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Smart Summary

Structured Summary of the Opinion: Suit to recover Rs. 460

Factual and Procedural Background

The plaintiff seeks to recover Rs. 460, being purchase money for 2 maus of land that formed part of a larger hypothecated tract. The first defendant had executed a hypothecation bond (25 December 1869) for Rs. 5,000 over certain lands to Srinivasa Ayyangar, who transferred the bond and the debt to the plaintiff by deed dated 21 October 1875. The plaintiff sued on that bond in Suit No. 4 of 1876 in the Subordinate Court of Kumbakonam, obtained a decree for sale (6 April 1876), and became purchaser of the hypothecated lands on 17 August 1876 for Rs. 6,000.

After purchase the plaintiff found that 2 maus of the purchased land had been acquired earlier (1874) by the South Indian Railway Company and that Rs. 460 representing the purchase money for those 2 maus was lodged in the treasury at Kumbakonam under the Land Acquisition Act, being claimed by the first defendant's mother (then alive). The plaintiff applied for payment of the Rs. 460, but was directed (28 February 1880) that the title question should be decided by regular suit.

The plaintiff filed Suit No. 230 of 1880 (September 1880) in the District Munsif's Court of Tiruvadi for a declaration of right to the Rs. 460 and for recovery of that sum. The first defendant (a resident within the Tiruvadi Munsif's jurisdiction) in his written statement said he had assigned his interest in the money to the second defendant (by deed dated 16 April 1880) and disclaimed interest in the suit. The second defendant was brought into the suit and by written statement raised objections as to the Court's jurisdiction and as to limitations and bar under the Civil Procedure Code. The Court of First Instance and the Court of Appeal decided against the second defendant. The second defendant sought Revision on jurisdictional and limitation grounds.

Legal Issues Presented

  1. Whether the suit is, in law, a suit to establish a right or interest in immoveable property (so as to attract the rules in Section 16, Civil Procedure Code) because the money in question represents land acquired under the Land Acquisition Act.
  2. Whether the District Munsif's Court had jurisdiction over the second defendant who does not reside within its local limits and as to whom the cause of action did not arise within those local limits (including the application of Section 20, Civil Procedure Code, and related provisions).
  3. Whether the suit is barred under Sections 42 and 43 (Chapter IV, Civil Procedure Code) because the plaintiff did not, in the original Suit No. 4 of 1876, claim the purchase money.
  4. Whether the claim is barred by limitation (including the application of Articles 95 or 96 of the Limitation Act) because the purchase money was lodged in the treasury since the land acquisition in 1874.

Arguments of the Parties

Pleadings / Second Defendant's Contentions (as set out in written statement)

  • The suit should be treated as one to establish a right or interest in immoveable property because the money represents land and both land and money are outside the Court's local limits.
  • The Court lacks jurisdiction because the second defendant does not reside within its local limits.
  • The suit is barred under Chapter IV, Sections 42 and 43, Civil Procedure Code, because the land was acquired by the Railway Company in 1874 before Suit No. 4 of 1876 was instituted and the purchase money should have been claimed earlier.
  • The suit is barred by limitation.

Plaintiff's Arguments (as presented in the record and at hearing)

  • The relief sought is to declare and recover money (Rs. 460) and not to regain possession of immoveable land; therefore Section 16 (suits to establish rights in immoveable property) does not apply.
  • The rights in the land and any mortgage are transferred to the compensation money under the Land Acquisition Act and the money is in fact moveable property in the treasury though impressed with the trusts of the land it represents.
  • As to jurisdiction over the non-resident second defendant, the plaintiff relies on Section 20, Civil Procedure Code, and notes that the second defendant did not apply to the Court to stay proceedings under that section; thus the plaintiff contended the second defendant should be deemed to have acquiesced in the institution of the suit.
  • The vakalatnama executed by the second defendant and filed authorizing a vakil was relied on by the plaintiff as evidencing acquiescence (even though no specific application was made on that basis).
  • On limitation, the plaintiff maintained he did not become aware of any mistake or fraud as to entitlement to the money until within six years before this suit, invoking Articles 95 or 96 of the Limitation Act to contend the claim is not barred.

