The limitation period for a suit for compensation for breach of contract is three years from the time when the contract is broken.

S. BARMAN, J.

( 1 ) DEFENDANT is the appellant. The District Board, Ganjam, was the original plaintiff. After the passing of the Orissa Zilla Parishad Act, District Boards were abolished and their properties vested in the State of Orissa. The suit out of which, this appeal arises was a money suit filed by the plaintiff against the defendant for a decree for Rs. 4383. 39 np. for balance of dues from the defendant as lessee of weekly market tolls.

( 2 ) THE facts stated are these: A Hat sits at village Hinjili once a week. Ganjam : district Board used to collect toll from all dealers in goods in the market. A particular tariff is prescribed under the Madras Local Boards Act applicable in the area The right to collect toll is leased out to the highest bidder. There are some sheds at Hinjili Hat owned by Dist. Board. Any shopkeeper who uses these huts has to pay rent. On January 21, 1955 the District Board publicly auctioned the right to collect the Hinjili market tolls for official year 1955-56 (April 1, 1955 to march 31, 1956 ). The defendant was the highest bidder at the public auction. The bid amount was Rs. 13,125/ -. The defendant deposited 1/4 of the amount, namely, Rs. 3281/4 to the credit of the Dt. Board. The terms and conditions of the agreement between the defendant and the District Board are contained in two muchlikas (Exts. 2 and 3) executed by the defendant In. favour of the plaintiff. Under the said terms the balance of the bid amount was to be paid in three equal instalments, namely 1st instalment by June 1, 1955; 2nd instalment by August 1, 1955; and 3rd instalment by October 1, 1955. It was also agreed that in default of payment, 12 per cent interest would be charged. Purusuant to the said agreement the defendant had paid a total sum of Rs. 10,363/4 including interests. On March 4, 1959 the plaintiff filed the suit for the balance dues of Rs. 4383. 39 np. including interest.

( 3 ) THE defenca so far as material for the purpose of deciding this appeal is that the plaintiff's claim is barred by limitation in that the money fell due at the end of each instalmant period; the suit having been filed beyond three years from the due date of each instalment period) the suit is barred by limitation. It was also pleaded in defence that the said agreement between the defendant and the plaintiff contained in the said Muchlikas (Exts. 2 and 3) which according to the defendant was in substance a lease was invalid by reason of non-registration.

( 4 ) THE learned trial Court dismissed the plaintiffs suit as barred by limitation in that the case, as based on bond payable by instalments, is governed by Article 74 of the Limitation Act, and further that the alleged acknowledgment by the defendant of the dues contained in an application by the defendant to the District board dated January 5, 1956 Ext. 5 did not save limitation. The learned trial Court did not give any finding on the alleged invalidity of the said Muchilikas. He, however, found that the Hat sheds were delivered to the defendant for use. In appeal the learned lower appellate court reversed the decision of the trial court, and decreed the suit in favour of the plaintiff on the finding that this case is governed by Art. 115 of the Limitation Act and that the period of limitation for the suit would be computed from the last date of the toll term period (referred to lease period) that is March 31 1956 and hence the suit having been filed on March 4, 1959 was within time. On the alleged affect of non-registration of the Muchalikas, the learned lower appellate Court found that as the defendant was admittedly in possession for the toll period in question, and had the benefit of the agreement, the defendant was bound to pay the plaintiffs dues claimed as compensation for use and occupation. The other findings of the trial court were not challenged before the lower appellate Court.

( 5 ) THE main point for consideration in this appeal is limitation. The arguments urged on