Limitation for contract security deposits turns on residuary coverage and acknowledgment extending time for refund claims.

Money deposited under a contract as security for due performance is not treated as money received for the plaintiff's use at the time of receipt, so Article 62 of the Limitation Act, 1908 does not apply; nor does Article 145 apply where the amount was not held by a depositary or pawnee. In the absence of a specific article, the claim falls under the residuary Article 120. The text also states that later letters acknowledging the amount due and permitting withdrawal against a joint receipt were sufficient to extend limitation, with the result that the suit was treated as within time.

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Issues: (i) Whether a suit for refund of money deposited under a contract as security for due performance is governed by Article 145, Article 62, or the residuary Article 120 of the Indian Limitation Act, 1908. (ii) Whether acknowledgments in subsequent letters saved limitation for the plaintiff's suit.

Issue (i): Whether a suit for refund of money deposited under a contract as security for due performance is governed by Article 145, Article 62, or the residuary Article 120 of the Indian Limitation Act, 1908.

Analysis: The amount was not deposited with a depositary or pawnee so Article 145 had no application. Article 62 also did not apply because the defendant did not receive the money for the plaintiff's use at the time of receipt, and the right to refund arose only when the contract was completed. Where money is held under a contract as security and becomes refundable on completion, no specific article covered the claim and the residuary provision applied.

Conclusion: Article 120 of the Indian Limitation Act, 1908 applied, and the suit was not governed by Articles 145 or 62.

Issue (ii): Whether acknowledgments in subsequent letters saved limitation for the plaintiff's suit.

Analysis: The contract had been completed in 1946 and the right to sue had accrued earlier, but later letters acknowledged the amount due and reiterated that it could be withdrawn against joint receipt. Those acknowledgments were sufficient to extend limitation.

Conclusion: Limitation was saved by acknowledgment and the suit was within time.

Final Conclusion: The appellate court's dismissal of the suit was set aside and the trial court's decree was restored, with costs throughout to the defendants.

Ratio Decidendi: Money deposited under a contract as security and refundable only on completion of the contract is not money received for the plaintiff's use, so Article 62 does not apply; in the absence of a specific article, the claim falls under the residuary Article 120, and a clear acknowledgment can extend limitation.

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