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1940 Supreme(SC) 47
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT MAUGHAM, LORD RUSSELL OF KILLOWEN, LORD WRIGHT, SIR GEORGE RANKIN, AND MR. M. R. JAYAKAR.
GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION, LIMITED - Appellant
Versus
JANMAHOMED ABDUL RAHIM - Respondents
On appeal from the High Court at Bombay.
Decided On : Sept. 17. 1940.
Solicitors for appellant:Smiles & Co. Solicitors for respondent: T. L. Wilson & Co.
Assignment of an administration bond under Section 292 of the Indian Succession Act, 1925, does not create a new cause of action or reset the limitation period. The three-year limitation under Article 68 of the Limitation Act, 1908, begins when the bond's condition is broken.
Headnote:(A) Indian Limitation Act, 1908 - Article 68 and 120 - Indian Succession Act, 1925 - Section 292 - Administration bond - Limitation period - Suit on a bond subject to a condition - Period of limitation is three years from the date the condition is broken - Assignment of the bond under statutory provisions does not create a new cause of action or provide a fresh starting point for limitation - The right of the assignee is not greater than that of the assignor - In the case of an administration bond, the condition is broken at the latest upon the death of the administrator, as the office ceases to exist and no further administration can be carried out by the deceased.
(B) Interpretation of Limitation Acts - Statutes of limitation must be applied with stringency according to their plain meaning, regardless of hardship caused to a particular party. The court cannot on equitable grounds enlarge the time allowed by law or introduce exceptions not recognized by the statute.
Facts of the case:
An administration bond was executed by an administratrix and a surety for the benefit of minor beneficiaries. The administratrix died before the obligations under the bond were fulfilled. After the eldest beneficiary attained majority, the court assigned the bond to him under the relevant succession law, enabling him to sue in his own name. A suit was subsequently filed against the surety for losses to the estate, alleging breaches of duty by the administratrix during her lifetime.
Findings of Court:
The suit was barred by limitation. The period of three years prescribed under Article 68 of the Limitation Act began to run from the date the condition of the bond was broken, which occurred at the latest upon the death of the administratrix.
Issues: Whether the assignment of an administration bond under Section 292 of the Indian Succession Act, 1925, creates a new cause of action for limitation purposes, and whether the death of the administratrix constitutes the breaking of the bond's condition under Article 68 of the Limitation Act, 1908.
Ratio Decidendi: The court held that an assignment of a bond under Section 292 of the Indian Succession Act merely confers a title to sue in the assignee's name and does not create a fresh cause of action. Furthermore, since the office of an administrator ends upon death, the condition of the administration bond is broken at the latest on the date of death, triggering the three-year limitation period. The assignment does not reset this clock.
Result: Appeal allowed.
Legal Category Hierarchy
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practice and procedure
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limitation
- period of limitation
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limitation
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probate and administration
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administration bonds
- assignment of bonds
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administration bonds
Judgement
Consolidated Appeals (No.43 of 1939) from a decree of the High Court in its appellate jurisdiction (March 31, 1938), which confirmed, with a minor variation, a decree of that Court in its ordinary original civil jurisdiction (May 24, 1937).
The suit which gave rise to these appeals was brought by the respondent, Janmahomed Abdul Rahim, as the assignee of an administration bond, against the appellant, the General Accident Fire and Life Assurance Corporation, Ld., as surety, claiming Rs.3,98,060, or such part thereof as might represent the loss to the estate of his father, one Abdul Rahim, through the failure of his mother, one Hawabai, to carry out the obligations under the bond.
The defendant (appellant) did not admit the alleged loss to the estate of Abdul Rahim; denied the alleged breaches of duty, and contended (inter alia) that the bond had not been validly assigned in law to the plaintiff (respondent), and that the purported assignment was the transfer of a mere right to sue and, as such, was void and inoperative, and that the plaintiff was not therefore entitled to maintain the suit. It was further alleged that the claim of the plaintiff was barred by the law of limitation.
The trial judge (Engineer J.) passed a decree in favour of the plaintiff for Rs.1,04,831-1-0, and costs, and for interest on the judgment sum at six per cent, until payment.
On appeal the Appellate Court (Beaumont C. J. and Kania J.) in separate but concurring judgments confirmed the decree of the trial judge, subject to a variation in the date from which the interest should run.
The principal question for determination in the present appeal was whether the suit was barred by limitation. The High Court in appeal, holding themselves bound by the decision in Manubhai Chunilal v. General Accident Fire and Life Assurance Corporation, Ld. (( 1936) I. L. R. 60
B. 1027.), had held that the defence of limitation was not open to the present, appellants.
The facts and the terms of the relevant statutory provisions appear from the judgment of the Judicial Committee.
1940. July 4, 8, 9. Sir Thomas Strangman K.C. and W. W. K. Page for the appellant. The question which arises at the outset is one of limitation, and if that point is a good one it disposes of both the appeal and the cross-appeal. Neither of the Courts below has dealt with this question, inasmuch as each Court considered itself bound by the decision in Manubhai Chunilal v. General Accident Fire and Life Assurance Corporation, Ld. (( 1936) I. L. R. 60 B. 1027.) The bond was in the form required by the Bombay High Court Rules. The material upon which the limitation point is to be decided is The
Law. Rep. 67 Ind. App. 416 ( 1939- 1940) General Accident Fire v. Janmahomed Abdul Rahim
172
Supreme Court Charter of December 8, 1823, which in cl. 45 gave jurisdiction to the Supreme Court to require security by bond before the grant of letters of administration, and there was a provision in cl. 46 of the Charter that if a bond was to be put in suit it was to be done under the order of the Court directing the Registrar to file the suit; the Letters Patent of the High Court, of June 26, 1862, which provided that the High Court had all the jurisdiction of the Supreme Court; the Amended Letters Patent of December 28, 1865; the Probate and Administration Act, 1881, ss. 78 and 79; the Indian Succession Act, 1925, which is a consolidating Act; the Bombay High Court Rules of 1922, rr. 495, 582 and 630; and the Indian Limitation Act, 1908, art.68, which has to be read with s.2, sub-s.3, which contains the definition of " bond,” and art. 120. [Detailed reference was made to the foregoing material.] It is submitted that this is a simple action on the bond, and that the cause of action arose at the very latest on the death of the widow, Hawabai—namely, on April 27, 1929, and the suit having been instituted on November 2, 1932, was time-barred under art.68 of the First Schedule to the Limitation Act, 1908. Ar
