Karnataka High Court
Babulal Vaktaji Shah And Anr. vs Chandabai on 1 July, 1988
Equivalent citations: AIR1989KANT221, ILR1988KAR2437, 1988(3)KARLJ588, AIR 1989 KARNATAKA 221, (1988) 2 CIVLJ 622 ILR 1988 KANT 2437, ILR 1988 KANT 2437
JUDGMENT
1. This appeal is by the defendant in O.S. No. 11/1964 on the file of the Principal Civil Judge, Belgaum and is directed against the said concurrent judgments and decrees of both the Courts- below, i.e., O.S. No,11/64 subseqently affirmed by the Additional District,Judge of Belgaum in R.A. No. 10/1973, granting the plaintiff in the suit who is the,respondent herein a decree enabling the decree for rendition of accounts of a firm M/s.Shah Vaktaji Dalkhand and Compnay, Gokak which her husband Dalichand was a partners during his lifetime. The correctness and the legality of the above said decree is challenged herein, on the very short ground that the plaintiff's suit was barred by time as on the date, it was instituted. Regrettably the respondent who is the plaintiff in the Court below a lady by name Chandabai, unrepresented in this Court despite of service of notice on her. I have to mention, at the outset that she was represented by an advocate of this Court Sri Jestamal, who subsequently sought and obtained permission to retire from the case for want of instructions after serving, a registered notice on her disclosing his intention to retire from the case. Subsequently, the respondent has not chosen to engage anybody else in place of, Mr. Jestamal and therefore I have not had the benefit of any argument on her behalf.
2. But, then, Mr, Mandagi, who appears for the, appellants has been good, enough to take me through the whole of the records and also assisted me by providing information regarding all the law then obtained on that point. With, the result, I have, not been handicaped by the omission of the other side in being represented in this Court by, Counsel.
3. As earlier mentioned, the whole case turns on a short point being whether the plaintiff's suit was, in time. On this point, both the Courts-below have held that suit to be in time relying on S. 47 of the Limitation Act, holding that the cause of action enabling the plaintiff to institute the suit arose only, after she discovered the factum of fraud having been practised on her by the defendants, who had successfully prevented her from approaching the Court by inducing in her belief that she was being continued as a in the firm in question in place of her deceased husband. The plaintiff having learnt of late, that she was not made a partner of that-firm and the representation made to her by the defendants in that behalf was thoroughly false , she had thereafter hastened to the Court with the suit.
4. A few facts necessary for the disposal of this appeal and which are not dispute are that the plaintiff husband one Dalichand and the two defendants were closely related in that Dalichand was uncle of the defendants.All three of them constituted members of a firm that was being run at Gokak,under the name and style of M/s. Shah Vaktaji Dalichand and Company along with two other firms located in Sholapur and Kholapur. It would appear, due to some misfortune, when the Plaintiff and her husband Dalichand were away on a Pilgrimage, Dalichand passed Away,on 5-11-1960. Thereafter, the plaintiff came back to Gokak four months later and then went away to her native place in Rajasthanfor a year before again returning to;Gokak during which period she received assurances from the defendants that she had been made a partner in place of her deceased husband and the firm of M/s. Shah Vaktaji Dalichand and Company was being carried on with her as the new, partner. However, the, plaintiff says that when, she made a demand for her share of the dividends of the firm, she then received a written, communication on 2-11-1963,from the defendants stating that she had no connection whatsoever with the firm in question, the same having been formed after the death of, her husband comprising of only the two defendant as partners and therefore, she was not entitled to any share in the dividends of that firm. Plaintiff asserts it was only then she became aware of the confidence trick played on her, by the defendants, who had I failed to induct her as a member of the firm despite their earlier assurances and the conduct in collecting hey signatures to blank papers etc, a I s I being required, necessary for conducting the, business of the new firm with her as a member.
