Ganon Dunkerley and Company Ltd. vs Western India Theatres Ltd.

Bose, J.—This is an appeal from a decision of G.K. Mitter, J., dismissing the Appellant''s suit for refund of money deposited as security for due performance of a contract for the construction of a cinema house in Calcutta known as the Elite Cinema. The Appellant''s case is that on March 27, 1947, it entered into a contract with Western India Theatres Ltd. (Defendant No. 1) for construction of a cinema hall in Calcutta which is known to the Elite Cinema and it was agreed by and under the said contract that the Appellant would have to deposit with the architect! of the Defendant No. 1 a sum of Rs. 7,000 by way of earnest money to be refunded on satisfactory completion of the work. On April, 26, 1947, the Appellant deposited Its. 7,000 with Messrs.

Abott and Davis, the architects of the Defendant No. 1. Thereafter the work was satisfactorily completed and although the Appellant demanded refund of the deposit the Defendants did not refund the amount. It appears that although under the original contract the work was to be completed by October 15, 1947, the time for completion was subsequently extended by mutual agreement between the parties and the work was in fact completed in or about October, 1948. It appears further that pending completion of the work under the contract Mr. Abott, one of the partners of Abott and Davis died. The Appellant has therefore used the Western India Theatres Ltd. and the surviving partner Mr. J. R. Davis for refund of the money with interest.

The defence of the Western India Theatres Ltd. (Defendant No. 1) is that there was no agreement with them for deposit of Es. 7,000 and they had nothing to do with the deposit which was made with their architects and hence there is no cause of action against them.

The defence of Mr. J.R. Davis, the Defendant No. 2, inter alia is that the firm of Abott and Davis has done various construction works for Western India Theatres Ltd. and a large sum of money was due to Abott and Davis from Western India Theatres Ltd. for such works. The firm of Abott and Davis had adjusted the sum of Rs. 7,000 paid to Abott and Davis by the Appellant towards the dues of the firm from Western India Threatres Ltd. Besides, various other pleas, the plea of limitation was also taken in the written statement of this Defendant No. 2. The learned trial Judge has given effect to the contentions of the Defendants and has dismissed the suit. The learned Judge has also held that the suit is barred by limitation.

The Appellant''s first contention is that the learned Judge''s finding that there is no cause of action against the Defendant Western India Theatres Ltd. is wrong. It is argued that the firm of Abott and Davis was acting as agents in the matter of negotiating the contract between the parties and the contract for the construction work was entered into as a result of negotiations of this firm of architects and the agreement for deposit of Rs. 7,000 was also entered into through this firm of architects as part and parcel of the main contract. The Appellant relies strongly on two letters dated August 27, 1953 and August 28, 1952 which passed between the Appellant and the Respondent Western India Theatres Ltd. The relevant portion of the letter of August 27, 1952, written by the Appellant to Western India Theaters Ltd. is as follows:

Dear Sirs,

Re: Elite Cinema and Messrs. Abott and Davis, Architects.

We are concerned with the return of deposit of Rs. 7,000 paid to Messrs. Abott and Davis, Architects, in connection with the works carried out by us at Elite Cinema, Calcutta and have to request you to be good enough to confirm that the said sum of Rs. 7,000 was deposited as earnest money with your said Architects, Messrs. Abott and Davis.

Thanking you,

Yours faithfully,

For Ganon Dunkerley and Company Ltd.

The reply to this letter is the letter of August 28, 1952, which runs as follows:

M/S. Ganon Dunkerley and Company Ltd. Bombay.

Dear Sirs,

With reference to your letter of the 27th instant, please note that the amount deposited by you with our architects Messrs. Abott and Davis is Rs. 7,000.

Yours faithfully,

For Western India Theatres Ltd. Sd.

Director Managing Agents.

These two letters make it quite clear that the Western India Theatres Ltd. were accepting the position that the sum of Rs. 7,000 had been deposited with their architects and the deposit had relation to the work of construction of the Elite Cinema. The Western India Theatres Ltd. did not even dispute in their reply dated August 28, 1952, the fact that the deposit was by way of earnest money. It is true that the Defendant No. 1 did not actually take part in the negotiations of the contract for the construction work, but it is quite clear that they were being represented by the architects who had been authorised to finalise the contract on their behalf. The correspondence exhibited in this case shows that quite clearly. The first letter to which reference may be made in this connection is the letter of February 28, 1947, the relevant portion whereof may be set out hereunder:

You are requested to make a deposit of Rs. 7,000, as earnest money against this contract and your cheque should be forwarded to my Calcutta office

A copy of the terms of agreement and appendages will be forwarded as soon as my client has signed the original.

Yours faithfully,

Sd. M. Ridley Abott.

This letter is addressed to the Appellant.

The next letter to be referred to is the letter of March 10, 1947, written by the Appellant to Mr. Abott and the relevant portion is as follows:

Dear Sirs,

Ref: Elite Cinema,--Calcutta.

We beg to acknowledge your letter Ref. No. P/270/22 of 28th ultimo from which we are pleased to note that the above contract has been finalised and submitted to your client for his signature.

We shall thank you to let us have a copy of the terms of agreement and appendages no sooner your client has signed the original. Immediately on receipt of the above we will at once remit Rs. 7,000 to your Calcutta office as earnest money against this contract

Yours faithfully,

Per Pro Gannon Dunkerley and Company Ltd.

The next letter is dated March 27, 1947, written by Ridley Abott to the Appellant. A copy of this letter was forwarded to the Defendant No. 1 Western India Theatres Ltd. and the relevant portion of the letter is as follows:

Dear Sirs,

I have the pleasure in informing you on behalf of my clients, Messrs. Western India Theatres, Ltd., that the contract between yourselves and them has been signed today for the Elite Cinema conversion

Yours faithfully,

Sd. M.A. Ridley Abott.

It may be pointed out in this connection that the Defendants have not disclosed the agreement under which the Defendant No. 2 was employed as architect under the Defendant No. 1. The original contract which was entered into for construction of the cinema house has however been disclosed and exhibited in this case and it is true that this contract which was actually signed by the Western India Theatres Ltd. did not contain any stipulation for deposit of any sum by way of earnest or security. But it is clear that the arrangement or agreement as to the deposit of Rs. 7,000 was treated as part and parcel of the main contract. It is equally clear from the letter of August 28, 1952, to which reference has already been made that the Defendant No. 1 was aware that the deposit of Rs. 7,000 was made in connection with the contract of construction work of the cinema. One Haricharan Bandopadhyaya was called as a witness on behalf of the Plaintiff Appellant. He has stated that the correspondence in connection with the entering into of the contract was carried on with Abott and Davis and Abott and Davis were acting in the capacity of architects and agents of Western India Theatres Ltd. (QQ. 11 and 12). With regard to the deposit of Rs. 7,000 his evidence is that the earnest money was calculated by the architects at Rs. 7,000 and about payment it. was said that Mr. Abott with whom the Appellant had discussion would write a letter to the Appellant at Calcutta and when the Appellant would confirm it from Calcutta, then they will pay (Q. 25). He has also stated that as there was no room in the standard agreement form for payment of the earnest money it was suggested that Abott and Davis would write a letter to the Appellant and the Appellant would confirm and then pay. It is thus clear from the oral evidence which is on record and also from the correspondence that this arrangement with regard to the payment of the deposit of Rs. 7,000 by way of earnest as against the contract of construction of Elite Cinema was intended to bei a part of the contract of construction work. It is also clear that the Defendant No. 1 had all along the benefit of the security deposit which was retained during the completion of the work. The amount remained in the custody of the architects as security for meeting any possible claim that might arise against the Appellant for non-fulfilment of the contract. It is also clear that the architects treated this deposit of Rs. 7,000 as being held on account of the Western India Theatres Ltd., and this amount was accordingly adjusted against the dues of Western India Theatres Ltd. to the firm of Abott and Davis. A letter written by one Fernandes to the Western India Theatres Ltd. dated November 18, 1947, has been disclosed in this case and this letter shows that a certain amount was being claimed by Defendant No. 2 from Defendant No. 1. It also appears from this letter that there was some correspondence with regard to this claim of Defendant No. 2 against Defendant No. 1 but -curiously enough none of the letters that passed between these two parties has been disclosed.

