R. S. NAWAL KISHORE v. UNION OF INDIA — 1969 DIGILAW 7 (DEL)

S. K. Kapur, J. ( 1 ) I will deal with the precise issues a little later but two principal questions arise in this suit- (1) Is the Union of India liable to pay the amount sued for by reason of the Indian Independence (Rights, Property and Liabilities) Order, 1947; and (2) is the suit within time either by reason of acknowledgment of liability by the Union of India or otherwise. ( 2 ) THE plaintiff filed the present suit for recovery of Rs. 25,876. 75 paise comprising the principal amount of Rs. 10,393. 75 paise and Rs. 15,483. 00 on account of interest at the rate of 7% per cent per annum on the principal amount. The plaintiff also prayed for future interest up to the date of payment. ( 3 ) BROADLY, the case of the plaintiff is that before the partition of the country on August 15, 1947, the plaintiff was carrying on business in West Pakistan and used to supply mustard-oil to North Western Railway. He was, for the purpose, an approved contractor of the said Railway and had, under an agreement, deposited a sum of Rs. 10,000. 00 by way of a standing security for due performance of contracts awarded to him for the supply of mustard-oil from time to time. This amount was put in a fixed deposit with the Central Bank of India limited at Lahore and the fixed deposit receipt was specifically pledged in favour of Financial Adviser and Chief Accounts Officer (hereafter REFERRED TO as F. A. and C. A. O.), North Western Railway and was handed over by the plaintiff to the said F. A. and C. A. O. The fixed deposit receipt used to be renewed at maturity and it appears that it was at least once renewed for the principal amount of Rs. 10,000. 00 plus interst earned thereon. The procedure adopted regarding the supply of goods was that orders were placed with the plaintiff from time to time for the supply of mustard-oil, 90 percent of the price of goods supplied used to be paid to the plaintiff against railway receipts and/or -hand receipts and the remaining 10 per cent on the completion of each contact for the supply of goods. It is alleged by the plaintiff that at the time of his migration from the territory now comprised in Pakistan to India the second instalment of 10 per cent "on several supply contracts was yet due and payable to the plaintiff, although he had fully completed those contracts". (Paragraph 12 of the plaint ). ( 4 ) THE first question that arises isly, "is the Union of India liable to refund this amount", being on the plaintiff. In paragraph 3 of the plaint it is stated- "these supplies of Sarson oil etc. used to be made at various Railway stations under the control of the North Western Railway, but all financial relations used to be with the Headquarters of the North Western Railway at Lahore. On partition of the country, some of ese Railway stations became part of India and some of Pakistan. " Paragraph 4 of the plaint reads- "that the plaintiff was a regular approved contractor of the North Western Railway and because he was submitting his tenders for supply of Sarson oil etc. periodically, as and when required by the North Western Railway, the said Railway Administration required the plaintiff to deposit a sum of Rs. 10,000. 00 by way of a standing security deposit as a cover against all the contacts for supply of Sarson oil etc. which may be granted to the plaintiff by the authorities of North Western Railway from time to time. This was under the terms of the agreement between the plaintiff and the North Western Railway authorities. " ( 5 ) BY paragraph 3 of the written-statement the defendant admitted paragraph 3 of the plaint to the extent that the financial relations of the plaintiff were with North Western Railway. Regarding supply at the stations which are now comprised in India, it is stated in the written-statement- "the plaintiff does not say what railway station became part of India. Hence the statement is vague and cannot be replied. " ( 6 ) PARAGRAPH 4 of the plaint was denied for want of knowledge as, according to the defendants, the contract was between the plaintiff and the Pakistan Western Railway authorities at Lahore. If the plaint is vague in this behalf, as I have said it is, the written-statement also does not lend any credit to the defendants. " ( 6 ) PARAGRAPH 4 of the plaint was denied for want of knowledge as, according to the defendants, the contract was between the plaintiff and the Pakistan Western Railway authorities at Lahore. If the plaint is vague in this behalf, as I have said it is, the written-statement also does not lend any credit to the defendants. I could have understood the defendants alleging that they were not possessed of the records and, therefore, could not say as to which stations were supplied with goods under which contracts but to say that the plaintiff has not disclosed which stations became part of India and, therefore, the paragraph