Kapildeo Rai v. Pt. Gopal Dutt Mishra And Another Opposite Party.

1. The sole question, for determination on this application in revision, under Section 25 of the Provincial Small Cause Courts Act, by the plaintiff, is, whether, here, Article 62, or Article 120, of the Limitation Act, 1908, applies? In order to decide the question of limitation it is necessary to know the material facts: The plaintiff took settlement of some land from the landlord on an annual rental of Rs. 78-12-0. The defendants, later on, purchased the entire interest of the landlord of the plaintiff. The defendants, therefore, filed a rent suit for recovery of rent of the land, which the plaintiff had taken settlement of, not against the plaintiff who was its tenant but against one Bishwanath Upadhya alias Sidhnath Upadhya, who had nothing to do with the rent claimed land.

2. The suit was decreed and the decree was executed by the defendants against the land of the plaintiff, although he was not a party to the decree under execution. The plaintiff, in order to save his property from sale, deposited the entire decretal amount to the extent of Rs. 290-2-0 in Court: in favour of the defendants decree-holder, and, thereafter, instituted a title suit for setting aside the aforesaid decree. The plaintiff's suit was decreed on 31-8-56 and the rent decree, in execution of which the plaintiffs land was put up to sale, was set aside and the said judgment was upheld on appeal on 18-4-58.

3. In the executing Court, where the money had been deposited by the plaintiff in favour of the defendants, the plaintiff, on 6th November, 1954, filed a petition to withhold the payment to the defendants till the disposal of the title suit brought by him. To this application of the plaintiff the defendants filed a rejoinder on 13th November, 1954, After hearing both the parties the plaintiff's application, for withholding the payment, was, however, rejected by the execution Court on 30th November, 1954. On 3rd December, 1954, the payment order, moved by the defendants for payment of the sum deposited by the plaintiff in their favour, was passed and, on 3rd December, 1954, the defendants withdrew the amount.

4. The plaintiff, thereafter, brought the suit for recovery of the money which was deposited by him in the executing Court for avoiding sale of his lands, which was alleged to have been wrongfully withdrawn by the defendants. The plaintiff alleged that the money deposited by him belonged to him, and, therefore, the defendants had no right to withdraw the sum, when the rent decree was obtained by them, not against the plaintiff, but against a person, who was not the tenant of the land, and the said rent decree had subsequently been set aside.

5. The suit has been dismissed by the learned Small Cause Court Judge on the ground that the money having been withdrawn by the defendant on 3rd December 1954, and, the present suit having been instituted on 9-6-59 it was barred by three years' limitation. He has not, however, mentioned the particular Article of the Limitation Act, which, in his opinion, applied to the present case.

6. In order to decide whether, to the above facts of this case, Article 62, as contended by the defendants opposite party, or, Article 120, as contended by the plaintiff petitioner, applies, it is necessary, at first, to read Articles 62 and 120 of the Limitation Act. They are in these terms:

“62. Pot money payable by the defendant to the plaintiff for money received by the defendant for the plaintiff's use. Three years. When the money is received. “120. Suit for which no period of limitation is provided elsewhere in this schedule. Six years. When the right to sue accrues.”

7. In support of his contention that, here, Article 120 would apply, Mr. Janeshwar Singh, who appeared for the petitioner, relied on two decisions of the Privy Council in O. Rm. O.M Sp. Firm v. Nagappa Chettiar, AIR 1941 PC 1 and Gurudas Pyne v. Narain Sahu, ILR 10 Cal 860 : 11 Ind App 59 (PC), and, also on a decision oil Shib Chandra Prasad, J., of this Court, in Johari Lal v. Bihar State Co-operative Bank Ltd., Patna, AIR 1959 Pat 477.

8. Mr. Angad Ojha, who appeared for the defendants opposite party, however, in support of his contention that, here, Article 62 would apply, relied on a Bench decision of the Madras High Court in India Sugar and Refineries Ltd. v. Municipal Council, Hospet, AIR 1943 Mad 191.

9. Article 120 provides the period of limitation of six years for a suit for which no period of limitation is provided elsewhere in the First Schedule of the Limitation Act the expression right to sue in Article 120, means the right to bring the particular suit with reference to which the plea of limitation is raised. Under Article 120 there can be no ‘right to sue’ until there is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted. Article 120, therefore, should be applied unless it is clear that the suit is within some other Article: Mohammad Riasat Ali v. Hasin Banu 20 Ind App 155 (PC), Gobinda Narayan Singh v. Sham Lal Singh, AIR 1931 PC 89 : 58 Ind App 125, and Mt. Bolo v. Mt. Koklan, AIR 1930 PC 270, which was followed in Annamalai Chettiar v. Muthukaruppan Chettiar, AIR 1931 PC 9 : 58 Ind App 1.

10. We, therefore, find that Article 120 is a general one and applies to suits to which no other Article in the First Schedule of the Limitation Act applies. It follows, therefore, that where another Article applies, this will not apply. Article 120 is an omnibus one. It is final and residuary and it will not apply to a case unless clearly it does not come under any other Article dealing with the specific case. The function of a residuary Article, such as this, is to provide for cases which could not be covered by the exact words used, in both the first and the third columns of the specific Articles. ‘After all, no Legislature and the ingenuity of no draftsman can provide in terms against all possible contingencies, and that is the reason why residuary Articles are inserted in the Limitation Act.’

