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AMICUS AI
Citation Codes
Equivalent Citations
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Case Number
Attorney(S)
  • R.B Kotwal, for the appellants.
  • V.S Desai, for the respondents.
Judges
  • Mr. Dixit, J.
Acts
  • provisions contained in s. 76 of the Transfer of Property Act.
  • provisions of s. 76 of the Transfer of Property Act.
  • art. 36 of Schedule II of the Limitation Act
  • article 120 of the Indian Limitation Act
  • article 36 of the Indian Limitation Act
  • art. 120 of the Indian Limitation Act.
  • s. 76 of the Transfer of Property Act
  • INDIAN LIMITATION ACT
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • R.B Kotwal, for the appellants.
  • V.S Desai, for the respondents.
Judges
  • Mr. Dixit, J.
Acts
  • provisions contained in s. 76 of the Transfer of Property Act.
  • provisions of s. 76 of the Transfer of Property Act.
  • art. 36 of Schedule II of the Limitation Act
  • article 120 of the Indian Limitation Act
  • article 36 of the Indian Limitation Act
  • art. 120 of the Indian Limitation Act.
  • s. 76 of the Transfer of Property Act
  • INDIAN LIMITATION ACT
See more information ...
Smart Summary

Summary of Opinion — Dixit, J.

Factual and Procedural Background

The plaintiffs (children of Rama) sued the defendants (grandchildren of Eknath) to recover Rs. 550 with future interest and costs, alleging wrongful pulling down of a mortgaged house and consequent loss. The factual background in the opinion is as follows:

  • Two possessory mortgages were executed by Rama in favour of Eknath: one on October 30, 1880 for Rs. 600 and another on July 5, 1889 for Rs. 50.
  • In 1944 the plaintiffs filed a suit for redemption (suit No. 555 of 1944). On April 18, 1946 there was a decree for redemption directing the plaintiffs to pay Rs. 650 to the defendants.
  • The plaintiffs alleged that the mortgaged house was wrongfully pulled down by the mortgagees while in possession and that the materials were used by the mortgagees to build their own house.
  • Plaintiffs stated in the earlier redemption suit that they would bring a separate suit for damages; they later filed the present suit on February 24, 1947, claiming Rs. 550 and stating the date of cause of action as August 28, 1946 (when a notice was allegedly given and refused).

Procedural history:

  • The defendants pleaded, inter alia, that the suit was time-barred under Order II, Rule 2 of the Code of Civil Procedure (CPC).
  • The trial Judge raised a preliminary issue whether the suit was barred under Order II, r. 2 CPC, answered it in the affirmative and dismissed the suit.
  • The plaintiffs appealed to the District Court (Extra Assistant Judge, Poona), which set aside the trial Court's decree and remanded the suit, holding the suit was not barred under Order II, r. 2.
  • On remand, the trial Judge gave plaintiffs a decree for Rs. 650 with costs and interest. On appeal from that decree, the Assistant Judge (appellate) dated September 16, 1950 allowed the defendants' appeal, set aside the trial Court's decree and dismissed the plaintiffs' suit, holding that although plaintiffs were entitled to Rs. 200 as damages, the claim was time-barred.
  • The plaintiffs prosecuted this second appeal to the court whose opinion is summarized here.

Legal Issues Presented

  1. Whether the plaintiffs' suit for damages is barred by the law of limitation (the only question expressly identified by the Court).
  2. If the limitation question arises, which provision(s) of the Indian Limitation Act apply — specifically whether Article 36 (tort), Article 120 (residuary six years) or Article 116 (registered written contract) govern this claim.
  3. Subsidiary: whether the wrongful act complained of is a tort (governed by Article 36) or an illegal act arising from a mortgagee's failure to perform duties under section 76 of the Transfer of Property Act (governed by Article 120), and whether a separate suit for damages can properly be brought when a redemption suit is pending or has been decided.

Arguments of the Parties

Appellants' (Plaintiffs') Arguments

  • The plaint alleged the mortgagees wrongfully pulled down the house while in possession and used its materials to build their own house, causing loss to the plaintiffs.
  • The plaintiffs asserted they would file a separate suit for damages (as declared in the earlier redemption suit) and filed the present suit on February 24, 1947; they recorded the date of cause of action as August 28, 1946.
  • As to limitation, the plaintiffs and their counsel (Mr. Kotwal) contended that the suit for damages can lie separately and that Order II, r. 2 CPC does not bar the present suit.