in the plaint is vague is, to say the least, rather amusing. In the replication filed by the plaintiff he stated that the supply was made to "delhi, Ambala, Saharanpur, Gaziabad etc. " railway stations. In the course of examination of Nawal Kishore (P. W. I) he stated that some supplies were made by him at the Railway Stations which now fall in India and admissibility of this statement was objected to by the learned counsel for the defendants, which objection was overruled, and, in my opinion, rightly so. Maharaj Krishan (D. W. I), a Sub-Head in the Divisional Office, Delhi Division, Northern Railway, New Delhi, stated that the plaintiff was not required to make any supply at Ambala. "the supply had to be made from Ambala to Lyallpur and from Harunabad to Khanpur. All the three stations Harunabad, Lyallpur and Khanpur are in Pakistan. " He further stated that- "according to me the plaintiff did not make any supply to the Railway Stations which are now within the jurisdiction of the Northern Railway or in the old East Punjab Railway. I do not agree with the correctness of the statement made in Exhibit P. 4 that there are no debits relating to prepartition period outstanding against the claimants in the books of the Northern Railway and there is no objection to the fixed deposit receipt being released in this case by the Financial Adviser and Chief Accounts Officer (P) Northern Railway, Lahore. " ( 7 ) BUTA Mal (D. W. 3) who was from January 1952 to July 1956 attached to the P. P. Section of the Northern Railway in the office of the F. A. and C. A. O. stated- "exhibit D. W. 3/1 is the original letter dated 8-6-1948 received from the plaintiff-firm. The words written in Exhibit P. 48 paper security and supply of S. oil made at Ambala appear to be wrong, because no supplies were in fact made at Ambala. " ( 8 ) THIS witness, however, admitted that the sum of Rs. 660/11. 00 mentioned in Exhibit D. W. 3/a was paid by the Union ofIndia and that represented 10 per cent. of the supply made by the plaintiff to the North Western Railway. ( 9 ) THERE are some letters which have a bearing regarding the stations at which the supply was made. Exhibit P. 51 is a letter dated 15th May, 1952, addressed to the plaintiff by the F. A. and C. A. O. , New Delhi, wherein it is inter alia stated- "as regards your claim amounting to Rs. 10,000. 00 deposited as standing security please intimate the stations at which the supplies were made or were intended to be made against this deposit. " ( 10 ) THE plaintiff replied to the said letter by letter dated 23rd May, 1952. wherein it is stated that- "the standing security amounting to Rs. 10,000. 00 was deposited for the supplies to be made to the whole of North Western Railway including Amritsar, Jullundur, Ludhiana, Ambala, Kalka and Delhi etc. where we made huge supply of Sarson oil. " ( 11 ) EXHIBIT P. 3 is a letter dated 6th September, 1950 from the Administrative Officer (Accounts) to the plaintiff in which it is stated that the fixed deposit receipt is in the custody of F. A. and C. A. O. and the matter of release is under consideration. The letter then refers to the plaintiff s claim for Rs. 208/13. 00 and 660/11. 00 and sets out the position emerging from verification of the records. It has been denied that any of the two amounts is due to the plaintiff. The said letter refers to the claim of Rs. 208. 00/13. 00 as relating to Purchase Order No. 197s/663/ 57b dated 11-12-45 "from Ambala to Lyallpur" and to the claim of Rs. 660. 00/11. It has been denied that any of the two amounts is due to the plaintiff. The said letter refers to the claim of Rs. 208. 00/13. 00 as relating to Purchase Order No. 197s/663/ 57b dated 11-12-45 "from Ambala to Lyallpur" and to the claim of Rs. 660. 00/11. 00 as relating to Purchase Order No. 197s/663/62dated 6-4-46 "from Harunabad to Khanpur". Letter dated 13th October, 1955, is from F. A. and C. A. O. , Northern Railway, New Delhi, to Officer Incharge claims (Exhibit P. 8) in which after reference to the security deposit of Rs. 10,000. 00 it is stated that the said claim has been verified by the North Western Railway, Pakistan, vide their non-payment certificate dated 2-6-1951 "and checked by this office staff". Then there are various letters, which it is not necessary to detail, written by the Indian authorities to the Pakistan authorities asking for varification of the plaintiff s claim. The letter. Exhibit D. W. 3/1 dated 8th June, 1948, is from the plaintiff to the Administrative Officer, Accounts, East Punjab Railway Delhi, infer alia claiming Rs. 660. 00/11. 00" on account of supply of Sarson oil against order No. 197-S/663/62,dated 6th April 1946 from Harunabad to Khanpur carried over to Karachi". Yet another letter is dated 11th October, 1951 (Exhibit D. 2) from the Accounts Officer, Prepartition Claims, North Western Railway, Lahore, to the Administrative Officer, Accounts Prepartition Claims, East Punjab Railway, Delhi, stating inter alia that the claim of Rs. 660. 