Huluvadi G. Ramesh, J.
1. This Second appeal is filed by the plaintiff being aggrieved by the judgment and decree passed by the Prl. Dist. and Sessions Judge, Chickmagalur in R.A.No. 3/91 in allowing the appeal and reversing the findings of the Civil Judge, Tarikere in O.S. No. 70/86 dated 31.3.87
2. The plaintiff had filed a suit against the defendants for return of earnest money of Rs. 65,000/- said to have been paid by him towards purchase of plaint 'A' and 'B' schedule properties over which the plaintiff had a charge and also to direct the defendants to produce 'B' schedule movables to Court and also for a personal decree against the defendants for return of the amount. The 1st defendant is a firm of which defendants 2 to 6 are partners. The properties described in the 'A' schedule is said to be a coffee estate known as Diwankhan 'C Estate owned by the defendants. It is stated that the defendants entered into an agreement with the plaintiff for sale of plaint 'A' and 'B' schedule properties for a consideration of rupees thirteen lakhs on 3.1.1979. On the date of the agreement plaintiff said to have paid Rs. 50,000/-as earnest money through cheque which was en-cashed by the defendants. It is stated that the defendants procured the said agreement by practicing fraud and by misrepresentation. Subsequently, the plaintiff came to know through his friends that the property, which was shown to him by 4th respondent, was not that of 'A' schedule property of which he has entered into an agreement with the defendants. On the ground that property intended to be sold by the defendants has not been offered to the plaintiff and rather a different property was shown and offered, the plaintiff said to have issued a notice on 13.2.1979 terminating the agreement and to return the amount of Rs. 50,000/-back along with interest. The defendants are said to have replied to the said notice on 21.2.1979 wherein they have stated that the amount is forfeited and as such, refused to pay the amount. Accordingly, the suit came to be filed. The defendants filed the written statement resisting the suit on the ground that suit is barred by limitation and also that plaintiff is guilty of suppression of material facts. Based on the pleadings, as many as five issues were raised. The Trial Court although has held that the plaintiff has not proved that the sale agreement dated 3.1.1979 is the product of fraud and misrepresentation and also has failed to prove that he has rightly rescinded the contract on 13.2.1979, it has held that plaintiff is entitled for refund of earnest amount of Rs. 50,000/- and also held that suit is not barred by limitation. Being aggrieved by the said order, an appeal was preferred by the defendants before the Prl. District and Sessions Judge, Chikmagalur in R.A.No. 3/91. The District Judge, by his order dated 10.7.2000 having raised three points for consideration although has held that the Trial Court was right in holding that the plaintiff is entitled for return of earnest money of Rs. 50,000/-, it has held that suit was barred by limitation. Being aggrieved by the same, this second appeal has been preferred by the plaintiff raising several substantial questions of law.
3. The following substantial question of law would arise for consideration in this appeal:
Whether the Lower Appellate Court has erred in not taking into consideration Article 113 of the Limitation Act?
4. Heard the Learned Counsel for the appellant. Although, on the previous occasion, the Learned Counsel for the respondents was heard in part, he did not appear today to further argue the matter.
5. It is the submission of the Learned Counsel for the appellant that although both the Courts below have held that appellant is entitled for return of earnest money, the Lower Appellate Court has failed to notice as to when actually the cause of action arose and it is only on demand for return of money and on communication of refusal to pay the same the limitation starts and not from the date of issuance of notice and accordingly, submitted that it is Article 113 of the Limitation Act which applies to the rase on hand and not Article 55 of the Limitation Act.
6. Per-contra, on the previous occasion, the Learned Counsel for the respondents had submitted that Article 55 of the Limitation Act applies to this case which refers to compensation for breach of contract and when it is within three years form the date of the agreement.