11. The crucial question, therefore, is whether Article 62 applies?

12. I will now notice the authorities relied upon at the Bar.

13. The decision of the Privy Council in AIR 1941 PC 1 : 67 Ind App 448, relied upon by Mr. Singh is of no assistance here. In that case, the question was if ‘the right to sue’ would be deemed to accrue, under Article 120, from the time of the plaintiffs knowledge of the fraud, misconduct or mistake, where such a ground was the basis of the suit. But this question does not arise here.

14. The decision of the Privy Council in ILR 10 Cal 860 : 11 Ind App 59 (PC), however, is very helpful in the present case, because, there, their Lordships were considering Article 60 of the Limitation Act of 1871, which corresponds to Article 62 of the Limitation Act of 1908.

15. This Article 62, in the present form was first introduced in the Act of 1871 as Article 60, it has continued in the same form in the Acts of 1877 and 1908 with only its number changed from 60 to 62.

16. In the just mentioned Privy Council case, the facts, as stated in the placitum of LR 11 Ind App 59 (PC), were these:

17. The plaintiffs having recovered a money decree against M.'s widow for the wrongful conversion of their timber M., attached in execution the property of the defendant, M.'s brother, and upon such attachment being disallowed sued to establish their right to execution against the attached property upon the ground that the defendant had benefited by the timber taken by M and M.'s after death had sold the same and appropriated the money.

18. Their Lordships held that the plaintiffs had a right to follow the proceeds of the timber, and that the defendant having recovered the money and not having paid it over to M.'s widow, they had at right to recover the amount from him.

19. With regard to limitation, their Lordships held that Article 60 (corresponding to Article 62) did not apply, but Article 118 (corresponding to Article 120) applied, and, therefore, the plaintiffs had a right at any time within six years from the time when the defendant received the money to hold him responsible to them for the amount.

20. It was contended before the Privy Council, in the above mentioned case, that when the defendant sold the timber of the plaintiff, the money was received by the defendant for the plaintiff's use, and, therefore, Article 60 (present Article 62), would apply, but this contention was overruled by their Lordships, and, in doing so, Sir Barnes Pear cock, who delivered the unanimous opinion of the Board, observed:

“…….; but that appears to their Lordships not to be the case. When he (i.e, the defendant) sold the timber he was selling it as the agent of Moti Dasi (i.e, defendant's brother's widow), and he received the money for her. The suit is to enforce an equitable claim on the part of the plaintiffs to follow the proceeds of their timber, and, finding them in the hands of the defendant, to make him responsible for the amount. That does not fall either within Arts. No. 60 or No. 48; but comes within Article 118 ‘a suit for which no period of limitation is provided elsewhere in this schedule’, and for suits of that nature a period of six years is the limitation. Their Lordships think fiat the plaintiffs had a right at any time within six years from the time when the defendant received the money to hold him responsible to them for the amount as long as it remained in his hands; they might have given him notice not to pay it over, and held him responsible in equity if he had done so.”

21. The above decision of the Privy Council, in my opinion, is a complete answer to the contention of the opposite party that, here, Article 62, and, not Article 120, applies.

22. Shib Chandra Prasad, J., of this Court, in AIR 1959 Pat 477, after a review of all the cases, including the cases relied upon here, held that where money paid by the plaintiff has been received by the defendant, it cannot be said that money belonging to the plaintiff was received by the defendant for the plaintiffs use, and not for his own use and, therefore, in such a case Article 62 would not apply, I express my respectful agreement to the decision of his Lordship.

23. AIR 1943 Mad 191, relied upon by Mr. Ojha, in my opinion, has no application to the facts here. In that case, the suit was by the plaintiff against the defendant Municipality, to recover licence fee and professional tax, alleged to have been wrongfully levied by the defendant Municipality. An attempt was made, in that case, to argue that Article 62 applies only to an action for money had and received in the strictest sense of the term as understood in the Courts of Common Law in England and that when the action is based not on any implied contract, but on the principle of ex aquo et bono, (i.e, in equity and good conscience).

24. Article 62 would have no application and the residuary Article 120 would apply. This argument, however, was not accepted and their Lordships held that Article 62 is intended to apply to all actions for money had and received to the use of the plaintiff, whether they be actions which may be deemed strictly to be based on implied contracts or whether they be merely to enforce an equitable claim to the return of the money had and received. Article 62 was, therefore, applied to the claim in so far as it related to professional tax wrongfully levied by the defendant Municipality.

25. It is well established principle of the English Common Law that when money has been received by one person which in justice and equity belongs to another, under circumstances which render the receipt of it a receipt by the defendant to the use of the plaintiff, the latter may recover as for money had and received to his use: per Viscount Haldane, in Royal Bank of Canada v. R., (1913) AC 283 at p. 296.