5. She therefore came to Court with the suit, out of which -this appeal arises, asking partner of two reliefs of dissolving the partnership firm and for accounts of that firm as also her share of the dividends on the footing that she was a member of the firm and in the alternative death of her husband Dalichand on 5-11-1960. Her right to both reliefs having been denied by the defendants who amongst other things, keenly contested this suit on the question of limitation, the learned Civil Judge held that plaintiff although was not entitled to a share in the new firm of which she was not proved to be a member, she was however entitled, to accounts of the quondam firm of which her, husband was a member and that her right to claim account was not barred by time although on the date of the suit more than 3 years had elapsed, from the date on which the cause of action for claiming accounts would ordinarily arise on the death of her husband on 5-11-1960. The learned Civil Judge held, placing reliance on S. 17 of the Limitation Act, that the defendants having falsely persuaded the plaintiff or having falsely induced in her a belief that she has been included as the new member of the firm in place of her husband, had successfully prevented her by their fraudulent tactics from seeking redress in a Court and the plaintiff having come to know of the deception practised on her, as alleged by her, in 1963, the suit filed in the year 1964 was clearly in time. On appeal, the learned, District Judge, after a consideration of the issue regarding limitation was also of the same view as the learned Civil Judge. He say that the trial Court has appreciated all these facts and has found correctly that fraud was practised on the plaintiff and therefore she was prevented from filing the suit within the period of' limitation and hence the running of limitation cannot start till the plaintiff came to know of this fraud. The learned; District Judge, oil appeal, formulated a point for consideration which reflected the finding he finally recorded as aforesaid. The point formulated by him is as follows :
Whether the plaintiff proves that the defendants committed fraud on, her so that she was prevented from filing a suit within, three years after the death of her husband for , accounts?
6. Learned counsel Sri Mandagi, appearing for the appellants, strongly criticised the view taken by the Courts below pointing out inter alia that once the cause of action for enforcing a right had arisen, running of time cannot be stopped or arrested by any subsequent fraud or disability as enjoined by S. 9 of the Limitation Act. His second contention is that having regard to the finding on facts reached by both the Courts-below being that the fraud allegedly practised on the plaintiff was of prevailing upon her not to go to Court to seek a rendition of accounts of the erstwhile firm and that the fraud practised was not such as to conceal from her the knowledge of her right to file a suit for accounts of the erstwhile firm of Which her husband was a partner.
7. In this case, the learned District Judge has recorded a clear finding that the erstwhile firm of M/s. Shah Vaktaji Dalichand and Company of which the plaintiff's husband Dalichand wasa partner came to be dissolved automatically on his death as enjoined by Sec. 42(c) of the Partnership Act. The relevant finding of the District Judge is as follows:
"Under See. 42(c): of the Partnership Act, the firm stood dissolved automatically by the death of one of the partners, viz., Dalichand the husband of the plaintiff. There is nothing to show that there was an express agreement between Dalichand and the present defendants. As already, stated from the pleadings, he died on 5-11-1960 when he was at Zaza on a piligrimage and it is also not disputed that the plaintiff returned to Gokak about four months later.
The finding as above makes it abundantly clear that the earlier partnership firm stood dissolved when Dalichand died on 5-11-1960 Under Art. 5 of the Limitation Act (old and new.), the period of Limitation for institution of a, suit for, accounts or share or profits of a dissolved firm is three years from the date of dissolution. Therefore, the firm having stood dissolved with effect from 5-11-1960, when Dalichand one of the partners, died the suit for accounts of that firm had to be filed on or before 5-11-063. But the suit has been filed in Feb. 1964 and there being no dispute about these dates, the indispensable inference to be drawn is that the suit was barred by time. But, the Courts-below have taken assistance, from S. 17 of the Act, which is same as Sec. 18 of the Limitation Act of 1908 to hold otherwise,. S. 17 of the, Limitation Act reads as follows:
"17(l)(a) xx xx xx xx xx
(b) the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of any such-person as aforesaid,
(c)-(d) xx xx xx , xx xx the period of limitation shall not begin to run until the plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence have discovered it;"
8. A plain reading, of the above provision makes it clear that where the right or entitlement to such relief is itself kept concealed by reason of fraud or a hoax practised of which, the plaintiff becomes a victim, in those circumstances, the cause of' action in law is held to arise only when the victim realises the factum of fraud perpertrated or at a point of time when the victim could have with reasonable diligence learnt or became aware of the hoax practised. The facts on which the present suit is brought do not support any case of concealment by the defendants of plaintiff's right to sue them for rendition of the accounts of the erstwhile -firm. In fact, such is not the case of the, plaintiff at all, The specific case with which she came forward to the Court was that because the defendants led her to believe that she would be made or she was made a partner in the firm in place of her deceased husband, she had not chosen to press her right to seek for accounts of the said firm. Nowhere had she alleged or established that by the machinations of the defendants, she was kept in the dark regarding her right to seek the accounts of -the quondam firm by going to a Court of law. The fact that she was dissuaded by the defendants from exercising that right even if true and such persuasion was indeed mala fide and fraught with a fraudulent intention and motive, such tactics will not prevent time that had already started running after the death of Dalichand to stop. In other words the plaintiff having been prevailed upon by the defendants indirectly not to sue or ask for the accounts of the quondam firm on the assurance of making her a partner in place of her husband will not stop the running of time in an action calling upon the defendants to render accounts of the quondam firm. As pointed out earlier, the plaintiff herself never said either in the plaint or anywhere in the evidence that she could not have asked for accounts of the former firm or that the defendants had in any manner prevented her from seeking accounts of the former firm. Her case is that she herself had not sought for rendition of such accounts and had not sought to enforce her right in that behalf in view of the assurances given by the defendants of inducting her as a partner along with them which assurance was subsequently found to be baseless and that discovery having been made in the year 1963, regrettably the suit filed in 1964 appears to be a little too late and Sec. 17 of the Limitation Act on its own could not have helped her as wrongly held by both the Courts-below.
