The main legal point established in the judgment is the existence of a relationship of bailor and bailee between the Bank and the 1st defendant, and the suit being well within time under Art.70 of the Limitation Act, 1963.

SUKUMARAN, J. :- Vijaya Bank Ltd., had its branch and activities in Cochin, among other places. Consequent on the enactment of the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance 1980, later replaced by Act 40 of 1980, the assets and rights became vested in the Vijaya Bank, the plaintiff in the case.

2. Messrs. Joshi Trading Company was one of the constitutents of the Bank. That firm had extensive dealings in rubber. It can be conveniently referred to as the firm. The firm had availed of various facilities from the Bank, including the pledging of goods and borrowing on the security of the goods pledged.

3. The 1st defendant had a variety of business activities. The partners of the firm were partners of D.B. Khona and Sons, well entrenched in business as shipping and clearing agents. In the light of the business transactions the Bank had with the firm, it entered into an arrangement with the 1st defendant for the storage of the goods, evidenced by Ext. A3 letter dated 12-4-1976.

4. After the 8th of November, 1977, the firm made itself scarce. The last deposit of rubber in the godowns by the firm was on 8-11-1977. As on 13-11-1977, there was an admitted balance of 140 tonnes, as seen from the Stock Register, Ext.B3, maintained by the 1st defendant. The

balance stock is evidenced by Ext.A69 as well. The Court below itself, in paragraph 6 of its judgment, held :

"Thus it is the clear case that the quantity of rubber goods received by the 1st defendant as the final stock is 140 Tonnes."

5. In December, 1977, the 1st defendant wrote to the Bank about the deteriorated law and order situation and requested the Bank to make alternate arrangements for the storage of the goods. The Bank, by Ext.A83, sought some further time in the matter.

6. When transactions became sticky, and outstandings continued to mount up, the Bank naturally endeavoured to enforce its rights and liquify the security. The Bank then had a jolting shock. The godowns were found empty.

7. The Bank sent a lawyer's notice, Ext.A78, on 14-6-1979 calling upon the 1st defendant to account for the goods entrusted with the 1st defendant. A reply was sought within two weeks. No reply was received within that time. Another notice, Ext.A79, was sent on 7-8-1979. Ultimately, on 23-2-1980, (more than about 8 months after Ext.A78 notice) the reply, Ext.A80 was sent.

8. Driven to the wall as it were, the Bank instituted the suit. Various contentions were raised by way of defence. The entrustment of the goods as pleaded by the Bank was denied. A plea of limitation was another. Subsidiary contentions such as about the price to be adopted if accountability in respect of the rubber stored had been established, and about the rate of interest payable, were also there.

9. The Court below dismissed the suit as barred by limitation. Article 3 of the 1st Schedule to the Limitation Act, according to that Court, was the applicable provision. That article allowed only three years time from the termination of agency. Ext.A82 letter was treated as a renunciation of agency. Reckoned that way, the suit filed on 28-1-1981 was found to be barred.

10. Findings were also entered on the other issues as well. According to the trial Court, damages for the quantity of accountable rubber has only to be reckoned according to the rates furnished by the firm on the basis of which the Bank had granted loans. Interest was found payable only at 6% per annum.

11. All the findings have been attacked in appeal by the plaintiff Bank.

12. The substantial question is about the bar of limitation.

13. As noted earlier, the defendant rested his case on Article 3 of Schedule I to the Limitation Act, 1963. The plaintiff maintained that the relevant Article is Art.70 which stipulated a period of 3 years from the date of refusal by the depositee to return the goods. Admittedly, reckoned that way, the suit is well within time. The crucial question therefore, is whether a relationship of depositor - depositee