Respondents' (Defendants') Arguments

  • The defendants contended the suit was barred under Order II, r. 2 CPC (i.e., a multiplicity of suits objection) and that the claim was not filed in time under the Limitation Act.
  • On limitation theory, Mr. V. S. Desai for the defendants argued that if the suit is considered as seeking damages for a tortious act, Article 36 of the Limitation Act would apply (and, if the alleged tort occurred circa 1937, the claim would be time-barred).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Anandrao v. Bhikaji Principle that liability of parties in a redemption suit should be decided once in that suit; mortgagee's liability to account for properties in his possession should be determined in the redemption suit. The Court regarded this principle as correct and used it to explain why, in principle, a mortgagor should generally have liabilities settled in the redemption suit rather than by multiplicity of subsequent suits. However, because of an earlier remand order in the present case (not appealed by defendants), the Court held the defendants could not now contest the right to bring a separate suit.
Sivachidambara Mudaliar v. Kamatchi Ammal The Madras High Court's view that section 76 of the Transfer of Property Act provides a cumulative remedy and does not bar other remedies available to the mortgagor; and the proposition that for torts to immoveable property Article 36 runs from date of tort. The Court expressly disagreed with the proposition that s. 76 is merely cumulative and not intended to bar other remedies. The Court distinguished acts by mortgagee in possession as not ordinary torts but as acts governed by s. 76, and therefore held Article 36 inapplicable in the mortgagor-mortgagee context, preferring Article 120 instead.

Court's Reasoning and Analysis

The Court addressed limitation as the sole question on appeal and proceeded step-by-step:

  1. Identification of potentially applicable Limitation Act provisions: the Court considered Article 36 (suits for compensation for tort to immovable property), Article 120 (residuary six-year period), and Article 116 (breach of registered written contract). Article 116 was ruled out because the contract was not produced.
  2. Examination of the factual character of the alleged wrong: The plaintiffs alleged the mortgagees pulled down the house; the first plaintiff's evidence supported that. However, the lower appellate Court found the house fell of its own accord; the Court accepted that finding of fact.
  3. Consideration of the procedural question whether a separate suit for damages may be maintained alongside a redemption suit: The Court acknowledged the principle (supported by Anandrao v. Bhikaji) that liabilities in a redemption suit should generally be determined in that suit to avoid multiplicity of proceedings, and that a mortgagor's claim against a mortgagee for loss arising from the mortgagee's conduct can be settled when accounts are taken in the redemption suit under section 76 of the Transfer of Property Act.
  4. However, the Court found that an earlier order by the Extra Assistant Judge had held that the present suit was not barred by Order II, r. 2 CPC, and the defendants did not appeal that order. Under section 105(2) CPC that unappealed remand order became conclusive, preventing the defendants from contesting that a separate suit might lie. Consequently the Court could not now permit defendants to rely on Order II, r. 2 CPC to bar this suit.
  5. Characterisation of the wrong as tort or as an illegal act under s.76: The Court held that acts by a mortgagee in possession are not properly characterised as torts; rather, they are illegal acts contrary to the duties imposed on the mortgagee by section 76 of the Transfer of Property Act. Section 76 imposes duties (e.g., management prudently, not committing acts destructive of the property) and provides that failure may result in debit when accounts are taken under a decree. Therefore, such a claim is governed by the residuary Article 120 (six years), not Article 36.
  6. Application of limitation to the facts: The first plaintiff's evidence placed the house's fall about 9–10 years before 1947 (circa 1937). If Article 36 applied (tort), the suit would be out of time. But under Article 120 the limitation is six years from accrual of the right to sue; the Court held the plaintiffs' right to claim this loss accrued when they filed the redemption suit and demanded redemption in 1944, so the present suit (filed in 1947) falls within six years of 1944. The Court also noted that the plaintiffs' stated date of cause of action (August 28, 1946) was not the correct accrual date for limitation purposes.
  7. Quantum: The lower appellate Court had found the plaintiffs' loss equal to the price of the materials of the house, assessed at Rs. 200. The present Court accepted that assessment and awarded Rs. 200.

