Fawcett, J.:— This was a suit brought by a pakka adatia against a client, who dealt through him in regard to contracts of cotton seeds, cloth bales, &c., in Samvat 1974–1975. He sought to recover a sum of Rs. 2,227-12-0 as balance due on the account with interest. The defendant raised various contentions, which are now immaterial. Among them there was no objection that the claim, or any part of it, was barred on account of limitation, but the point seems to have been raised, as the Subordinate Judge in his judgment held, that by virtue of an admission in the written statement that a certain sum was due the claim was not time barred and passed a decree for the amount claimed with future interest. The defendant appealed, and among the grounds of appeal was one that the lower Court was wrong in holding that the admission of part of the claim in the written statement saved the bar of limitation. The appellate Court had also before it other questions which were raised, but which are not now material. In regard to the point of limitation the District Judge held that the claim was time barred. The proved transactions between the plaintiff and the defendant are in regard to the purchase and sale of eleven bales of cloth, in respect of which items were debited and credited in the account of the defendant. The District Judge says:

“On 23rd August 1918, there is a debit for the value of eleven bales purchased. On 7th September 1918, and then on 8th September 1918, there are credit items for the valus of five bales and six bales sold by defendant. Thus this saoda for eleven bales was settled on 8th September 1918, and on that date plaintiff could know what amount defendant had to pay to him for the loss. The plaint was filed on 18th November 1921, more than three years after 8th September 1918. I have not overlooked the fact that the saoda for eleven bales was of the vaida of 15th Kartik Sud corresponding to 18th November 1918. But it was open to parties to settle it up even before that date and since the whole contract was fulfilled before then, I think limitation ran from the day after 8th September 1918.”

2. The plaintiff comes to us in second appeal on the ground that the lower Court erred in holding the claim in regard to these eleven bales to be time barred.

3. In the arguments before us Mr. Shingna for the appellant contended that the article applicable was either Article 65 or Article 120. On the other hand, Mr. Rao for the respondent contended that the article applicable was Article 83, and he cited various authorities in support of that contention. In my opinion, the article that directly applies to the claim is Article 83. In this case the contracts were made through the plaintiff as pakka adatia on terms that in Bhagwandas v. Kanji (1) are stated by Sir Lawrence Jenkins at pp. 215 and 216. He there says that the contract is one of employment for reward; and as pointed out by the Privy Council in Bhagwandas Parasram v. Burjorji Buttonji (2), in so far as the plaintiff made the contracts in suit in exercise of the authority conferred upon him and became liable for their performance, he also became entitled to be indemnified by his employer, against the consequences of the acts done by him, unless those acts were unlawful. Here, there is no question of any illegality. In view of this relationship, in my opinion, the basis of the plaintiff's claim in respect of the loss caused by these cross-contracts is the right to be indemnified, and the suit is therefore one upon a contract to indemnify, which does not fall either under Article 81 or Article 82, and so comes under Article 83.

4. In Kandaswamy Pillai v. Avayambal (3) it was held that Article 83, Limitation Act, only applied to a case where the obligation to indemnify directly arose from the contract itself and not from any statutory enactment such as that contained in Section 222 of the Contract Act. This view has been dissented from in various cases, such as Manghi Ram v. Ram Saran Das Maman Chand (4), Abdul Aziz Khan v. Muhammad Baksh (5) and Mahamad Mazaharat Ahad v. Mahamad Azimuddin Bhuian (6). I agree with the view taken in these latter cases, because there is nothing in the article itself which, in my opinion, justifies the distinction made by the Madras High Court. But, in any case, I think that the obligation to indemnify in this instance arises from the customary terms of a pakki adat, quite apart from the provisions of Section 222 of the Contract Act; and if that is so, even if the distinction made by the Madras High Court is a good one, still the present case falls under Article 83. I do not think that the case can be properly held to fall under Article 65, Limitation Act. That article requires the suit to be one for compensation for breach of a promise to do anything at a specified time, or upon the happening of a specified contingency. Due effect must, I think, be given to this word “specified.” It might, for instance, be contended that Article 65 contemplates a contract in writing just as a contract in writing is obviously contemplated in Article 66 and Article 67, where the same word “specified” is used; and the Privy Council in Durga Chowdhrani v. Jewahir Singh Chowdhri (7) and Ramgopal v. Shamskhaton (8) held that the word “specified” in section 584 of the cpc, 1882, as used in the phrase “specified law or usage,” meant “specified in the memorandum of appeal.” But, on the other hand, I am prepared to concede that a thing can be specified in an oral contract as well as in a written contract; and Section 46 of the Contract Act, for instance, which says:

