Article 70: (Art. 145 of the Act of 1908):
The period of limitation for a suit to recover movable property deposited or pawned from a depository or pawnee is three years and the period of limitation begins to run from the date of refusal after demand.
Article 70 is a special Article governing the suit for recovery of movable property deposited or pawned from the depository or pawnee.
The General Clauses Act, 1897 defines ‘movable property’ as property of every description except immovable property. Movable property includes money as well.
The expression ‘deposit’ in Art. 69 should be in the nature of entrustment so that the depositor would be entitled to claim the deposit from the moment it is deposited. Thus, ‘deposit’ means entrustment. The expression ‘depository’ appearing in Art. 70 is on par and appears alongside the expression ‘pawnee’. The word ‘depository’ would include the person who holds the deposit as well as the person for whose benefit it is held as security, for example, money with a stake-holder’.
Pawn means a pledge. Section 172 of the Contract Act defines a pledge or pawn thus:
The bailment of goods as security for payment of a debt or performance of a promise is called ‘pledge’. The bailor is in this case called the ‘pawner’ and the bailee is called the ‘pawnee’. Pledge is a contract whereunder deposit of goods is made a security for a debt and the right to the property vests in the pawnee so far as is necessary to secure the debt.
On the satisfaction of the debt the pawn is extinguished and the pawner has the right to ask the pawnee to redeliver the goods pawned. If such demand is refused cause of action arises for the pawner to file a suit for recovery of the goods pawned and to such a suit, Art. 70 is attracted.
Art. 70 is attracted where there is a suit for recovery of specific article deposited or pawned but not when the plaintiff asks for goods of like or similar nature and quality.
Art. 70 is attracted when a suit is filed for recovery of movable deposited or pawned but not to a suit for recovery of compensation for wrongful detention of movable property.
In Vijaya Bank v. United Corporation, (AIR 1991 Ker. 209), the Bank advanced money to the customer on keeping pledged goods as security. The goods kept in the godown was lost. A suit by Bank against the godown- keeper (bailee) to recover the goods attracts the Art. 70.
When the deposit is made for security for debt or for keeping the movable in safe custody, the Art. 70 does not apply.
In Badri Prasad v. State of Rajasthan, (AIR 1968 Raj. 59), it has been held that the Art. 70 does not apply to a suit for refund of money deposited with the employer for security for good conduct.
In Shankar v. State of Maharashtra, (AIR 1970 Bom. 8), it has been held that a suit for recovery of money deposited as security for due ‘ performance of contract does not attract Art. 70.
In Union of India v. Gangadhar, (AIR 1962 Pat. 372), it has been held that a suit for recovery of earnest money deposited with the vendor in pursuance of an agreement for sale is not governed by Art. 70.
In Joseph v. Kora, (AIR 1972 Ker. 170), it has been held that the receipt of money by the father-in-law by way of stridhanam cannot be termed deposit for the purpose of the Art. 70.
In the case when some promissory notes are kept with the defendant as security or for safe custody, they are treated as deposit to the defendant.
The term ’deposit’ should include cases where a thing is handed over to a person on the understanding that the depository might use the thing for his own benefit and then return it when demanded.
In Union of India v. Vajir Sultan, (AIR 1966 AP 218), it has been held that a suit against the Government for recovery of money kept as security deposit for the proper discharge of the plaintiffs function as Government engineer attracts the Art. 70. But, in Badri Prasad v. State of Rajasthan, (AIR 1968 RAJ. 59), it has been held that when a sum is deposited as advance customs duty, the amount paid is not deposited within the meaning of Art. 70 and customs officials cannot be treated as depositories for the purpose of Art. 70.
Under Art. 70, the starting point of limitation is the date of refusal after demand. Under Art. 70, limitation starts not from the date of demand but from the date of refusal following demand.