellants, would try to bring the claim of the plaintiff under Art. 63 of the Limitation Act, 1963, which speaks about a suit by a vendor of immovable property for personal payment of unpaid purchase money and the period of limitation is three years from the time fixed for completing the sale, or where the title is accepted after the time fixed for completion, the date Of the acceptance. The reliance on this Article, in our view, is not tenable. The plaintiff cannot be given the character of an unpaid vendor of immovable property. The vendor was only A.K Srivatsan. The plaintiff's rights are derivable only under Ex. B3, an independent agreement. In our view, the appropriate Article to be applied is Art. 55, which speaks about compensation for the breach of any contract, express or implied not specifically provided for and the period of limitation is three years from the time when the contract is broken or where there are successive breaches, when the breach in respect of which the suit instituted occurs or where the breach is continuing, when it ceases. It is not the case of the plaintiff that there were successive breaches or that the breach was a continuous one. It is by now settled that the word “compensation” for breach of contract, occurring in the Article is not only referable to unliquidated damages but would also include a claim for a certain sum due under a contract, the obligations under which were not respected. In the instant case, as and when the sale deeds get executed, the plaintiff was entitled to be paid his dues as per the agreement, Ex. B4, and when there was a failure to pay the same, the contract was broken and the cause of action arose and time would run normally from the dates of the sale deeds. Even if we accept the case of the plaintiff that his dues should be paid after the finalisation of all the sales, we find that the last of the sale deeds was on 4th June, 1963 and the three years period as per Art. 55 would have lapsed even in 1966. To get over this, the plaintiff has projected a case that the defendants agreed to settle his dues after the land acquisition proceedings terminated and the compensation amounts were paid. The plaint allegations are vague. When exactly the assurance was given and accepted is not at all stated. The plaintiff, examined as P.W 1, has not improved the position by his oral evidence. Except for the bald assertion that the defendants agreed to pay the dues after the land acquisition proceedings, the plaintiff, as P.W 1 has not expatiated in a convincing manner the details of the agreement or the assurance by the defendants to pay the dues after the termination of the land acquisition proceedings. The plea itself was vague and the evidence in this behalf stands on a much worse basis.

    4. The other plea that defendants 3, 4 and 17 agreed to pay the dues after they negotiated sales in favour of third parties does not appear to have been prosecuted further by placing any concrete evidence in this behalf. Realising this position, Mr. V.C Srikumar, learned counsel appearing for the first respondent, the plaintiff in the suit would state that defendants 1 to 5 in any event constituted themselves as trustees for realising the amounts due to the plaintiff under the agreement, Ex. B4 from all the purchasers, and pay them over to the plaintiff. Except for a stray sentence in the plaint, we are not able to find the details of the constitution of trust relationship between the parties. The attempt on the part of Mr. V.C Srikumar was to avail of S. 10 of the Limitation Act, 1963. This reliance, in our view, is a misconceived one on the facts disclosed in the case. Three ingredients must be satisfied before there could be an invocation of S. 10 of the Limitation Act, which contemplates that suits against trustees and their representatives shall not face the bar of limitation at all. The said ingredients are as follows: (1) There must be property which has become vested in a person in trust for a specific purpose: (2) The suit must be against such person or his legal representatives or assigns (not being assigns for valuable consideration); and (3) The suit must be for the purpose of following in the hands of such person the trust property or its proceeds or for an account of such property or proceeds. The words “vested in trust” occurring in S. 10 of the Limitation Act, 1963, though need not necessarily imply a transfer of ownership in the strict sense, do at any rate imply something more than mere possession and a temporary control. Unless it was established that the concerned defendants collected the moneys from the purchasers and held them for the specific purpose of disbursement to the plaintiff, it is not possible to invoke the aid of section 10 at all. There is no case pleaded in the plaint that any of the defendants collected the amounts from the other purchasers, held them for the benefit of the plaintiff and for disbursement to him, so as to have the character of a trustee stamped on him. It is true, the word “trust” used in the Limitation Act, 1963 is in a wider sense, and it will cover all the obligations in the nature of trust, though they are not trusts in the strict sense of the term as defined in S. 3 of the Trust Act, 1882. But, in the absence of moneys coming into the hands of the concerned defendants for the benefit of the plaintiff with an obligation annexed to it, namely, disbursement of the same to the plaintiff, it is impossible to conceive the concept of a trust even in its wider sense. Hence, we have to eschew this attempt on the part of the learned counsel for the first respondent to get over the bar of limitation. Mr. V.C Srikumar, learned counsel for the first respondent, would also contend that Art. 113 of the Limitation Act, 1963 would be applicable. Art. 113 is a residuary one. The period is three years from the time when the right to sue accrued. Even if this Article is to be resorted to, in our view, the right to sue accrued only when the amounts become payable, and the amounts became payable as and when the sale deeds got executed. The question as to when a right to sue arises will depend largely upon facts and circumstance of the particular case and to the facts and circumstance of the instant case, there is no escape from the position that the right to sue accrued only as and when the sale deeds get executed. We have already rejected the case of plaintiff that there was a stipulation to pay the amounts at a future time. The payments pleaded by the plaintiff as having had been made in 1967, 1968, 1969 and 1970 could not also be availed of to get over the bar of limitation because they cannot be held to be payments within the meaning of S. 19 of the Limitation Act, 1963. S. 19 (relevant portion) reads as follows:—

    “Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:

    Provided that, save in the case of payment of interest made before the 1st day of January, 1928 an acknowledgment of the payment appears in the handwriting of, or in a writing signed by the person making the payment.”

    To invoke the aid of S. 19, except in the case of payment of interest made before 1st January, 1928, there should be an acknowledgment of the payment appearing in the handwriting of, or in a writing signed by, the person making the payment. No document has been produced by the plaintiff to evidence the payments alleged. Hence, it is not possible to take note of this plea of payments to get over the law of limitation as done by the court below. The law of limitation stares in the face of the plaintiff with regard to his claim and the attempt on the part of his counsel before us to get over the same did not fructify.

    5. The preceding discussions oblige us to countenance the plea of limitation put forth on behalf of the appellants with regard to the claim of the plaintiff, and this obliges us to interfere in this appeal. Accordingly, this appeal is allowed, the judgment and decree of the first court are set aside in so far as the appellants are concerned, and the suit of the plaintiff, the first respondent herein, as against the appellants will stand dismissed. We have not disturbed the decree of the first court as against the other defendants, who have not preferred the appeal, including the award of costs as against them. In the peculiar circumstances of the case, the appellants and the first respondent are directed to bear their respective costs throughout. We also make it clear that we have not altered the direction of the first Court with regard to the payment of court fee due to the State by the plaintiff, the first respondent herein.

    VCS.

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    K.P Subramanian And 9 Others v. Elumalal Gramani And 3 Others
    (Jan 9, 1985)