“Where, by the contract, a promisor is to perform his promise without application by the promisee, and no time for performance is specified, the engagement must be performed within a reasonable time”

5. Clearly applies to an oral contract as well as a written contract. At the same time it seems to me that the word “specified” implies that there must be some particularity in the contract as to the time when the promise is to be performed, or as to the contingency which is to happen. I quite agree that in a contract of this kind there is an implied promise on the part of the defendant to pay the plaintiff under ordinary rules as to constructive contracts, such as are given in Halsbury's Laws of England, Vol. 7, S. 2, at pp. 465 and 467. The case would fall either under Article 946 or Article 950, para 2, as regards an agent's right to recover any payment that he makes on behalf of his employer. But that does not necessarily imply a promise to pay at any particular time, and certainly not a promise to pay at a “specified” time.

6. The view of the District Judge would amount to this; that there was an implied promise to pay as soon as the cross-contract effected on 8th September 1918, resulted in showing what was the loss on the transactions. If an agreement were proved to pay such loss immediately on its being ascertained, then, no doubt, there would be a specified time which would bring the case under Article 65. But, where is the evidence of any such contract in this case? So far as I am aware there is not an iota of such evidence, and the accounts that were actually rendered by the plaintiff to the defendant were drawn up at a date subsequent to 8th September. It seems to me that the circumstances would not warrant it being held that there was an agreement by the defendant to pay the loss in a case settled by cross-contract on the very day that the loss is ascertained. A debtor is generally not in a hurry to pay his debts, and the probable state of affairs would be that the obligation to pay would not arise till the plaintiff made a demand for payment by sending his account to the defendant. That would probably be at any rate not before the settlement day, for ordinarily, while some transactions might be settled by cross-contract, others might stand over for settlement on the vaida day.

7. In my opinion, there is no warrant for holding that in this case there was an implied promise to pay the loss on the very day that the loss was ascertained. Then, can it be said that there was a breach of a promise to pay anything upon the happening of a specified contingency? Can it be said that the settlement of differences of cross-contracts is a specified contingency within the meaning of this article? In my opinion, the answer is clearly, No. The word “contingency,” so far as it applies to contracts, obviously has reference to the case of “contingent contracts,” which are the subject-matter of Ch. 3, Contract Act. S. 31 defines a “contingent contract” as a contract to do or not to do something, if some event, collateral to such contract, does or does not happen; and the various illustrations to this and the following sections are all ordinary cases of a contract to do something, such as to make a payment, if a house is burnt, if a person survives another, if somebody marries somebody, and so on. The only way in which the present case can be brought within the definition of a contingent contract is to say that there is a contract between the parties that, if the transactions are settled by cross-contracts payment will be made at once, although otherwise payment would be made later: but the event of settling transactions by cross-contracts is one within the entire control of the parties and not of the fortuitous kind contemplated by Ch. 3, Contract Act, or the general meaning of the word “contingency.” Accordingly, in my opinion, Article 65 cannot properly be applied in the present case; and, as I have already said, the teal basis of the suit is a pakka adatia's right of reimbursing, or being indemnified, so that Article 83 seems to me to be the appropriate one. Under Article 83 limitation begins to run from the time, “when the plaintiff is actually damnified.” These words are of significance.

8. The article does not say, “when the loss is ascertained,” but “when the plaintiff is actually damnified;” and that is based upon the leading case of Collinge v. Heywood (9), which interpreted the corresponding law in England. There it was held that on a contract to indemnify plaintiff against costs of which he is afterwards called upon to pay, the cause of action arises when he pays, and not when the costs were incurred or the attorney's bill was delivered to the plaintiff, and therefore, the time of statutory limitation runs from the time of payment. Accordingly, here also limitation would not run from the time when the plaintiff submitted a bill or an account to the defendant about the loss; a fortiori it would not run merely from the time when the loss was ascertained. It runs from the time when the plaintiff becomes out of pocket by payment of the loss incurred on account of these contracts; so that, if the District Judge intended to hold that Article 83 applied, I think he is clearly in error in saying that time ran from 8th September, when the loss was ascertained.