00/11. 00 had been varified for Rs. 660. 00/2. 00. ( 12 ) FROM these letters the learned counsel for the plaintiff wanted me to deduce that- (1) the letters read with the statement of Buta Mal (D. W. 3) and of the plaintiff showed that 10 per cent being the balance price of goods supplied was paid by the Union of India meaning thereby that the Union of India accepted and discharged its legal liability which had devolved on it with respect to the said contracts; (2) supplies were made under the contracts at all the stations of North Western Railway including some stations which become part of India after the partition of the country. Particular support was sought to be placed for the purpose on the letter. Particular support was sought to be placed for the purpose on the letter. Exhibit P. 3, which referes to Purchase Order No. 57-B dated 11-12-45 "from Ambala to Lyallpur", and (3) Part payments were due to the plaintiff at the time of partition of the country under various contracts awarded to him, for supply of mustard oil. ( 13 ) NEITHER the agreements nor the Purchase Orders are available on the record. The perusal of the plaint, the evidence and the documents on the record yields the following results having bearing on the point under consideration:- (1) There was an agreement under which the plaintiff deposited a security of Rs. 10,000. 00; (2) the arrangement was that this security will be available against all the contracts for purchase of mustard- oil entered into between the parties; (3) the said agreement under which the amount of Rs. 10,000. 00 was deposited was itself not a self-contained contract for supply of goods and each order placed for the supply of goods constituted a separate contract; (4) the said security of Rs. 10,000. 00 was to stand automatically allocated to all such contracts for supply of mustard-oil as may be subsisting between the parties from time to time. In this connection it is significant that in paragraph 4 of the plaint the plaintiff stated that the amount was "by way of a standing security deposit as a cover against all the contracts for supply of Sarson oil etc. which may be granted to the plaintiff by the authorities of Northern Western Railway from time to time. " (5) according to the plaintiff, the security deposit was refundable to the plaintiff on satisfactory completion of the contracts undertaken by him though 10 per cent. which may be granted to the plaintiff by the authorities of Northern Western Railway from time to time. " (5) according to the plaintiff, the security deposit was refundable to the plaintiff on satisfactory completion of the contracts undertaken by him though 10 per cent. on two purchase orders remained to be paid and was paid after the partition of the country; (6) according to the plaintiff; all contracts awarded to him before 15th August, 1947, had been fully completed "to the entire satisfaction of all concerned" (paragraph 13 of the plaint); (7) according to the plaintiff, the supplies were made at all the stations, including the stations which are now comprised in India, while, according to the defendants witnesses, supplies were required to be made only at the stations which now form part of Pakistan; (8) the plaintiff s case is and his the learned counsel argued the entire case on the basis that at the time of partition only two contracts under Purchase order No. 197-S/663/57-B and No. 197-S/663/62 were subsisting to the limited extent, namely, 10 per cent. balance price had not been paid though the plaintiff had fulfilled all his obligations thereunder; (9) whatever contracts were in force from time to time the security of Rs. 10,000. 00 was to stand allocated to those contracts; and (10) the general contract under which the security was deposited would not be decisive of the question whether the supplies were to be made to all the stations in North Western Railway or to the stations which are now comprised in Pakistan. ( 14 ) THAT is so because the effect of the general agreement depositing Rs. 10,000. 00 was merely to allocate the security to diverse contracts awarded to the plaintiff for supply of goods from time to time. If the said general contract itself created obligations for supply of goods slightly different considerations may prevail for then it may possibly be said that since the contract envisaged supplies to all stations covered by the North Western Railway, the liability under the contract would devolve on the Dominion of India because that contract could not be termed as one exclusively for the purpose of Pakistan within the 1947 Order. If, on the other hand, the general contract provided merely that the plaintiff will supply mustard-oil to such stations as he may be directed to under separate contracts awarded from time to time, the liability of the Union of India will have