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of <h1>Court sets aside judgment, orders refund of deposit with interest. Appellant awarded costs.</h1> <h3>Ganon Dunkerley and Company Ltd. Versus Western India Theatres Ltd.</h3> Ganon Dunkerley and Company Ltd. Versus Western India Theatres Ltd. - 1961) 65 Cal WN 504 Issues Involved:1. Whether there was a valid agreement for the deposit of Rs. 7,000 as earnest money.2. Whether the Defendant No. 1 (Western India Theatres Ltd.) had a cause of action against them.3. Whether Defendant No. 2 (J.R. Davis) was liable to refund the deposit.4. Whether the suit was barred by limitation.Issue-Wise Detailed Analysis:1. Valid Agreement for Deposit of Rs. 7,000:The Appellant claimed that on March 27, 1947, it entered into a contract with Western India Theatres Ltd. for constructing a cinema hall and agreed to deposit Rs. 7,000 as earnest money with the architects, Abott and Davis. The deposit was made on April 26, 1947. The work was completed satisfactorily by October 1948, but the refund was not made. The defense argued there was no agreement for such a deposit. However, correspondence between the parties, including letters dated August 27, 1952, and August 28, 1952, confirmed the deposit. The court found that the deposit was part of the construction contract, evidenced by the letters and the oral testimony of Haricharan Bandopadhyaya, indicating the architects acted as agents for Western India Theatres Ltd.2. Cause of Action Against Defendant No. 1:Western India Theatres Ltd. denied any agreement regarding the deposit. However, the court found that the architects were authorized to finalize the contract on behalf of Western India Theatres Ltd., as indicated by the letter from Ridley Abott dated February 28, 1947, requesting the deposit. The court concluded that the deposit was part of the main contract, and Western India Theatres Ltd. benefited from the security deposit during the construction. Thus, there was a cause of action against Western India Theatres Ltd.3. Liability of Defendant No. 2 (J.R. Davis):Defendant No. 2 argued that the deposit was adjusted against dues owed by Western India Theatres Ltd. to Abott and Davis. The court found that the deposit was held as earnest money against the construction contract and was refundable upon satisfactory completion. The correspondence and oral evidence confirmed that the architects undertook to refund the deposit. The court held that Defendant No. 2, as the surviving partner of Abott and Davis, was liable to refund the amount to the Appellant.4. Limitation:The trial judge held the suit was barred by limitation, applying Article 115 of the Limitation Act (compensation for breach of contract). The Appellant argued that Article 145 (suit against a depositary) or Article 120 (residuary article) should apply. The court reviewed various precedents and concluded that Article 145 was applicable, providing a 30-year limitation period from the date of the deposit. Alternatively, if Article 145 was not applicable, Article 120 with a six-year limitation period would apply. The court found that the suit was not barred by limitation under either article.Conclusion:The court allowed the appeal, setting aside the trial court's judgment and decree. Both Defendants were held liable to refund the Rs. 7,000 deposit with interest from the date of the suit until realization. The Appellant was awarded costs for both the trial and the appeal.
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