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TMI Blog1966 (12) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... the vendor Company) entered into ah agreement to sell the building in question situated in Lahore (now in West Pakistan) for a consideration of ₹ 1,35,000 to Shri Ram Lal Puri (hereinafter called the vendee) who paid ₹ 20,000 by way of earnest money at the time of the agreement. The sale was to be completed by 5-4-1947. On 1-4-1947 the vendee sought extension of time for the completion of the sale up to 20-4-1947, to which the vendor company agreed. On 17-4-1947 the vendee paid ₹ 30,000 as an additional advance seeking extension of time by another month which, was agreed to. Nothing further happened in the matter and both sides it seems, kept quiet. The vendor company remained at Lahore till 11-8-1947 and the country was partitioned on 15-8-1947, forcing the parties to leave Lahore and to come to India. The vendee also tried without success to have his claim of ₹ 50,000 verified against the property in question. On 8-12-1952, he presented his application under section 10 of the Displaced Persons (Debts Adjustment) Act LXX of 1951 seeking payment of ₹ 50,000 as debt due to him from the vendor-company within the contemplation of debt as defined in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Punjab Ordinance 7 of 1947 called the West Punjab Protection of Evacuee Property Ordinance 1947, was enforced, by Clause 4 of which management of the evacuee property was taken over by the Custodian and under Cl. 9, an evacuee lost his right to transfer the property subject to the conditions stated therein. This ordinance was replaced by Ordinance 18 of 1948 called the Pakistan (Protection of evacuee Property) Ordinance 1948 which was in turn superseded by the Pakistan (Administration of Evacuee Property) Ordinance, 1949, in both of which Ordinances, similar provision as in the initial Ordinance was repeated. On 1-12-1947, accordingly, the vendor-company had, in the opinion of the learned Single Judge, ceased to be in a position to have the right and control to transfer the property in dispute under the contract of sale in question. In view of this state of evacuee legislation in Pakistan, the learned Tribunal was held by the learned Single Judge not be right in finding that breach of contract had occurred on the part of the vendee in not completing the contract of sale before the partition of the country. The vendee's claim was held to be governed by Section 65 of the Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a contract which later became void. It is further pressed on us that if this consideration is eliminated, so argues the learned counsel, then Article 120 would cover the case, and indeed the submission proceeds that even the learned Single Judge would have applied this Article had he not been influenced by what in his view was also the common law of England. In the alternative. Shri S.N. Chopra has submitted that even under Art. 97 which prescribes the period of three years, the vendee's claim would be within time because under Section 36(b) of Act LXX of 1951, the period of limitation has been extended for proceedings like the present. 4. I may now appropriately read Sec: 65 of the Indian Contract Act and the there Articles of Limitation Act namely, Articles 64, 97 and 120, to which reference has been made at the bar. Three years when the money is received. Three years the date of failure. Six years When the right to sue accrues. ing of some provision of the Limitation Act. The statute of limitation is of course a statute of repose and is inspired by a desire not to keep indefinitely alive controversies. Dictates of substantial justice demand such a course. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years for compensation on the breach of any contract, express or implied, not in writing registered and not specially provided for in the Limitation Act but this residuary Article dealing with compensation for breaches of unregistered contracts would seem to me to be clearly inapplicable because the present is not a case of recovery of compensation. The only Article in the present case would thus be Article 120, the general residuary Article. This seems to me to be the position on the language of the relevant statutory provisions. Shri Hardy has placed reliance on some decided cases to support his submission, though It is conceded that none of those decisions directly deal with the case of restoration of the earnest money in any comparable circumstances with the present case. In Ram Labhaya v. Municipal Committee, Amritsar, 1966-68 Pun LR 84: (AIR 1966 P H 460) a Bench decision of the Punjab High Court, on which Shri Hardy has placed considerable reliance, it has been observed that Article 62 of the Limitation Act would be applicable where agreement was void in its inception, the terminus a quo being the date on which it was made and if at the time of the agreement there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Rayagonda Anna Patil v. Jankibai, AIR 1959 Bom 468. In that case, defendant No. 1 agreed to sell certain lands to the plaintiff for a sum of ₹ 25,000/- within four months of the date of the Agreement which was 30-12-1945. ₹ 22,500/- wore paid to the vendor, the remaining amount was to be paid at the time of the execution of the sale-deed. By a subsequent agreement dated 26-4-1946, the time limit for execution of the sale-deed was extended and the sale was agreed to be executed within four months of the date when the vendor would obtain possession of the lands from a third person against whom a decree for possession had been obtained. The plaintiff sued for specific performance of the agreement on 19-2-1951 or in the alternative for refund of consideration or for recovery of the suit amount by way of damages. It was alleged in this suit that defendant had obtained possession of the lands by the end of August, 1949. The provisions of Bombay Tenancy and Agricultural Lands Act were made applicable to the area on 1-5-1949 and the defendant was found to have obtained possession of the lands in question on 6-12-1946. On these facts, it was held that sale in contravent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of earnest money runs from the dismissal of suit for specific performance of a contract, but there the parties relied on Arts. 62 and 97, The arguments at the bar in that case were apparently centered round these two Articles and the aspect regarding the scope of earnest money was also not canvassed and, therefore, not considered by the learned Judge. It is accordingly unnecessary to say anything more about that decision. N.V. Jagannadhayya v. Ramanatha Mohapatra, AIR 1955 Ori 11, dealt with the case of forfeiture in a contract for sale of goods and while considering the relevant scope and effect of Arts. 97 and 115, it was observed that Art. 115 applies to a case of damages for breach of contract by the defendant and Article 97 to a case where that which is to pass from one contracting party to the other cannot by reason of circumstances since the contract, pass to the other party and, therefore, the plaintiff calls upon the defendant to fulfil the terms of his contract either expressly or impliedly, that he will, in such circumstances, return anything which has been already paid on account of the contract. These observations obviously are not attracted to the case in han ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m in respect of the earnest money is not in terms covered either by Article 97 or by any other specific Article of the Indian Limitation Act. It is, therefore, governed by the residuary Article 120 and applying this Article, the claim would concededly be well within time. I may point out that the view taken by the learned Single Judge that the liability created under section 63 of the Contract Act being initially a common law liability, its incorporation in the statute is immaterial, has not speaking with all respect, appealed to us and indeed Shri Hardy has also frankly expressed his inability to support this view. Quite a good portion of our Contract Act has its roots in the common law of England but that can scarcely be a cogent ground for holding that a liability created under the Contract Act would for that reason not be a statutory liability, though on the view we have taken of the character of earnest money in the present case, this aspect loses much of its importance. 7. Coming now to the remaining sum of ₹ 30,000 paid as additional advance, it appears to us that on the evidence on the record, this amount was intended by the vendee to be paid towards the purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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