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  • Madgavkar
  • Baker, JJ.
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  • Madgavkar
  • Baker, JJ.
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Smart Summary

Summary of Opinion — Madgavkar, J. (with Baker, J.)

Factual and Procedural Background

The following narrative is taken from the opinion itself.

In 1903 (22nd September) the deceased Chanvirappa (father of the present plaintiff-respondent) and one Mahalingappa Katti purchased land by registered sale-deed. The defendants-appellants assert that Chanvirappa was benami for them and that the purchase-money was provided by the appellants' father Gangappa.

In 1916 Gangappa (the appellants' father) instituted Suit No. 184 of 1916, impleading several defendants: the plaintiff-respondent's uncle (No. 1), his cousin (No. 2), the plaintiff-respondent himself represented by his mother Madivalava as guardian (No. 3), and Mahalingappa (No. 4). The plaintiff-respondent was then said, according to the appellants, to be aged 15.

The 1916 suit was referred to arbitration by the parties by a reference made without Court sanction. The award (Ex. 78) was in favour of Gangappa, and on that award a decree was passed on 29th September 1917 in favour of Gangappa.

On 15th October 1923 the present plaintiff instituted the present suit to set aside the 1917 decree. The opinion records, verbatim, that the plaintiff "was born on 10th October 1930" in the same sentence describing the 1923 suit; the opinion itself contains that statement.

The grounds pleaded in the 1923 suit were: (1) fraud, (2) negligence, and (3) want of Court sanction to the reference under Order 32, Rule 7, Civil Procedure Code (CPC). The defendants denied these allegations and pleaded limitation.

The trial Court found that fraud was not proved but that there was negligence on the part of the plaintiff's mother; it held that the reference, award and decree were void for want of the required sanction under O. 32, R. 7; and it held that the suit was not barred by limitation applying Article 120 of the Limitation Act, with the right to sue accruing when the plaintiff first learned of the decree.

Legal Issues Presented

  1. Whether the decree passed on the basis of an arbitration award made pursuant to a reference that lacked Court sanction under Order 32, Rule 7 CPC was valid or void.
  2. Whether the present suit to set aside the 1917 decree was barred by limitation — specifically, when the right to sue accrued for the purposes of Article 120, Limitation Act (i.e., at the date of the decree in 1917, at the date the decree came to the plaintiff's knowledge, or at some later date when the defect became known).

Arguments of the Parties

Appellants' Arguments

  • The appellants contended that even if Article 120 applies, the right to sue accrued from the date of the decree (29th September 1917), so the suit instituted on 15th October 1923 is time-barred.
  • They argued that where the legislature intended that time should begin to run from the date of knowledge it expressly provided so (citing Articles 90–92 as examples), which is not the case in Article 120 — implying Article 120 does not depend on knowledge.

Respondent's Arguments

  • Mr. Desai for the respondent submitted that the 1916 proceedings proved at least a fraud upon the Court if not a fraud on the plaintiff, and that in any case the decree in 1916 was void for want of the Court's sanction under O. 32, R. 7 CPC.
  • The respondent argued that if the decree was void for want of sanction, time could not begin to run against the plaintiff until the decree was brought to his notice — which occurred on 27th July 1922 by notice in darkhast No. 174 of 1922 — and therefore the present suit (filed 15th October 1923) was within the statutory period under Article 120.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ottappurakkal Thazhate v. Cherichil Pullikhal Held that the right of junior members of a tarwad to sue accrues the moment the document is completed and not when the plaintiff obtains knowledge of it (i.e., accrual upon completion rather than knowledge). The court noted this case was relied on by the appellants but observed that a tarwad is a peculiar institution (members usually resident) and that such a principle may not be generally applicable to the present facts; it did not treat the case as controlling here.
Cowasji N. Pochkhanawalla v. R.D. Setna This was a case of a settlor who sued to recover property he had settled by invalid trusts; the principle is that when the settlor is aware at the moment of creating the instrument, the question of accrual on knowledge does not arise. The court observed that the present question could not arise in the settlor's case because the settlor is immediately aware of the transaction; the decision was not treated as directly applicable to the facts before the court.
Bolo v. Koklan The Privy Council held (as quoted): "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." The court applied this principle to the present case, holding that there was no infringement nor clear and unequivocal threat to infringe the plaintiff's rights until notice of 27th July 1922; therefore the right to sue accrued only then for Article 120 purposes.

