Sir Philip Macdonell:-

This is an appeal from a decision of the High Court of Bombay in its appellate jurisdiction, given in favour of the plaintiff-respondent, and reversing a judgment of the Original Side of that Court which judgment had dismissed the plaintiff-respondent's action to recover various sums of money bailed by him to the defendant-appellant between the years 1923 and 1928. The only question for determination in this appeal is whether the respondent as plaintiff brought this action within time or whether his claim is barred under the Limitation Act 9 of 1908, and the answer to this question depends on what was the character of the bailment under which the plaintiff handed over and the defendant received these sums of money. If by that bailment the respondent must claim these sums of money as “money payable for money lent,” (Art. 57, Limitation Act) or as “money lent under an agreement that it shall be payable on demand,” (Art. 59, Limitation Act) then and in each case the period of limitation would be three years commencing from the date when the loan was made, and 14th April 1932, when the present action was brought, will admittedly have been more than three years after the last of such loans was made, consequently the action would fail.

If however by that bailment the respondent could claim these sums of money as “money deposited under an agreement that it shall be payable on demand, including money of a customer in the hands of his banker so payable,” (Art. 60, Limitation Act) then the period of limitation would be three years commencing from the date when demand for these sums of money was made and this action was admittedly brought within three years after such demand by the respondent. The question has then to be determined whether he bailed these moneys to the appellant as a loan or as a deposit. The authority ruling such a question is to be found in the judgment of the Board delivered by Lord Atkin in Mohammad Akbar Khan v. Attar Singh, (1936) 23 AIR PC 171=162 IC 454=63 IA 279=17 Lah 557(PC) at page 288 as follows :

Was this then a loan, or was it a deposit payable on demand? It should be remembered that the two terms are not mutually exclusive. A deposit of money is not confined to a bailment of specific 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 seem to 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 seem to be a normal condition of the obligation of the depositee to repay.

The trial Court concluded that the respondent handed these moneys to the appellant not as a deposit but as a loan, but founded this decision principally on its inability to accept the evidence of the respondent where in conflict with that of the appellant, and nowhere applied the test laid down in the case just cited, so as to ascertain whether on the admitted facts in the case there was an obligation on the appellant to “seek out” the respondent and repay him, or whether he was to keep the moneys till the respondent asked for them. The Appellate Court however held that on those admitted facts the respondent bailed these sums to the appellant as a deposit for safe custody, and their Lordships apprehend that this is the correct inference to draw from them.

The admitted material facts are these. The respondent lost his father in 1920 when of the age of fifteen. Thereafter he seems to have relied very much on the appellant and he married in 1922 a connexion by marriage of the appellant. He had claims against certain firms of which his father had been a partner, and he made an agreement with the appellant that the latter should help