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TMI Blog1913 (3) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by his sons. 4. For the appellant it is argued that Article 91 is inapplicable to the case, first, because it cannot, in any case, be applied to a suit founded on an allegation of undue influence, and secondly, because the suit is not a suit to cancel or set aside an instrument. As to the 1st contention, the 1st column of Article 91 does in terms apply to the suit, because in no other article is provision made for setting aside a deed executed under undue influence, but it is argued that the language of the 3rd column, the column in which the starting point of "limitation is set out, is inapplicable to a case of undue influence and consequently the article must be held inapplicable. It is doubtless true that cases can be imagined in which the undue influence may continue for three years after the victim has become fully aware of all the facts entitling him to avoid the consequences of its exercise and may so prevent his taking action, but that possibility does not seem to me to indicate that the starting point is wholly inapplicable; it shows only that there may be cases in which its application would be a hardship. In very many, if not in most, cases of undue influence, the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing a suit to set aside the sale on payment of Rs. 1,25,000 before possession could be recovered; but it is argued that that observation assumes the necessity and is not to be taken as laying down a rule of law that an instrument of transfer which is voidable by the transferor for undue influence can be avoided only by a decree of the court; or, if it was intended to lay down such a rule, that rule cannot be applied to a transfer made after the enactment of the Trusts Act and the Transfer of Property Act. 8. I do not feel justified in deciding that that is unnecessary which the Privy Council has declared to be necessary, unless it is quite clear that these enactments, which, it may be, did not apply to the sale dealt with in Janki Kunwar v. Ajit Singh I.L.R. (1885) C. 58, have altered the law upon this subject. 9. Mr K. Srinivasa Aiyangar did not rest his case on any distinction between an 'ancillary' and a 'substantial' relief prayed for in the suit. I do not think he could do so in the face of the decision to which I have just referred. Then their Lordships lay it down that the Immovable property (in that case) could not be recovered until the deed of sale had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... force the agreement and so will not allow it to be proved; but whatever be the foundation on which the rule is based, it has the effect of preventing the rescission, by oral agreement, of a transfer which cannot be effected by oral agreement, but not of other transfers. The inference is that the law desires the same publicity and the same safeguards in the case of a re-transfer as were required to support the original transfer, for, if a writing was unnecessary for the transfer, then it is unnecessary for the re-transfer, and consequently the rule I cannot be put merely on the ground that documentary evidence is J better than oral evidence. And the fact that the transferor has been wronged and is, therefore in a position to compel there-transfer seems to me to make no difference from this point of view; it is a concession to him if the decree of a court under the Specific Relief Act is allowed to suffice to re-vest the transferee's interest in him, instead of the registered instrument required by the Transfer of Property Act. The English cases Clough v. London and North Western Railway Co. (1871) L.R. 7 Ex. 26, Oakes v. Turquand (1867) L.R. 2 H.L. 325 and Reese River Silver Min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, in this country, is after the suit is duly instituted : (vide., Order V Rules 1 and 2, Civil Procedure Code). The defendants, therefore were not trustees under Section 86 at the date of the suit, and the right to immediate possession had not then vested in the plaintiff by virtue of that section. 17. But if I assume the section to be applicable at all or if Section 89 can, be held applicable, then Section 96 will, I think, operate to prevent their application here. For, as I have held, I am bound by the Privy Council decision to hold that there is a rule of law requiring that, if a sale is to be rescinded, it must be by judicial rescission or a written instrument, and that rule will apply to the present case. Now, in order to obtain a judicial rescission, the plaintiff must invoke the aid of the court within the time allowed by Article 91 of the 2nd Schedule of the Limitation Act. This he has not done, and to allow him now to rely on Section 86 of the Trusts Act would be to place on the defendants an obligation, of which they have been in effect relieved by Article 91 - an obligation in evasion of that provision of the law. Again, Section 96 shows that Chapter IX of the Tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rust-deed on the plaintiff so as to be valid beyond the late Rajah's life; the case of Vijiasami Tevar v. (sic) Tevar I.L.R. (1905) M. 560, shows that in the Sivaganga Zamindari (carved out of Ramnad), no such cus torn, as contended for, against inalienability exists, and the decisions in Sartaj Kuari v. Deoraj Kuari I.L.R. (1887) 10 A. 272, Sivasubramania Naicker v. Krishnammal I.L.R. (1894) M. 287,and Sri Baja Rao Venkata Surya Mahipathi Rama Krishna Rao Bahadur v. The Court of Wards I.L.R. (1899) M. 383, clearly establish that the onus of proving a custom of inalienability in the case of these impartible zemindaries lies heavily on the person who alleges it. (After the coming into force of the Madras Impartible Estates Act, the question of the right to alienate, of course, stands on an entirely different footing). Far from there being any evidence of such custom in this case, the evidence is almost wholly against the existence of any such custom. (See Exhibits, CIIL, CXL series, CXLIA CXLIE etc.) That before the decision in Sartaj Kuari v. Deoraj, Kuari I.L.R. (1887) A. 272, it was erroneously thought by the court, by the Revenue officers and by the litigant public as a matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpted to enunciate, in the form of sections, the principles which the Courts of Equity in England had established for their own guidance in order to fix wrong-doers with obligations to be fulfilled in favour of wronged persons, substantive rights and obligations were at once created by those sections without the person who invokes those