Counsel Argument Summaries

  • Mr. Rama Rau (for the appellant / second defendant) argued that Section 20 did not apply to suits governed by Section 176 (as asserted in the proceedings) but only to suits under Section 19.
  • Mr. Bhashyam Ayyangar (for the plaintiff) argued the suit could be brought in more than one Court (where the cause of action arose or where the defendant resided) and maintained that, because the second defendant did not apply to stay proceedings under Section 20, he should be deemed to have acquiesced under the last paragraph of Section 20. He also relied on the vakalatnama as evidence of acquiescence.
  • In reply, Mr. Rama Rau urged that because the second defendant by his written statement objected to jurisdiction, he could not be held to have acquiesced in the institution of the suit against him.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
In re Stewart's Trusts (22 L.J.N.S. 369) Holds that money paid into Court as compensation for land taken under compulsory powers is to be considered as money or personal estate in the hands of the Court impressed with the trusts of the real estate; for questions of entitlement the money may be considered as real estate. The Court relied on this authority to explain that although compensation money may be treated, for entitlement questions, as representing immoveable property, in fact it remains money (moveable). The precedent supported the view that Section 16's test of suits for immoveable property should be applied by reference to the fact that the plaintiff's claim is to recover money, not to reinstate title in land.

Court's Reasoning and Analysis

The Court proceeded through the four contested grounds in sequence and applied statutory interpretation and the factual record as follows.

  1. On whether the suit is for a right or interest in immoveable property (Section 16, Civil Procedure Code):
    • The Court noted the relief sought is a declaration of right to the money and payment of that money to the plaintiff — the action is directed to money and not to the land itself.
    • Under the Land Acquisition Act (Part VII; Section 16 referred to in the opinion), rights in land and mortgages are transferred to the compensation money; the money in the treasury is moveable property albeit impressed with the trusts of the immoveable property it represents.
    • The Court relied on the English authority In re Stewart's Trusts to explain the accepted doctrine that compensation money may be considered as real estate for certain entitlement questions but is in fact money. The Court emphasized that being "considered" as immoveable for some questions does not make the money immoveable in fact.
    • Thus, although entitlement to the money may depend on proof of title to the land, that proof is incidental in this suit to the plaintiff's claim to moveable property (the money). The decision sought will determine entitlement to money, not a substantive determination of title to immoveable property or any interest therein. Accordingly, Section 16 does not oust this Court's jurisdiction.
  2. On jurisdiction related to the second defendant's non-residence and Section 20:
    • The Court identified the cause of action as the denial by the defendants of the plaintiff's title to the money deposited in the Kumbakonam treasury and the second defendant's assertion of title to that money.
    • Although the plaintiff admitted the second defendant did not reside within the Munsif's jurisdiction and that the cause of action did not arise there as regards the second defendant, the plaintiff relied on Section 20 (Civil Procedure Code) because the second defendant had not applied to the Court to stay proceedings under that section.
    • Counsel disputed whether Section 20 applied in the circumstances; Mr. Rama Rau contended Section 20 did not apply to suits governed by Section 176 (argued by him), while Mr. Bhashyam Ayyangar argued the second defendant must be deemed to have acquiesced by failing to apply under Section 20, and the vakalatnama was relied upon as further evidence of acquiescence.
    • The Court stated it could not adjudicate the factual question whether the second defendant in fact acquiesced; however, it interpreted the legislative intention in Section 20 to require that objections to jurisdiction by non-resident defendants under Section 176 (as referred to by the Court) be raised at the first opportunity by an application under Section 20. If not so raised, the defendant is deemed to have acquiesced. The Court found the last paragraph of Section 20 specially applicable to Section 176 and concluded that because the second defendant did not apply under Section 20 he must be deemed to have acquiesced to the Court's jurisdiction.
  3. On the plea that the suit was barred under Sections 42 and 43 (Chapter IV, Civil Procedure Code):
    • The Court examined whether the plaintiff had omitted to include the claim for the purchase money in the earlier Suit No. 4 of 1876. It found the earlier suit was a suit on the hypothecation bond against the first defendant and that the plaintiff was unaware at that time of any claim by the first defendant's mother or of any sale to the Railway Company in 1874.
    • The Court interpreted Section 43 as presuming that an omission to sue on a claim implies prior knowledge of facts giving rise to the claim; because the plaintiff lacked awareness of the alleged sale and the mother's asserted claim, he could not be said to have omitted that claim within the meaning of Section 43, nor to have deliberately relinquished it.
    • Moreover, the Court noted that even if the plaintiff's knowledge had been sufficient, a suit against the mother for declaration of title to the compensation money could not have been joined with the suit on the hypothecation bond because the causes of action against the mother and against the mortgagor (first defendant) were distinct.
  4. On limitation:
    • The Court observed that the money remained in the Taluk Treasury in the name of the first defendant's mother, and that the award of the money to her must have been by mistake or by some asserted claim which was erroneous or fraudulent.
    • The Court found, based on the facts and the grounds of Revision, that the mother had no title to the land or to the purchase money and that it was not alleged she had such title in the revision grounds.
    • Applying Articles 95 or 96 of the Limitation Act, the Court concluded that the plaintiff's cause of action was not barred because the plaintiff did not become aware of the alleged fraud or mistake until within six years prior to the institution of the suit.