Court's Reasoning and Analysis

The following summarizes the court's step-by-step legal analysis as stated in the opinion.

  1. Validity of the reference and decree under O. 32, R. 7 CPC:
    • The court emphasised that the provisions of Order 32, Rule 7 are imperative. Because the reference was made without the sanction of the Court, the reference, award and the resulting decree were held to be void.
    • The court therefore found it unnecessary to decide fully on the question of fraud, although it noted multiple indicia of lack of bona fides in the conduct of Gangappa (e.g., omission to show the minor's name in the reference and the award, and representing the minor as his mother in those documents), and observed that an inference of fraud upon the Court could possibly be drawn on those facts.
  2. Possession and knowledge facts:
    • The respondent's mother, and on her death the respondent, were in actual possession of the property.
    • The mother died on 4th November 1918. The respondent applied for mutation on 1st December 1920 in his own favour.
    • The appellants had earlier filed a darkhast in 1920 which was dismissed in October 1920 (no bhatta paid, no notice issued). The appellants' second darkhast was given on 21st June 1922 and notice was ordered to issue on 27th July 1922 (darkhast No. 174 of 1922); it was at that point the existence of the 1917 decree was apparently first brought to the respondent's notice.
    • There is an assertion in the record that the respondent sold his property in September 1923 but the court records there is no evidence on that point.
  3. When does the right to sue accrue under Article 120 (Limitation Act)?
    • The court identified three possible dates for accrual under Article 120:
      1. When the decree is passed (29th September 1917);
      2. When the decree comes to the knowledge of the plaintiff; and
      3. When the defect (e.g., gross negligence or lack of sanction) becomes known to him.
    • The court reasoned that treating the first date as the accrual date would often result in hardship, where a decree is obtained against a person before he ever knows of it; this would be a greater hardship than limitation aims to prevent.
    • The court reviewed the authorities relied upon by the parties. It explained that Ottappurakkal (tarwad case) and Cowasji Pochkhanawalla (settlor case) involve special factual contexts in which immediate accrual was held appropriate, and therefore those decisions were not controlling here.
    • The court relied principally on the Privy Council decision in Bolo v. Koklan, quoting its formulation that no right to sue exists until accrual and infringement or at least a clear and unequivocal threat to infringe the right.
    • Applying that principle to the facts, the court concluded there was no infringement nor even a clear and unequivocal threat to the plaintiff's rights until after the notice of 27th July 1922 (the ordered notice in the second darkhast). Only then did a threat to execute the 1917 decree against the plaintiff arise, and thus only then did the right to sue accrue for Article 120 purposes.
  4. Conclusion on limitation:
    • Because the right to sue accrued in or after July 1922, the suit instituted on 15th October 1923 was within the statutory period under Article 120. Therefore the suit was not barred by limitation.
  5. Concurrence of Baker, J.:
    • Baker, J. addressed the same limitation point, accepted that O. 32, R. 7 absence of sanction rendered the 1917 reference, award and decree invalid, and agreed that Article 120 applied.
    • Baker, J. similarly held that there was no knowledge or clear threat until 1922 when notice was issued, quoted the Privy Council in Bolo v. Koklan, and reached the same conclusion that the suit was not time-barred.

Holding and Implications

Holding: The court dismissed the appeal. The opinion states, in its operative result, that the appeal fails and must be dismissed with costs; the concluding line reads simply: "Appeal dismissed."

Implications (direct effect on the parties):

  • The trial Court's conclusion that the arbitration reference, award (Ex. 78) and the 1917 decree were void for want of sanction under Order 32, Rule 7 CPC is upheld in substance by the appellate discussion (the absence of sanction was treated as decisive).
  • The appellate court held that the plaintiff's suit filed on 15th October 1923 to set aside the 1917 decree was within the period of limitation under Article 120 because the right to sue accrued only when the plaintiff was put on notice of the decree (27th July 1922).
  • The appeal by the defendants-appellants is therefore dismissed with costs, leaving the plaintiff-respondent's challenge to the 1917 decree effective.

No broader precedent or expansive rule beyond the application of existing authorities (notably Bolo v. Koklan) is articulated as a novel legal principle by the court in this opinion. The decision's practical consequence is limited to the adjudication between these parties on the validity of the 1917 decree and the operation of Article 120 in the facts of this case.

