JUDGMENT Mushtaq Ahmad, J.
1. This is a defendant's appeal arising out of a suit for recovery of Rs. 650 as damages (not for refund of sale-consideration as urged by the learned Counsel for the appellant) in the following circumstances.
2. On 16th April 1936, the defendant-appellant applied under Section 4, U.P. Encumbered Estates Act, after which, on 21st April 1936, the proceedings were forwarded to the Special Judge under an order of the Collector. Later, on 9th June 1936, the defendant executed a sale-deed in favour of the plaintiffs-respondents in respect of a part of the property which became the subject of the proceedings under the said Act. On the basis of the deed, the vendees (respondents) laid a claim to the property purchased by them Under Section 11 of the Act. This claim was rejected on the ground that the sale-deed having been executed after the Collector had passed an order under Section 6 of the Act was absolutely void. It may be mentioned that after the sale-deed, the vendees had entered into possession of the property and even got their names mutated, but that after the order of the Special Judge declaring the sale-deed as void, the defendant-vendor had again taken possession over the property and got his name restored in the revenue papers. On 1st June 1912, the present suit was filed by the plaintiffs-vendees for the relief I have already mentioned.
3. The only question argued before me was whether this suit was barred by limitation. The trial Court held that it was so barred and dismissed it. The lower appellate Court took the view that the plaintiffs were entitled to a simple money decree on the basis of the indemnity clause in the sale-deed which authorised them to claim compensation from the vendor in case they lost possession over the property. In that view, it held that the claim was within time under Article 116, Limitation Act, and decreed the same for Rs. 541-4.
4. Learned Counsel for the defendant appellant argued that Article 116 applied only in cases in which the contract of transfer was valid and not where it was void ah initio, as in the present case. The contract was admitted to be void ab initio in the present case, inasmuch was the sale-deed had been executed in violation of the imperative prohibition enjoined by Section 7, Encumbered Estates Act. Learned Counsel further argued that Article 97, Limitation Act, had also no application, as it could not be said that the amount claimed had been paid to the vendor-defendant "upon an existing consideration, which afterwards fails". This article, according to his contention, would apply only in cases where there was an existing consideration which would be only if the contract was initially valid. He, however, urged that the article applicable to the case was Article 62, Limitation Act, the suit being one for recovery of money had and received by the defendant for the plaintiff's use and that, therefore, it was time barred, having been brought more than three years after the money had been so received.
5. Having considered the matter carefully, I have come to the conclusion that this contention is wrong. It must be remembered that the suit giving rise to this appeal was not for recovery of the purchase money at all. It was for recovery of Rs. 650 as damages incurred by the plaintiffs on account of the plaintiffs having lost the property and they being entitled to recover the same by enforcement of an indemnity clause in the sale-deed. The pleadings in paras. 7, 9 and 12 leave no doubt that this was the nature and basis of their claim. They referred expressly to a recital in the sale-deed which itself was to the effect that in case the vendees were put to any loss on account of any claim made by the vendor or anyone else or on account of any other cause, the vendor would be personally liable to compensate the vendees, who would also be entitled to recover their loss from the property of the vendor.
