PRADEEP NANDRAJOG, J.

( 1 ) AN interesting question of law regarding limitation arises for consideration (as a preliminary issue) in the suit. The other issue involved is, whether a contract concluded between the parties and whether defendant is entitled to retain the sum of Rs. 15 lacs received by it from the plaintiff.

( 2 ) SHORN of verbose details, plaintiff a society registered under the societies Registration Act 1860 promotes the interest of those in textile business. Defendant, a Government of India Enterprise, is the custodian of a land in New Delhi where trade fairs are held. The complex is called Pragati maidan.

( 3 ) PLAINTIFF was desirous of holding an exhibition at New Delhi and wanted defendant to license a space to it.

( 4 ) IN response to the query from the plaintiff, on 18. 07. 1990 defendant sent a telegram stating that in principle it had agreed to provide an area of approximately 13,000 sq. meters. Rs. 25 lacs towards advance license fee was directed to be deposited. It was informed that thereafter defendant would confirm the space to be licensed and the duration of the license.

( 5 ) THEREAFTER letters were exchanged between the parties. Parties correspon