LUCKNOW NAGAR MAHAPALIKA Vs. SARDAR KARAMJEET SINGH

JUDGEMENT

(1.) The question referred to this Bench for answer was "Whether a suit based on a contract is governed by Section 97 of the Town Improvement Act or it is governed by the general law of limitation," After considering the circumstances of the case, and in agreement with the learned counsel for the parties, we have re-drafted the question and now it reads: "Is a suit by a bidder at an auction held by the Lucknow Improvement Trust for selling land in connection with a scheme framed by it under the Town Improvement Trust Act, for refund of one-fourth price deposited by him on his bid being accepted, but which was subsequently forfeited by the Trust oh account of his failure to pay the. balance within the prescribed time, a suit in respect of an act purporting to be done by the Trust under the Act?"

(2.) The brief facts of the case in which the question has arisen are that on 5th December, 1947, the Lucknow Improvement Trust -held an auction sale of the lease-hold rights of plots 8 and 9 of the Revised Lay out Plan of Naka Hindola Scheme Lucknow and accepted Rs. 21,750/- on account of 1/4th sale consideration, as part payment of the total sale consi-deration of Rs. 87,000/- from one Sardar Bahadur Singhar Singh, since deceased. One of the terms of the auction sale was that the remaining 3/4th's sale consideration must be paid by the purchaser within ten days from the date of the auction, failing which the 1/4th sale consideration deposited by him would stand forfeited. On 13th December, 1947, before the expiry of ten days from the date of auction sale, the purchaser wrote to the Improvement Trust, Lucknow, that he was unable to pay the 3/4th's balance within the time fixed and asked for its extension by two months but he received no reply to it. By a resolution dated 13th April, 1948, the Improvement Trust, Lucknow forfeited the 1/4th advance sale consideration paid by Sardar Bahadur Singhar Singh on the ground of non-payment of the 3/4th's balance within ten days, as agreed under the terms of the auction, and the resolution was conveyed to, the purchaser. The purchaser Sardar Bahadur Singhar Singh died on 10th January, 1948, and the three plaintiffs as his sole legal representatives sued the Improvement Trust on 5th December-1950, for the return of Rs. 21,750/- Which had been accepted by it from Sardar Bahadur Sing-fear Singh on 5th December, 1947, with interest and costs. Before instituting the suit, however, the plaintiffs had on 2nd December, 1949, served the defendant Trust with a notice under Section 97 of the Town Improvement Act asking it to return the amount in question but the defendant did not return the same.

(3.) The suit was contested on behalf or of the Improvement Trust on a large number of grounds including limitation . This plea gave rise to issue No. 4 in the suit which was "Is the suit barred by limitation?" It appears from the judgment of the trial Court that at the time of arguments the plea of limitation was given up by the defendant. While discussing issue No. 4, the trial court has observed: "The plea of bar of limitation was intended to be raised on the basis of Section 97 of the Town Improvement Act but it was conceded that that section could hardly apply. A perusal of the section shows that it has clearly no application. Issue is decided against the defendant." The trial Court decreed the plaintiffs' claim and directed that the parties should bear their own costs.