Holding and Implications

APPEAL ALLOWED.

Core holdings and immediate consequences:

  • The decree of the lower appellate Court (which had dismissed the plaintiffs' suit as time-barred while allowing Rs. 200 in principle) is set aside.
  • There is a decree in favour of the plaintiffs for a sum of Rs. 200, with interest at 4% per annum from the date of suit to the date of payment.
  • Costs: the plaintiffs shall recover their costs from the defendants in proportion to their success throughout, and the plaintiffs shall pay the defendants the costs in proportion to their failure throughout (as articulated in the judgment).

Broader implications: The Court expressed the legal view that wrongs committed by a mortgagee in possession are to be treated under section 76 of the Transfer of Property Act (and therefore as governed by Article 120 of the Limitation Act) rather than as independent torts governed by Article 36. The opinion also emphasised the finality effect of an unappealed remand order under section 105(2) CPC. The judgment did not frame the outcome as establishing a wholly novel precedent beyond applying and reconciling existing authorities.

Appeal allowed.
G.N.V
Show full summary ...

    Genuji Ramji Bandkhele v. Murlidhar Laxman Nirhale

    Dixit, J.:—

    This appeal arises from a suit filed by the plaintiffs-appellants to recover from the defendants-respondents a sum of Rs. 550 with future interest and costs.

    On October 30, 1880 a possessory mortgage was executed by one Rama who is the plaintiffs' father in favour of one Eknath, the grand-father of the present defendants in order to secure a sum of Rs. 600. On July 5, 1889 another possessory mortgage was executed by Rama in favour of Eknath in order to secure a further sum of Rs. 50.

    In 1944 the plaintiffs filed a suit for redemption of the two mortgages and on the April 18, 1946 there was a decree for redemption and according to the decree, the plaintiffs were to Pay to the defendants a sum of Rs. 650.

    The mortgaged property was a house and the plaintiffs alleged that the house was pulled down wrongfully by the mortgagees while in possession. When suit No. 555 of 1944 was filed the plaintiffs stated in the plaint that they would file a separate suit to recover damages in respect of the loss occasioned by the falling of the house and the plaintiffs filed this suit on February 24, 1947 to recover a sum Rs. 550, basing their cause of action as on August 28, 1946. The plaintiffs averred that the mortgaged property was pulled down by the defendants' father and grand-father and that the materials of the house were used by them for the construction of a house of their own. It was alleged that in that way the mortgagees had unauthorisedly and illegally disposed of the mortgaged property. It was further alleged that the mortgagees had, as possessory mortgagees, a statutory duty which they had avoided to fulfil and in that way the plaintiffs had been put a great loss. In paragraph 4 of the plaint the date of the cause of action was stated to be August 28, 1946 when the plaintiffs made, by notice, a claim against the defendants which the defendants refused to comply with.

    The defendants filed a written statement, raising various contentions. It was contended inter alia, that the suit was barred under O. II, r. 2 of the Code of Civil Procedure and that the suit was not in time.

    The learned trial Judge raised a preliminary issue which was whether the suit was barred under Order II, r. 2 of the Code of Civil Procedure and answering the issue in the affirmative, dismissed the plaintiffs' suit. From the decree made in the suit the plaintiffs went in appeal before the District Court, Poona, and the learned Extra Assistant Judge set aside the decree of the trial Court and remanded the suit for further hearing according to law, holding that the suit was not barred under Order II, r. 2.

    Upon the suit going back to the trial Court, the learned trial Judge gave the plaintiffs a decree for Rs. 650 with costs of the suit and interest at 4 per cent on the aforesaid amount from the date of suit to the date of satisfaction. On appeal from that decree, the learned Assistant Judge, by his judgment, dated September 16, 1950, allowed the defendants' appeal, set aside the decree of the trial Court and dismissed the plaintiffs' suit, holding that although the plaintiffs were entitled to a sum of Rs. 200 by way of damages, the plaintiffs' claim was not in time. From the appellate decree the plaintiffs have come up in second appeal.

