Naithi vs Cherian

Joseph Vithayathil, J.—Plaintiff is the Appellant. The suit is for recovery of money alleged to have been deposited by the Plaintiff with the Defendant. The Plaintiff is the sister of the Defendant. One Uthup Kora had executed a kuri security bond (Ex. b) in favour of one Itty Ulahannan. Itty Ulahannan assigned the right under the document in favour of the Plaintiff''s father under Ex. A, dated 1-1-1108. The Plaintiff''s father subsequently assigned the right in favour of the plain-jttff under Ex. B dated 5-6-U11, Plaintiff in turn assigned the right to the Defendant under Ext. C dated 26-9-1114. The consideration for the assignment was stated to be Rs. 400/- It was also stated in the document that the consideration was received by the Plaintiff in ready cash. According to the Plaintiff, the amount was not received by her but was deposited with the Defendant who undertook to pay interest at six per cent, per annum and to return the principal on demand by the Plaintiff.

It was alleged that the Plaintiff was paid some amounts towards interest till the year 1124. The Plaintiff demanded return of the amount on 2-1-1951. Ex. C is the notice of demand. The suit was instituted on 1G-6-1125 (27-1-1951) for recovery of the principal amount of Rs. 400/- and interest at six per cent, per annum from 1-1-1125.

The Defendant contended as follows: The assignment in favour of the plaintilV by the father was a benami transaction intended only to screen the kuri right from a creditor of the father. The debt due to that creditor was subsequently paid by the Defendant. Thereupon the father caused the Plaintiff of weigh the kuri in favour of the Defendant. No consideration was agreed to be paid to the Plaintiff for the assignment, and no amount was deposited with the Defendant by the Plaintiff.

The Defendant realized under the Kuri security bond only an amount much less than Rs. 400/T. Nothing has been paid to the Plaintiff by way of interest. The suit is, in any case, barred by limitation. The suit was instituted at the instance of the Defendant''s brother, Thommen, who was on inimical terms with him.

The trial court found that Ex. B assignment executed by the Plaintiff''s father in favour of the Plaintiff was not a became document, that it was executed for streedhanam amount due to the Plaintiff, that Ex. C assignment in favour of the Defendant was for consideration, that the amount recited as ready cash in the assignment deed, Ex. O, was deposited by the Plaintiff with the Defendant and that the Defendant agreed to pay interest on the amount at six per cent, per annum and to repay the principal on demand by the Plaintiff.

Since the demand was made only on 2-1-1951 it was held that the suit was not barred by limi-tation. Accordingly, the suit was decreed with costs.

In appeal filed b& the Defendant, he did not press the contention that the assignment, Ext. B, was a became transaction and that Ext. C assignment was executed by the Plaintiff at the instance of the father for amount due from him to the Defendant. Since the Defendant had no case that he paid the Plaintiff the consideration mentioned in Ext. C the only point that was pressed in the appeal was the one relating to limitation.

It was argued that the view'' taken by the trial court that it was Article 60 and not Article 59 of the Limitation Act that applied to the case was wrong. The lower appellate court accepted the argument and held that it was Article 59 that applied and that'' the suit was barred by limitation. The decree of the trial court was accordingly set aside and the suit was dismissed with costs.

The only question for decision in the second appeal is whether it is Article 59 or Article 60 of the Indian Limitation Act that applies to the case.

Article 59 reads:

For money lent Three years. When the loan under an agreement is made.

that it shall be payable on demand.

Article 30 reads as follows;

For money depo- Three years. When the de-sited under, an ag- mandlsmade." reement that it shall be payable on demand, including money of a customer in the hands of his banker so payable.

The decision of the case depends on the question whether the amount claimed in the suit was lent by the Plaintiff to the Defendant under an agreement that it should be paid on demand or whether it was deposited by the Plaintiff with the Defendant under an agreement that it should be paid on demand.

The distinction between a deposit and a loan was considered by ''Their Lordships of the Privy Council in Mohamed Akbar Khan v. Attar Hiug''h, 1930 Alt 171 (A), Lord Atkln observed as follows in that case:

Was this then a loan or was it a deposit payable on demand? It should be remembered that the two terms are not mutually exclusive. A deposit of money is not confined to a bailment of specific currency to be returned in specie. As in the case of a deposit with a banker it does not necessarily involve the creation of a trust, but may involve only the creation of the relation of debtor and creditor, a loan under conditions.