9. Supposing that Article 61 applied and not Article 83, the suit being treated as one for money paid for the defendant, still the same test would apply. Limitation would run only from the time when the money was paid by the plaintiff for the defendant. Therefore, in my opinion, before it can be decided whether the suit is time barred, it has to be ascertained when it was that the plaintiff paid this loss as agent of the defendant. So far as I am aware, it is not clear when in fact, he paid it; and to enable us to pass orders on the appeal, in my opinion, the parties should be heard on this point if necessary, an issue should be framed about it and sent to the lower Court for determination.

Mirza, J.:— The only point in this appeal is whether the appellant's claim in the suit is time barred. The appellant sued the respondent to recover a sum of Rs. 2,227-12-0 which had become due on a transaction for the purchase of eleven; bales of cloth. The respondent employed the appellant as his pakka adatia to purchase eleven bales of cloth deliverable on 18th November 1918. Before the due date the transaction was settled by means of two oross contracts of sale, one dated 7th September 1918, for the sale of five bales and the other dated 8th September 1918, for the sale of six bales. Rs. 2,227-12-0 was the difference which thus became payable by the respondent. The appellant instituted this suit on 18th November 1921. The lower appellate Court held that the suit should have been brought within three years from the day after 8th September 1918, and was therefore time barred.

10. Mr. Shingne for the appellant contends that the period of three years should be computed from 18th November 1918. He relies upon Article 65 of the schedule to the Limitation Act, and contends that the respondent committed-a breach of his promise on 18th November 1918, when he had to pay for and take delivery of the eleven bales. This argument in my opinion, ignores the fact that on 18th November, the transaction was not outstanding. It was settled and closed on 8th September, previously. The liability of the respondent in respect of the transaction was then ascertained and settled. The original transaction became merged in the subsequent transaction. The amount found due became payable immediately and the period of three years would, in my opinion, commence from 8th September 1918.

11. In Chandulal v. Sidhruthrai (10) Jenkins, C.J, in dealing with the nature and effect of cross contracts under the pakki adat system, states that when the cross contracts are effected the liability is treated as balanced and adjusted. In Bhagwandas v. Kanji , the learned Chief Justice says that a contract between a pakka adatia and his constituent is one of employment for reward. At p. 217 (of 30 Bom.) he remarks

“I do not any that there is no relation of principal and agent between the parties at any stage; there may be up to a point.”

12. He is inclined to limit the agency to the earlier stages in the transaction when, e.g, the rata at which goods are to be purchased or sold is agreed upon.

13. When the transaction is settled the constituent is immediately, in my opinion, liable to the pakka adatia in respect of the difference. That liability, in my opinion, does not depend on the pakka adatia proving actual loss or damage to himself as he would have to do in an ordinary agency. He is entitled, if he so chooses, to appropriate the contracts to himself. The constituent is not interested in the pakka adatia's transactions with third parties in pursuance of his employment as pakka adatia. The pakka adatia is not bound to disclose those transactions to the constituent. Article 83 of the schedule to the Limitation Act has, in my opinion, no applicability to the case.

14. The judgment of the lower appellate Court, in my opinion, is correct. The appeal should be dismissed with costs.

Fawcett, J.:— In view of this difference of opinion the case will have to be referred to another Judge or other Judges for decision under section 98(2) of the cpc, on the point of law on which we differ, viz., whether the plaintiff's suit is time barred.

15. The case was next heard, by a Bench composed of Patkar and Baker, JJ.

Patkar, J.:— This is a suit brought by the plaintiff to recover from the defendant a sum of money as damages on the allegation that the defendant purchased through the plaintiff eleven bales of cloth at Rs. 2-12-6 per lb. on 20th August 1918. The defendant, on 7th September 1918, sold five bales through the plaintiff, and on 8th September, sold six bales, and it is alleged that in the transaction of the eleven bales the defendant was bound to pay the plaintiff loss to the extent of Rs. 479-13-0.

16. In the suit the plaintiff also claimed that the defendant had entered into an additional transaction of purchase with him with regard to five bales. The learned Subordinate Judge held the transaction proved, but the lower appellate Court held that the transaction was not proved. We are therefore concerned only with the transaction of eleven bales of cloth purchased by the defendant through the plaintiff on 20th August 1918.

17. The question of limitation was not raised in the trial Court, and the defendant in his written statement admitted the claim with regard to Rs. 479-13-0 in respect of the transaction relating to the eleven bales. On appeal the learned District Judge held that limitation ran from 8th September 1918, on the ground that on that day the plaintiff could know what amount the defendant had to pay to him as damages. He therefore dismissed the plaintiff's suit.

