Sainik School Society is an independent legal entity and not a State Government or Central Government, and therefore not entitled to the extended period of 30 years limitation under Article 112 of the Limitation Act.

Headnote:
LIMITATION ACT - ARTICLE 112 - SOCIETIES REGISTRATION ACT, 1860 - SAINIK SCHOOL SOCIETY - WHETHER A STATE GOVERNMENT OR CENTRAL GOVERNMENT - WHETHER ENTITLED TO EXTENDED PERIOD OF 30 YEARS LIMITATION - HELD, NO
Fact of the Case:

Sainik School, Satara, run by the Sainik School Society, sued the defendant for recovery of a sum of Rs. 4,875/- being the value of scholarship and fees paid to the defendant's son who discontinued studies at the school after three years. The defendant pleaded that the withdrawal was due to ill-health and that the suit was barred by limitation. The trial court dismissed the suit on the ground of limitation, holding that there was no privity of contract between the defendant and the State Government or the Central Government and that Article 112 of the Limitation Act did not apply. The appellate court reversed the trial court's decision, holding that the Society was a Government and that Article 112 applied.
Finding of the Court:

The High Court held that the Society was an independent legal entity, which was largely controlled and liberally aided by the Central Government as well as by the State Government, but that this did not change the legal character of the Society and raise its status to the level of the Government. The Court further held that the suit was clearly barred by time and had to be dismissed on that score.
Issues: 1. Whether there was a privity of contract between the defendant and the Central Government and/or the State Government? 2. Whether Sainik School could be treated as Central or State Government?
Ratio Decidendi: 1. The Court held that there was no privity of contract between the defendant and the Central Government and/or the State Government, as the privity of contract was between the Defendant and the Society. 2. The Court held that Sainik School could not be treated as Central or State Government, as it was an independent legal entity, which was largely controlled and liberally aided by the Central Government as well as by the State Government, but this did not change the legal character of the Society and raise its status to the level of the Government.
Final Decision: The High Court allowed the second appeal, quashed and set aside the judgment and decree passed by the learned District Judge, Satara, and restored that of the trial court. No costs.

JUDGMENT - MOHTA V.A., J.:—Is Sainik School, Satara, which runs under the aegis of the Sainik School Society—a Society duly registered under the Societies Registration Act, 1860—a State Government or Central Government and hence entitled to the benefit of extended period of 30 years limitation for filing a suit under Article 112 of the Limitation Act, is the point of law that needs to be determined in this litigation.

2. Sainik School imparts required education to young lads interested in making Regular Armed Forces as their career. Scholarships are also awarded to the students who are admitted by selection process. Quantum depends upon income of the guardian. Course is for five years. Admission is given on certain terms and conditions. The guardian has to execute a surety bond to the effect that if for any reason, not beyond the control of either the student or the guarantor, the student fails to pursue his studies at the said school before appearing for selection for entry to any Institution, the guarantor shall be liable to pay to the Governors of the School in cash the amount received from the School or the value of the scholarships received for the period the student was taking education in the school.

3. Gopal Banahatti (the original defendant) had executed such bond dated 10-3-1965 (Exh. 32) as a guarantor for his son Dilip who was admitted to the school on 15-3-1965. Dilip pursued studies for three years and thereafter discontinued. The Defendant communicated by a letter dated 8-2-1968 that the name of Dilip should be removed from the rolls as he was being withdrawn from the said school since he was not keeping good health and was having liver problems at Satara. The Principal of the school wrote back calling upon the Defendant to pay back the value of the scholarship amounting to Rs. 4,875/- for three years also the fees of Rs 410/- for the months of January and February 1968. Since the amount was not paid and Dilip ceased to attend the school, the State of Maharashtra and the Government of India as plaintiffs Nos. 1 and 2 have filed this suit on 10-7-1972 for recovery of a sum of Rs. 4,875/-.

4. This suit was defended on various grounds including (i) that withdrawal of Dilip from the school was on account of ill-health which was beyond the control of Dilip or his guardian and (ii) that the suit was barred by time in view of Article 30 of the Limitation Act, not having been filed within 3 years of the breach of conditions of bond.

5. The trail Court relying on the evidence adduced by the defendant including that of Dr. Degalurkar, the medical practitioner, came to the conclusion that the factual defence was correct. Liver of Dilip was affected, it was not advisable for him to continue his studies at Satara and hence the withdrawal from the school was for reason beyond the control of Dilip or his guardian. The trail Court also dismissed the suit on the ground of limitation, since the suit was not filed within three years from the breach of the condition of the bond . In trial Court's view, there was no privity of contract between the defendant on one hand and the State Government or the Central Government on the other, the privity of contract was with the Society and, therefore, the State Government and/or the Central Government could not file this suit Article 112 could not be attracted.

6. The plaintiffs filed an appeal in the Court of the District Judge, Satara, which was transferred to Second Extra Assistant Judge, Satara. The appeal was allowed and a money decree as prayed for was granted taking a view (i) that there was no justification for withdrawing Dilip from the school; (ii) that the Society was nothing but a Government and hence Article 112 of the Limitation Act applied and not Article 30. Aggrieved thereby, this Second Appeal has been filed.

7. The finding that there was no justification for withdrawing Dilip from the school, is based on appreciation of evidence. No case for interference in Second Appe

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