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        Companies Law

        2013 (2) TMI 168 - HC - Companies Law

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        Limitation for refund of exhibition deposit falls under residuary article when no concluded contract exists. A refund claim for money paid to secure exhibition space was held to fall outside Article 24 of the Limitation Act because the payment was only a deposit ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                          Provisions expressly mentioned in the judgment/order text.

                              Limitation for refund of exhibition deposit falls under residuary article when no concluded contract exists.

                              A refund claim for money paid to secure exhibition space was held to fall outside Article 24 of the Limitation Act because the payment was only a deposit made during negotiations, with no concluded contract and no immediate right to recover it as money received for the plaintiff's use. Article 24 applies only where the amount is recoverable on receipt in that character; where refund depends on later events, it does not apply. The residuary Article 113 therefore governed the suit, and the claim was within limitation.




                              Issues: Whether the suit for refund of the amount paid to obtain space for an exhibition was governed by Article 24 of the Schedule to the Limitation Act or by the residuary Article 113, and consequently whether the claim was within limitation.

                              Analysis: The amount paid was not held to be money received by the defendant for the plaintiff's use. The correspondence showed that the parties were still at the stage of negotiations, no concluded contract had come into existence, and the payment was only a deposit made in anticipation of a possible contract. Article 24 applies where the money is immediately recoverable on receipt as money received for the plaintiff's use. Where the right to refund arises only on later events, and the payment is not of that character, Article 24 does not govern. In the absence of Article 24, the suit fell under the residuary Article 113.

                              Conclusion: Article 24 was inapplicable and Article 113 governed the suit. The claim was within limitation and the appeal failed.


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                              ActsIncome Tax
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