to be determined only in the light of those contracts because those would be the contracts for the supply of goods, and, therefore, decisive of the matter. My conclusion on the materials before me is that each individual subsisting contract, to which the security stood allocated, will decide whether or not the subsisting contracts were exclusively for the purposes of the Dominion of Pakistan, and, if so, the Union of India will not be liable. ( 15 ) NO effort appears to have been made by the plaintiff, at least nothing was brought to my notice, to lead secondary evidence of the contracts and the general agreement. I doubt whether oral evidence can at all be looked at to prove the contracts but, in the absence of any such objection by the defendants, I am not obliged to decide the same. In any case, I will have to examine whether the subsisting contracts, or the contracts to which the security deposit ultimately stood allocated, gave rise to the obligalions for which the liability would be of the Dominion of India or of the Dominion of Pakistan. Mr. Sawhney, the learned counsel for the plaintiff, again relied mainly on Exhibit P. 3 and the evidence of the plaintiff. From Exhibit P. 3 he wanted me to deduce that the supplies were made "from Ambala to Lyallpur. He also drew my attention to letter Exhibit P. 48 which recites- "on account of paper security and supply of S. oil made at Ambala. " I am not inclined to attach much importance to the letter Exhibit P. 48 for- (a) Maharaj Krishan (D. W. 1) and Buta Mal (D. W. 3) said that the statement in the letter was not correct; (b) even if the said witnesses could not have been conversant with the exact supply position as canvassed by Mr. Sawhney, the same would be the position of the authorities writing the letter; and (c) it was not even the plaintiff s case that the paper security of Rs. 10,000. Sawhney, the same would be the position of the authorities writing the letter; and (c) it was not even the plaintiff s case that the paper security of Rs. 10,000. 00 related to supply of oil at Ambala only as, according to him, he had been supplying oil to various stations in India and Pakistan" ( 16 ) ON the statement of the plaintiff made in this behalf I do not place much faith, not on the ground that he may not be telling the truth but because his statement is a general one, namely, "some of the supplies of oil made by me were at the railway stations which now form part of the territory of the Union of India" and "i had completed all my contracts before the 15th August, 1947. Delhi, Amritsar and Jind were some of "the railway stations which now form part of the territory of the Union of India, where the supplies of oil were made by me in pursuance of those contracts. Ambala was also one of such stations". Even if it be assumed that under certain purchase orders supplies were made by the plaintiff at stations now forming part of India (though there is no cogent material even to come to that conclusion), the plaintiff has not spoken about the precise contracts to which the security stood allocated and whether under those contracts the plaintiff had to supply the goods to the railway stations now in India. Exhibit P. 3 talks of "from Ambala to Iyallpur". According to Mr. Nanak Chand, the learned counsel for the defendants, these words meant that the goods were despatched from the plaintiff s headquarters at Ambala to Layllpur, while, according to Mr. Sawhney, the learned counsel for the plaintiff, the supplies were made at all stations from Ambala to Lyallpur. It is difficult to accept Mr. Sawhney s argument as it has never even been the case of the plaintiff that he supplied goods at all stations right from Ambala to Lyallpur and yet if his argument were to be accepted these words can bear no other meaning. The burden of the issue was on the plaintiff and I must hold that the plaintiff has not discharged his burden and proved that the contract was for the purposes which, as from 15th August, 1947, are not exclusively the purposes of the Dominion of Pakistan. The burden of the issue was on the plaintiff and I must hold that the plaintiff has not discharged his burden and proved that the contract was for the purposes which, as from 15th August, 1947, are not exclusively the purposes of the Dominion of Pakistan. ( 17 ) THE 1947 Order fell for consideration before their Lordships of the Supreme Court in Union of India v. Chaman Lal Loona In this case appallant Union of India was sought to be made liable under a contract between the parties for the supply offodder to the Manager, Military Farms, Lahore Cantonment. S. K. Das, J. , speaking for the Court, approved the following observations by Chagla, C. J. in. Union of India v. Chinu Bhai Jeshing- bhai (2) :- "it is clear from the language used in art. 8 that the test to be applied with regard to this contract is not whether the contract was for the purposes of the