P L D 1965 (W (PLP)

Limitation Act (IX of 1908), Arts. 62 & 97‑Sale‑Vendee put in actual possession of property by vendor having no title in such property‑Possession of vendee disturbed subsequently by rightful owner‑Suit for recovery of purchase price on failure of considera tion‑Art. 97 and not Art. 62 applicable‑Art. 97 applicable in cases of both void-able and void sales. Ghulam Husain v. Mir Jakar Ali A I R 1939 Nag. 27 and Hansraj v. Dehra Dun AF. Electric Company A I R 1933 P‑ C 63 distinguished. In re: M. A. Hnit and Mst. Fatima Bibi 54 I A 145; Jackson v. Kashi Rao A I R 1932 Nag. 5; Subaroya v. Raja Gopala A I R 1915 Mad. 708; Arunachala v. T. Ramasami A I R 1915 Mad. 742; Sankara v. Umer A I R 1923 Mad. 46; Multan Mal v. Budhu Mal A I R 1921 Bom. 252; Jai Indra Bahadur Singh v. Khairati Lal A I R 1928 Oudh 465; Muhammad Siddiq v. Muhammad Nuh A I R 1930 All. 771; Rattanbai v. Geshi Ram A I R 1932 Bom. 36; Mst. Gopal Dai v. Dhanna Mal A I R 1927 Lah. 570; Raja of Venkatagri v. Sobhanadri A I R 19441'Mad. 211; Punjab Government v. Lala Bejnath A I R 1945 Lah. 164 and "Halsbury's" Laws of England, 3rd Edn. Vol. 24 ref. SARDAR MUHAMMAD IQBAL, J.‑

Sheikh Manzoor‑ul‑Hasan & Brothers respondents were appointed petrol dealers by Messrs Caltex Oil Pakistan Limited on the 23rd of October 1947. They purchased from Muhammad Ishaq appellant on the 20th of February 1950 a compressor and a kiosk with furniture for Rs. 3,000 and possession was delivered to them. By the order of the Additional District Magistrate, Rawalpindi, the respondents were deprived of these articles and they were delivered to Messrs Caltex Oil Pakistan Limited and Raja Ghulam Sarwar, Managing Director, Murree Hill Transport Limited (they have not been impleaded as respondents to this appeal). The respondents instituted a suit on the 17th of February 1953, and on the basis of their title through sale claimed Rs. 3,000 from Messrs Caltex Oil Pakistan Limited and Raja Ghulam Sarwar and, in the alternative, prayed that if it be found that the appellant had no title in the said property, he should be made liable to pay the aforesaid amount to them on the basis‑ of the failure of consideration.

2. The defendants denied their liability to pay the amount and, inter alia, maintained that the plaintiffs' suit was barred by the law of limitation., On a reference to the Custodian under section 34 of Ordinance XV of 1949 to determine the nature of the property, it was held that the said property was evacuee property. The appellant, therefore, had no title in the property which he could pass on to the respondents. The respondents suit against Messrs Caltex Oil Pakistan Limited and Raja Ghulam Sarwar failed on this ground. The learned Civil Judge, however, dismissed the suit also against the appellant on the ground that the sale being void, the respondents had failed to institute the suit under Article 62 of the Limitation Act within three years when the money was received. The respondents preferred an appeal only against Muhammad Ishaq appellant. The learned District Judge held that the Article applicable in this case was 97 and not 62 of the Limitation Act, and by accepting the appeal decreed the suit against Muhammad Ishaq appellant. The appellant has come up in second appeal.

3. The sole question for consideration in this case is whether the suit is barred by limitation. In support of his contention that Article 62 of the Limitation Act was applicable, the learned counsel for the appellant relied on Ghulam Husain v. Mir Jakar Ali (A I R 1939 Nag. 27) and Hansraj v. Dehra Dun M. Electric Company (A I R 1933 P C 63) which cases are, however, clearly distinguishable. In the first of the cases mentioned it was hold that when a transfer is void under law, in a suit to recover consideration by the transferee, time runs from the date of the receipt of the money by the defendant. It may, however, be noticed that the basis of the judgment was that the parties on the date of the agreement knew that the transaction was void. In the second case, the Judicial Committee ruled that the amount in suit whether paid under a void agreement with the company, or paid without the company's knowledge or authority, was, immediately after payment, recoverable by the company as money had and received. It may, however, be noticed that it was not held that in all cases of void transactions the time against defendants starts running from the date of the payment and the Article applicable is 62 of the Limitation Act. The view taken in that case was that "in the absence of special circumstances the time at which an agreement is discovered to be void within the meaning of section 65 of the Contract Act is the date of the agreement."

