The main legal point established in the judgment is that a cash security deposit from a tenant cannot be adjusted towards arrears of rent, and acknowledgments and payments made by the tenant can save the claim for arrears from limitation.

1. Two questions of law arise in this appeal filed by the plaintiffs-landlords in a suit for arrears of rent of a building and the memorandum of cross-objections by the 1st defendant. They are: (1) Whether the acceptance of a cash security from the tenant at the time of letting out the building is hit by S.8 of the Kerala Buildings (Lease and Rent Control) Act, 1965 and whether the tenant is entitled to adjust the same in the monthly rent payable by him before he vacates the building and (2) wether the letters by the tenant claiming set off of the cash security given to the landlord against the rent due will be acknowledgments of the liability for rent under S.18 of the Limitation Act, 1963, whether the payments of rent made by the tenant claiming to be in full settlement of the arrears on the dates of those payments in the covering letters forwarding the cheques for payment will be payments on account of the debt under S.19 of the Limitation Act and whether the acknowledgments and payments will save the limitation for a suit for arrears of rent where a part of the claim will otherwise be time-barred.

2. The short facts of the case shorn of unnecessary details are as follows: The Ist defendant by Ext. A2 letter dated 5-12-1966 offered to take a shop-room in the building belonging to the plaintiffs situated in round south, Trichur town on a monthly rent of Rs. 300/- on payment of a cash security of Rs. 10,000/-. The 1st plaintiff agreed and on 19-12-1966 the 1st defendant paid the cash security of Rs. 10,000/- to the 1st plaintiff. Accordingly, the 1st defendant was put in possession of the shop-room on 20-12-1966. A lease deed 20-12-1966, a certified copy of which was produced in the case as Ext. Al, was also got executed. Thereafter, for the first 4 months the 1st defendant paid to the 1st plaintiff the monthly rent of Rs. 300/-regularly. But in June 1967, by Ext. A14 letter dated Nil the 1st defendant demanded the Ist plaintiff to return the cash security of Rs. 10,000/- paid on 19-12-1966. The 1st plaintiff by Ext. A15 letter dated 7-6-1967 told the 1st defendant that the cash security paid on 19-12-1966 was for the regular payment of rent and due fulfilment of the terms and conditions of the lease deed and it can be returned only when the defendants vacate the shop-room. Thereafter, the Ist defendant by Ext. A 27 letter dated 19-10-1971 forwarded, to the Ist plaintiff a cheque for Rs. 4,500/- in full settlement of all the arrears of rent till October 20, 1971. The plaintiff by Ext. A 28 letter dated 30-10-1971 requested the 1st defendant to clarify how by payment of Rs. 4,500/-all arrears of rent upto 20-10-1971 will be wiped off and to give the details of the appropriation. The plaintiffs' case is that the 1st defendant did not furnish the details of the appropriation, but, according to the 1st defendant, he gave the details. Further payments of arrears of rent were made by the 1st defendant at intervals and the last payment was an amount of Rs. 4,200/-by a cheque forwarded as per Ext. A43 letter dated 20-1-1976. As the rent was in arrears, the plaintiffs filed the suit after issuing Ext. A44 lawyer notice to the 1st defendant. The Ist defendant filed a written statement contending that Rs. 10,000/- paid to the Ist plaintiff on 19-12-1966 was a security for the execution of a lease deed. A contention that part of the plaint claim was barred by limitation was also among other contentions taken in the written statement.

3. Before the trial court, on the plaintiffs' side Exts. Al to A49 were produced and the 1st plaintiff was examined as pw.1 while on the defence side Exts. BI to B5 were produced and the 1st defendant was examined as Dw.1. The trial court in its judgment gave the following findings: The 1st defendant is not entitled to adjust the rent payable from Rs. 10,000/- given by him as security for payment of rent. It has only to be returned at the time when he vacates the shop-room. Except Rs. 1,250/- the a