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TMI Blog2013 (2) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... as pure and simple, a deposit, in anticipation of a contract. When given, it was not the intention of the plaintiff to take it back. That is the true test to determine whether Article 24, of the Indian Limitation Act, applies. In the absence of application of Article 24 as it would apply only if the money was recoverable immediately upon receipt by the defendant, and not on account of any facts which transpire subsequently, necessarily the governing provision was Article 113. There is no doubt that the suit was filed within the time prescribed by this latter provision. Thus the Single Judge’s findings and conclusions do not call for interference as Clause 7 (iii) of the guidelines enabled forfeiture of advance payment made in the event the licensee cancelled the space which was booked. This pre-supposed a concluded contract followed by the act of cancellation by the licensee. Thus defendant had no right to retain Rs. 15 lakhs as forfeited amount - the defendant was also directed to pay interest - appeal dismissed. - RFA (OS) 10/2007 - - - Dated:- 4-1-2013 - MR. S. RAVINDRA BHAT AND MR. S.P. GARG JJ. Appellant Through: Mr. A.B. Dial, Sr. Advocate with Ms. Ananya Datta Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld an exhibition in Bombay. It requested refund of the sum of Rs. 15 lacs paid by it. This was replied to by the defendant, on 19.8.1991, stating that: .We regret to inform you that it will not be possible for us to refund Rs. 15 lacs in view of the guidelines and terms and conditions already communicated to you for organising fairs in Pragati Maidan, New Delhi. On 30.9.1991, ITPO wrote another letter to the plaintiff in reply to its (plaintiff s) telex dated 20-8-1991 stating that it (ITPO) had no objection, in principle, to the holding of ITME'92 at Bombay during the period from 27.11.92 to 6.12.92 subject to the final clearance from the Ministries of External Affairs, Home Affairs, Industry of Commerce. The ITPO spelt out the conditions for holding the exhibition in Bombay, in its letter dated 14.10.1991. Apparently, the plaintiff was not interested, and held the exhibition at Bombay. It wrote several letters to ITPO to refund the sum of Rs. 15 lakhs. ITPO did not refund the amount. The plaintiff instituted a suit before this Court on 17.8.1994 claiming Rs. 15 lakhs (paid to the defendant ITPO) together with interest @ 21% per annum from the date of the payment with p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Defendant queried the plaintiff to let it know the exact space requirement so that defendant could finalize other related details. 29. Telex message dated 11.3.1991, contents noted in para 10 above shows that the defendant wrote to the plaintiff that it was in a position to offer space between 27.11.1992 till 26.12.1992. Confirmation of acceptance of the dates was sought from the plaintiff. 30. No such confirmations were sent by the plaintiff and on 31.7.1991 plaintiff sought refund of the amount tendered. 31. From the correspondences it is evident that parties remained at the stage of negotiations and could not crystallize a concluded contract. Neither duration of the license, nor space identification nor license fee, much less terms of the license were finalized. The impugned judgment also held that the plaintiff had no right to forfeit the amount. The Single Judge noticed that Clause 7 (iii) of the guidelines enabled forfeiture of advance payment made in the event the licensee cancelled the space which was booked. He held that this pre-supposed a concluded contract followed by the act of cancellation by the licensee. The court accordingly decided Issue No. 4 holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of limitation is provided elsewhere in this Schedule. Three years. When the right to sue accrues. 12. In the impugned judgment, the learned Single Judge noticed that the following observations of Mookerjee, J. in Mahomed Wahib v. Mahomed Ameer 32 Cal 527 had been extracted by the Supreme Court: The Article, when it speaks of a suit for money received by the defendant for the plaintiff's use, points to the well-known English action in that form; consequently the Article ought to apply wherever the defendant has received money which in justice and equity belongs to the plaintiff under circumstances which in law render the receipt of it, a receipt by the defendant to the use of the plaintiff. The learned Single Judge then noticed that the Supreme Court explained the decision in Mahomed Wahib, as follows: In other words, the learned Judge held that it was not necessary in order to attract Article 62 that at the moment of the receipt the defendant should have actually intended to receive it for the use of the plaintiff and that it was sufficient if the receipt was in such circumstances that the law would impute to him an obligation to retain it for the use of the plain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lal Puri v Gokalnagar Sugar Mills Co. Ltd AIR 1967 Del 91, where the question pertained to recovery of earnest money. Though the Division Bench did not cite the Supreme Court decision in A. Venkata Subbarao, nevertheless its reasoning was similar: Now the law of limitation being a disabling provision, the various Articles deserve to be construed on their plain language and a suitor approaching the Courts for adjudication of his claim is entitled to a trial on the merits unless his claim is clearly time-barred by plain reading of some provision of the Limitation Act. The statute of limitation is of course a statute of repose and is inspired by a desire not to keep indefinitely alive controversies. Dictates of substantial justice demand such a course. It is, however, not permissible to strain or stretch the language of the Limitation Act with a view to bar a suitor and the Limitation Act seems to me to call for a strict construction in favour of right to proceed if the language on plain reading permits it. It is in this background that the facts of the case and the arguments advanced at the bar have to be considered. (5) The vendee's claim can properly be divided into two part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e position on the language of the relevant statutory provisions. 15. In a similar vein other High Courts too, have understood and interpreted Article 24 as applying to those cases where the money received by the defendant is of such character as can be immediately demanded back by the plaintiff. In Shankar Moreshwar Kulkarni Chinchwadkar v. State of Maharashtra AIR 1970 Bombay 8 the Bombay High Court held as follows while dealing with a claim for return of earnest money: In the present case, according to the terms of the contract, the amount was to become due on completion of the contract. It was to become due by reason of subsequent events. The right to refund did not arise immediately on receipt by the defendant. Accordingly, Article 62 will have no application to the facts of the present case. We have also stated hereinabove that Article 145 would not be applicable. The only article that would appear to us to be applicable is Article 120, which is the residuary article. 9. 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 in our opinion. Art ..... X X X X Extracts X X X X X X X X Extracts X X X X
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