ELAMPALLOR TRUST v. KAMALAKSITY AMMA — 1989 DIGILAW 52 (KER)

Judgment :- 1. This is an appeal by the first defendant. The suit was one for realisation of money. The short facts for the disposal of this appeal are these. 2. The first defendant is a Private Family Trust. The administration of the Trust is controlled and managed by as elected committee. The present convenor is one M. Karunakaran Pillai. The 2nd defendant is the former convenor of the first defendant Trust. The plaintiff is also a member of the Trust. 3. On five occasions the Trust received loans totalling an amount of Rs. 21,000/- from the plaintiff. When the plaintiff demanded to repay the said sum of Rs. 21,000/- she was told by the 2nd defendant that the general body of the first defendant has decided to treat the said loan amount of Rs. 21,000/-as a deposit with the first defendant repayable on demand with interest not exceeding 7 per cent per annum from the income of the Trust to which the plaintiff also agreed to. The defendants did not repay the amount. The plaintiff demanded the amount with interest on 20-6-1986. The amount was not repaid. The first defendant issued a reply notice denying the liability of the first defendant. This letter caused the filing of the suit. The contention of the first defendant is that the suit is not maintainable either on facts or in law. There was no scheme for the Trust authorising the 2nd defendant to avail loan for the first defendant. The act of the 2nd defendant is without authority and is not binding on the first defendant. Further it was contended that the plaintiff did not advance any amount by way of loan to the first defendant. It was also contended that the suit is barred by limitation. 4. The court below considered the question regarding receipt of loan by the Trust. Considering the documentary evidence, Exts. Al to A5 receipts issued by the 2nd defendant for and on behalf of the first defendant and also the day book of the first defendant the court below found that the contention of the defendants that no amount was borrowed from the plaintiff is absolutely false and incorrect. There is ample evidence in the case to establish that the 2nd defendant was in charge of the Trust and he was authorised to receive loans for the Trust. There is ample evidence in the case to establish that the 2nd defendant was in charge of the Trust and he was authorised to receive loans for the Trust. The loans were taken for the construction of the buildings for the Trust. Ext. A9 is a copy of a compromise petition filed in O.S. No. 234/80. dw.1 the present convenor of the first defendant was the plaintiff in the above suit. It is pertinent to note that in the compromise petition all the acts done by the 2nd defendant and the committee were ratified. 5. Ext. A10 is a copy of the minutes of the first defendant which shows that on 9-e-1980 the general body of the first defendant Trust decided to treat the loan amount received by it as a deposit and further decided to pay interest at the rate of 7 per cent per annum. The plaintiff alleged that she accepted the above decision. In the circumstances she demanded the amount from the first defendant. The defendants have no case that the amount has been paid. So the court below rightly found that the plaintiff is entitled to get the plaint amount with future interest at the rate of 7 per cent per annum. 6. Learned counsel who appeared for the appellant did not contend the non-liability of the first defendant to pay the amount, but only submitted before us that the claim is barred by limitation. Admittedly the amount is kept by the defendants as a deposit payable on demand. The relevant Article of Limitation applicable in this case is Art.22 of the Limitation Act. It runs thus: From the copy of the first defendant's minutes Ext. A10 it is clear and plain that on 9-e-1980 the general body of the first defendant Trust decided to treat the loan amount received by it as a deposit and this decision was accepted by the plaintiff. True a deposit is not a bailment of specific currency to be returned in specie but would only create the relationship of debtor and creditor. It is a loan under certain conditions. The distinction which is perhaps the most significant one is that the deposit not for a fixed terms does not seem to impose an immediate obligation on the depositee to seek out the depositor and repay him. It is a loan under certain conditions. The distinction which is perhaps the most significant one is that the deposit not for a fixed terms does not seem to impose an immediate obligation on the depositee to seek out the depositor and repay him. He has got the right to keep the money with him till asked for it. A demand by the depositor would therefore is a condition to create an obligation on the part of the depositee to repay the amount. It is observed in Suleman Haji Ahmed Umer v. Haji Abdulla Haji Rahimtulla (AIR. 1940 Privy Council 132) thus: "A loan and a deposit payable on demand are not mutually exclusive. A deposit of money is not confined to a bailment of specified currency to be returned in specie. As in the case of a deposit with a banker it does not necessarily involve the creation of a trust, but may involve only the creation of the relation of debtor and creditor, a loan under conditions, The distinction which is perhaps the most obvious is that the deposit not for a fixed term does not impose an immediate obligation on the depositee to seek out the depositor and repay him. He is to keep the money till asked for it. A demand by the depositor would therefore be a normal condition of the obligation of the depositee to repay." 7. In AIR. 1971 SC. 2551 (Ram Janki Devi and another v. M/s. Juggilal Kamlapat) the Supreme Court has said that the surrounding circumstances the relationship of parties, character of transaction and the manner in which the parties treated the transaction are factors decisive of whether a transaction is a deposit of money or loan. The case unfolds on facts clinching plain and clear proof that the first defendant unequivocally treated the amount received as a deposit. So the time runs under this Article for the purpose of limitation for the repayment of the loan when a demand is made for the amounts due. The time when the demand has to be made is left with the plaintiff. So the time runs under this Article for the purpose of limitation for the repayment of the loan when a demand is made for the amounts due. The time when the demand has to be made is left with the plaintiff. It entirely depends upon the intention of the plaintiff and the starting point of limitation may be indefinitely postponed by him by not making the demand vide AIR 1964 SC 1256 (Memon Abdul Karim Haji Tayab, Central Cutlery Stores, Veraval v. Deputy Custodian-General, New Delhi and others) and AIR 1960 Madras 264 (A R.G.B. Balagurumurthy Chettiar and others v. A.K. Chinnaswami Raju and others). The demand was made by a registered notice on 13-10-1986 and the suit was filed on e-e-1987. So we bold that the suit h not barred by limitation. The trial court has also held so. We see no merit in this appeal and the same is dismissed.