The distinction which is perhaps the most obvious is that the deposit not for a fixed term does not seem to impose an immediate obligation on the depositee to seek out the depositor and repay him. He is to keep the money till asked for it. A demand by the depositor would therefore seem to be a normal condition of the obligation of the depositee to repay. This proposition of law was reaffirmed by the Privy Council in AIR 1940 132 (Privy Council) Sir Phillip Macdonell observed in that case that the test was whether there was any duty on the bailee of the moneys to seek out the bailor and repay him or whether his duty was only to repay the amount if and when the bailor requested repayment.

The question was considered by the Tra-vancore High Court in Srecmoolanatha Iyer v. Sankarammal, 29 Ker LJ 56 (C). Following the decision of the Madras High Court in Murugiah Pillai Vs. Pakkiria Pillai, Abraham Varghese, O. J., observed:

Whether a transaction is a deposit or a loan is a question of fact or intention to be decided upon the circumstances of each case, but if there (was any doubt, the transaction should be presumed to be a deposit governed by Article 60 rather than a loan governed by Article 59.

The trial court relied on the evidence of Pw. 3 and the Plaintiff for holding that the transaction in question was a deposit and not a loan. (After reviewing briefly the evidence his Lordship concluded):

This would go to show that the first demand for the money was not Ext. E notice. According to the Plaintiff, she used to ask the Defendant for the return of the money and the Defendant repeatedly promised payment. In the circumstances, it cannot be said that the evidence of the Plaintiff, even if believed, goes, to show that it was a case of deposit and not loan. The Defendant is not a banker. It cannot therefore be presumed that money handed over to him was money deposited and not money lent. In Govind Chintaman Bhat Vs. Kachubhai Gulabchand, Macleod C. J., and Crump J., observed:

A Plaintiff relying upon Article 60 must prove that something took place between the parties at the time the money passed which would constitute the handing over of the money ''a deposit'' and not ''a loan''. It has been suggested that the difference between ''a loan'' and ''a deposit'' is that the borrower who takes money on deposit stands in a fiduciary relationship to the lender. That might either arise from a direct agreement, or might be implied from the circumstances in which money came to the hands of the borrower. Ordinarily when A hands over money to B on the understanding that it is not a gift, but has to be repaid when demanded, that would be considered in law ''a loan'', and when the Plaintiff seeks to prove that the money so handed over was ''a deposit'' the onus would lie upon him to prove that "there were additional circumstances which turned the ''loan'' into a ''deposit''.

I do not think that the circumstances of this cast go to show that the transaction was of the nature'' of a deposit and not a loan.

It is true that the Defendant is the brother of the Plaintiff. But the Plaintiff was married at the time and her father also was alive. According to the Plaintiff, the agreement relating to the deposit was entered into before the assignment deed, Ex. C, was executed. If that was so, there was no reason why the terms of the agreement were not embodied in the document itself. The recital in the document is that the consideration was received by the Plaintiff as ready cash. There is no explanation for not stating in the document that the amount was deposited with the Defendant for being paid to the Plaintiff on demand by her. It has also to be noted that the Defendant did not realize the amount under the kuri security bond on the date when Ex. C was executed. He realized the amount only subsequently and, according to him, he got Rs. 200/-while according to Pw. 3 he realised Rs. 300 and odd. As stated already, the consideration for Ext. C is Rs. 400/-.

Again,, the Plaintiff swears that the Defendant was in need of money for purchasing a. property and that it was for that purpose that she executed the assignment deed, Ex. C, in his favour. This will go to show that it was a case of money borrowed by the Defendant for his own purpose and not a case of deposit of money with the Defendant by the Plaintiff. At any rate, there is no reliable evidence in the case to show that the Defendant was under no obligation to repay the amount until the Plaintiff made a demand for the same.

It was contended by the Defendant that this-suit was instituted by the Plaintiff at the instance of his brother, Thommen. There was litigation between Thommen & the Defendant. The Defendant executed the decree obtained by '' him against Thommen and the latter deposited the decree amount in court. Soon after the amount was deposited this suit was instituted by the Plaintiff and she applied for attachment before judgment the amount deposited. It is clear from the evidence of the Plaintiff that her husband is not taking any interest in this case.

The Plaintiff admits that her husband has-not gone to the court for the purpose of the case. It is in evidence that the Plaintiff and her husband were in strained circumstances, and yet the-Plaintiff did not demand payment of the amount-for well-nigh twelve years.

In the light of all these circumstances. I am inclined to agree with the finding of the'' lower appellate Court that the case of deposit, alleged by the Plaintiff is not true and that the suit brought more than three years after the date of Ext. C is barred by limitation. I, therefore, confirm the judgment and decree of the lower appellate Court and dismiss the second appeal with costs.