Holding and Implications

Holding: The petition for Revision is dismissed with costs.

Implications and direct consequences:

  • The District Munsif's Court's jurisdiction to adjudicate the plaintiff's claim to the Rs. 460 (the compensation money) is upheld: the suit is for moveable money (even if that money is impressed with trusts deriving from the immoveable land) and not a suit to establish a right or interest in immoveable property for jurisdictional exclusion under Section 16.
  • The second defendant, having failed to apply under Section 20, is to be deemed to have acquiesced in the institution of the suit in the Munsif's Court; his plea of want of jurisdiction on the basis of non-residence is therefore rejected by the Court.
  • The suit is not barred by Sections 42 and 43 because the plaintiff was not aware, at the time of Suit No. 4 of 1876, of the facts necessary to give rise to a claim to the purchase money; he did not omit or deliberately relinquish the claim.
  • The claim is not barred by limitation under Articles 95 or 96 of the Limitation Act since the plaintiff became aware of the mistake or fraud within six years before instituting the present suit.

The opinion records the Court's decision to dismiss the revision petition with costs and does not purport to lay down any broader principle beyond the application of the statutes and authorities to the facts of this case.

Show full summary ...

    Venkata Viraragavayyangar v. Krishnasami Ayyangar

    1. This is a suit to recover Rs. 460.

    2. The first defendant executed a bond, dated the 25th December 1869, for Rs. 5,000, hypothecating 2 velis 11 maus of land in the District of South Tanjore to Srinivasa Ayyangar, who transferred the hypothecation bond and right and debt due thereon to the plaintiff' by deed, dated the 21st of October 1875.

    3. Plaintiff filed Suit No. 4 of 1876 in the Subordinate Court of Kumbakonam on the bond against the first defendant, and obtained decree for sale, dated the 6th April 1876, of all the lands hypothecated. On the 17th of August 1876 plaintiff became purchaser of all the hypothecated lands for Rs. 6,000.

    4. Part of the lands so purchased were 151/2 maus in Pattakal Katlai, within the jurisdiction of the Subordinate Court of Kumbakonam. After the purchase, plaintiff discovered that 2 maus out of the 15J maus had been acquired by the South Indian Railway Company in 1874, and that the purchase money (Rs. 460) was lodged in the treasury at Kumbakonam under the Land Acquisition Act as being claimed by the mother (since deceased) of the first defendant, who, it is said, sold the 2 maus to the Railway Company. The plaintiff applied to the Subordinate Judge of South Tanjore for an order to pay him the Rs. 460 purchase money, but by order, dated the 28th of February 1880, it was directed that the question of title thereto should be decided by regular suit.

    5. The suit, No. 230 of 1880, was accordingly filed by the plaintiff in September 1880 against the first defendant for a declaration of right to the Rs. 460 and to recover that sum. The first defendant resides within the jurisdiction of the District Munsif's Court of Tiruvadi, and therefore this suit is filed in that Court.

    6. Originally, the now first defendant, the sole heir of his deceased mother, was the only defendant, but in his written statement he stated that he had executed a deed on the 16th of April 1880 assigning his interest in that purchase money to the now second defendant in satisfaction of a decree, and disclaiming all interest in the suit.

    7. On the 21st January 1881, the second defendant signed a vakalatnama to N. Ramachandra Ayyar, Vakil, authorizing him to present a petition in this suit to he made a party hereto, and represent his claim and submit written statement, etc. The second defendant was made a party to this suit by order of the District Munsif on reading the first defendant's written statement.

    8. The second defendant filed his written statement and thereby raises the question of law--Whether the Court has jurisdiction to try the case--

    (1) because the suit should be treated as one in which the plaintiff sues to establish a right or interest in immoveable property (the money representing the land), and both land and money are outside the local limits of the jurisdiction of the Court;

    (2) because the second defendant does not reside within the local limits of the jurisdiction of the Court;

    (3) the second defendant also contended that this suit is barred under Chapter IV, Sections 421 and 432 Civil Procedure Code, inasmuch as the land was acquired by the "Railway Company in 1874, before the Suit 4 of 1876 was instituted;

    (4) the second defendant contends that the suit is barred by limitation.

    9. The Court of First Instance and of Appeal decided against the second defendant, and he now asks for Revision on the ground that the Court had no jurisdiction to decide the case as pointed out, and also on the two grounds that the suit was barred under Chapter IV, Civil Procedure Code, and by limitation.