7. The Trial Court has noted that the suit is not barred by limitation. As per the order of the Trial Court the cause of action arose to the plaintiff only after the expiry of date fixed for completing the transaction i.e., 19.2.1979 from the date of issuance of notice on 13.2.1979 and the reply was sent by the defendants on 21.2.1979 and the suit having filed on 19.2.82 it is well within three years, In this regard, the Learned Counsel for the plaintiff had relied upon the ruling reported in the case of Rachappa Mudakappa v. Tippanna Almappa and Ors.1981 (2) KLJ 3 Before the Lower Appellate Court the defendants have submitted that the plaintiff had rescinded the contract by issuing notice on 13.2.1979 and it gave cause of action to him and as per Article 55 of the Limitation Act of 1963 within three years from the date of issuance of notice, the suit ought to have been filed and since the suit was filed on 19.2.82 the same was barred by time. However, it is the case of the plaintiff even before the Lower Appellate Court that it is not Article 55 or 47 of the Limitation Act, but it is Article 113 of the Limitation Act which applies to the case on hand and also in this regard the learned Counsel for the plaintiff had relied upon the ruling reported in AIR 1967 DELHI 91 and AIR 1960 SC 335.
8. As per the ratio laid down by the Apex Court in the decision reported in the case of Rukhmabai v. Lala Laxminarayan and Ors. AIR 1960 SC 335 there can be no right to sue until there is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted'. The Lower Appellate Court stating that the suit is not for compensation for any breach of contract and it is for return of advance amount and the ruling of the Apex Court noted above is not applicable to the case on hand, and further stating that the plaintiff has not proved that the cause of action arose only on 19.2.1979 which was the time fixed for performance of the contract and also holding that it is not possible to say that the notice was served on the defendants on or after 19.2.1979, it has held that the suit was barred by limitation.
9. In the instant case, there is no dispute as to the order of entitlement and also for refund of earnest money that is said to have been paid by the plaintiff in favour of the defendants towards purchase of 'A' schedule property. It is seen that although there was a contract to purchase the immovable property and also in this regard an agreement is said to have been entered into between the parties on 3.1.1979, the plaintiff on realising that the property that was shown by the defendants was different from what was offered to sell, on 13.2.79 said to have issued a notice rescinding the contract and also sought for return of earnest money. The said notice either must have reached the defendants on 19.2.1979 or even earlier to that. The defendants also said to have sold the same property in favour of some other third person for a higher amount than what was agreed between the plaintiff and defendants and it has also fetched them sufficient benefit and rescinding of the contract by the plaintiff has not in any way caused loss or injury to the defendants. However, when the plaintiff had indicated his intention while terminating the contract and sought for return of earnest money, within a short span after having entered into the cause of action would arise only when there is a refusal by the defendants on such notice. When there is a communication of the intention of the defendants regarding forfeiture of the amount and the said communication dated 21.2.1979 is said to have reached the plaintiff on 23.2.1979, the suit filed on 19.2.1982 is shown to be within three years from the date of communication of refusal to return the earnest money. The Lower Appellate Court has failed to understand the implication as to when the cause of action arose for the plaintiff to file the suit. When the plaintiff had indicated his intention not to act upon the agreement and had sought for return of earnest money paid by him and the same was communicated to the defendants, immediately, there may not be any such cause of action and even if the defendants have agreed to return the amount on such receipt of notice there may not be any controversy. When the defendants have communicated to the plaintiff that they have forfeited the amount and thereby expressed their intention by refusing to return the earnest amount on 23.2.1979, it gave raise to cause of action. As per Article 113 of the Limitation Act it is the date of accrual of cause of action and from that date within three years the suit has to be filed and also it is not indicated in the notice issued by the plaintiff that amount shall be returned within a particular time. In the instant case it is not the Article 55 of the Limitation Act, but it is Article 113 of the Limitation Act which applies to the case.
10. For the foregoing reasons, while answering the substantial questions of law in favour of the appellant, the appeal is allowed and the finding of the Lower Appellate Court is reversed while confirming the judgment and decree passed by the Trial Court. Parties to bear their own costs.