It was argued on behalf of the Respondent No. 1 that as there is a specific clause in the main contract of construction work dealing with the question of security and the circumstances under which security could be demanded, the architects had no authority to demand this security deposit of Rs. 7,000 and consequently this arrangement with regard to the deposit of security was not binding on the Respondent No. 1. It may be pointed out, however, that the clause referred to and as appearing in the contract deals with only special contingency when security may be demanded but it does not prevent the architects from asking for general security to be given for due performance of the contract. There is no restriction put anywhere on the power of the architects to demand the security. Our attention was also drawn to Hudson''s Building and Engineering Contracts, 8th Ed. p. 51. The passage referred to is as follows:

An architect, even if employed to obtain tenders, has no implied authority to enter into a contract on behalf of his employer, or to promise to vary or depart from a concluded contract between his employer and a builder, e.g., by promising the builder to certify for an increased price, or ordering a variation in the work.

It was argued on the authority of this passage that the architects in this particular case had no authority to enter into any contract at all and particularly the contract for payment of the security deposit. I have already dealt with this aspect of the matter in an earlier part of this judgment. But even assuming that there was initially no authority in the architects to conclude an agreement with regard to the payment of deposit of Rs. 7,000, it appears to me that the two letters dated August 27, 1952 and August 28, 1952, which passed between the Appellant and the Western India Theatres Ltd. and to which reference has been made in an earlier part of the judgment, clearly showed that there bad been ratification of this agreement as to payment of deposit or the act with regard to the demand of the security deposit. It appears to me, therefore, that in the circumstances it is not open to the Western India Theatres Ltd. to disclaim liability for the amount deposited.

The next point that was urged on behalf of the Appellant is that in any event there is no escape from the position that Defendant No. 2, J.E. Davies is liable to refund the amount. Now, on this point, the correspondence makes it abundantly clear that it was Abott and Davis who actually received this amount and this amount was credited in their account. In the letter of February 28, 1947, already referred to, Mr. Abott was asking the Appellant company to send a cheque to the Calcutta office of the firm of Abbot and Davies. Then again in the letter of April 10, 1947 Mr. Abbot was writing to the Appellant inter alia as follows:

You should now deposit Rs. 7,000 with my Calcutta Office as earnest money against this contract.

These two letters show that the money was demanded and taken as earnest money against the contract of construction work of the "Elite Cinema". In the subsequent correspondence that passed between the parties and dated April 18, 1947, April 23, 1947 and April 26, 1947, the Appellant was enquiring from the firm of Abott and Davies as to in whose name the cheque would be drawn and Abbot and Davis had informed the Appellant that the cheque would be drawn in the name of Abbot and Davis, Calcutta and along with the letter of April 26, 1947, the Appellant had sent the cheque making it clear in that letter that the cheque was being sent as deposit towards the contract for the construction of the Elite Cinema. On October 9, 1947, the Appellant had written to Abbot and Davis with regard to the deposit in the following manner:

Dear sir,

We have now heard from the owners and understand that all further work to be carried out at the Elite Cinema, Calcutta, is to be under Mr. J. B. Fer-nandes, Architect, Bombay.

When the work was started we had deposited Rs. 7,000. We shall be glad to learn how that amount is to be disposed off now-whether it will be refunded to us or be transferred to the owner or the above Architect.

Yours faithfully,

Sd. M/S. Gannon Dunkerley and Company

A copy of this letter was sent to Mr. Fernandes. On October 14, 1947, Mr. Davies wrote to the Appellant in reply to the letter of October 9, 1947, that "regarding the deposit of Rs. 7,000, we "are making arrangements with Mr. Fernandes to transfer this "amount to his account for refund at the applicable time." On October 20, 1947, the Appellant answered the letter of October 14, 1947, as follows:

We thank you for your letter dated 14th October 1947, and note that you are making arrangements with Mr. Fernandes to transfer the amount of deposit Rs. 7,000 of his account for refund to us at the applicable time.

It is thus clear that the amount was deposited and retained as earnest money and it was contemplated that it would be refunded, at the proper time. We therefore find it difficult to concur with the finding of the learned Judge that Rs. 7,000 was paid to please or to humour the architects. There is no evidence to support any such finding. The architects undertook to refund it at the applicable time. The subsequent correspondence indicates that the architects were not in a position to pay the amount at once upon demand being made for refund of the amount and so the Appellant had even offered to accept payment of the amount in instalments from the firm of the architects and the letters dated March 10, 1950, August 17, I960 and January 17, 1952, make the position clear.

The evidence also establishes the fact that the work was completed to the satisfaction of the Defendants and there can therefore be no question that this amount became refundable to the Appellant. Haricharan was asked specifically in question 40 whether the Defendants at any time complained of any unsatisfactory nature of work and his answer was "no". His evidence further is that upon completion of the work full payment had been made to him in respect of the work done by him. The Defendant No. 2 is the person in whose custody the money was kept deposited and there can be no question that as depositary he is liable to refund the amount. The cause of action as against Defendant No. 2 is on the deposit and the obligation to refund it.

The Learned Counsel appearing on behalf of the Defendant No. 2 has placed reliance on a decision of the Court of Appeal in England Ellis v. Goulton (1893) 1. Q.B. 350. In this case, an action was brought by the purchaser of certain freehold property against one Goulton who was the vendor and against one Jackson who acted as the vendor''s Solicitor. The property was sold at an auction and one of the conditions of sale was that the purchaser was to pay a deposit of 10 per cent. in part payment of the purchase money into the hands of the vendor''s Solicitor as agent for and on account of the vendor. The purchaser deposited the 10 per cent with the vendor''s Solicitor upon the property being sold to him and the Solicitor received it expressly as agent for the vendor. The vendor failed to make out a title to the property and rescinded the contract. The deposit money not having been returned, the purchaser brought an action against Goulton (vendor) and Jackson (the solicitor). It was held that as Jackson had received the deposit as agent for and on account of the vendor and not as agent of both the Plaintiff and the vendor, Defendant Jackson could not be made liable for refund of the amount to the Plaintiff. It was pointed out that Jackson was not a stakeholder nor was there any fiduciary relationship between the Plaintiff and Jackson and so the Plaintiff had no cause of action against Jackson. But in the case before us, the deposit money was agreed to be kept in the hands of the architects by both the Plaintiff and the Defendant No. 1, Western India Theatres Ltd. The firm of Abbot and Davies was thus holding the money under the arrangement that they would refund the amount to the depositor upon due performance of the contract and they would hand over the amount or any part thereof to the Defendant No. 1 in case of the contract not being duly performed by the Appellant. It is thus clear that the firm was holding the amount as agent of both the Appellant and Western India Theatres Ltd., in other words, as a stakeholder; and so the Defendant No. 2 is personally answerable for the deposit. Lord Justice Bowen at p. 352 of the report Ellis v. Goulton (1893) 1 Q.B. 350 made the following observation:

When a deposit is paid by a purchaser under a contract for the sale of land, the person who makes the payment may enter into an agreement with the vendor that the money shall be held by the recipient as agent for both vendor and purchaser. If this is done, the person who receives it becomes a stakeholder, liable, in certain events, to return the money to the person who paid it. In the absence of such agreement, the money is paid to a person, who has not the character of stakeholder; and it follows that, when the money reaches his hand it is the same thing so far as the person who pays it is concerned as if it had reached the hands of the principal.

Lord Justice A.L. Smith at p. 354 in dealing with the question of liability of Jackson made the following observations:

It seems to me that as soon as it is admitted that Jackson received the money as agent for the vendor, and not as stakeholder, the matter is determined. The Plaintiff has no ground on which he can succeed in getting back the money from Jackson. He cannot sue in contract, nor in trover or detinue, for the money is not in specie or set apart in a bag, and the Plaintiff has no equitable right as against Jackson. It is said that Goulton, the vendor, stood in a fiduciary position with regard to this deposit, and that therefore the Plaintiff could follow the money into the hands of Jackson, and In Re. Hallett''s Estate is cited in support of this view, which however must fail, because no such fiduciary relation exists.

This case before the English Court of Appeal was a case of deposit in connection with a sale of property. It was a deposit of a part of the purchase-money. So no fiduciary relationship arose as a result of such deposit and in the circumstances in which such a deposit was made. But when money is deposited for due performance of the contract and refundable upon completion of the contract or engagement, there is some sort of fiduciary relation created. This is clear from the decision in Muncherji Romanji Panthaki v. Dorabji Jehangir Randiva (1895) ILR 19 Bom. 775. In this case a sum of money was kept in deposit with the grandfather of the Plaintiff and this amount was credited in the Plaintiff''s name in the Defendant''s books. The Court held that the circumstances under which the money was paid, made the transactions one of deposit and not a transaction of loan and Tyabji, J., observed as follows:

There are several circumstances which show that this was not the case of an ordinary loan, but was a transaction of a fiduciary character.