9. This conclusion of mine is not based only on a priori considerations but is supported by high authority in law. In Ramalagu Servai v. Solai Servai, AIR 1921 Mad 283, a Bench of the Madras High Court held that S. 18 of the Limitation Act did not apply where there was no fraud regarding the date when the cause of action arose and in such a case a subsequent act of fraud could not be relied upon to save limitation. That was a case in which a member of a joint family collected a debt due to the family after the family had divided and kept the amounts with himself. In a suit for recovering that sum by the other members of the family, it was pointed out when it was not shown that there was no fraudulent concealment from the plaintiff of his right to institute a suit at the time when that right first accrued to him, S. 18 of the Limitation Act will not help the plaintiff to create a fresh date for computing the time for instituting the suit. The principle therefore is that when there is no concealment from the plaintiff of his right to institute a suit and time having already begun to run, the same will not be suspended or arrested by any subsequent fraud. The principle was again reiterated in much later decision of the Madras High Court in Re Marappa Goundar, . A learned single Judge of that Court held in that case that S. 18 was an enabling section which postponed the starting point of limitation for suits and application like applications to set aside execution sales where the plaintiff's or the applicant's right to seek relief was kept from his knowledge by means of fraud, and where, the judgment-debtor was aware of the date fixed for the execution sale, he cannot rely upon S. 18 for excusing the delay in filing application to set aside the execution sale. In a totally different context the Supreme Court had occasion to consider the applicability of Sec. 18 in Yeshwant Deorao v. Walchand Ramchand, . Dwelling on See. 18 their Lordships observed as follows:
"If a man is prevented from making an application, because of the fraud of the debtor, he is not necessarily prevented from knowing his right to make the application. By the enactment of S. 18, the Legislature has distinctly contemplated that for the Limitation Act the starting point is changed on the ground of fraud, only when the knowledge of the right to make the application is prevented by the fraud of the judgment-debtor. Having the knowledge that he had the right to make the application, if the judgment-debtor prevents the decree holder from knowing the existence of certain properties against which the decree could be enforced the case is clearly not covered by words of S. 18".
The authoritative pronouncement of the Supreme Court as aforesaid concludes this question in favour of the appellants and enables me to hold that the respondent-plaintiff had relied upon S. 17 of the Limitation Act in vain in the facts and circumstances of this case wherein she had herself never sought to enforce her right to seek accounts of the erstwhile firm which came to dissolve on the death of her husband on 5-11-1960 and this not being a case in which unaware of her right to seek accounts on the happening of that event and the postponement pleaded resting on the circumstances of the false assurance given by the defendants inducting her in place of her deceased husband as a partner in the old firm would regrettably not save the limitation from running. The result therefore is the suit filed in Feb 1964 for accounts of the erstwhile firm of M/s Shah Vaktaji Dalichand and Company being beyond three years from the date of death of the DaliChand the husband of her plaintiff was clearly barred by time. She was of course not entitled to any relief with regard to accounts or dissolution of the new firm, which was also a prayer made in the suit, but rightly negated by the Courts below. The result, therefore, is the decree in her favour made by both the Courts below directing the defendants to render accounts of the old firm M/s. Shah Vaktaji Dalichand and Company has to be and is hereby set aside. This appeal, therefore, stands allowed and in lieu of the judgments and decrees of the Courts below, there will now be a decree dismissing the suit in C.S. No. 11/64 as barred by time. Parties will bear and pay their own costs throughout.
10. Appeal allowed.