principles in his favour being obliged to obtain the establishment of those rights by first invoking the aid of the court in the manner indicated and provided for by law. The appellant's vakil relies on Sections 86 & 89 of the Trusts Act which are as follow: Where property is transferred in pursuance of a con tract which is liable to rescission or induced by fraud or mistake, the transferee must, on receiving notice to that effect, hold to that effect, hold the property for the benefit of the transferor, subject to re-payment by the latter of the consideration actually paid. Where by exercise of undue influence, any advantage is gained in derogation of the interests of another' the person gaining such advantage without consideration, or with notice that such influence has been exercised, must hold the advantage for the benefit of the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be the compelling of B to execute a registered conveyance to A), the provisions of the Transfer of Property Act requiring a registered conveyance to transfer property see Immudipattam Thirugnana Kondama Naick v. Periya Dorasami I.L.R. (1900) M. 377, the provisions of the Evidence Act, Section 92, excluding oral proof of the setting aside of a registered document and requiring proof of such to be in writing, the provisions of Section 26 of the Specific Relief Act, requiring the court to decree specific performance only subject to a variation in certain circumstances, might all be evaded and set at naught, as the Trusts Act, Section 91, merely uses the general expression that, if specific performance could be enforced (with or without variation and with or without conditions), A must hold the property for the benefit of B. There might be cases coming under a few sections of chapter IX, where a judicial declaration of trust might be unnecssary even when the beneficiary comes in as plaintiff, but the present is not such a case. Property in the hands of a mere constructive trustee does not become the property of the beneficiary under the constructive trust so as to enable him to treat i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble the party to a contract or the executant of a conveyance to sue for reliefs flowing from the rescission of the contract or setting aside of the conveyance, as the case may be, provided that he himself repudiates the contract or the conveyance, his own repudiation, if found to be for good cause, having equal effect with a decree of court rescinding the contract or setting aside the conveyance. In considering this question, we have to bear in mind that Courts of Equity in England were not bound by any law of limitation so far as the distinctive reliefs granted by such courts were concerned. Equity no doubt tried to follow the law as much as possible and refused to grant equitable reliefs where the plaintiff was guilty of laches. Laches took the place of limitation but the ground covered by the two was not the same in many cases. For instance, the law of limitation never took note of the fact that a plaintiff was unable to bring his suit within the period prescribed owing to poverty, but the doctrine of laches allowed poverty to be a good excuse, Expressions, therefore, quoted from several of the cases decided by Courts of Equity in England in which the effect of the repudiation b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) M. 169, has decided otherwise, though the learned Judges did admit the difficult nature of the question, and I do not wish to unsettle the law as fixed by that decision. A defendant who has properly repudiated a contract or a deed, might well be allowed to sit tight over his possession and defend his right to such possession by setting up, by way of plea, such proper repudiation by him, though he might be barred if he seeks positive relief as plaintiff on the basis of such repudiation. (Even a defendant could not however retain possession, if he had only a right to obtain a title-deed from his vendor and had lost that right by limitation - see the judgment of the Full Bench in Kurri Veera Reddi v. Kurri Bapyreddi I.L.R. (1906) M. 336. If, as the appellant's learned vakil, Mr. K. Srinivasa Aiyangar, contends, the vendor became a trustee for the purchaser as soon as the contract for sale was made, and also gave possession to the beneficiary-purchaser of the property held in trust, he could not recover possession from the purchaser who had neglected to obtain the registered conveyance). But so far as a plaintiff seeking relief is concerned, the decision in Lakshmi Doss v. Roop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ish law, as numerous English decisions were referred to in the course of the arguments in this case, I shall very briefly refer to what I consider to be the result of those decisions. Isolated passages in several of those judgments can, no doubt, by ingenious interpretation, be made to support the appellant's view. I do not mean, however, to enter upon an elaborate refutation of the arguments advanced by the appellant's learned vakil based on such passages. I shall merely refer to what Lord Halsbury in his Laws of England, Vol. XX Para (1745) says on this point: Where the representee has been induced by misrepresentation, whether fraudulent or innocent, to enter into a contract or transaction with the representor, which, unless and until rescinded, would be binding on the parties, such contract or transaction is voidable at the option of the representee. This means that the representee, on discovery of the truth, has a right to elect whether he will affirm or disaffirm the contract or transaction, and, if he adopts the latter' course, is entitled to give notice to the representor of repudiation, and demand from him a complete restoration of the status quo. In the even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of complete restitutio ad integrum; which means that, on his part, the representee must also make all such corresponding repayments, retransfers, and reconveyances as are necessary to restore the status quo on both sides. Where the representee has simply paid money to the representor under the contract, and has received neither money nor money's worth in exchange, and so has nothing to restore, the proceeding assumes the form of an action for money had and received, which succeeds, or fails, on precisely the same principles as if the action were for rescission; and similarly, where the representee has parted with property or an instrument, without receiving any money or other benefit, the action may be in trover, or for the mere delivery up of the instrument to be cancelled, in which case, again, the same principles apply." In Bigelow on Fraud at pages 75 to 79, the whole matter is put very lucidly. "There are three classes of cases in which rescission may be effected, each having a mode of its own. These classes, nameless in the books, may be severally termed 'rescission, in pais' 'judicial rescission,' and 'rescission by plea (or answer'). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cion etc., is not a contract. However, Sections 19 and 19A loosely call an agreement caused by coercion etc., as a contract voidable at the option of the party whose consent was so caused. Then Section 19 (a) is a most important section; it is as follows: When consent to an agreement is caused by undue influence, the agreement is a contract voidable at the option of the party whose consent was so caused. Any such contract may be set aside either absolutely, or, if the party who was entitled to avoid it has received any benefit thereunder, upon such terms and conditions as to the court may seem just. (a) A's son has forged B's name to a promissory note. B, under threat of prosecuting A's son, obtains a bond from A for the amouut of the forged note. If B sues on this bond, the Court may set the bond aside. (b) A, a money-lender, advances Rs. 100 to B, an agriculturist, and, by undue influence, induces B to execute a bond for Rs. 200 with interest at 6 per cent, per month. The Court may set the bond aside, ordering B to re-pay the Rs. 100 with such interest as may seem just. 10. I think this section clearly indicates that, as regards a contract voidable by the plain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... barred from bringing a suit to set aside the declaratory decree obtained through fraud by A. It seems to me clear that that fraudulently obtained decree which has not been set aside must stand in his way. Similarly, it seems to me that the other articles, including the article relevant to this case : viz., Article 91, will stand in the way of a plaintiff suing for the relief claimed by him against the tenor of the decisions or instruments, as the case may be, to which he has been a party and which are binding on him till set aside by the court. In a very recent article in page 55 of the Madras Law Journal (February), Mr. Shephard says that Section 36 of the Specific Relief Act indicates that "rescission imports a judicial decision" and that "rescission by a person entitled to rescind means that he, having resolved not to persist in demanding performance is in a position to sue for rescission or to defend an action brought on the contract." If he allows the time prescribed by the Indian Law of Limitation to sue for rescission to pass, his rescission in pais cannot entitle him to sue for any other relief on the basis that the contract has been set aside, though, as a defendant, he m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conveyed property the Privy Council held that the suit fell under Article 91 and was barred. Criticising the judgment of the lower court, their Lordships say as follows: - "Then the Judicial Commissioner deals with the case in a different way. He says that the suit is essentially a suit for the possession of Immovable property, and as such falls within the 12 years' limitation. Now this is clearly wrong there. It was not a suit for the possession of Immovable property could not have been recovered until the deed of sale had been set aside and it was necessary to bring a suit to set aside the deed upon payment of what had been advanced, namely, the Rs. 1,25,000. Therefore there has been on the part of the lower courts a misapprehension of the law of limitation in this case. Their Lordships are clearly of opinion that the suit falls within Article 91 of the Act XV of 1877 and is therefore barred." The appellant's learned vakil sought to distinguish this case by arguing that the Privy Council dealt with the case of a document voidable for fraud and not for undue influence. The facts of the case, however, clearly show that it was a case of undue influence. The word "fraud" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demption of the plaint property brought without setting aside a judicial sale under which the mortgaged properties had been sold away irregularly in satisfaction of a money decree against the plaintiffs' predecessor-in-title, the mortgagee having purchased the equity of redemption in such court sale. I shall here quote some of the observations of their Lordships in this case. "A sale valid until set aside can be legally and literally set aside; and anybody who desires relief inconsistent with it may and should pray to set it aside." "If a sale is a reality at all, it is a reality defeasible only in the way pointed out by law. In the adoption case just cited from 13 Ind. App., this Board remarked that there was no principle on which simple declarations of invalidity should be barred by the lapse of twelve years after the adoption, while the very same issue, if only mixed up with a suit for the possession of the same property, is left open for twelve years after the death of the widow. Their Lordships make the same remark now. What is the justification for refusing to construe Article 12(a) according to its obvious meaning whenever a suitor goes on to pray for that relief which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o apply to cases of undue influence. I need only say that the Privy Council did apply that article to the case of undue influence in Janki Kunwar v. Ajit Singh I.L.R. (1887) C. 58, and even Sir S. Subramania Aiyar in Roop Laul v. Lakshmi Doss I.L.R. (1905) M. 1, applied that article, though he thought that the time from which the period begins to run might be the cessation of undue influence and not the time when the facts become known to the plaintiff. I am, however, unable to hold that the cessation of undue influence can fix the time from which the period begins to run when the legislature has clearly fixed another period. Formerly, in English Law, the period when a man was in prison was excluded from computation against him. All those rules are now obsolete and we have to looks to the plain words of the statute, which is based principally on considerations of public policy, and we cannot allow considerations as to hardship in the case of particular plaintiffs to override the plain provision of the act. The Limitation Act provides exceptions on the ground of the plaintiff's disability or inability to sue in Sections 7, 8 and 13 (the last section relating to the defendants ..... X X X X Extracts X X X X X X X X Extracts X X X X
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