Dominion of Pakistan at the date when it was made. Ex hypothesi that test is clearly inapplicable. All contracts contemplated by art. 8 must be contracts which when made were made by undivided India by the Governor-General in Council. The test that must be applied is an artificial test and the test may be either if the contract had been entered into on August 15, 1947, whether it would have been a contract for the purposes of the Dominion of Pakistan, or if the Dominion of Pakistan had been in existence when the contract was entered into, whether it would have been a contract for the purposes of "pakistan". ( 18 ) APPLYING this test, their Lordships of the Supreme Court came to the conclusion that the contract was exclusively for the purposes of the Dominion of Pakistan as from 15th August, 1947. If this test is applied, as it must be, there is nothing to show to what contracts did the security in question relate and the onus being on the plaintiff, he must be held to have failed to prove that the contracts were not exclusively for the purposes of the Dominion of Pakistan. On this short ground the plaintiff s suit should fail. ( 19 ) YET another hurdle raised in the way of the plaintiff by the learned counel for the defendants is the plea of limitation. According to Mr. On this short ground the plaintiff s suit should fail. ( 19 ) YET another hurdle raised in the way of the plaintiff by the learned counel for the defendants is the plea of limitation. According to Mr. Sawhney, Article 145 of the Indian Limitation Act, 1908, applies while, according to Mr. Nanak Chand, Article 115 of the said Act governs the matter. I will read those Articles- "115.-FOR compensation for the breach of any contract, express or emplied, not in writting registered and not herein specially provided for. three years When the contract is broken, or (where there are successive breaches when the breach in respect of which the suit is instituted occures, or (where the breach is continuing) when it ceases. " "145-AGAINST a depositary or pawnee to recover movable property deposited or pawned. Thirty years The date of the deposit or pawn ( 20 ) MR. Sawhney relied on Ahilyamba Chatram v. Subramania ; Bibhu Bhusan v. Anadi Nath,; Kishtappa Chetty v. Lakshmi Ammal, and Union of India v. Mohamed Sultana ). In the first mentioned two cases the main discussion is on the question as to whether or not the deposit or money is covered by Article 145. As a matter of fact, there is no discussion at all in these two cases on the question now presented before me. In both those decisions however Article 145 was held applicable for the recovery of money deposited by way of security for proper performance of the duties of an office or for the service of the depositary. In Kishtappa Chetty s case again the discussion is whether Article 145 covers more than the depositum in Roman Law. In Mohamed Sultan s case Article 145 was held applicable and not Article 115 to a suit against the Government for the recovery of a security deposit, which security had been deposited by an auctioneer with the Government for proper discharge of its functions. The learned Judge relied principally on Mohamad Habibul Hac v. Tikam Chand. Narsimham, J. dealing with an argument that no cause of action had arisen in favour of the depositor on the date of deposit and consequently Article 145 could not be applied differed from Ram Rabnijay Prasad Singh v. Mt. The learned Judge relied principally on Mohamad Habibul Hac v. Tikam Chand. Narsimham, J. dealing with an argument that no cause of action had arisen in favour of the depositor on the date of deposit and consequently Article 145 could not be applied differed from Ram Rabnijay Prasad Singh v. Mt. Bachia Kauri , on the ground that the Patna decision proceeded on the assumption that "when a starting point is provided for limitation to run it must be deemed that a cause of action has arisen on that date". According to the learned Judge, the correct criterion had been laid down in Bibhu Bhusan s case in the folowing words:- "in our judgment however the limitation Act does not take any notice of the termination of the contract of bailment, and omitting all reference to bailment had used the word depositary with the object of relying upon the act of deposit as the starting point of limitation. " ( 21 ) I will discuss this judgment after I have dealt with the three decisions relied upon by Mr. Nanak Chand as supporting his point of view. Those are-Ram Ranbijay Prasad Singh v. Mt. Bachia Kuari (8) Dhanra Mills Ltd. v. Laxmi Cotton Traders, and Union of India v. M/s. Gangadhar Mimraj and another. I need not separately deal with the Privy Council decision in Mohammed Habibul Hac s case as that has been dealt with in the decisions REFERRED TO by Mr. Nanak Chand. ( 22 ) THERE is yet another decision on which Mr. Sawhney, the learned counsel for the plaintiff, placed considerable