The Art. 47 is applicable under the following conditions: (i) That the suit must be for the recovery of money paid by the plaintiff for the defendant; (ii) Such money must have been paid by way of consideration which was in existence at the time of payment; and (iii) That the consideration must have failed. The expression “existing consideration” in Article 47 means consideration which is not void ab initio or invalid.
In Lalji v. Ramrup, (AIR 1934 Pat. 148), it has been held that the Article 47 is based on the principle of justice and equity because it will be inequitable that a person receiving from another something should be allowed to retain the same when the consideration for the same became infructuous subsequently. In all such cases the implied contract to return the money on failure of consideration is presumed. In Sushila v. Sridhar, (AIR 1970 Ori. 89), it has been held that the application of the Article 47 would depend upon whether the consideration failed at once or subsequently.
If the consideration failed at the time when the contract was made but not subsequently the Art. 47 cannot apply. Therefore a suit by vendee for refund of consideration against the vendor, the sale being void because of want of title of the vendor does not attract the Article 47, but Art. 24.
A case of partial failure of consideration does not fall under Art. 47. If the vendor does not deliver the possession of property, the date of failure of consideration will be the date of sale and the time started to run from that date.
In Mahabir Choudhry v. Gajadhar Sahu, (1968 BLJR 473), it has been held that where a purchaser of tenanted land files a suit for rent against that tenant and the suit is dismissed, limitation for a suit for the refund of the purchase money starts from the date of dismissal of his suit against the tenant.