4. The circumstances of the present case are distinguishable. The property was evacuee property. The appellant had no title in it. He, therefore, by sale could not transfer any right or interest in the‑said property to the respondents. He, however, on the 23fd of October 1947, by sale delivered the possession of the property to the respondents who remained in its use and occupation until they were dispossessed on the 20th of February 1953. There is no evidence to prove, or even indicate; that the respondents were aware of the fact that the property was evacuee and that it did not belong to the appellant. Under the contract of sale between the respondents and the appellant, the appellant was bound to secure the respondents' quiet possession of the articles and there could not be any failure of the consideration till the vendees had been deprived of the articles. On behalf of the appellant it was argued that because no sale whatever was created, there never was any consideration and that consequently article 97 of the Limitation Act had no application which applied to those cases where there was failure of consideration and that the case was covered by Article 62 because the money, which was received by the appellant, was received on account of the respondents and, therefore, should be treated as money received by him for the use of the latter. We ave not been able to persuade ourselves to agree to this. It is, moreover, against the accepted view of all the High Courts in this regard. At the time of the contract, which was discovered void only on the decision of the Custodian, the purchasers paid the price while the appellant handed over the property to the purchasers. The respondents were, therefore, entitled to the full use: of the property even though the seller had no title in it. The seller, under the circumstances, received the money on his own account and for his own use and not for the use of the purchasers who were actually in enjoyment of the property sold. It is true that there never was any sale, but possession of the articles sold was clearly a consideration and that consideration continued to exist until the respondents were deprived of possession. In re : M. A. Hnit and Mst. Fatima Bibi (54 1 A 145) a Muslim woman, purporting to act as guardian of her nephew who was a minor, mortgaged a part of her nephew's property, and ultimately a decree was obtained by the mortgages upon this mortgage and they brought the property to sale under the mortgage decree. Several years later, on a suit for the benefit of the minor, the sale and the mortgage were set aside on the ground that the aunt of the minor was not the guardian of the minor and had no authority to create the mortgage. The Judicial Committee held that Article 97 was applicable to the suit for recovery of the money lent on this void mortgage and that time did not begin to run until the date of the decree setting aside he mortgage. In Jackson V. Kashi Rao (A I R 1932 Nag. 5), relying on Subaroya v. Raja Gopala (A I R 1915 Mad. 708), Arunachala T. Ramasami (A I R 1915 Mad. 742), Sankara v. Umer (A I R 1923 Mad. 46), Multan Mal v. Budhu Mal (A I R 1921 Bom. 252) and Jai Indra Bahadur Singh v. Khairati Lal (A I R 1928 Oudh 465), it was held that in a case in which the vendee has been put in possession of the property by the vendor and the sale is void ab initio as against the rightful owner, the imitation begins to run not from the date of the sale but from the is dispossessed by the rightful owner. The facts of the case were that on the 22nd of February 1918 the defendant for himself and for his minor brother executed a sale deed in favour of the appellant The sale on behalf of the minor was void. The purchaser lost possession in 1928 of the moiety of "the conveyed. He instituted the suit on the 24th of June 1929 against his original vendor, the defendant, to recover the amount as damages for failure of consideration in respect of the sale transaction of the minor. The suit was resisted on the ground that the claim was barred by limitation. Repelling the contention it was held that the possession or other benefit obtained in pursuance of a void transaction is a subsisting consideration. This view is in accord with the view taken in Muhammad Siddiq v. Muhammad Nuh (A I R 1930 All. 771), Rattanbai v. Geshi Ram (A I R 1932 Born. 36) and Mst. Gopal Dai v. Dhanna Mal (A I R 1927 Lah. 570). In Raja of Venkatagri v. Sobha nadri (A I R 1944 Mad. 211), the sale, though a voluntary one, was void, but the purchaser continued in possession of the property, and it was held that the suit claiming refund of the price paid by the plaintiff was within time as the cause of action to institute the suit accrued and arose only when he was dispossessed and not when the sale was found to be void. In Punjab Government v. Lala Bejnath (A I R 1945 Lah. 164) it was held that even in the case of a void sale where consideration has been paid, it does not fail till the purchaser has lost possession. In this case "though the sale was void, the property sold was handed over to the purchasers who paid price for it. Both parties treated the contract of sale as a good one and continued taking the benefit of it till it was discovered about eight years later that the contract was a void one. At that stage the purchasers were evicted from the property and as soon as they were evicted, the consideration, so far as they were concerned, totally failed. Till that stage the purchasers were in the enjoyment of the property and it could not be said that they had any cause of action to bring a suit on the ground of the total failure of con side ration. The consideration did exist for this transaction and that consideration could not, and did not, fail till the purchasers were evicted from the property." We may in this context refer to Halsbury's Laws of England, 3rd Edition, Volume 24, which reads as under "Where on the sale of the property the vendor covenants that he has a good title to transfer, while in fact he has not a good title, the breach of the covenant is at the time of the sale and there is no continuing breach; but if the vendor covenants for quiet enjoyment, there is no breach of that covenant till there is an interference with the enjoyment of the purchaser or those claiming through him." We have, therefore, no doubt that if the vendee takes the actually possession of the property purchased by him from a vendor, who may or may not have a sound and unfettered right to convey, and his possession is disturbed, the cause of action for damages or compensation arises on the date of such disturbance, and time begins to run against the vendee from that date, by Article 97 of the Limitation Act.

5. A feeble attempt was made to argue that Article 97 of the Limitation Act applies only to cases of void-able transactions where the contract is good till it is avoided but not to cases of void agreements which create no rights or interest whatsoever in the property. We are of the opinion that id both void-able and, void sales if the seller places the purchaser in possession of the property sold, the right of the vendee to possession is secured until he is disturbed by the rightful owner. The purchaser is, therefore, entitled to full use of the property even though the seller has no title in it. The seller in such a case receives the money on his own account and for his own use and not for the use of the purchaser. The purchaser remains in enjoyment of the property in consideration for the use of his money by the seller. It is only on the purchaser being dispossessed that the consideration fails. The same view was taken in Punjab Govern ment v. Lala Bejnath.

6. In the present case, it is admitted that the respondents were dispossessed within three years of the suit. It is quite clear that the time when the limitation commenced to run was the date of the failure of the consideration, that is to say, the time when the respondents were deprived of what they had bargained for or; in other words, limitation began to run from the 20th of February 1950. Until that moment the consideration held‑ good and the respondents had no cause of action, Consequently, from that point of view Article 97 of the Limitation Act would clearly apply and the suit was brought within time.

7. The result is that the appeal fails and is dismissed with costs. K. B. A. Appeal dismissed.