1928 Supreme(Mad) 103
IN THE HIGH COURT OF MADRAS
Phillips, Odgers, JJ.
(Peruri) Viswanadham And Anr.
Versus
(Pendela) Narayana Dass And Anr.
Decided On : 5 March, 1928
The main legal point established in the judgment is that the period of limitation for a suit begins to run from the time when the fraud or misconduct becomes known, and the right to sue accrues when the plaintiff becomes aware of the fraudulent conveyance of the property.
Headnote:
Limitation - Mortgage of temple properties - Article 120 of the Limitation Act - Summary of Acts and Sections: Article 120 of the Limitation Act, cases of fraud, denial of title, and fraud in alienation - The court discussed the interpretation of Article 120 of the Limitation Act and its application to cases of fraud, denial of title, and fraud in alienation. It highlighted the principle that the period of limitation for a suit begins to run from the time when the fraud or misconduct becomes known, and that the right to sue accrues when the plaintiff becomes aware of the fraudulent conveyance of the property.
Fact of the Case:
The appeal is against the decree declaring that the mortgage executed by defendant 1 in favor of defendant 2 is not binding on the plaintiff representing the worshippers of the temple. The appeal is mainly argued on the question of limitation, which was not raised in the lower Court until the time of arguments.
Finding of the Court:
The court found that the period of limitation under Article 120 of the Limitation Act runs from the date of the knowledge of the plaintiff of the transaction, and that the plaintiff's suit is within time. The appeal was dismissed with costs.
Issues: The main issue was the applicability of the period of limitation under Article 120 of the Limitation Act and whether the plaintiff's suit was within time.
Ratio Decidendi: The court held that the right to sue accrues when the plaintiff becomes aware of the fraudulent conveyance of the property, and that the period of limitation for a suit begins to run from the time when the fraud or misconduct becomes known.
Final Decision: The appeal was dismissed with costs.
Phillips, J.
1. This is an appeal against the decree declaring that the mortgage executed by defendant 1 in favour of defendant 2 is not binding on the plaintiff who represents the worshippers of the temple to which the mortgaged properties belong. The appeal is argued mainly on the question of limitation which was not raised in the lower Court until the time of arguments. The Subordinate Judge has found that the article of limitation applicable is Article 120 of the schedule of the Limitation Act and that time has to be computed from the date on which the plaintiff becomes aware of the transaction in suit, and consequently that it would have been necessary to take further evidence in order to establish the fact that the plaintiff became aware of this transaction more than six years before the suit. It is now argued that this decision is wrong and that the period of limitation under Article 120, Lim. Act, runs from the date of the alienation and not from the date of the knowledge of the plaintiff of the transaction. The words in the article are " when the right to sue accrues." It was held in Ottappurakkal Thazhate Soopi v. Cherichil Pallikkal Uppathumma [1910] 33 Mad. 31, that when a karnavathi made an alienation which was sought to be set aside by some of the members of the tarward, the suit was barred as being brought more than six years after the date of the alienation. It does not appear from the report of that case that there was any fraud alleged on the part of the karnavathi, and, therefore, this case is perhaps not entirely applicable to the facts of the one we are considering. That case, Ottappurakkal v. Uppathumma [1910] 33 Mad. 31, was referred to in a subsequent case Venkatachella Reddiar v. Collector of Trichinopoly [1915] 38 Mad. 1064, where it was approved by one of the two Judges, whereas the other one based his decision on the fact that the plaintiff had knowledge of the transaction more than six years before the suit. It is argued that the decision in the case is applicable here on the ground that the present suit is not one based on fraud. The plaint, however, shows that the plaintiff alleges a breach of trust, and this breach consists in defendant 1s dealing with properties as his own which really belonged to the temple It is difficult to see how this is not an allegation of fraud on the part of defendant 1, for the effect of his action, if left undisturbed, would be to deprive the temple of some of its properties and would have given defendant 2 the right to bring those properties to sale in case of default, as belonging to defendant 1 personally. This element of "fraud in the case, I think, defferentiates it from Ottappurakkal Thazhate Soopi v. Cherichil Pallikhal Uppathumma [1910] 33 Mad. 31. There are many subsequent cases in this Court, where, in case of fraud, it has bean held that the right to sue accrues under Article 120, Lim. Act, when the plaintiff becomes aware of the fraud. I may refer to two cases, Muruga Chetty v. Rajaswamy [1915] 29 M.L.J. 574 and Tirumal Rao v. Tungamma Shethithi [1914] 1. L.W. 134. Both these refer to cases of denial of plaintiffs title and it was held that until he was aware of that denial his right to sue did not accrue. It is difficult to distinguish cases of denial of title from one like the present which is in effect a denial by defendant 1 of the temples title to the property. Again in Venkateswara Ayyar v. Somasundarani Chettiar [1918] 7 M.L.W. 280, to which I was a party, it was held that until a creditor became aware of the alienation, which he attacked as being in fraud of creditors, his right to sue did not accrue. That, no doubt, was put upon the ground that a creditor has always an option as to whether he will or he will not avoid an alienation and that until he is in a position to exercise that option he cannot be said to have the right to sue. The case, therefore, though not entirely analogous to the present one, is in principle very similar. Here, t