    Upon this appeal, the only question for decision is whether the plaintiffs' suit is barred by limitation. Various articles under the Indian Limitation Act have been suggested as being applicable to the facts of this case. It is said that article 36 of the Indian Limitation Act will apply. But it is clear that article will apply if the suit is based upon a tortious act. It is next suggested that article 120 of the Indian Limitation Act will apply. That article is a residuary article and applies when there is no specific period of limitation fixed under the Indian Limitation Act and the period is six years from when the right to sue accrues. One other article is suggested as being applicable, which is article 116 and article 116 applies to a case where there is a breach of a contract in writing registered. Now, in this case the contract between the parties has not been produced and, therefore, article 116 is, I think, out of the question. The only articles which are then required to be considered are arts. 36 and 120 of the Indian Limitation Act.

    Now, the plaintiffs in the plaint alleged that the mortgaged property was pulled down by the mortgagees in possession. The first plaintiff gave evidence at the trial and his evidence was that the house was felled by the father of the defendant Murlidhar, that it did not fall of its own accord and the house was pulled down and the mortgagee built his own house about 9 or 10 years back. In his evidence he further stated that in the former suit No. 555 of 1944 the Court had not given permission to file a separate suit in respect of the allegation made by him in the present suit.

    Now, as regards suit No. 555 of 1944, it was a suit brought by the present plaintiffs against the defendants for redemption of the mortgages. In that suit there was a preliminary decree. In the previous suit the plaintiffs had stated that they would bring a separate suit against the defendants for damages in respect of the loss occasioned by them to the mortgaged property.

    The question, therefore, arises whether a mortgagor, having brought a suit for redemption, can bring another suit claiming damages in respect of the mortgaged property. It seems to me that on principle a mortgagor can bring only one suit. In a suit for redemption the mortgagor can ask the mortgagee to have the mortgage redeemed and to deliver the mortgaged property upon payment of the mortgage amount due to the mortgagee. In this instance what happened was that while the mortgagees were in possession, the house fell down. According to the plaintiffs it was pulled down by the mortgagees. According to the finding of the lower appellate Court, the house fell down of its own accord, i.e, in the natural course of events. I must, in the circumstances accept the finding of the Court below, viz., that the house was not pulled down by the mortgagees while in possession.

    Now, Mr. Kotwal contends that this suit for damages can lie and the bar of Order II, r. 2 does not apply. Mr. V.S Desai on behalf of the defendants contends that on the footing that this suit is to enforce the plaintiffs' claim in relation to a tortious act committed by the defendants, the present suit will lie. But if the suit is a suit to recover damages by reason of the loss occasioned by the mortgagees, then only one suit will lie. In this connection he relies upon the principle established in case of Anandrao v. Bhikaji.(3) Sir Norman Macleod says as follows (p. 980):

    “Now the liability of the parties to the mortgage in a redemption suit can only be decided once, and if this decree were to stand, the plaintiff would get back on payment of the mortgage money only the Survey Numbers in the mortgagee's possession. He would then, according to the decision of the lower appellate Court, be relegated to file a number of suits against persons in possession of those lands which the mortgagee has not restored, and if he failed to get possession, the question would arise whether he could have recourse to the mortgagee for damages. But certainly it is not the policy of the Code to allow such proceedings. The question what is the liability of the mortgagee to account for the properties of which he got possession, must be determined in this suit, and if the mortgagee will not give back possession of the lands, of which he was given possession, then he must pay for them, for he is liable for the restoration of the lands which have got into the hands of strangers”.

    With respect, I think, this is the correct principle. A contrary view appears to have been taken in Sivachidambara Mudaliar v. Kamatchi Ammal,(4) where the learned Judges of the Madras High Court observed as follows (p. 73):,

    “As regards s. 76 of the Transfer of Property Act we are clearly of opinion that it provides a cumulative remedy, and is not intended to operate as a bar to any other remedy which the mortgagor might have 1953 under the law”.

    With respect; I am unable to concur in this principle. A mortgagee in possession is bound by the provisions contained in s. 76 of the Transfer of Property Act. By clause (a), he must manage the property as a person of ordinary prudence would manage it if it were his own and by clause (e), he must not commit any act which is destructive or permanently injurious to the property. The last part of s. 76 providing that:

    “If the mortgagee fails to perform any of the duties imposed upon him by this section, he may, when accounts are taken in pursuance of a decree made under this chapter, be debited with the loss, if any, occasioned by such failure”.

