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Issues:
- Suit barred by limitation under Article 18 of the Limitation Act of 1963. - Nature of security deposit and its refundability. - Applicability of various Articles of the Limitation Act to the case. - Comparison with previous judgments on refund of security deposits. - Determination of the appropriate Article for the present case. Analysis: The judgment by the Rajasthan High Court, delivered by Justice C.B. Bhargava, pertains to an appeal by the State of Rajasthan against a lower court's decree in favor of the plaintiff for a sum of Rs. 10,940. The central issue raised in the appeal was whether the plaintiff's suit was barred by limitation, specifically under Article 18 of the Limitation Act of 1963. The plaintiff had undertaken construction work at a hospital and a road, with a security deposit clause in the agreement. The State had deducted 10% from the running bills as security deposit but failed to refund the amount, leading to the suit for refund. The learned Deputy Government Advocate argued that Article 18 or other applicable Articles like 22, 24, or 55 should govern the case, emphasizing that the character of the amount deducted as security deposit changes once held by the Government. However, Justice Bhargava disagreed with this contention, stating that the nature of the deposit shifts to that of a security deposit once deducted, irrespective of its initial purpose. The judge also distinguished previous cases cited by the advocate, noting that they were not directly relevant to the refund of security deposits. Regarding the application of different Articles of the Limitation Act, the judge ruled out Article 22, 24, and 55, asserting that Article 113, being a general provision for suits without specific limitation, was more appropriate. Citing precedents from various High Courts, including the Bombay and Calcutta High Courts, the judge reiterated that the essence of a claim for refund of a security deposit lies in the completion of the contract, making Article 120 of the Limitation Act applicable in the absence of a specific provision. In conclusion, Justice Bhargava dismissed the appeal, finding no merit in the State's argument regarding limitation. The judge affirmed that the suit for refund of the security deposit was timely filed within six years of the contract's completion, thereby upholding the lower court's decree in favor of the plaintiff.
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