And then the learned Judge goes on to discuss the circumstances under which the money was paid and which showed that the transaction was in the nature of a deposit. This case has been followed in Govind Chintaman Bhat Vs. Kachubhai Gulabchand, . 28, 30.

In a decision of the Madras High Court Gangineni Kondiah v. Gottipati Pedda Kondappa Naidu (1910) ILR 33 Mad. 56 it was pointed out that a depositary within the meaning of Article 145 of the Limitation Act is a person who stands in a quasi fiduciary relation. These cases, therefore, show that although no express trust is created by the transaction of deposit between the depositor and the depositary, some sort of fiduciary relationship is created by such transaction. The decision of the English Court of Appeal is, therefore, distinguishable from the facts of the case before us. We, therefore, hold that both the Defendants 1 and 2 are liable to the Plaintiff Appellant to refund the amount and that there is a good cause of action against both these Defendants.

It has been argued on behalf of the Appellant that the appropriate article applicable is Article 145 of the Limitation Act and if it is held that this article is not applicable, then Article 120 is the article which is applicable to this case. The contention on behalf of the Defendants is that the proper article which applies to the facts of this case is Article 115 of the Limitation Act or Article 60 of the Limitation Act. In my view there is in the facts and circumstances of this case ample scope for the application of Article 145 of the Limitation Act. It has been held that when one man''s property is handed over by that man to another, the latter becomes a depositary unless there is something in the terms of the handing over which would prevent it from being treated as a person with whom it was deposited at all. Reference may be made to the decision of the Madras High Court reported in Kishtappa Chetty Vs. Lakshmi Ammal, . This case has been followed by me in Suit No. 3105 of 1950 Jyotish Chandra Sen v. Manmatha Nath Sen and Ors. Unreported judgment of Calcutta High Court, dated 19-7-1955. Short notes in AIR (1955) N.U.C. 5614. It may also be pointed out that this Madras case has been followed in various other cases of the different High Courts.

It has further been held that the "movable property" in Article 145 does not mean only property returnable in specie, but the expression has been held to be wide enough to include a case of deposit of money. The case of Lala Govind Prasad v. Chairman, Patna Municipality (1907) 6 C.L.J. 535 is an authority in support of this proposition. Asutosh Mookerjee, J., at p. 538 after dealing with certain cases proceeded to construe Article 145 as follows:

Under these circumstances, it appears to be a reasonable construction of Article 145 to hold that the term "movable property" includes money, and is not restricted in its application to cases where property is recoverable in specie.

Further down at p. 539 referring to the case of Kristo Kamini v. Administrator-General of Bengal (1904) ILR 31 Cal. 519 the learned Judge made the following observation:

The point, however, directly arose in a recent case which was heard in the first instance by Mr. Justice Sale and subsequently by the Court of Appeal. The majority of the Learned Judges who heard the case on appeal held that Article 145 might apply even though the property was not recoverable in specie.

Then again at p. 540 the following further observations were made:

It further appears that there is not, in point of principle, any substantial difference between the two cases in one of which a Government security, and in the other, a sum of money, is deposited, for the faithful discharge of the duties undertaken by the depositor, and there is no intelligible reason why two different periods of limitation should be applicable to the two cases in each of which the depositor seeks for the return of his deposit after his service has terminated. If a Government Security or a sum of money is delivered to be held as security for the performance of some engagement, and upon the express or implied understanding that the thing deposited is to be restored to the owner as soon as the engagement has been fulfilled, the person with whom the deposit has been made may rightly be treated as a depositary within the meaning of Article 145 of the Second Schedule of the Limitation Act.

After referring to the meaning of the word "deposit" as given in the Oxford Dictionary, Vol. III, pp. 214-15 the following observation was made:

A deposit is defined to be "something usually a sum of money, committed to another person''s charge as a pledge for the performance of some contract, in part payment of a thing purchased, etc." and a "depositary" is defined to be a "bailee of personal property to be kept by him for the bailor without re- compense" It follows, consequently, that the Defendant in the present case must be treated as a depositary within the meaning of Article 145.

Holmwood, J., after referring to Maclean C.J.''s judgment in the case of Administrator-General v. Kristo Kamini (1904) ILR 31 Cal. 519 observed:

If a man makes a deposit in specie, i.e., current coin of Queen Victoria, he is entitled within 30 years to have the equivalent of that coin in current coin of King Edward VII returned to him. This is obvious if the particular currency in which he made his deposit has been withdrawn in the meantime, and I apprehend that its non-withdrawal makes no difference whatever to the principle.

The only difficulty about the application of (1907) 6 C.L.J. 535 145 is the possibility of cases arising in which a man had already served 30 years after making his deposit before retiring and applying to withdraw it, but such cases must be extremely rare and could be easily got over by a renewal of the deposit after the first thirty years.

The next case to which reference may be made is Gangahan Chahravarti v. Nabin Chandra Banihya (1915) 20 C.W.N. 232. This was a Division Bench judgment presided over by Mookerjee, J. and Newbould, J. It was also held in this case that Article 145 applies even when the property is not recoverable in specie and does not cease to be applicable merely because the Defendant refuses to return the property. Such refusal does not bring into operation either Article 48 or Article 49 of the Limitation Act. This was a case in which the Plaintiff had made over some gold to the Defendant to be made into ornaments. The Defendant did not deliver the ornaments and upon a suit being brought by the Plaintiff it was held that Article 145 of the Limitation Act applied. The decision Lala Govind Prasad v. Chairman of Patna. Municipality (supra) has also been followed in another case of this Court Nandalal Bose v. Asutosh Ghose AIR (1920) Cal. 167. In this case a sum of money was deposited as security for appointment as Tahsildar under the Manager of the Court of Wards. The suit had been brought for the recovery of the money and it was held that Article 145 of the Limitation Act applied to the facts of the case. Reference was made in the judgment by Walmsley, J., to the case of Lala Govind Prasad (1907) 6 C.L.J. 535 and the principle of that case was followed:

The next case to which reference may be made is the case of Pronwtho Nath Mullicli v. Prodyumno Kumar Mullich AIR (1921) Cal. 416. It was held by C.C. Ghose, J., that all actions for recovery of deposit of movable property are comprised within Article 145 of the Limitation Act and no exception is made as regards deposits where demand and refusal make the continuance of possession unlawful. It was pointed out further, that a deposit is one of the species of bailments and bailments are of two kinds, voluntary and involuntary. Where the depository dies and the deposit passes into the hands of his widow or son, the latter becomes an involuntary bailee and a suit to recover the deposit from such involuntary bailee is governed by Article 145.

In a decision of the Rangoon High Court Ma Shwe On v. Ma Saw AIR (1928) Rang. 309 the same principle was reiterated that when goods are deposited the article applicable is Article 145 and the mere fact that the depositor demands the thing and the depositee refuses to return the same does not make Article 49 applicable to the case; and Article 145 is an article which is not controlled by Article 49.

In another decision of this Court Ajneswar Karmakar Vs. Kailash Chandra Ghose, where the Plaintiff sued for refund of certain gold and silver kept in the custody of the Defendant or in lieu thereof the price of the said gold and silver, and his case was that he had handed over the gold and silver for making some ornaments but the Defendant never made the ornaments nor returned the gold and silver, it was held that the Article that was applicable for determining the period of limitation was Article 145 and reference was made in the judgment by Duval, J., to some of the earlier Calcutta cases to which I have referred and these cases were followed.

The next case to which reference may be made is the case of Bibhu Bhusan Dutta and Others Vs. Anadi Nath Dutt and Others, . In this case, certain Government Promissory Notes belonging to two brothers of a joint family were given as security for the service of one of them. After retirement from service, the Government Promissory Notes were given back to the person in respect of whose service the Government Promissory Notes had been deposited. Soon after this the person to whom the Government. Promissory Notes had been returned died. In a suit by the heirs of the other brother against the heirs of the deceased bother, it was held that the character of the transaction being in the nature of a deposit, Article 145 of the Limitation Act applied and the nature of the deposit was not altered by the death of the depositary and the heirs of the deceased became depositaries after his death within the meaning of Article 145.