18. On second appeal the case came before Fawcett and Mirza, JJ. Fawcett, J., was of opinion that the article of limitation applying to the present case was Article 83, Lim. Act. Mirza, J., was of opinion that Article 88, Lim. Act, had no applicability to the present case, but, without specifying the article of the limitation act applicable to the case, held that when there was a cross-contract entered into by the plaintiff on behalf of the defendant the liability was settled, and the liability did not depend on the pakka adatia proving actual loss or damage to himself. In view of this difference of opinion the case was referred to this Bench under Section 98, Clause (2) of the CPC.

19. The question therefore arising in the present case is which article of the limitation act applies to the facts of the present case. According to the decision in Bhagwandas Parasram v. Burjorji Ruttonji , when a commission agent enters into a transaction on behalf of his constituent be becomes entitled to be indemnified by his employer against the consequences of the acts done by him unless those acts are unlawful. To the same effect is the decision in the case of Tika Ram v. Daulat Ram (11). The commission agent therefore has a right to be indemnified in respect of the transactions entered into on behalf of his constituent.

20. Under those circumstances we think Article 83, Lim. Act, would apply. This view is accepted in the cases of Kadari Pershad v. Har Bhagwan (12), Munshi Ram v. Bhagiuan Das (13) and Firm Kirpa Ram v. Firm Sawan Mal, A.I.R 1927 Lah. 826. To the same effect are decisions in Manghi Ram v. Ram Sam Das-Maman Chand , Abdul Aziz Khan v. Mahomad Bakhsh and Mahomed Mazaharal Ahad v. Mahomad Azimuddin Bhuian where the view taken in Kandaswamy Pillai v. Avayambal is dissented from. In Kandaswamy's case the Madras High Court appears to have held that the agent's right to indemnification arises from the statute law, i.e, Section 222 of the Contract Act, and is not a part of the agency contract. We think that the right to indemnification though recognized by statute is the necessary consequence of the agency contract. The contract to indemnify under Article 83, Lim. Act, need not be by express stipulation, and may be either imposed by statute or implied or inferred in virtue of the jural relations of the parties: see Ram Barai Singh v. Mohendro Prosad (14).

21. We think that a suit by a commission agent to recover loss on the transactions entered into on behalf of his constituents is governed by Article 83, Lim. Act. Article 65, Lim. Act, would not apply unless there is an agreement between the parties to pay the loss immediately on its being ascertained; and in the absence of any specified time or specified contingency, Article 65 would not apply. Under Article 83, Lim. Act, the time would begin to run when the plaintiff is actually damnified. It is urged on behalf of the respondent, relying on the case in Chandulal v. Sidhruthrai , that when cross contracts are entered into by a commission agent the liability on the original contract must be considered to have been balanced and adjusted. On the other hand, it is contended that the time ought to begin to run from the vaida date which in this case would be 18th November 1918. It is further urged that in the books of the plaintiff the account is written on 19th November 1918, i.e, the day after the vaida day. Incidents of the custom relating to pakki adat have been fully dealt with in Bhagwandas v. Kanji . It may be that when the commission agent allocates the cross-contracts to himself it might be said that he is damnified on the day when the cross-contracts were entered into. If, on the other band, he: enters cross-contracts with others, it cannot be said that the loss has necessarily occurred to the commission agent on the day on which such cross-contracts were entered into. There is no evidence in the present case to show when as a matter of fact the plaintiff commission-agent was damnified. There is no dispute with regard to the amount due to the plaintiff, viz., Rs. 493-13-0. We think therefore, that it is desirable that we should send down an issue in this case on the following point:

When was the plaintiff actually damnified?

22. Both the parties will be allowed to lead evidence on the point. Finding will be returned within two months. (On return of the finding on the issue Patkar and Baker, JJ. delivered the following judgment on 12th March 1931.)

Patkar, J.:— The case was sent down for a finding on the issue as to the date on which the plaintiff was actually damnified. The finding of the lower appellate Court is that the plaintiff was actually damnified on the vaida day, viz., on 18th November 1918. The suit was brought on 18th November 1921. Therefore the plaintiff's claim is within time.

23. It is agreed on both sides that the amount due to the plaintiff would be Rs. 479-13-0. The decree of the lower appellate Court will be reversed, and a decree passed in favour of the plaintiff for Rs. 479-13-0 with proportionate costs. The rest of the claim will be dismissed with costs.

P.N/R.K

24. Order accordingly.