Admission of a subsisting liability.

S. RAMACHANDRA IYER, C.J. :- This appeal, which arises on a certificate granted by Jagadisan, J. under clause (15) of the Letters Patent, raises a question of limitation with respect to a claim by a disappointed buyer for return of the advance amount paid by him on the contract of sale being repudiated by the seller. The suit giving rise to this appeal was originally instituted by the respondent in the civil Court at Surat on 15-6-1954; but, later on, on that Court declining to entertain the suit on a finding as to its jurisdiction, the plaint was presented to the District Munsifs Court, Sattur, in August 1955. It is not now disputed that the respondent would be entitled to the benefit of S. 14 of the Limitation Act with respect to the period covered by the presentation of the plaint in the civil Court at Surat and in the District Munsifs Court at Sattur. We have to consider in effect therefore whether the suit was barred on 15-6-1954, when it was presented to the Court at Surat.

2. A few facts have to be stated for the purpose of appreciating the real point now in controversy. Some time towards the end of March 1951 the appellant (a manufacturer of fire matches) entered into a contract with the respondent to sell a number of bundles of match boxes. At the time of entering into the contract, and in consideration thereof, the respondent paid the appellant a sum of Rs. 1001 as advance towards the price. In April 1951 the appellant sent certain packages of goods to the respondent in purported performance of the contract. The latter declined to accept the goods as not conforming to the specifications contained in the contract. But the appellant would not agree. It can now be taken as proved - and, indeed, there is no controversy on that point - that the appellant did not deliver the proper goods in accordance with the terms of the contract, but on the other hand he persisted in his refusal to perform the contract otherwise than in the way he did. He was thus guilty of breach. He would therefore be bound to return the advance paid by the respondent towards the contract. The principle underlying this obligation on the part of the seller has been expressed by Benjamin in his book on Sale of Goods, 8th Edn. at page 413 thus :

"The buyer who has paid money under a contract of sale may recover it back when the consideration on which it was paid has failed, for, in that event, it is unconscientious for the seller to retain it without consideration, and the money is, in consequence, in the eye of the law, received by the seller to the use of the buyer (Royal Bank of Canada v. Rex, 1913 AC 283 at p. 296)."

3. The respondents claim has been principally contested on the ground of limitation. It has therefore to be considered when the cause of action to recover back the advance paid accrued to him, and, secondly, the proper article of the Limitation Act that would govern the case. On the former question, there can be no doubt, on the correspondence between the parties, that the appellant unequivocally repudiated his obligation on 3-5-1951, to supply the goods according to the terms of the contract. On the latter question, i.e., as to the relevant Article of the Limitation Act which would apply to the case, the Courts below have expressed divergent views. The trial Court, which dismissed the respondents claim, applied Art. 62, while the lower appellate Court, which reversed that judgment, held that Art. 120 would apply. Jagadisan, J. in second appeal, held that Art. 97 would be the appropriate article. But the learned Judge did not accept the position that the consideration failed immediately on the breach of contract as he held that the consideration should be held to have failed only when the respondent accepted the breach and made the demand for return of the advance amount. That demand was made on 18-7-1951. The suit was therefore held to be in time. It is doubtful whether the date of failure of consideration for the purpose of Art.