In a decision of the Judicial Committee AIR 1938 110 (Privy Council) it was held by the Privy Council that where Government Promissory Notes are left by a debtor with his creditor as security for a sum borrowed by him or for safe custody, a suit for recovery of the notes or for credit in the account between the parties for the sum realised by the sale of the notes and interest, is in either case governed by Article 145 of the Limitation Act and not by Article 49.

In a comparatively recent decision of the Madras High Court Ahilyamba Chatram and Devasthanam Vs. R. Subramania Ayyar, the principle enunciated in the decision of Lala Govind Prasad''s case (supra) had been applied and it was held by Ramaswami. J., that the word "deposit" in Article 145 has not been used in the limited sense of "depositum" but in a wider sense as including a "com-modatum", a.e., a bailment for the use of the bailee and would therefore include a deposit of money and hence a suit, to recover a sum of money deposited as security for proper performance of the of money deposited as security for proper performance of the duties of an office and from which the employer was entitled to deduct all sums not accounted for by the employee, comes under Article 145 of the Limitation Act.

In a very recent case of this Court decided by my learned brother Prolash Brothers v. Union of India (1959) C.L.J. 85 the principle laid down in the case of Bala Govind Prasad (supra) by Sir Asutosh Mookerjee was applied and it was held that either Article 145 of the Limitation Act or Article 120 applied to the facts of the case.

The learned trial Judge has, in holding that the claim is barred by limitation and Article 145 of the Limitation Act has no application to this case, followed the decision of Gentle, C.J. and Patanjali Sastri, J., Kashavlal Joshi Vs. M.K.A. Sankara Iyer and Others, . 76. In this case Gentle, C.J., held that Article 145 applies to cases where the thing deposited is recoverable forthwith or on demand. We are unable to concur in this view as we see no justification for restricting the scope of the Article within these narrow limits. A case of deposit recoverable on demand is dealt with specifically in Article 60 of the Limitation Act. There can therefore be no reason for enacting another article like Article 145 to cover such a case and to make it overlap with Article 60. The observations of the Division Bench of the Madars High Court Gangineni Kondiah v. Gottipati Pedda Kondappa Naidu already referred to are pertient on this point, although the Court was there considering whether Article 145 or Article 49 of the Limitation Act applied to the case. The Bench presided over by Sir Arnold White, C.J. and Krishnaswami Ayyar, J., made the following observations at p. 57:

Article 145 is the special article dealing with a suit against a depositary to recover movable property deposited and the period of 30 years provided by it runs from the date of the deposit. Article 49, on the other hand, deals generally with a suit for other specific movable property and it seems to us to have no application where the specific provision contained in Article 145 applies But apart from the foregoing reasoning it is prima facie clear that all action of the recovery of a deposit of movable property are, by the express words of Article 145, comprised within it. No exception is made as regards deposits where demand and refusal make the continuance of possession unlawful. The article includes suits against a pawnee for recovery of movable property. It cannot be contended for a moment that if a pawnee refuses to return the pledge on demand and thereby makes his possession wrongful, there is any other article applicable to the case. There is no reason therefore for making any distinction in the case of the suit for return of the deposit.

In a subsequent Full Bench case of the Madras High Court Seeti Kuthi v. Kunhi Pathumma (1917) ILR 40 Mad. 1040 Srinivasa Ayyangar, J., at p. 1063 in construing the effect of column 1 of the various articles of the Limitation. Act in relation to column 3 of such articles made the following observation:

There may no doubt be cases where on ground of public policy or owing to the difficulty in fixing precisely the time when the cause of action arises, a limited period may be fixed beginning from more or less arbitrary starting points; for example, a suit to recover movable property from a depositary or pawnee must, under Article 145 of the Limitation Act, be brought within thirty years from the date of the deposit, or pawn, though there may be a contract between the parties fixing a time before which the depositor or pawnor could not recover the property from the bailee.

This case makes it quite clear that even if a time is fixed for refund of the deposit, the article applicable is Article 145 of the Limitation Act. In the case reported in 6 C.L.J. 535 to which reference has repeatedly been made in earlier parts of this judgment, Holm wood, J., had also this aspect of the matter in his mind. There are various other articles in the Limitation Act from which it will appear that column 1 and column 3 of such articles have no real correlation to each other, nor any uniform logical basis can be found in the fixation of the date from which the limitation will start running. In some of these cases the point of time from which the period of limitation will start running appears to have been fixed rather arbitrarily. In the case of Muthu Korakkai Chetty v. Madar Ammal (1921) ILR 43 Mad. 185 which is a decision of a Full Bench of the Madras High Court, Sheshagiri Ayyar, J., at p. 213 in dealing with this question of construction of the articles in relation to the two columns appearing in the articles stated as follows:

Therefore, in my opinion the true rule deducible from these various decisions of the Judicial Committee is this: that subject to the exemptions, exclusion, mode of computation and the excusing of delay, etc., which are all provided in the Limitation Act, the language of the third column of the First Schedule should be so interpreted as to carry out the true intention of the legislature, that is to say, by dating the cause of action from a date when the remedy is available to the party. This is a rule of construction and not a rule of law.

In the case of Sarat Kamini Dasi v. Nagendra Nath Pal (1925) 29 C.W.N. 973, 980 Mukerji, J., in dealing with this particular question and the question of construction of Article 109 of the First Schedule to the Limitation Act observed:

A careful study of the third column of the schedule reveals an outstanding fact which cannot be ignored, namely, that the starting point of limitation does not always synchronise with the cause of action ; in many cases it does, but in others it dates from some specified events which again are either anterior or posterior to the accrual of the cause of action.

In the case of AIR 1932 165 (Privy Council) which is a decision of the Judicial Committee Sir Dinshaw Mulla in delivering the judgment of the Judicial Committee observed at p. 167:

The fixation of periods of limitation must always be to some extent arbitrary, and may frequently result in hardship. But in construing such provisions equitable considerations are out of place and the strict grammatical meaning of the words is, their Lordships think, the only safe guide.

Having regard to these weighty observations in these various cases which I have referred to, it appears to us that the view which has been expressed by the learned trial Judge following the decision of Gentle, C.J., in Kashavlal Joshi Vs. M.K.A. Sankara Iyer and Others, is not correct and we are, therefore, unable to subscribe our approval to the decision of G. K. Mitter, J., in Suit No. 1034 of 1949, on the basis of which the learned Judge has held in this case that Article 145 is not applicable.

The learned Judge has held that if the contract pleaded in paragraph 1 of the plaint had been established, the article of the Limitation Act that would be applicable is Article 115 and not Article 145. Now in order to attract Article 115 the suit has to be for compensation for breach of contract, express or implied not specially provided for. In some cases it has been held that compensation in Article 115 means damages Johuri Mahton v. Thakoor Nath Lukee (1880) ILR 5 Cal. 830, 832 and other cases and it has also been held that the article cannot by any stretch of language apply to the case of a deposit (Datt Singh v. Srihar Singh AIR (1955) N.U.C. All. 3551). It was observed in that case that "the claim for a return of the deposit money cannot by any stretch of the language of Article 115 be considered as a suit for compensation for breach of any contract. It was further held in this case that when an employee makes a deposit for due performance of his duties, the deposit is in the nature of a trust and the proper article in such a case is Article 145 which provides for a greater period of limitation than Article 120. Even if Article 145 is not applied, there is no scope from the conclusion that the other article applicable to a case of this type is Article 120."