Show full summary ...

    Sadashivappa Gangappa v. Sangappa Chanvirappa Mahamadkoti

    Madgavkar, J.:— This is an appeal by the defendants against the decree of the First Class Subordinate Judge, Bijapur, in favour of the plaintiff-respondent declaring that the decree in Suit No. 184 of 1916 was not binding on the plaintiff-respondent.

    2. The relevant facts are shortly as follows: On 22nd September 1903, the deceased Chanvirappa, father of the plaintiff-respondent, and one Mahalingappa Katti purchased certain land under a registered sale-deed. It is the case for the defendants-appellants that Chanvirappa was benami for themselves, that the money came from the appellants' father Gangappa in a shop in which both had a certain interest. In 1916 the appellants' father Gangappa brought a suit, No. 184 of 1916, impleading as defendants No. 1 the uncle of the present-plaintiff-respondent, No. 2 his cousin, No. 3 being the plaintiff-respondent himself by his mother Madivalava as guardian, No. 4 being the auction-purchaser Mahalingappa. The plaintiff-respondent was then, even according to the appellants, aged 15. That suit was referred to arbitration by the parties by a reference which was made without the sanotion of the Court. And the award, Ex. 78, was in favour of Gangappa, the father of the appellants. On this award a decree was passed on 29th September 1917, in favour of Gangappa, the father of the appellants, and the plaintiff in that suit. On 15th October 1923, the present plaintiff, who was born on 10th October 1930, instituted the present suit to set aside that decree. The grounds set forth on his behalf were first, fraud; second negligence and third, want of sanction of the Court necessary under O. 32, R. 7, in respect of the reference. The defendants-appellants denied these allegations and raised the plea of limitation. The trial Court held that fraud was not proved, but negligence only on the part of the mother of the plaintiff-respondent, but on the third point held that the reference, the award and the decree passed in terms of the award were void for want of the necessary sanotion of the Court to the reference under O. 32, R. 7 of the CPC. On the question of limitation it held that the suit was not barred, Article 120 applied and the right to sue accrued when the plaintiff first came to know of the decree.

    3. The finding of negligence has not been seriously questioned before us, nor the view of the trial Court on the ground based on O. 32, R. 7 of the CPC. On the question of limitation however it is argued even if Article 120 applies, the right to sue accrued and time began to run from the date of the decree, i.e, 29th September 1917, more than six years before the present suit, instituted on 15th October 1923, so that the suit was barred by limitation. It was pointed out that wherever the legislature intended that time should begin to run from the date of knowledge of the plaintiff, such as in Articles 90, 91 and 92, the legislature has expressly so enacted in these articles, which is not the case in Article 120.

    4. For the respondent it has been pointed out to us by Mr. Desai that the proceedings in the suit of 1916 prove, if not a fraud on the plaintiff, at least a fraud upon the Court, and that in any case if the decree in the former suit of 1916 was void, as was practically conceded, by reason of the want of sanction of the Court under O. 32, R. 7, time could not begin to run against the plaintiff until the notice on 27th July 1922, in darkhast No. 174 of 1922 by the appellants.

    5. The provisions of O. 32, R. 7, are imperative. The referenoe without the sanotion of the Court and therefore the award and the decree are clearly void. It is not, therefore, necessary to enter deeply into the question of fraud. At the same time there are several indications of lack of bona fides on the part of the appellants' father Gangappa. For instance in the reference the defendants are shown as the present respondent's, uncle and others, so that the fact of a minor being concerned is not on the face of the reference apparent. In the award Ex. 78, again the minor's name is not mentioned, but on the oontrary, the defendant there is shown as his mother Madivalava, and similarly the body of the award makes no mention of the present respondent or his minority with the result that on such an award coming before the Court ordinarily unless the fact that defendant 3 was really not the mother, but the minor represented by the mother was brought to the notice of the Court, a decree might be passed, as apparently it actually was without the Court at any stage of the proceedings being informed of the fact of the minority of defendant 3 in the suit and the necessity for its sanction. Speaking for ourselves we are not clear that on the question of fraud on these facts an inference of fraud upon the Court and therefore upon the minor could not be inferred. However in the view we take of the necessity of sanction under O. 32, R. 7, and the voidness of the decree on that ground, it is not necessary further to consider this question.