reliance, that is, Nanda Lal Bose v. Ashutosh Chose (Calcutta High Court ). In that case Article 145 was applied to a suit for recovery of money deposited by the plaintiff as a Manager of a Court of Wards. ( 23 ) THAT brings me to the decisions in favour of the defendants. In Ram Ranbijay Prasad Singh s case the suit was for return of money deposited by an employee with his employer as security for good conduct. It was held- "the period from which limitation runs under Article 145 is the date of the deposit or pawn. That means to say that, although no cause of action arose in this particular case at the date of the deposit, yet time was running against the plaintiff or his legal representative. It was held- "the period from which limitation runs under Article 145 is the date of the deposit or pawn. That means to say that, although no cause of action arose in this particular case at the date of the deposit, yet time was running against the plaintiff or his legal representative. That makes the application of Article 145 impossible as a general principle. Now the Limitation Act provides fortime running only after because of action has arisen, and I think it may be taken as quite certain that if any other construction than that is to be placed upon a particular Article, it will be clear the Legislature never intended that that Article should apply to the facts of such a case as this. " ( 24 ) IN the case of Dhanraj Mills Ltd. , the amount in question was a payment for fulfilling the contract. On behalf of the plaintiff Article 145 was invoked. A division Bench of the Bombay High Court decided that- (1) "the deposit contemplated by Article 145 is a deposit which must as far as possible be approximated to a pawn. In other words, the deposit to which Article 145 applies is only that deposit where there is an element of entrustment"; and (2) under Article 145 limitation begins to run from the date of deposit or pawn. In case of a deposit for the performance of a contract the depoist does not become returnable until the happening of a certain contingency with the result that if Article 145 were applied to such a suit the time would begin to run from a point when the cause of action had not accrued to the depositor. ( 25 ) DEALING with the Privy Council decision in Mohammad Habibul Hac s case, it was observed that- "the privy Council was dealing with the entrustment by a debtor of Government Promissory Notes to his creditor as security for the debit and it is on these facts that the Privy Council came to the conclusion that Article 145 was the relevant Article which applied. . . . . . . . . . . . . . . . " IN M/s. Gangadhar Mimraj s case the suit was for refund of security deposit for due performance of a contract. . . . . . . . . . . . . . . . " IN M/s. Gangadhar Mimraj s case the suit was for refund of security deposit for due performance of a contract. The Patna High Court decided that Article 115 and not Article 145 applied to the case and expressed agreement with the view taken by the Bombay High Court in. Dhan Raj s case. It was also decided that such a suit was a suit for compensation. ( 26 ) I am in respectful agreement with the view taken by the High Courts of Bombay and Patna. In a case like the present the security was to be refunded only after due fulfilment of the contract for supplies between the parties. That was the contingency provided for. The contingency in a contract on the happening of which the security becomes refundable may not even arise for 30 years, for instance, even in a case like the present the Railway authorities may have placed an order with the plaintiff for supply of goods during the next 30 years. In that case the plaintiff will not be in a position to claim refund for 30 years. It is inconceivable that the Legislature could have been guilty of such confusion of thought and provided a period of limitaton which may expire even before the plaintiff could file a suit and yet if Mr. Sawhney s contention is accepted, such a result must follow undermining the very basic concept of the law of limitation. This aspect persuades me to take a view different from the one taken in Union of India v. Mohamed Sultan (6 ). The observation of the Calcutta High Court in Bihhu Bhusan s case, relied upon by the Andhra Pradesh High Court, was made when dealing with the question whether the suit against the defendants who were not themselves the actual depositaries but were only heirs of the depositary would be a suit within Article 145. The observation of the Calcutta High Court in Bihhu Bhusan s case, relied upon by the Andhra Pradesh High Court, was made when dealing with the question whether the suit against the defendants who were not themselves the actual depositaries but were only heirs of the depositary would be a suit within Article 145. It is in that context that the Calcutta High Court observed that the Limitation Act did not take any notice