Reliance has been placed by Mr. Chatterjee, Learned Counsel for the Respondent No. 1, on the decision of the Judicial Committee 21 CWN 577 (Privy Council) to show that the word "compensation" in Article 115 and Article 116 has a very wide connotation and it applies to both claims for unliquidated damages and claims for specific amount or a sum certain. In this case the Privy Council has laid stress on the fact that Article 116 of the Limitation Act covers cases of compensation for breach of contarct which is a registered one and so whenever there is a registered contract Article 116 will apply and it will prevail over other articles in the Limitation Act even if such articles would have been specifically applicable to the case if the contract had not been registered. The Privy Council points out that the words "not specially provided for" are absent from Article 116 and so Article 116 applied to the case even though the suit with which the Judicial Committee was concerned was one for arrears of rent to which Article 110 was applicable inasmuch as the rent was being claimed on the basis of a registered document. Mr. Chatterjee also referred to Maneklal Mansukhbhai v. The Suryapur Mills Company Ltd. (1928) ILR 52 Bom. 477 in which a liquidator had brought a suit against a contributory for realisation of unpaid call money. There is no specific article in the Limitation Act which covers such a case and, therefore, it was rightly held that Article 115 applied. It may be noted, however, that the decision of the Judicial Committee in Tricomdas case (supra) has been followed in this Bombay case and the word "compensation" in Article 115 or Article 116 has been interpreted to have been used in its widest sense. Our attention was also drawn to the case of Rameswar v. Ram Chandra (1884) ILR 10 Cal. 1033 Brojo v. Budhan (1928) ILR 55 Cal. 551, 563, 564 and Ramasami v. Muttusami and Anr. (1892) ILR 15 Mad. 380, 381. But in these cases the loans advanced were repayable after a fixed period, and as such a case is not specifically covered by any other article, the residuary Article 115 was held applicable. It is true that Article 115 was applied to claims for sums certain interpreting the expression "compensation" as being applicable to actions for debts but the fact remains that these cases did not fall under any other specific Article and so Article 115 had to be applied. Reference was made also to the decision of G.N. Das, J., Tarak Nath Saha and Others Vs. Rajani Kanta Saha and Others, . But the facts of this case are distinguishable. The head-note runs thus:

A deposited certain amount with B on conditions set forth in an Ekrarnama which provided that the amount would carry interest at certain rate and to the amount of interest B would add certain amount making in the aggregate a sum of Rs. 250 which was to be spent in performance of Durga Pujah. It also provided that if B or his successors were unable to perform the Puja, the amount of deposit would be divided between the parties in certain proportion. On failure of the successors of B to perform the Puja in a certain year, the successors of A sued them to recover the share on basis of Ekrarnama. It was held that the suit was governed by Article 115 and not by Section 10 or Article 120 of the Limitation Act.

It is quite clear that this suit that was instituted was on the basis of an Ekrarnamah, the terms of which had been broken. It was really a suit for recovery of the contribution that had been made by one party to the other and the transaction was not a deposit in the strict sense of the term, and, accordingly, Article 115 was applied.

Now a deposit made as security for due performance of a contract is refundable whether it is coupled with a promise or agreement to repay it or not. Even if nothing is agreed as to its repayment at the time the deposit is made, the obligation to repay arises upon the proper performance of the engagement by reason of the very nature of the transaction of deposit. If an express agreement is entered into for repayment of the deposit, the transaction still remains a deposit and its nature is not thereby altered. The essence of the cause of action for a suit for refund of a deposit is not the breach of the contract to repay it, but the fact that the transaction is a deposit which by its very nature is refundable. The person who holds the deposit and the person on whose behalf or for whose benefit the deposit is held as security are liable to refund it because it is a deposit. They are both in the position of depositaries So my conclusion is that the article applicable is Article 145 of the Limitation Act and if for any reason this article cannot be held to be applicable there is no doubt that Article 120 is applicable to this case. In the case of Upendra Lal Mukhopadhaya v. The Collector of Rajshahi (1886) ILR 12 Cal. 113 where a deposit was made as security for the discharge of duties as Manager of an Estate under the Court of Wards which deposit was liable for all sums not accounted for by the depositor and a suit had been brought after the dismissal of the depositor from his appointment, for recovery of the deposit it was held that the period of limitation was certainly not less than six years, and Article 120 or the Limitation Act applied to the case even if Article 145 was for some reason not applicable, Field; J., was, however, inclined to the view that Article 145 was also attracted to this case. In the case which was decided by my learned brother Prokash Brothers v. Union of India (1959) C.L.J. 85 to which I have already referred in this judgment, a sum of money had been deposited by a Contractor in connection with a tender which had been invited by the Government, and it was held that the proper Article applicable was Article 145 and even if this article could be held to be not applicable to the facts of the case, there was no question that Article 120 of the Limitation Act applied to this case. At p. 101 in dealing with the question whether Article 120 was applicable to the facts of the case, my learned brother proceeded to observe as follows:

Lastly, Mr. Mukherjee argued that while it may be true that Article 120 would save the limitation in this case, the cause of action as pleaded in the plaint was not so framed as to bring it within (1959) C.L.J. 85 120. I have not been impressed by that argument.

After dealing with the pleadings in some detail and the facts of the case, the conclusion which my learned brother arrived at was that the Plaintiffs case did come within the provision of (1959) C.L.J. 85 120 of the Limitation Act (p. 103).

It was also argued by Mr. Chatterjee that Article 60 of the Limitation Act applied to this case. His contention is that the pleading being that the deposit was repayable upon satisfactory completion of the work, it was obligatory on the depositor to make a demand after completion of the work and the limitation will run from the date of demand. It is difficult to follow why the Learned Counsel advanced this argument when his client''s specific case was that no demand had at all been made upon the Respondent No. 1 at any time before suit.

The Learned Counsel, however, referred to a decision of the, Patna High Court (Firm Bhupal and Others Vs. Abdul Hakim and Others, and to the decision of my learned brother in Prohash Brothers (supra) already referred to which explains and distinguishes the Patna case. In this Patna case, the Plaintiff after the death of her father brought a suit to recover her share in money alleged to have been deposited by her father with the Defendant. The Defendant alleged that the amount in dispute represented a loan and was not a deposit and relied upon a statement made by one of the Plaintiffs witnesses to that effect in a previous suit. It was found by the trial court that the amount was deposited for a fixed period and it was held that after the expiry of the fixed period, the amount deposited was to be deemed payable on demand by the depositor and the claim for recovery of the money was, therefore, governed by Article 60. Fazl Ali, J., who delivered the judgment, relied on a decision of the Madras High Court reported in Murugappa Chetti Vs. Ramanathan Chetti, but a perusal of that case makes it quite clear that there the deposit had been made by a customer with his banker and there was, therefore, no question that a claim in respect of such a deposit fell within the express terms of Article 60 of the limitation Act. It appears to me that this Patna High Court case was not decided correctly and it can no longer be regarded as good law after the decision of the Supreme Court in Kashinath Sankarappa Wani Vs. New Akot Cotton Ginning and ; Pressing Co., Ltd., . In the case before the Supreme Court, the facts were that a receipt evidenced a deposit of a certain, amount for a period of twelve months from August 1, 1939, to July 31, 1940 and contained a term that interest thereon would cease on the due date. It was held that this was sufficient to establish that the amount due at the foot of the deposit became due and payable on the due date mentioned in the receipt and that there was no question of the amount being payable at any time thereafter on demand being made, in that behalf by the creditor and limitation started running from July 31, 1940, that is, the due date and not from the date of the alleged demand.

Prior to this Supreme Court decision, the Rangoon High Court also took the same view as the Supreme Court (I.S. Seemn v. R.K. Banerjee AIR (1936) Rang. 338. For all these reasons, we hold that the claim in this suit is not barred by limitation.

In the result, the appeal is allowed. The judgment and decree of the learned trial Judge are set aside and there will be a decree in favour of the Plaintiff Appellant against both the Defendants for Rs. 7,000 with interest thereon at six per cent, from the date of suit till realisation.

The Appellant is entitled to the costs of this Court and of the Court below.

Certified for two Counsel.

P.B. M ukharji, J.

I agree.

Liability and limitation are the two interrogations which this appeal is required to answer. It is a triangular fight between the building contractor on the one hand and the owner and the architect on the other. The first is the Plaintiff Appellant and the last two are the Defendants Respondents. The claim is a simple, modest claim for return of a deposit of the sum of Rs. 7,000 which the Appellant paid in the hands of the architect in connection with the construction of what is known as the "Elite Cinema" in Calcutta. The defence of the two Defendants is mutually destructive. It is admitted on the pleadings and on the records that the Appellant has earned the return of that money. What is disputed is who is liable to pay the sum and what is said is that whoever is liable, he is protected by limitation.

The owner Defendant, Western India Theatres Ltd., pleads that the amount was deposited with the architects Messrs. Abbot and Davies and it had nothing to do with that deposit. The architect Defendant pleads that the money was taken in the account of the owner Defendant, Western India Theatres Ltd., and as the architect had a claim of Rs. 6,418-8 against the owner and as the owner failed to pay that money to the architect, the architect appropriated and adjusted the sum of Rs. 7,000 towards the architect''s claim against the owner.

