Earnest money refund falls under the residuary limitation rule, while further advance payments remain subject to the failed-consideration bar.

Refund of earnest money was held to fall under the residuary limitation article because the payment was security for performance, not part payment of price or money paid on a consideration that failed; the claim was therefore within time. A further sum paid as advance towards the purchase price was treated as money paid on an existing consideration that later failed, so the specific limitation article applied and the claim was time-barred. Section 36(a) of the Displaced Persons (Debts Adjustment) Act, 1951, did not save the barred claim because the contractual performance had already become unlawful on the facts established. Relief was limited to the earnest money, and the additional advance was rejected.

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Issues: (i) Whether the claim for refund of earnest money was governed by Article 97 of the Limitation Act or by the residuary Article 120; (ii) Whether the additional sum of Rs. 30,000 paid as further advance was governed by Article 97; (iii) Whether limitation was saved by Section 36(a) of the Displaced Persons (Debts Adjustment) Act, 1951.

Issue (i): Whether the claim for refund of earnest money was governed by Article 97 of the Limitation Act or by the residuary Article 120.

Analysis: The amount of Rs. 20,000 was found to be earnest money, paid as security for performance and not as part payment of the purchase price. Such payment was not treated as money paid on an existing consideration that later failed, nor as money received for the plaintiff's use. Since no specific article of limitation squarely covered a claim for return of earnest money in these circumstances, the residuary provision was held applicable.

Conclusion: The claim for refund of the earnest money was governed by Article 120 and was within time.

Issue (ii): Whether the additional sum of Rs. 30,000 paid as further advance was governed by Article 97.

Analysis: The further sum of Rs. 30,000 was treated as payment towards the purchase price on the then existing consideration for the transfer of the property, and not as earnest money. On that characterisation, the claim fell within the three-year limitation applicable to money paid upon an existing consideration which afterwards failed.

Conclusion: The claim for Rs. 30,000 was governed by Article 97 and was barred by limitation.

Issue (iii): Whether limitation was saved by Section 36(a) of the Displaced Persons (Debts Adjustment) Act, 1951.

Analysis: The contractual performance had been rendered unlawful by the evacuee property legislation in Pakistan long before the application was filed. The statutory extension of limitation under Section 36(a) could not therefore revive the barred claim on the facts established.

Conclusion: Section 36(a) did not save the claim.

Final Conclusion: Relief was granted only to the extent of the earnest money of Rs. 20,000, while the claim for the additional Rs. 30,000 was rejected as time-barred.

Ratio Decidendi: A claim for return of earnest money, when no specific article of limitation squarely applies, falls under the residuary article, whereas a further payment made towards the purchase price is governed by the article applicable to money paid on a consideration that has failed.

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