TMI Blog1971 (9) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... ontends that the suit is governed by Article 18 of the Limitation Act of 1963 and having been filed after the expiry of three years from the date of the completion of the work was beyond time. 3. Plaintiff respondent was given a contract for terrazzo and cement flooring in the Maharao Bhim Singh Hospital Kota on 25th February. 1957, and for the construction of a road inside the same hospital on 30th March, 1957 at an estimated cost of ₹ 96,119 and ₹ 15,238/- respectively. In terms of the agreement, the plaintiff was required to deposit security and if it was not deposited in advance, it was provided that 10 per cent, shall be deducted from his bills. Clause 1 (b) of the agreement provides that : the persons whose tender may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation Act of 1963 and even if Article 18 does not apply, either Article 22, 24 or 55 would apply to the case. It is contended that the plaintiff's running bills were for the price of work done and the amount deducted by the Govern- ment from those bills will also retain the same character irrespective of the fact that the said amount is held by the Government by way of security deposit. In my view, the contention is not sound. 6. It may be true that the running bills submitted by the contractor are for price for work done and the money in his hands will have the same character. But after the Government makes a deduction of 10 per cent, from the amount of the running bills and holds it by way of security deposit, its nature will be o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the completion of the contract. 9. Article 22 applies to money deposited under an agreement that it shall be payable on demand. The security deposit is not payable on demand and, therefore, Article 22 has also no application. 10. Article 55 applies to suits for compensation for the breach of any contract, express or implied not hereinafter specifically provided for. In a suit for refund of security deposit, the essence of the cause of action is not the breach of the contract to repay it as the amount of security deposit is refundable by its very nature after the completion of the contract. Even if no time is specified for the refund of the security deposit, it is implicit that the obligation to pay refund arises as soon as the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mukhopadhya v. The Collector of Rajshaye (1886) ILR 12 Cal 113. 12. In Harij Gram Panchayat t. Thakkar Lakhiram Ramji, AIR 1962 Guj 14 it was held that in a suit brought for the refund of deposit by way of security for the due performance of the contract neither Article 62 nor Article 60 nor Article 97 of the Act of 1908 applies and in the absence of any specific Article application to the suit Article 120 applies. 13. The same view was taken by the Bombay High Court in Shankar v. State, AIR 1970 Bom 8. It was held there that: Where money is deposited by way of security for the due performance of a contract or otherwise under the terms of a contract and is refundable after the completion of the contract, Article 62 is not applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 depositories. Accordingly, the article applicable is Article 145 of the Indian Limitation Act and if for any reason this article is not applicable, there is no doubt that Article 120 is applicable to the present case. Thus there is sufficient authority for the view I have taken in the matter. The contracts in this case were completed on 27-1-1958 and the suit has been filed within six years of that date. Although on behalf of the defendant, the Engineer incharge has deposed that the amount of security deposit was refundable six ..... X X X X Extracts X X X X X X X X Extracts X X X X
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