Case: Memon Abdul Karim Haji Tayab Vs. Deputy Custodian General, New Delhi And Others

The matter has a long history behind it which it is necessary to set out in order to understand the point now in dispute in the present appeal. The money in question was deposited with the appellant by his sister as far back as January 1946. The total amount deposited was Rs. 90,000/-, but the appellants sister took back Rs. 5,000/- with the result that the balance of Rs. 85,000/- remained deposited with the appellant. The appellants sister thereafter migrated to Pakistan sometimes between June to August 1949. Sometime later, the Assistant Custodian Veraval called upon the appellant to pay this sum lying in deposit under S. 48 of the Administration of Evacuee Property Act. No. XXXI of 1950, (hereinafter referred to as the Act). The appellant contested the matter on the ground that the money had been given to him as a loan and its recovery was barred in January 1949 long before his sister had migrated to Pakistan, and therefore the amount could not be recovered from him. The Assistant Custodian however directed the recovery of the amount as arrears of land revenue under S. 48 of the Act, as it then stood. The matter was taken in appeal before the Custodian Saurashtra, but the appeal failed. The appellant then went in revision to the Custodian General, and the revision also failed. Then followed a writ petition by the appellant before the Saurashtra High Court in 1955. The writ petition was dismissed by a learned Single Judge; but on Letters Patent Appeal the appellant succeeded, the High Court holding that the amount was not recoverable under S. 48 of the Act as it stood at the relevant time. This decision was given on December 9, 1957. In the meantime, S. 48 had been amended on October 22, 1956 and we shall refer to this amendment in due course.2. After the appellant had succeeded in the High Court, another notice of demand was served on him by the Assistant Custodian on January 22, 1958, and after hearing the objections of the appellant, the Assistant Custodian again directed the amount to be recovered. The appellant then took the matter in appeal to the Custodian General. The Custodian General allowed the appeal in August 1958 and remanded the proceedings for further enquiry as directed by him. The Custodian General then held that S. 48 as amended applied to the fresh proceedings which began on the notice issued by the Assistant Custodian in January 1958. He further held that the amount was recoverable under the amended S. 48 provided it was due to the evacuee on the date the property of evacuee vested in the Custodian. He was therefore of opinion that it would have to be determined when the sister of the appellant migrated and whether the amount was due to her on the date of her migration and had not become barred by the law of limitation on that date. He was further of opinion that the question whether the transaction amounted to a loan or a deposit had to be determined as there were different periods of limitation for these two types of transactions. He therefore remanded the matter for disposal after finding the facts in accordance with the directions given by him. After the remand further evidence was taken and it was held that the amount in question was payable by the appellant as it was a deposit and was still recoverable when the property vested in the Custodian. Thereupon the appellant again went in appeal to the custodian General and that appeal was dismissed on February 6, 1961. Then the appellant applied to this court for special leave which was granted; and that is how the matter has come up before us.

Court's reasoning:
We are of opinion that the argument is misconceived. Section 9 deals with the recovery of immovable property or specific movable property which can be physically seized; it does not deal with incorporeal evacuee property which may vest in the Custodian and which, for example, may be of the nature of an actionable claim. So far as actionable claims are concerned, they are dealt with by S. 48 as amended read with S. 10(2) (1). It is also a misconception to think that the amount of Rs. 85,000/- which is involved in this case is actually evacuee property. It is true that under S. 48 as amended, the Custodian can take action for recovery of such sums as may be due in respect of any evacuee property and if the sum of Rs. 85,000/- which was deposited with the appellant is actually evacuee property, the Custodian may not be able to take action under S. 48 (1) and (2) in respect of the same. But the property which vested in the Custodian was not the actual money in specie lying with the appellant who must be treated as a banker with respect to the property with him; on the other hand the property which vested in the Custodian would be the right of the appellants sister to recover the amount from the appellant and that would be incorporeal property in the form of an actionable claim. It is in respect of that actionable claim that the Custodian can proceed under S. 48, sub-secs. (1) and (2), to recover the sum payable to him in respect of that property, namely, ;the actionable claim. The contention of the appellant that S. 48(1) will not apply to the recovery of this sum of money must therefore fail and the Custodian would have the right to recover the sum of money as it is payable in respect of the evacuee property of the appellants sister, namely, the right which she had to recover the sum from the appellant, and it is this right which vested in the Custodian. The Custodian could not take action under S. 9 by physically seizing the amount because the amount cannot be treated as specific property which is liable to be seized under that Section. If the appellants sister had the right to recover this amount from the appellant that right would be incorporeal property which would vest in the Custodian and in respect of which action could be taken under S. 48 as amended and not under S. 9 of the Act. The contention of the appellant that S. 48(1) and (2) do not apply to this case must thereforethe findings of the authorities concerned, it appears that the deposit was made sometime in January 1946. The appellants sister migrated sometimes between June to August 1949. According to the law in force in that area, at the relevant time on the date of migration of the appellants sister, she became an evacuee and her property would vest in the Custodian on such date. So her right to recover this amount from the appellant would vest in the Custodian sometime between June to August 1949, if it was still alive under the law of limitation that in such cases only the remedy is barred though the right remains. Further as this was a deposit, limitation would run at the earliest from the date of demand and there is no evidence that any demand was made by the appellants sister for the return of the money before she migrated to Pakistan. Therefore, the period of limitation had not even begun to run on the date the appellants sister migrated to Pakistan, assuming Art. 60 of the Limitation Act, No. 9 of 1908 applied. Consequently the right of the appellants sister to recover the amount vested in the Custodian and was not barred by limitation at the time when she became an evacuee. The demand was made for the first time on January 10, 1952 by the Assistant Custodian and time would run from that date, at thecontention thus raised in this Court for the first time raises a question as to the effect of sub-s. (3) of S. 48.Besides the effect of S. 48 (3), it is contended for the respondent that if this question had been raised before the proper authorities evidence might have been led to show that the recovery was not barred even for the case proceeded in the assumption that Article 60 of the Limitation Act applied and proper defences could have been raised as for example the conditions on which the deposit was made i.e. either in demand or otherwise and acknowledgments of liability made by the appellant. Such defence would have raised questions of fact which have never been investigated. Therefore it is urged that the appellant should not be allowed to raise the point that the recovery would be barred even if the amount was treated as a deposit and should be confined to his case that this was a loan and not a deposit, for he never pleaded at any time before the authorities concerned that even if it was a deposit the recovery would be barred by time. We are of opinion that there is force in this contention on behalf of the respondents and we are not prepared to allow the appellant to raise the question whether the recovery would be barred even if the amount is treated as a deposit. In this view of the matter, it would not be necessary to consider the exact effect of S. 48 (3) and to decide whether it will apply even to cases where the recovery had become barred under the Limitation Act before October 22, 1956.We therefore do not allow the appellant to raise the point that the recovery would be barred even if the amount was a deposit.