From these facts, it is clear that there is no defence on merits so far as the Plaintiff''s claim for return of the deposit is concerned. The Plaintiffs deposited this sum an earnest money. It was a security for the Plaintiff''s due performance of its contract with the owner. It is found on record that the Plaintiff satisfactorily completed the work and that his work was duly certified by the architect. He, therefore, has made good his claim for the return of this money.

The learned trial Judge found that there was no agreement between the Defendant, Western India Theatres Ltd., and the Plaintiff and that this sum of Rs. 7,000 was not paid to Abbot and Davies in the account of the Defendant, Western India Theatres Ltd. His nest finding is that the sum of Rs. 7,000 was paid by the Plaintiff to the firm of Abbot and Davies merely to please them or to humour them and had nothing to do with the contract.

We are unable to accept either of these findings. There is no evidence to substantiate or justify the finding that the Plaintiff made this deposit to please or humour the architect. On the contrary, the evidence clearly shows by correspondence and in particular by the letter dated February 28, 1947, that the architect was negotiating the building contract for the owner, that the architect described the owner as the "client" and the Plaintiff was formally in writing "requested to make a deposit "of Rs. 7,000 as earnest money against this contract". The date of this letter was almost a month before the actual contract in writing was entered into. The cheque for Rs. 7,000 was drawn by the Plaintiff in favour of the joint names of the two partners Ridley Abbot and defandant J.R. Davies of the firm Abbot and Davies. The cheque was endorsed by the payee and was duly cashed and the proceeds credited to the payee''s account. Although this letter was exhibited, there is no evidence on behalf of the Western India Theatres Ltd. now at the trial to show that they knew nothing about this deposit or that it was not asked on account of them and against their contract with the Plaintiff. The other compelling fact is that even long after the construction was complete, the Plaintiff wrote to the Defendant, Western India Theatres Ltd. on August 27, 1952, with special reference to the return of this deposit asking them "to be good enough to confirm that the said sum "of Rs. 7,000 was deposited as earnest money with your said "architects Messrs. Abbot and Davies". The Defendant, Western India Thatres Ltd., on August 28, 1952, confirmed this fact by writing, "the amount deposited by you with our architects, "Messrs. Abbot and Davies is Rs. 7,000". If the Defendant, Western India Theatres Ltd. did not know anything about payment of Rs. 7,000 to the architects at the time when it was deposited, then it would be natural to expect that it would express its surprise on receipt of this communication to say that it was not aware of such a deposit or that even if it was done, it was done without its knowledge and consent. On those facts, is cannot be disputed, in our view, that there was at least or understanding between the Plaintiff and the two Defendants in respect of this deposit. It is true that there is no clause relating to this deposit in the written contract between the Appellant and the first Defendant but the circumstances why that was not so has been exhaustively dealt with by my learned brother in his judgment and I do not wish to repeat on that point except by saying that even the written contract between the Appellant and the first Defendant was actually witnessed and attested by the second Defendant after the latter had in writing received the deposit. Therefore, there is no reason on evidence to justify the learned trial Judge''s finding that this money was paid to the architect to please or humour him.

On the liability, the second Defendant J.R. Davies, appears to have no defence at all to the Plaintiff''s claim. So far as he is concerned, he has got the money and got the proceeds of the cheque. The Plaintiff is entitled to return of this money because the architect has certified that the work had been done properly and no deduction can be made from the Plaintiff''s deposit for defective work or for any other cause. The second Defendant Davies, therefore, is a clear depositary so far as this money of Rs. 7,000 is concerned and must account for the same. So far as the first Defendant Western India Theatres Ltd. is concerned, it had the benefit of this money as a deposit and earnest while the Plaintiff undertook the construction of the Cinema.

Then comes the question of limitation. Lord Kenyon described the statute of limitation as a Statute of Repose and Baron Bramwell described it as a State of Peace. Considering the zeal with which this case has been fought on the ground of limitation I wounder if this great compliment to the Statute of Limitation would be repeated by a modern Judge. The Limitation Act and its Articles have been a constant source of endless litigation and bitter legal battles granting neither repose nor peace, either to the litigants or to the Courts. This particular appeal is an example.

The learned trial Judge excluded Article 145 of the Limitation Act by a wrong interpretation and applied Article 115 by a wrong-interpretation and failed to consider the applicability of Article 120. He excluded the application of Article 145 of the Limitation Act on the strength of his own judgment in Sanwalram Bagaria v. Bhuramull Mauandia Unreported judgment by G.K. Mitter, J. of Calcutta High Court in Suit No. 1034, of 1949 delivered on 6th September, 1956 on which he relied. The gist of that decision is that Article 145 applies only to cases where the person making the deposit is entitled to have the deposit returned forthwith or on demand. In coming to that conclusion the learned Judge relied mostly and largely on the decision of Gentle, C.J. and Patanjali Sastri, J., in Western India Oil Distributing Company Ltd. v. Rathnasabapathy AIR (1948) Mad. 76. That interpretion in my view is no longer open. The basis of that interpretation is that column 1 and column 3 in the Schedule to the Articles of the Limitation Act must be read together. The origin of this doctrine of reading columns 1 and 3 together lies in the English Statues of Limitation where the principle is expressly recognised in the Statutes themselves that the starting point of limitation should run from the cause of action. Somehow this English notion crept into the interpretation of the Indian Limitation Act as will be exemplified in the Full Bench decision in Mulla Veetil Seeti Kvtti v. K.M.K. Kunhi Pathumma (1917) ILR 40 Mad. 1040 and the Special Bench decision in Harimohan Dalal v. Parameshwar Sahu (1929) ILR 56 Cal. 61, 73.

That column 1 and column 3 should be read together is a wholesome principle and there may not be any quarrel over the doctrine of reading column 1 and column 3 together. In fact columns 1, 2 and 3 must be read together to give harmonious meaning and construction. But that is far from saying that words will be introduced in column 3 which are not there and new points of limitation will be made by courts which were not made by the Statute. The Indian Limitation Act does not follow any doctrinaire or dogmatic principle to fix the starting point of limitation from the cause of action. In many cases it does so, but in many other articles it gives different dates apart from the cause of action. There is no such hard and fast rule in the Indian Limitation Act and its articles. It will be wrong to import English notions drawn from English Statutes of Limitation following entirely different principles and to apply them to the Indian Statute. I can do no better here than draw the attention to the observations of Sir Manmatha Nath Mukerji, J. in Sm. Sarat Kumari Dassi v. Nagendra Nath Pal (1925) 29 C.W.N. 973, 980 where the learned Judge points out after a careful study of the Third Column of the Schedule of the Limitation, Act. how it reveals the outstanding fact which cannot be ignored, namely, that the starting point of limitation does not always synchronise with the accrual of the cause of action, and that while in many cases it does, but in many others it dates from specified events which again are either anterior or posterior to the cause of action.

Repeated warnings have been given on this point by the Privy Council. I think the point is concluded today and is no longer open to argument. In Luchme Baksh Roy v. Ramjit Ram Pandey (1873) 13 ILR 177 (P.C), the Judicial Committee observed:

It has been said that this case ought to be decided upon an equitable construction, and not upon the strict words of the Statute ; but their Lordships think that Statutes of Limitation, like all others, ought to receive such a construction as the language in its plain meaning imports: Statutes of Limitation are in their nature strict and inflexible enactments.

Subsequently the Privy Council repeated this principle of "strict grammatical" construction so far as the Indian Limitation Act is concerned in the case of AIR 1932 165 (Privy Council) Sir Dinshaw Mulla observed:

There is, in their lordships'' opinion, no warrant for reading into the words quoted ''any qualification either as to the character of the appeal or as to the parties to it''; the words mean just what they say. The fixation of perio Is of" limitation must always be to some extent arbitrary, and may frequently result in hardship. But in construing such provisions equitable considerations are out of place and the strict grammatical meaning of the words is, their Lordships, think, the only safe guide.