    10. First Ground.--Is this a suit to establish a right to, or interest in, immoveable property?--Section 16d, Civil Procedure Code. In terms, it certainly is not, as the relief sought is a declaration of plaintiff's right to the money, and payment of it to him. It is the money alone and not the land in respect of which relief is prayed for. The land is vested in and in the possession of, the Railway Company, discharged of all incumbrances thereon--Section 16 and Part VII of the Land Acquisition Act, 1870. The rights of parties to the land and to any mortgage on or interest in it are transferred to the compensation money. The money paid into the treasury is to be considered as money or moveable property in the treasury impressed with the trusts and obligations of the immoveable property which it represents.

    11. In England, money was paid into Court under the compulsory powers Section 69 of the Land Clauses Act, 1845, as compensation for lands taken which were settled, etc., or subject to incumbrances. In that case, Stuart, V.C. said, "I think that where money has been paid into Court by reason of real estate having been taken under the compulsory powers, and remains in Court, it is to be held as money or personal estate in the hands of, the Court impressed with the trusts of real estate." Again he said: "The money in Court is to be considered, for the purpose of the question as to who was entitled to it, real estate."--In re Stewart's Trusts (22 L.J.N.S. 369).

    12. In that case the question was whether the money paid in as compensation for purchase of land, settled to A for life with remainder to B, passed after the death of A and B to the executor of B or to his heir-at-law; and it was held it went to the heir-at-law, being money impressed with the trust of the real estate bought.

    13. But then it was not held, and could not be held, that the money was real estate. It was to be considered as real estate. Even if the money in this case is to be considered as immoveable property for the purpose of the question as to who is entitled to it, still it is, in fact, money and not immoveable property. It is the fact that is to be dealt with under Section 16, Civil Procedure Code, in order to determine the jurisdiction.

    14. No doubt, the right to the money must depend upon proof of the right of the plaintiff, as mortgagee and purchaser under the decree, to the land.

    15. Such proof, however, will not lead to any determination in this suit of any right to immoveable property or any interest therein, but will lead to a determination of a right to property which is in fact moveable.

    16. The test of jurisdiction is whether the suit is for determination of any right or interest in immoveable property. The decision in this case will be whether or not plaintiff is entitled to the money and not whether he is entitled to the land sold. The title to the land sold is incidental to proof of the right to the money. If a suit was filed on a money bond and the defendant pleaded "no consideration," and if the alleged consideration was an estate outside the Court's jurisdiction, sold by plaintiff to the defendant, and that plaintiff had no title, should not the question of title be determined by the Court before adjudicating on the liability of the defendant to pay the bond? There the question of title would be incidental to the right to sue on the bond. But the jurisdiction to sue on the bond would not thereby be ousted, as the suit would not be for land or an interest in it. We think that the suit is not one within Section 16 for the determination of a right to immoveable property or to any interest therein.

    17. The second question is whether, as the second defendant does not reside within the local limits of the Munsif's jurisdiction, and the cause of action did not arise there, the Court had jurisdiction to try the case.

    18. The cause of action is the denial by the first and second defendants of the title of the plaintiff to the money in deposit in the treasury at Kumbakonam, and the allegation of the second defendant of his title thereto.

    19. The plaintiff admits that the second defendant does not reside within the local limits of the jurisdiction of the Court, and that the cause of action as regards the second defendant did not arise within such local limits. But he relies on Section 20, Civil Procedure Code, as an answer to this ground of appeal of want of jurisdiction it being admitted that the second defendant did not apply to the Court to stay proceedings under Section 20.

    20. Mr. Rama Rau for appellant contended that Section 20 did not apply to suits governed by Section 1763, but only to suits under Section 19.

    21. Mr. Bhashyam Ayyangar contended that this suit was one which might be brought in more than one Court, viz., in the Court where the cause of action arose, or in this Court if leave was given or if the defendant acquiesced in the institution of the suit, or in a Court within whose jurisdiction the second defendant resides. He contended that, as the second defendant did not apply to stay the proceedings under Section 20, he is to be deemed to have acquiesced in the institution of the suit under the last paragraph of that section.

    22. He also relied on the vakalat executed by the second defendant, which was filed, authorizing his vakil to be made a party to the suit, as evidence of acquiescence, though no application was in fact made on his behalf for that purpose.

    23. Mr. Rama Rau, in reply, urged that, as second defendant by his written statement objected to the jurisdiction, he could not be held to have acquiesced in the institution of the suit against him.

    24. We cannot go into the question whether the second defendant did, as a fact, acquiesce; therefore, we cannot, on the one hand, consider the vakalat as evidence of acquiescence, nor, on the other hand, can we consider the plea set up as evidence that he did not acquiesce.