    This last part of s. 76 suggests that the liability of the mortgagee can be settled when accounts are taken in pursuance of a decree made under Chapter IV. It seems to me that if loss is occasioned by the mortgagee's default in the performance of the duties imposed upon him by the section, the amount of the loss should be determined in the same suit. In my view, the liability of the mortgagee to account to the mortgagor for the loss sustained by the mortgagor on account of the non-observance of the duties imposed upon him by s. 76 must be determined and settled in the suit brought by the mortgagor for redemption.

    However that may be, this question does not strictly arise for decision because at a previous stage of the proceedings the learned Extra Assistant Judge took the view that this suit of the plaintiffs was not barred under Order II, r. 2 of the Code of Civil Procedure. The defendants did not appeal from that order and, in my opinion, the order has become conclusive in view of s. 105 sub-s. (2) of the Code of Civil Procedure, which provides that:

    “Notwithstanding anything contained in sub-s. (1), where any party aggrieved by an order of remand made after the commencement of this Code from which an appeal lies does not appeal therefrom, he shall thereafter be precluded from disputing its correctness”.

    Therefore, although I do not agree with the view taken by the learned Judge that a separate suit can lie, it is not now open to the defendants to contend that a separate suit will not lie even if the view be that the suit is a suit which arises out of a contract.

    Mr. Desai, however, contends that the suit is a suit to recover damages arising out of a tortious act. This is suggested by the language of the plaint. This is also fortified by the evidence which the first plaintiff gave at the trial. Here again, in my opinion, the true view would appear to be that when a mortgagee is in Possession any which he does cannot be said to be an act arising out of a tort. A mortgagee in possession has a right to remain in possession and if he commits an act which is illegal, the act is not a tortious act but is only an illegal act and is attracted by the provisions of s. 76 of the Transfer of Property Act. Mr. Desai strongly relies upon the view taken by the Madras High Court in Sivachidambara Mudaliar v. Kamatchi Ammal,(5) in which the last part of the head-note runs as follows:

    “In suits for compensation for tort to immoveable property, the period of limitation prescribed in art. 36 of Schedule II of the Limitation Act runs from the-date of the tort and not from the time when the plaintiff has knowledge of such tortious act”.

    In that case the act which was alleged to be tortious was an act of cutting trees. The trees were cut in about 1901 and it was held that the suit for damages was governed by art. 36. In my opinion, when the relationship is that of a mortgagor and mortgagee, it is, I think, wrong in principle, to say that any act which is committed by the mortgagee in possession is a tortious act. In my opinion, it is an act which is contrary to the express provisions of s. 76. Therefore, this suit which is a suit for compensation for the loss occasioned to the plaintiffs by the wrongful act of the mortgagees in possession is a suit which would not be governed by art. 36 but would be governed by art. 120 of the Indian Limitation Act. According to the evidence of the first plaintiff, the house fell down some 9 or 10 years before 1947 when he gave evidence. This means that the house fell down in about 1937. If the suit is governed by article, 36, then the suit is clearly out of time. But if the suit is governed by article 120, then the suit is not barred by the law of limitation because the plaintiffs' cause of action would be the date when the plaintiffs demanded redemption which was in 1944. The present suit is admittedly within six years from 1944. The plaintiffs stated the date of the cause of action as August 28, 1946. But, in my opinion, that is not the correct date when the cause of action arose because the plaintiffs had a right to claim the amount of loss when the plaintiffs filed the former suit and since there is no bar of Order II, r. 2, the present suit is well within time. The lower appellate Court has found that the amount of the loss is the price of the materials of the house which fell down. That amount has been estimated at Rs. 200. The plaintiffs will, therefore, be entitled to a decree for that amount.

    The result is that this appeal will be allowed, the decree of the lower appellate Court set aside and there will be a decree in favour of the plaintiffs for a sum of Rs. 200 with interest on that amount at 4 per cent from the date of suit to the date of payment. The plaintiffs shall recover their costs from the defendants in proportion to their success throughout and the plaintiffs shall pay the defendants the costs in proportion to their failure, also throughout.

    Appeal allowed.
    G.N.V
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    Comments

    Genuji Ramji Bandkhele v. Murlidhar Laxman Nirhale
    (Dec 16, 1953)