26. This kind of equitable action to recover back money which ought not in justice to be kept is very beneficial, and, therefore, much encouraged. It lies only for money paid by mistake upon a consideration which happens to fail, or for money got through imposition (express or implied), or extortion or oppression, or an undue advantage taken of the plaintiffs situation, contrary to laws made for the protection of persons under those circumstances: as per Lord Mansfield in Moses v. Macferlan, (1760) 2 Burr 1005, at p. 1012. This remedy as bottomed in the principle of ‘unjust enrichment’.

27. The above principles of the English law have been enacted in the different Articles in the Limitation Act. We are here concerned only with Article 62.

28. Article 62, when it speaks of a suit for money received by the defendant for the plaintiff's use, points to the well known action under the English law for money had and received by the defendant for the plaintiff's use consequently the Articles 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: per Mookerjee, J., in Mahomad Wahib v. Mahomad Ameer, ILR 32 Cal 527.

29. The conditions necessary for the applicability of this Article, therefore, are (1) the suit must be for money received by the defendant; (2) the money must, in justice and equity, belong to the plaintiff at the time of such receipt; and (3) the circumstances under which the money is received by the defendant must be such that, in the eye of the law, the receipt is by the defendant for the use of the plaintiff.

30. The test to determine whether money is received by the defendant for the use of the plaintiff is to see whether, under the law, the money is to be treated as so received. The intention of the person receiving the money or of the person paying the money that it should be used for the benefit of the plaintiff is not a conclusive factor in determining the question. Article 62, therefore, will apply only where at the time of the receipt of the money, by the defendant, it is received by him for the use of the plaintiff.

31. The observation of Sadasiva Aiyer, J., of the Madras High Court, on this question, in Ramasamy v. Muthusamia, AIR 1919 Mad 957 : ILR 41 Mad 923 (DB), is very apposite and may usefully be quoted below:

“While privity of contract between the parties is, of course, not necessary to sustain such an action, I think there must be what might be called some privity of a legally recognisable nature, such as some knowledge of particular facts in the man who received the money, and some mistake or ignorance of facts on the part of the man who paid the money, or some relation of trust and confidence between the person who received the money and the person claiming the money or portion thereof, on which the Court would fasten as creating the relation of principal and agent (though by fiction) between, the plaintiff and the defendant.’’

32. In the light of the above principles, let us examine the facts of the instant case in order to decide if on the facts, under the law, the receipt of the money by the defendants can be deemed to be for plaintiffs use so as to attract the application of Article 62.

33. In the present case, however, the circumstances under which the money was received by the defendants cannot, under the law, be deemed to be received by them for the use of the plaintiff. The money which the plaintiff deposited was his, and he had to deposit it, although he was not a party to the decree under execution, because his property was put up for sale. When the defendants withdrew that money belonging to the plaintiff, it cannot be said that it was received by the defendants for the plaintiff's use, because the defendants received it as their own money and on their own behalf, inasmuch as, that money had been deposited in their favour by the plaintiff.

34. Taking advantage of the deposit in their favour, therefore, the defendants, who had no right to withdraw it, treating this money as their own, withdrew it and kept it in their possession. It is true that the money originally deposited by the plaintiff in favour of the defendants was deposited, not because that money was legally payable to the defendants; but, because, as the plaintiff's property was wrongfully sought to be sold in satisfaction of a decree, to which he was not a party, he was forced to deposit it in order to save his property from sale.

35. The plaintiff, therefore, immediately brought a suit, to set aside the decree. During the pendency of his suit, the plaintiff applied in the execution Court not to pay the money to the defendants till the decision of the suit, but this application of the plaintiff was opposed by the defendants and they succeeded in getting that petition of the plaintiff rejected and immediately thereafter withdrew the money. This amounted to the plaintiff giving a notice to the defendants.

36. They had full knowledge of the fact that the plaintiff was not liable to pay their decree as he was not a party to it, and, therefore, they were not entitled to the money which the plaintiff was forced by circumstances to deposit to avert the sale of his land, which was sought to be sold in execution of a decree to which he was not a party and which the execution Court had no jurisdiction, therefore, to sell. They treated the money as their own and withdrew it as such.

37. In these circumstances, it cannot be said, by any stretch of imagination, that the money, which was received by the defendants, on the facts here, can be said, under the law, to have been received by them for the plaintiffs vise, so as to attract the application of Article 62. In my opinion, therefore, Article 62 does not apply to the facts of the present case, and, es such. Article 120 must apply.

38. For the reasons given above, I would, therefore, hold relying on the decision of the Privy Council in ILR 10 Cal 860 : 11 Ind App 59 (PC), which, in my opinion applies fully here, that Article 62 does not apply to the present case, and, as admittedly no other Article of the Limitation Act applies, Article 120 would apply, and, as such the plaintiff had a right any time within six years from the time when the defendants received the money to hold them responsible to him for the amount as long as it remained in their hands, and accordingly, the present suit, having admittedly been brought within six years from the date of withdrawal of the plaintiff's money by the defendants, was not barred by limitation. In the result, the application succeeds, and the rule is made absolute, and, the judgment and order of the Court below are set aside and the plaintiffs suit is decreed with costs of this Court and of the Court below.

BE/V.S.B

39. Revision allowed.