6. The lower appellate Court on these pleadings in the plaint held that the suit was within time under Article 116, Limitation Act, the indemnity clause being embodied in the sale-deed which was a registered document. The question whether Article 116, as held by the lower appellate Court, or Article 62, as contended for by the learned Counsel for the appellant, would apply depends entirely on the nature of the suit. If the suit were only for recovery of the purchase price on the ground that the contract had been discovered as void, surely the proper article applicable would have been Article 62, as it would have been obviously a case of a suit for money had and received by the defendant for the plaintiff's use. It may also be conceded that in the case of a void contract, the fact of the contract being void would be deemed to be discovered on the date of the contract. This was pointed out by their Lordships of the Judicial Committee in Hansraj Gupta v. Dehra Dun Mussoorie Electric Tramway Co. Ltd. A.I.R. (20) 1933 P.C. 63 and by this Court in Sana Ullah v. Jai Narain Singh A.I.R. (29) 1942 ALL. 409. But where the suit is not for refund of the purchase price, as it is not in the present case, and it is for recovery of damages suffered by the vendee on account of his having lost the property and the deed of sale is a registered document, the proper article to be applied is Article 116, Limitation Act. In such a case, the claim would always be on the basis of the indemnity clause in the sale deed, namely that, if the vendee lost the property or was dispossessed from it by the vendor, the latter would compensate the former personally. In the present case, as I have already mention-ed, such an undertaking was given by the vendor who, further, created a charge both on the property in suit and on other properties of his in favour of the vendees for the satisfaction of such claim as the latter might have in case they lost the property. It may be mentioned at once that this would be the legal position even in cases in which the sale deed was from its very inception a void document, either by reason of its having [purported to transfer property which was not transferable or by reason of its having been in violation of any other statutory prohibition. This would mean that Article 116 could be invoked by a vendee even in cases where the sale-deed was absolutely void, the only condition being that he is suing for the enforcement - of the indemnity clause contained in the deed, as the vendees have done in-the present case. In Zea Uddin Ahmad [Khan v. Akbar All A.I.R. (19) 1932 All. 358, it was found that the vendor had sold property of which he was not the owner and which as a result of a subsequent litigation, was held to have belonged to a third party, so that the sale was absolutely void. There was a claim for compensation against the vendee and it was held that the article applicable was Article 116, Limitation Act. Their Lordships, in support of that view, relied on a previous judgment of this Court in the Collector of Mirzapur v. Dawan Singh 30 ALL. 400. This latter was also a case of a void transfer and yet Stanley C.J. and Banerji J. in applying Article 116, Limitation Act, observed that:
This was, in our opinion, a suit which was governed by Article 116 of Schedule II, being in substance a suit for compensation for breach of contract, namely, the contract to deliver possession and pay the amount secured by the bond in case of default of delivering possession.
The same was the position taken in the case of Ode Ram v. Chhida Singh A.I.R. (31) 1944 ALL. 276, which was a case of a claim made for damages on account of the lessee not obtaining possession under a void transaction of lease. The article held applicable is Article 116 and not Article 62, Limitation Act. Ismail and Malik JJ. in that case remarked that:
To our mind, the covenant as regards repayment in this case is entirely separable from the mortgage and can be treated as independent of it. The plaintiff has a right to base his claim on the agreement and as it is a, registered document Article 116, Limitation Act, will apply and the suit having been filed within six years it should be deemed to have been filed within time.
There is a Single Judge decision of this Court in Shahu Avadesh Kumar v. S. Zakual Husnain A.I.R. (81) 1944 ALL. 243, which in fact went a step further. There it was held that where a transferee had been in possession of a property for some time, but dispossessed later, the period of six years under Article 116, Limitation Act, which-was the article applicable would begin not from the date of the illegal transfer but from the date of the transferee's dispossession. Of course, this particular question does not arise in the present case as the suit was within six years from the date of the sale-deed dated 9th June 1936.
7. Their Lordships of the Judicial Committee in Babu Nisar Ahmad Khan v. Babu Raja Mohan Manucha A.I.R. (27) 1940 P.C. 204, also held that if the claim was based on a covenant to indemnify the transferee in case of his dispossession, Article 116 only would apply. The same position is confirmed by a previous decision of their Lordships in Ram Raghubir Lal v. United Refineries (Burma) Ltd. A.I.R. (20) 1933 P.C. 143. The Bombay High Court in Ratanbai v. Ghasiram Gangabisan Wani A.I.R. (19) 1932 Bom. 36, the Nagpur Chief Court in the Full Bench decision in Kashirao v. Zabu A.I.R. (19) 1932 Nag. 5 and also the Oadh Chief Court in Udairaj Singh v. Ram Udit Tewari A.I.R. (11) 1924 Oudh 147, took the same view. These cases were all reviewed in a recent decision of the Oudh Chief Court in Ahsan Ali Khan v. Suraj Narain A.I.R. (29) 1942 Oudh 82, where also it was affirmed that in the case of a void transfer, a claim by the transferee for compensation against the transferor in respect of the damage suffered by him in consequence of his dispossession from the leased property on the basis of an indemnity clause in deed was governed by Article 116 and not Article 62, Limitation Act.
8. The lower appellate Court was, in my opinion, therefore, right in applying this Article 116 to the present case and holding that the suit was within time. The vendees having been found to have remained in possession to a certain date, they were allowed interest on the amount actually paid by them to the vendor only from that date and thus they were granted a decree for Rs. 541-4-C. With this view, I am unable to find any fault. I hold that the learned Judge came to a right conclusion on the question of limitation involved in this case.
9. I, therefore, dismiss this appeal with costs. Leave to appeal under the Letters Patent is refused.