of the termination of the contract of bailment and the character of the transaction, insofar as it was a deposit, was not altered so that the person in whose hands the deposit comes by virtue of his succeeding to the estate of the original depositary becomes the depositary of the same. My conclusion, therefore, is that Article 145 docs not apply. I find no impediment in applying Article 115. Mr. Sawhney, the learned counsel for the plaintiff, said that it could not be a suit for compensation, The expression used in Article 115 is not damages but compensation which is not ordinarily used as an equivalent to damages. In my opinion, the expression compensation is not wholly inapplicable or inappropriate to such like suits or even to suits in respect of bonds and promissory notes. In such a case when payment is not made in breach of a contract, there is a breach and a suit against defaulting obliger or promissor is not to make him do something in furtherance of the contract but for compensation for the breach of a contract. The contract was admittedly in writing not registered. Article 115, therefore, in my opinion, applies. ( 27 ) MR. Sawhney, the learned counsel for the plaintiff, then took recourse to certain documents to show that the limitation was kept alive by acknowledgment. As I have already said, the plaintiff himself set up a case that he had fulfilled all his obligations under the contract before the 15th August, 1947. The period of three years would, therefore, start when the amount became refundable to the plaintiff, that is, before 15th August, 1947. The obligation to refund the amount arose on the part of the promissor as soon as the plaintiff fulfilled his part of the contract. Even if 10 per cent, being the part price, remained unpaid, it will not affect the obligation of the promissor to refund the security. The obligation to refund the amount arose on the part of the promissor as soon as the plaintiff fulfilled his part of the contract. Even if 10 per cent, being the part price, remained unpaid, it will not affect the obligation of the promissor to refund the security. The period of limitation would, therefore start, in any case, before 15th August, 1947. Part payment has not been sat up as a defence to the plea of Imitation and I am, therefore, not obliged to consider the same. The plaintiff, therefore, must show that there was an acknowledgment before the expiration of the period prescribed for the suit, that is, in any case before 15th August, 1950. Mr. Shawhney, in this connection, relied on Exhibit P. 33 a letter dated 26th - February, 1948, Exhibit P. 2, a letter dated 9th May, 1948: Exhibit D. W. 3/1, a letter dated 8th June, 1948; Exhibit P. 34, a letter dated 6th October, 1948; Exhibit P. 35, a letter dated 23rd October, 1948; Exhibit P. 1, a letter dated 29th October, 1948; Exhibit P. 36, a letter dated 20th May, 1949; and Exhibit P. 3, a letter dated 6th September, 1950. The acknowledgment, before it can help the plaintiff, must be by the Union of India, and, therefore, any acknowledgment by Pakistan authorities will be of no avail. That is so because the Union of India is sought to be made liable and Pakistan authorities cannot be termed as "an agent duly authorized in this behalf" within Explanation II ofsection 19 of the Indian Limitation Act, 1908, or within Explanation (b) of Section 18 of the Limitation Act, 1963. It also cannot be said that acknowledgment by Pakistan authorities would be an acknowledgment by some person through whom the Union of India derives any liability within section 19 of the 1908 Act or section 18 of the 1963 Act. The liability devolves, if at all, in this case by virtue of the 1947 Order. Moreover, Pakistan came into existence on 15th August, 1947, and it, therefore, cannot be said that the Union of India derived liability through Pakistan. ( 28 ) I will now take up the letters relied upon by Mr. Sawhney. Mr. The liability devolves, if at all, in this case by virtue of the 1947 Order. Moreover, Pakistan came into existence on 15th August, 1947, and it, therefore, cannot be said that the Union of India derived liability through Pakistan. ( 28 ) I will now take up the letters relied upon by Mr. Sawhney. Mr. Sawhney REFERRED TO some other letters as well of the date beyond 1950 but those will help the plaintiff in saving limitation only if it is first saved up to 1950. Exhibit P. 33 is a letter from Pakistan authorities and even otherwise does not constitute acknowledgment. Letter Exhibit P. 2 also does not constitute any acknowledgment. This letter marely calls upon the Accounts Officer to arrange to obtain fixed deposit receipt duly released from Lahore authorities for delivery to the plaintiff "if nothing is due from them. " This shows that it was not an acknowledgment by a person conscious of his liability. On the other hand, it shows that the Indian authorities were still not aware whether they were liable, which liability would depend on anything being due or not by the plaintiff of which position the authority writing the letter was not either aware or conscious. Letter Exhibit D. W. 3/1 is from the plaintiff and cannot constitute acknowledgment. The reasoning applicable to Exhibit P. 2 applies also to Exhibit P. 34. Exhibit P. 35 talks of the payment of Rs. 660. 