In about the same time the Privy Council was saying almost the same thing in Lasa Din v. Gulab Kumar (1932) ILR 7 Luck. 442, 452, 453. There the question arose under Article 132 and the question of limitation was, when the money sued for became due to enforce payment of money charged upon immoveable property. After noticing different authorities and disapproving the Calcutta decision in Sitabchand Nahar v. Hyder Malla (1897) ILR 24 Cal. 281 Sir George Lowndes observed as follows:

Their Lordships are not greatly oppressed by the authority of Reeves. Butcher, (1891) 2 Q.B.D. 509. It is, they think, always dangerous to apply English decisions to the construction of an Indian Act. The clause thereunder consideration differed widely from that now before their Lordships, and indeed from the clauses with which the Allahabad Court had to deal; the question for decision would have fallen in India, not under Article 132, but under Article 75 which is in very special terms; and Section 3 of the Statute of James, with which the Court was concerned, made the time to run, not from the date when the money became due, but from the date when the cause of action arose. If in the Indian cases the question were "When did the mortgagee''s cause of action arise ?''- i.e., when did he first become entitled to sue for the relief claimed by his suit- their lordships think that there might be much to be said in support of the Allahabad decisions. Judged by the Indian criterion, ''when the money sued for became due'', upon the best consideration their lordships have been able to give to this difficult question, they think that the decision of the Chief Court of Oudh was wrong, and that they should have held that the Appellant''s suit was within time.

The Judicial Committee of the Privy Council in that case disapproved the Allahabad decision in Gaya Din v. Jhumman Lal (1910) ILR 37 All. 400.

These observations of the three Privy Council decisions are unanimous on the point that the kind of interpretation which the learned trial Judge adopted was not open to him in construing the Indian Limitation Act. To import words "on "demand or forthwith" in Article 145, which are not there in column 3 of that article is not permissible. Column 3 under Article 145 is plain and straightforward. It reads: "the date of "the deposit or pawn". It does not say that such deposit or pawn must be returnable forthwith or on demand. The learned Judge introduced those words by a reference to the first column of Article 145 where it said "against a depositary or pawnee to "recover movable property deposited or pawned." Even if in the first column there is no mention of the words "forthwith or "on demand". What is said is that unless such deposit or pawn was returnable forwith or on demand, there was no point in the time running from the date of the deposit or pawn because1 the cause of action for the return of the deposit or pawn did not arise immediately after. If this argument were correct, then I do not see why the Legislature was so tender to grant as long as 30 years'' time for the return of a deposit or pawn which was returnable forthwith or on demand and that in relation to movable property. The unusual length of time in the second column appears even to exclude the very contemplation of such a limitation on the deposit or pawn that it should be returnable forthwith or on demand. Then again interesting questions of hardship were put forward to support the view that unless the words in the third column in Article 145 are not limited to deposits or pawn returnable forthwith or on demand, difficulties would arise in cases such as of service deposits where a man enters service by depositing a certain sum of money. It is said that if he serves for 35 years, his claim would be barred after 30 years although his service continued. There are many answer to this argument. The first answer of course is that given by the Privy Council that questions of hardship will not be allowed to enlarge or mitigate clear words of the Indian Limitation Act. Secondly, Holmwood, J. in the well known case of Lala Gobind Prasad v. Chairman, Patna Municipality (1907) 6 C.L.J. 535, 542 expressly referred to this point and said:

The only difficulty about the application of Article 145 is the possibility of cases arising in which a man had already served 30 years after making his deposit before retiring and applying to withdraw it, but such cases must be extremely rare and could be easily got over by a renewal of the deposit after the first thirty years.

I shall venture to add one more reason of mine. It is this that normally such case of service deposits would be governed by the service rules and conditions which are all in writing and if the deposit is to continue as long as the man serves, then after the period of 30 years the rules in writing or the service conditions in writing are the written acknowledgment to extend the period of limitation. Again looking at from another point of view, if the service deposit is that he has to deposit and keep his deposit as long as he serves, then the deposit is being renewed de die in diem during the course of his service and the date of deposit accordingly will go on extending from the day to day until the day of termination of service, from when the time of 30 years will begin to run. I see, therefore, no difficulty nor even hardship in this respect.

The Indian Limitation Act and the scheme of its Articles must be clearly borne in mind in arising at any power interpretation of them. One of the well known principles in the words of Sir Richard Couch in Harrinath Chatterji v. Mohunt Mathoor Mohun Goswami (1883) L.R. 201. All 183, 192 is: "The intention of the law of "limitation is, not to give a right where there is not one, but to "interpose a bar after a certain period of a suit to enforce an "existing right." It is variously put and understood such as it is said that limitation bars remedies and does not create rights. Article 145 does not certainly create any right which was not existing in law. The first column of Article 145 gives a description of the suit as "against a depositary or pawnee to recover "immovable property deposited or pawned." The right to recover deposit or the pawned article is a right recognised in the substantive law. The First Schedule of the Limitation Act contains three columns, the first one is "Description of suit", the second one is "Period of Limitation", and the third one is "Time from which the period begins to run". In the previous Limitation Act IX of 1871 the words in the third column were "Time when the period begins to run." Since Act XV of 1877 these words were changed into "Time from which period beings "to run". It is also a well-established rule of construction of the Limitation Act that if there be two articles which may cover a case, the one more general and the other more specific, as a principle of construction the more particular or specific, article ought to be regarded as the one governing the case. This has been established by a series of decisions, such as, Lal Govind v. Chairman of the Patna Municipality (1907) 6 C.L.J. 535, Swamp Das Mondal v. Jogneswar Roy Chowdhury (1899) ILR 26 Cal. 564 (F.B.) the principle laid down by the Privy Council in Mahomed Riaset Ali v. Mussumat Hasin Banu (1883) L.R. 20 IndAp 183, 192 where Sir Richard Couch at p. 159 lays down the principle that the general Article should be applied unless it is clear that the suit is within some other article. After resolving the competition between Article 183 and Article 49 by holding that neither applied Sir Richard Couch applied Article 120 and made the following observations at p. 159:

This is not a suit for distributive share of property (Article 123), nor a suit for specific movable property wrongfully taken (Article 49). This latter article does not appear to be applicable to a suit to establish a right to inherit the property of a deceased person. Article 120 provides a period of limitation of six years for a suit for which no period of limitation is provided else where in the Schedule. Their Lordships think this article should be applied, unless it is clear that the suit is within some other article, which in their opinion it is not, and consequently the suit as regards the movable property is not barred.

Applying this principle, Article 145 in this case is clearly applicable as against the second Defendant as a depositary. If that is so, no other general article on contract, such as Article 115, can be applied as against the second Defendant. If the claim against the second Defendant can be formulated, both as a claim for compensation under Article 115 with three years'' limitation for breach of a contract and also as a depository under Article 145, then the longer period which preserves the right and does not defeat the claim should be preferred as a principle of construction. By the application, therefore, of two principles, one laid down by Sir Richard Couch that the specific article must apply in preference to the general article, and by application of the other principle that in giving effect to a Statute of Limitation, if two articles limiting the period for bringing a suit are wide enough to include the same cause of action and neither of them can be said to apply more specifically than the other, that which keeps alive and not that which bars the suit should generally and apart from other equitable consideration be preferred, as laid down by Sir Dawson Miller, C.J. in Tofa Lal Das v. Syed Moinuddin Mirza (1925) ILR 4 Pat. 448, 465, 457, the second Defendant cannot resist the Plaintiff''s claim on the ground of limitation, and the learned trial Judge was, therefore, in error in holding it otherwise.

There is also an insuperable difficulty in accepting the interpretation which the learned Judge put upon Article 145. The words "on demand" or "forthwith" if imported in the third column of Article 145 would make the position of a pawnee, which is also covered by Article 145, incongruous, irrational and impossible. A pawnee can recover the pawned article only on redeeming it. Unless he offers to redeem it, he cannot get it back. Therefore, a pawnee cannot recover it immediately or on demand unless superadded to that is his offer to redeem. Therefore, from that point of view, the offer to redeem it is the date from which the cause of action arises, a conclusion which goes against the interpretation put upon it by the learned trial Judge.

this Court therefore holds that the terminus a quo under Article 145 of the Limitation Act is the date of the deposit irrespective of the fact whether the cause of action arose on the date of the deposit or thereafter.

