LexRAM JANKI DEVI & ANR. versus M/S. JUGGILAL KAMLAPAT
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
B
D
E
F
G
H
RAM JANKI DEVI & ANR.
v.
M/S. JUGGILAL KAMLAPAT
January 28, 1971
[G. K. MITTER AND A. N. RAY, JJ.]
573
Deposit and Loan-Difference between-Tests-Demand for part of
loan whether sftlrts limitation.
Two groups known as the Singhania group and the Gupta Group were
partners in M/ s. India Supplies. Both were also interested in the ;business
of Lakshmi Ratan Cotton Mills. In the present litigation the GJpta group
was represented by the appellants and the Singhania group bY the respon-
dent.
In the year 1942 Lakshmi Rattan Cotton Mills was the creditor of
Ml s. India Supplies for the approximate sum of Rs. 4,00,000. Lakshmi
Ratan Cotton Mills was a debtor to the respondent for the approximate
sum of Rs. 4,00,000. Lakshmi Ratan Cotton Mills demanded the sum of
Rs. 4,00,000 from India Supplies. India Supplies could not repay Lakshmi
Ratan Cotton Mills. Thereafte\' India Supplies proposed that the respon-
dent should deposit a sum of Rs. 4,00,000 with India Supplies to wipe out
the indebtedness of the India Supplies to Lakshmi Ratan Cotton Mills.
The respon<Jent accepted the said proposal and thereafter a letter dated 29,
September 1942 was written by the head of the Gupta group on behalf
of India SJ!pplies to the respondent recording the agreement that "a sum
of Rs. 4,00,000 should be debited to India Supplies as deposit at the usual
rate of interest as agreed upon." The resiondent was to place to the credit
of Lakshmi Ratan Cotton Mills a sum o . Rs. 4,00,000 in its account with
tho respondent thus reducing the indeb dness of Lakshmi Ratan Cotton
Mills from Rs. 9,00,000 to Rs. 5,00,000. Disputes and differences arose
between the two groups thereafter.
In 1944 there was an arbitration
award.
The Singhanias went out of both India Supplies and Lakshmi
Ratan Cotton Mills, and the Gupta group earned on both the businesses.
The present suit was filed by the respondent in 1953. The claim was based
on the aforesaid deposit of Rs. 4,00,000. The suit though originally filed
in the court of the Cvil Judge, Kanpur w.as tried by the Allahabad High
Court in its original jurisdiction. The suit was decreed in favour of the
respondent. With certificate appeal was filed {n this Court. The ~stions
for consideration \Vere ; (i) whether the money was deposited under an
agreement and payable on demand so that limitation would commence
from the date of demand within three years of which it was filed, or
whether it Wlls a loan made on 30th December 1942 in respect of which
the suit was barred under Art. 59 by limitation, the same not having been
filed within three years ·from the date of the loan; (ii) whether there was
a demand for a part of the amount in 1943 and therefare limitation would
start from that date.
HELD : (i) The amount was a deposit and not a loan.
The case of a deposit is something more than a mere lQiln of money.
It will aepend on the facts of each case whether the transactiOn is clothed
with the character of a deposit of money. The surrounding circumstances ·
the relationship and character of the transaction and the manner in which
the partfos treated the transaction will throw light on the true form of the
transaction. !577 HJ
574
SUPllEME COUllT REPOR;I'S
[1971} 3 S.C.R..
V. E. A. Annamalai Chettiar & Anr. v. S. V. Y. S. Veerappa Chettlar,
A.LR. 1956 S.C. 12 and Nawab Major Sir Mohammad Akbar Khan v.
Attar Singh & Ors., 63 I.A. 279, referred to.
Some of the partners of the appellant and the respondent in the year
1942 wel"e common. It would be more explicable and na(Jlfal course of
events that monies would be ke,Pt in deposit with the appellant in order
to enable them to have
financ1al
accommodation without immediate
worry of repayment. 1be mere fact that money in specie was not paid
wou Id not be destructive of the case of deposit. The r<;spondent acted as
bankers. The way in 'which the respondent made entries in the pass-book
of the appellant was consistent with. the roznamcha, f!hata and nakalbahi
books. It was \lot a .case of the respondent giving loan to the appellant
for the obvious reason .tbat the histdry of the . transaction between
the
appellant and LakshmtCotton Mills showed that the appellant had to be
put on a footing of financial: stability by giving the appellanHhe use of the
sum of Rs. 4,00,000 for a jong time. The absence of aµy
negotiable
instrument was significant, A hundi Or a11(omissory note would. have been
coExcerpt shown. Read the full judgment & AI analysis in Lexace.