00/11. 00 to the plaintiff. That would at best be an acknowledgment of liability to pay the remaining 10 per cent. out of the price payable for a particular purchase order. The liability to refund the security was a different and distinct liability. The reasoning given with respect to Exhibit P. 2 applies to Exhibit P. 1 as well. In Exhibit P. 36 the only statement is that the plaintiff s claim was under verification. Exhibit H P. 3 also merely says that the matter regarding refund of security was under consideration of the two Governments. If none of these letters constitutes acknowledgment, as, in my opinion, they do not, the claim became time-barred in 1950 and subsequent letters, none of which has been set up as constituting agreement to pay. can be of any avail to the plaintiff. Mr. If none of these letters constitutes acknowledgment, as, in my opinion, they do not, the claim became time-barred in 1950 and subsequent letters, none of which has been set up as constituting agreement to pay. can be of any avail to the plaintiff. Mr. Nanak Chand, the learned counsel for the defendants, contended that, in any case, these letters were not expressed to be written in the name of the President and consequently Article 299 of the Constitution was destructive of their validity and, therefore, the letters could not be looked at. There is no force in this contention. Article 299 is limited to contracts and assurances of property made in the exercise of executive power of the Union. An acknowledgment constitutes neither contract nor assurance of property. ( 29 ) THE question then resolves itself to the matter of authority, namely, whether the officer signing the letter had authority to acknowledge the debt ? That aspect of the case was concededly not raised by the defendants in the written-statement and, therefore, the defendants cannot be allowed to depend on lack of authority at the stage of arguments. ( 30 ) MY conclusion, therefore, is that the defendants are not liable under the 1947 Order and, in any case, the suit is barred by time. ( 31 ) THE defendants further relied on the fact that under intimation from the Pakistan authorities a demand of about Rs. 11,000. 00 has been raised against the plaintiff and, therefore, the security deposit never became refundable. I need not decide this question. ( 32 ) MR. Sawhney also relied on section 30 of the Limitation Act, 1963, and said that he could file the suit either within five years of the enforcement of the said Act or within the period prescribed under the 1908 Act, whichever is shorter, and, even in the latter case, the commencement of the period will be from the date of the enforcement of the 1963 Act. This has no merit, as, apart from anything else, section 31 provides a complete answer to Mr. Sawhney s argument and the limitation having expired before the commencement of the 1963 Act, it could not be revived. Mr. Sawhney also suggested that section 31 (a) applied only if the period of limitation was "prescribed by the Indian Limitation Act 1908". This has no merit, as, apart from anything else, section 31 provides a complete answer to Mr. Sawhney s argument and the limitation having expired before the commencement of the 1963 Act, it could not be revived. Mr. Sawhney also suggested that section 31 (a) applied only if the period of limitation was "prescribed by the Indian Limitation Act 1908". He said that in the various decisions Article 115 of the 1908 Act was applied not because that was the period prescribed for such a suit but because the Courts could not find in the Indian Limitation Act, 1908, any other suitable Article. If it is held that Article 115 applies then that would be the period prescribed by the 1908 Act. I, therefore, cannot agree with Mr. Sawhney s argument. ( 33 ) THE above disussion will dispose of issues Nos. 1, 2 and 3 in favour of the defendants. The said issues are as under:- (1) Is the suit within time ? (2) Are the 37 letters REFERRED TO in paragraph 19 of the plaint acknowledgments of the liability ? If not, to what effect ? (3) Is the Union of India liable to refund this amount ? ( 34 ) A It is, in the circumstances, unnecessary to decide the following three remaining issues:- (4) Has the Pakistan Government repudiated its liability in respect of the amount in suit ? If so, has the Union of India ceased to be liable ? (5) To what amount, if any, is the plaintiff entitled ? (6) Is the plaintiff entitled to any interest ? If so at what rate ? ( 35 ) IN the result, the suit is dismissed with costs.