Now coming to the liability of the first Defendant, the Western India Theatres Ltd., the position can be stated in a few words. The learned trial Judge held that there was no contract as such in writing or at all between the Plaintiff-Appellant and this Defendant-Respondent. If there was no such contract, then it is difficult to understand how Article 115 was applied to defeat the Plaintiff''s claim, for Article 115 proceeds on the basis of compensation for a breach of contract, express or implied. Now if there is a contract between the Plaintiff-Appellant and the first Defendant-Respondent, the question is: Does Article 115 apply and bar the Appellant''s claim against the first Defendant? The case law has been elaborately and exhaustively dealt with by my learned brother on this subject, and it will appear from that analysis that no case up to now has gone to the extent of holding that return of a deposit has been held to be compensation for breach of an express or implied contract. When I am speaking of deposit in this connection, I am speaking of deposit simpliciter as earnest money as in this case and not those cases where, for instance, money is paid for purchase of property and then the consideration fails either due to defect of title or other reasons. It may be said that there is no express contract within the meaning of Article 115 in this case between the Appellant and the first Defendant, but then there may be an implied contract, and if there is an implied contract, that is also within Article 115. On the facts I am of the view in this case that both the first and the second Defendants were joint depositaries in respect of this deposit. Then the question is competition between Article 145 and Article 115 and on the principles which I have already discussed this Court holds that Article 145 of the Limitation Act also applies against the first Defendant.

The word "depositary" in Article 145 has been judicially noticed in many cases including the case of Lala Gobind Prasad v. Chairman of the Patna Municipality (1907) 6 C.L.J. 535 where deposit is defined to be "something usually a sum of money, committed to "another person''s charge as a pledge for the performance of soma "contract, in part payment of a thing purchased," and a "depositary" is defined to be a bailee of personal property to be kept by him for the bailer without recompense. The case thereupon proceeded to hold that deposit includes money apart from other movable properties. This case is not conclusive on the point nor does it determine in a case such as this one if there could be two depositaries or joint depositaries. The second Defendant actually was holding the money although he was doing so as the architect and agent of the owner, and for the purpose of construction of the owner''s "Elite Cinema", the first Defendant. In such a case, where the physical custodian is acting under his principal or with his consent and acquiescence and ratification such as is exemplified in the two letters of August 1952 mentioned above, can it not be said that for this money, so far as the Plaintiff Appellant is concerned, both the Defendants are joint depositaries? For, after all the Appellant is not interested in the internal quarrels between these two co-Defendants. It is true that it is the hand of the architect which took the money but it was for the owner and the construction of his "Elite Cinema" and this arrangement was subsequently at any rate ratified in writing by the two letters exchanged between the Appellant and the first Defendant dated the 27th and the 28th August 1952. If this view be correct that they are joint depositaries, then the same Article 145 applies in the case also against the first Defendant. This conclusion is also supported by the consideration that if it is not so, then the result will he that while as against the architect who was merely holding the money as a depositary or stake-holder or as agent only of the first Defendant the claim is not barred because of thirty years'' limitation under Article 145, yet it is barred against the first Defendant because of three years'' limitation on the IH ground that it was a compensation for breach of contract under Article 115. To hold the scales equally between the co-Defendants, 1 as the money was paid for security of the contract of construction of the "Elite Cinema", it will be justifiable to apply such meaning to the word "depositary", on the facts of this case, as to include the owner also.

There is another way of looking into the problem so far as the Plaintiff''s claim against the first Defendant is concerned and that will show that in any event Article 120 and not Article 115 will apply to the first Defendant. Apart from the two letters of August 1952, which show that the first Defendant knew about the Plaintiff''s deposit with the architect and the purpose for which it was deposited, nothing is disclosed to reveal the true nature of the relationship between the two Defendants. Curiously enough, the two Defendants have not disclosed the contract between themselves. Neither the architect nor the owner has disclosed the contract by which the architect was appointed. More curiously, except one letter, no correspondence is disclosed between the two. The absence of this evidence caused by the nondisclosure by the two Defendants entitles this Court to draw an adverse inference against them and to hold that had that been disclosed, it would have shown that there was clear provision in that contract between the two Defendants directing the architect to hold the money and to pay to the building contractor on completion of the work and on the proper certificate of the architect. In that event, the liability of the first Defendant and the remedy against him will more properly come under Article 120 of the Limitation Act because having regard to the tripartite nature of the rights and obligations of the three parties involved, no other article could be said to specifically apply as between the Plaintiff and the first Defendant, if there was such a specific direction in the contract between the two Defendants. The principle laid down by Sir Richard Couch will apply and the residuary Article 120 will be the only article which can be attracted.

It may not be out of place to refer in this connection to a particular section of the Indian Contract Act. Section 233 of the Indian Contract Act provides:

In cases where the Agent is personally liable, a person dealing with him may hold either him or his principal, or both of them liable.

The illustration there given does not apply to the facts of this case and the illustration also is not exhaustive. If drawing the inference as this Court is entitled to draw for the non-disclosure as pointed out, the Agent is personally liable in this case, then the plainted is justified in holding both the principal and the Agent liable. Section 230 of the Contract Act provides that:

In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.

Then follows where such a contract shall be presumed to exist but those three cases there mentioned, where the presumption of contracts to the contrary would be made, are not attracted to the present facts but the opening words of Section 230 makes it quite clear that there may be a contract to the effect that an agent is personally liable. We draw that inference in this case by the deliberate non-disclosure of the contract between them that the agent in this case was personally liable. Therefore, it follows u/s 233 of the Contract Act that the Plaintiff Appellant is entitled to sue both the principal and the agent. Although it is unnecessary to refer at length to the English law on this subject, of agency having regard to the specific statutory provisions of the Indian Contract Act, it will be proper to refer to this principle clearly enunciated by the learned Editor of Bowstead on the Law of Agency, 10th Ed. at pp. 255 to 259 and specifically Article 128. It is said there:

Where money is paid to an agent for the use of his principal and the circumstances of the case are such that the person paying the money is entitled to recover it back, the agent is personally liable to repay such money.

The cases mentioned there by Bowstead include the case where the agent contracts personally and the money is paid to him in respect of or pursuant to the contract unless the other contracting party elects to give exclusive credit to the principal. It is also explained there under Article 128 of Bowstead that where a specific fund existing in the hands of an agent to the use of his principal, is. charged by the principal in favour of a third person, the agent is bound, upon receiving notice of the charge, to hold the fund, or so much thereof as is necessary to satisfy the charge, to the use of such third party. There can be no doubt on the facts of this case that if the architect was acting as an agent for the owner in this respect for holding this deposit of Rs. 7,000 he was clearly charged with the duty to return it to the owner when the work was satisfactorily completed, on due certificate of the architect, as was so in the present case. He can not appropriate now this deposit to satisfy his own outstanding bills unpaid by the owner because the security was given for the specific purpose of the contractor''s due performance of work. The deposit money is of the contractor not of the architect. The correspondence shows that the architect admits that this money was refundable at, what is called, the "applicable time". In that view of the matter there will be no breach of contract, express or implied, as between the Plaintiff and the first Defendant to come within Article 115 of the Limitation Act. It can then only come under Article 120.

In the 8th ed. of Hudson''s Building and Engineering Contracts at p. 50 it is said:

Consequently an architect or engineer may well find himself with a dual function under the same contract: as an employee and agent of the building owner he will be responsible to him for the skilful and proper discharge of his duties, but as quasi arbitrator he will have a duty to both parties to the contract, and prasvidesd that he discharges this latter duty honestly he will owe no responsibility to either party.

The same authority at pp. 398 and 399 makes it clear that forfeiture clauses sometimes contain provisions forfeiting any moneys due to the contractor at the time of the forfeiture "Where the employer" enters under a forfeiture clause on "default of the contractor to complete, and completes, and the "clause empowers him to deduct the cost of completion from all "moneys due from him to the contractor, or to recover the "cost of completion from the contractor, the employer is not "in the position of a mortgagee in possession, all of whose acts and "jealously scrutinised, but as against the contractor and those "claiming under him, e.g., assignees of retention money, the "employer, although he may be bound to account to the con-"tractor, is allowed a discretion in the way in which he "completes." Then again at p. 400 it is said "building "contracts in the past not infrequently contained provisions "forfeiting to the building owner any moneys due to the. "builder at the time of termination". Now on the facts of this case the Defendants by their non-disclosure of the contract and relevant correspondence between themselves have deprived the Court from knowing what is the contract between these two co-Defendants on this deposit money and what are the circumstances, if any, of this forfeiture. Therefore the Court is entitled to draw the adverse inference against both the Defendants, that had they been disclosed they would have shown that this deposit cannot be forfeited in the facts of this case and must be returned.

For these reasons both the Defendants are liable. The claim is not barred against either. In any event Article 145 or Article 120 protects this claim from limitation. I agree with my learned brother that this appeal should be allowed and the judgment and decree of the learned trial Judge set aside and the suit decreed with costs, here and below, as proposed.