    25. The last paragraph in Section 20 appears to us specially applicable to Section 176, for no acquiescence is necessary to give jurisdiction under Section 16, 18, or 19.4

    26. As the second defendant did not apply under Section 20, he must be deemed to have acquiesced. The evident intention of the Legislature was that the question of jurisdiction over defendants, non-resident, &c, under Section 176, should be raised on the first opportunity, and that, if it was not then raised in the manner pointed out by Section 20, it should not be afterwards raised by plea.

    27. We, therefore, hold that the second defendant is to be deemed to have acquiesced in the jurisdiction of the Court.

    28. The third ground is that this suit is barred by Sections 42, 43, Civil Procedure Code, as the plaintiff did not, in Suit No. 4 of 1876, ask for a declaration of right to the purchase money in Suit 4 of 1876.

    29. That was a suit on foot of the hypothecation bond against the first defendant, and the plaintiff obtained a decree. To that suit first defendant's mother was not a party, as the plaintiff was not aware she claimed any right to the land, or had purported to sell the two maus to the Railway Company. In fact, plaintiff knew nothing of the alleged sale by the first defendant's mother or of the acquisition of the two maus by the Railway Company. He did not, therefore, know that he had, nor was he aware of the facts from which he could have, any cause of action or title to make any claim to the purchase money. The provision in section 43 as to omitting a claim clearly involves the idea that the plaintiff so omitting was, at some time prior to the suit, aware or informed of the claim, or aware of the facts which would give him a cause of action. He, therefore, did not omit, within the meaning of Section 43, to sue in respect of such claim, nor did he designedly relinquish it. Moreover, at the date of the Suit 4 of 1876, first defendant's mother being alive, if plaintiff brought a suit against her for declaration of title and to recover the money, a suit for that purpose could not have been joined with the suit on the hypothecation bond. The cause of action against her would be entirely different from that against the first defendant--the mortgagor.

    30. Fourth Ground.--On the question of limitation. The purchase money is in the Taluk Treasury, even though it may be there in the name of first defendant's mother. It is quite clear that the purchase money must have been awarded to her either by mistake as to her title by the Company, or by mistake on her part of putting forward a claim which she was not entitled to, or by fraud on her part in claiming it when she had no right to it, or by the mistake of the Collector in believing she was entitled thereto.

    31. Upon the facts, there is no doubt she had no title to the land sold, or to the purchase money. Moreover, it is not alleged that she had such title in the grounds for Revision. Whether the money was awarded to her by her fraud or by mistake, it is clear that, under Article 95 or 96 of the Limitation Act, the plaintiff's claim is not barred, as he did not become aware of the fraud or mistake until within six years before this suit.

    32. We think, therefore, that this petition for Revision should be dismissed with costs.

    1 Suit in how to be framed.

    [Section 42 : Every suit shall, as far as practicable, be so framed as to afford ground for a final decision upon the subjects to in dispute, and so to prevent further litigation concerning them.] 2 suit to include the whole of the claim [Section 43: Every suit shall include the whole of the claim; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.

    Relinquishment of part of claim.

    If a Plaintiff omit to sue for, or intentionally relinquish, of claim any Portion his claim, he shall not afterwards sue for the of claim portion so omitted or relinquished.

    Omission to sue for one of several remedies.

    A person entitled to more than one remedy in respect of the same claim may sue for all or any of his remedies; but if he omits (except with the leave of the Court obtained before the first hearing) to sue for any of such remedies, he shall not afterwards sue for the remedy so omitted.] 3 Suit to be instituted where defendants reside or cause of action arose.

    [Section 17b : Subject to the limitations aforesaid, all other suits shall be instituted in a Court within the local limits of whose jurisdiction.

    (b) all the defendants, at the time of the commencement of the suit actually and voluntarily reside, or carry on business, or personally work for gain.] 4 Suit for immoveable property situate in single district, but within jurisdiction of different courts.

    [Section 19 : If the suit be to obtain relief respecting, or compensation for wrong to immoveable property situate within the limits of a single district, but within the jurisdiction of different courts, the suit may be instituted in the Court within whose jurisdiction any portion of the property is situate; provided that, in respect of the value of the subject-matter of the suit, the entire claim be cognizable by such Court.

    Suits for immoveable property situate in different districts.

    If the immoveable property be situate within the limits of different districts, the suit may be instituted in any court, otherwise competent to try it, within whose jurisdiction any portion of the property is situate.]

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    Venkata Viraragavayyangar v. Krishnasami Ayyangar
    (Apr 6, 1883)