    6. On the second point it appears that the respondent's mother, and on her death the respondent have been in possession of the property. The mother died on 4th November 1918 and on 1st December 1920, the plaintiff-respondent applied to the revenue authorities for a mutation of names in his own favour. It was only when the appellants objected to this by reason of their decree and he received the necessary notice referred to above on 27th July 1922, that the existence of the decree in the suit of 1916 was apparently first brought to the knowledge of the respondent. The appellants it is true had filed previous darkhasts in 1920, but no bhatta was paid, no notice was issued, and it was dismissed in October 1920, and it was only in the course of their second darkhast given on 21st June 1922, when notice was ordered to issue on 27th July 1922, against the respondent to show cause why the sale deed as per the award should not be enforced, that the matter came to his notice. He was alleged to have sold his property in September 1923. There is no evidence however on that point.

    7. In regard to Article 120, the right to sue can only accrue on one of three dates in point of cbronologieial order; firstly, when the decree is passed; secondly, when the decree comes to the knowledge of the plaintiff; and thirdly, when the defect, whether gross negligence or lack of sanction of the Court becomes known to him. It is obvious that the first date might well result in a claimant losing his rights by reason of a decree wrongly obtained against him before its existence is ever known to him, a hardship greater in our opinion than the one which limitation is intended to prevent by the ripening of legal lights. The third is not expressly provided for. In Ottappurakkal Thazhate v. Cherichil Pullikhal (1) a case relied on for the appellants, it was held that the right of junior members of a tarwad to sue for a declaration that an alienation by the karnavan is not binding on the tarwad accrues the moment the document is completed and not when the plaintiff obtains knowledge of it. A tarwad however is a peculiar institution. The members are usually, resident therein. It may be that such a document could not ordinarily be passed or at least possession given without the knowledge of the members. Cowasji N. Pochkhanawalla v. R.D Setna (2) was the case of a settlor who sued to recover property which he had settled by invalid trusts. The present question obviously could not arise when at the very moment of the trust the settlor who made it was perfectly aware of its existence. In a recent case, Bolo v. Koklan (3), it was laid down by their Lordships of the Privy Council that in regard to Article 120 (p. 331 of 57 I.A):

    “there can he 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.”

    8. These words may well be applied to the present case. Whatever right the plaintiff possessed, and he was in aotual possession, there was no infringement nor even a clear and unequivocal threat to infringe that right until some time after 27th July 1922, the date of the notice in the second darkhast by the appellants, when they also objected to the mutation of names in favour of the respondent.

    9. We are of opinion that in cases such as the present Article 120 applies, and the right to sue accrues when the defendants threatened the plaintiff with the execution of the decree of 1916. It follows that the present suit is within the statutory period. Accordingly, the appeal fails, and must be dismissed with costs.

    Baker, J.:— The only point that has been raised in this appeal is the question of limitation, it being admitted that in view of the total absence of any sanction by the Court on behalf of the minor the reference to arbitration, and the award, and the decree of 1917 cannot be upheld. It is common ground that Article 120, Lim. Act, will apply to the present case, and the only question is when the cause of action accrued to the plaintiff, and it is contended that the cause of action accrued at the date of the decree, which was on 29th September 1917 and therefore the present suit brought on 15th October 1923, was time-barred. Admittedly the plaintiff was in possession and no attempt was made to execute the decree of 1917 against him, that is to say, no earnest attempt, and no notice was issued to him until 1922. A reference to the arbitration proceedings will show that the name of the present plaintiff, who was then a minor, did not appear at all in the award before the arbitrators, although it appeared in the decree. There is nothing to show that the plaintiff had any knowledge at all of the existence of this decree until July 1922, when a notice was issued against him to show cause why a sale-deed as provided by the award decree should not be passed, and the present suit was filed immediately after that. It was held by the Privy Council in Bolo v. Koklan that 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. That ruling appears to apply to the facts of the present case. There was no infringement of the plaintiff's right or any clear and unequivocal threat to his rights till the year 1922. This being so, the suit is not barred by limitation. The appeal fails, and must be dismissed with costs.

    P.N/R.K

    10. Appeal dismissed.

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    Comments

    Sadashivappa Gangappa v. Sangappa Chanvirappa Mahamadkoti
    (Feb 12, 1931)