A suit for refund of security deposit is governed by Article 120 of the Limitation Act of 1908.

C. B. BHARGAVA, J.

( 1 ) THIS is an appeal by the State of Rajasthan against the judgment and decree dated 31st March 1967, of the District Judge Kota by which plaintiffs suit was decreed for a sum of Rs. 10940/ -.

( 2 ) THE only point which has been canvassed on behalf of the appellant is that the suit of the plaintiff was barred by limitation. Learned Deputy Government advocate contends that the suit is governed by Article 18 of the Limitation Act of 1963 and having been filed after the expiry of three years from the date of the completion of the work was beyond time.

( 3 ) PLAINTIFF respondent was given a contract for terrazzo and cement flooring in the maharao Bhim Singh Hospital Kota on 25th February. 1957, and for the construction of a road inside the same hospital on 30th March, 1957 at an estimated cost of Rs. 96,119 and Rs. 15,238/- respectively. In terms of the agreement, the plaintiff was required to deposit security and if it was not deposited in advance, it was provided that 10 per cent, shall be deducted from his bills. Clause 1 (b) of the agreement provides that : the persons whose tender may be accepted that is the contractor shall permit Government at the time of making any payment to him for work done under the contracts to deduct such sum as will (with the earnest money deposited by him) amount to per cent of all money so payable, such deductions to be held by Government by way of security deposit. Plaintiffs case is that he completed the work to the entire satisfaction of the engineer in-charge on 27th January, 1958. The State deducted the amount equal to 10 per cent, on his running bills as his security deposit for due performance of the contract to the extent of Rs. 10,580/ -. In spite of repeated demands, this amount for security deposit was not refunded to the plaintiff. " The plaintiff served a notice under Sec. 80 Civil Procedure Code on 14th November, 1963, but still the amount was not paid. So he had to institute the present suit for the refund of Rs. 10580/- plus Rs. 3636/-as interest on the said amount at the rate of 6 per cent, per annum.

( 4 ) THE suit was contested in the lower court and the learned District Judge after making deduction of Rupees 1385. 52 which was due from the plaintiff passed a decree for Rs. 9194. 48 plus Rs. 1745. 52 as interest pendente lite. The learned district Judge without any objection on the part of the appellant held that the suit was governed by Article 120 of the Limitation Act of 1908.

( 5 ) LEARNED Deputy Government Advocate says that the appropriate article applicable is Article 18 of the Limitation Act of 1963 and even if Article 18 does not apply, either Article 22, 24 or 55 would apply to the case. It is contended that the plaintiffs running bills were for the price of work done and the amount deducted by the Govern- ment from those bills will also retain the same character irrespective of the fact that the said amount is held by the Government by way of security deposit. In my view, the contention is not sound.

( 6 ) IT may be true that the running bills submitted by the contractor are for price for work done and the money in his hands will have the same character. But after the Government makes a deduction of 10 per cent, from the amount of the running bills and holds it by way of security deposit, its nature will be of a security deposit as if the amount was deposited in advance. "the agreement provides two alternatives for the contractor. He may pay the security deposit in advance or he may permit the Government to deduct 10 per cent, from the running bills. The character of deposit in both these cases will be identical and if Article 18 cannot apply to cases for the refund of security deposit paid in advance, it cannot also apply to the amount deducted from the running bills held by the Government as security deposit. In the hands of the contractor, the amount would certainly be for the price of the work done but when after the deductions