- (1.) THE plaintiff-Sudarsan Chit Funds is. the petitioner and the petition has been filed against the judgment of the appellate Court (Subordinate Judge, Udumalpet), dated 12th December, 1977, by which the decree and'judgment of the trial Court dated 31st January, 1977, in O. S. No. 19 of 1976, dismissing the suit as barred by limitation, has been confirmed.
(2.) THE plaintiffs filed the suit for recovery of the arrears of chit instalments under the-promissory note executed by the defendants. THE defendants pleaded, inter alia, that the suit is barred by limitation and that the suit cannot be enforced against some of the defendants as they are entitled to the benefits of the Debt Relief Act. Separate issues were framed by the learned District Munsif and issue-No. 3 reads whether the defendants are entitled to any Debt Relief Act benefits and additional issue was framed as to whether the suit is barred by time. On issue No. 3, the learned District Munsif gave a finding that the defendants are not entitled to any benefit under the Debt Relief Act. Only on-additional issue he has given a finding that the suit is barred by limitation. On appeal by the plaintiffs in the Sub-Court at Udumalpet, the learned Subordinate Judge concurred with-the above finding of the District Munsif on the question of limitation and dismissed the appeal with costs. Hence the present revision. Learned counsel for the petitioner has argued that under section 25 of the Tamil Nadu Chit Funds Act, 1961, the foreman of the chit shall not be entitled to claim consolidated payment of all the future subscriptions from a defaulting prized subscriber, unless he shall have demanded the same in writing, that in the present suit the foreman had issued lawyer notice under the original of Exhibit A-5 on 29th June, 1973, to the defendants, which were acknowledged by the defendants under Exhibits A-6 to A-8, though one notice under Exhibit A-9 was returned and that therefore the period of limitation will have to run from 29th June, 1973, and the suit which has been filed within three years thereafter is not barred by limitation. In support of the said argument, learned counsel has relied upon the case reported in Laser v. P. Selvamony and others1, and in Kunjamma George v. Kesava Pillai2. The decision in Laser's case1 , was rendered after the judgments of both the Courts below. The judgment in A. S. No. 46 of 1977 was rendered on 12th December, 1977, and the judgment in O. S. No. 19 of 1976 was rendered on 31st January, 1977. But the learned counsel for the plaintiff in the lower Courts appears to have cited the decision in Kunjamma's case2. Both the Courts below have applied the decision rendered by the Madras High Court in Thirumalachariar v. S. P. Varadappa Chetttar3, in preference to the decision of the Kerala High Court. In Laser's case1, it has been held that under section 25 of the Chit Funds Act, the foreman would not be entitled to claim a consolidated payment of all the future subscriptions from a defaulted prized subscriber, unless he shall have demanded the same in writing. In the above case, the foreman had given a notice in writing on 30th September, 1970. an d therefore it was held that the suit filed within three years from the dpte of notice was well within time. In support of the above decision, the decision of the Kerala High Court in Kunjamma's case2 , was referred to. In Nanoo Sukumaran v. P. Sankaran4, it was held, that under section 32 (1) of the Travancore Chitties Act (which is in pari materia with section 25 of the Tamil Nadu Chit Funds Act, 1961), in a case, where the defendants make any default in payment of future subscriptions, which default made the whole amount payable under section 32 (1) of the Travancore Chitties act from the date when the foreman made a demand for the amount if no such demand was made by the foreman, the suit instituted after the expiry of three years of the first default is not barred by limitation so far as all the future instalments are concerned and that only the instalments falling within a period of three years before the institution of the suit are recoverable and the instalments, which became due three years before the institution of the suit alone were barred by limitation under Article 113 of the Limitation Act and article 37 of the Limitation Act is not applicable. Section 32 (1) of the Travancore Chitties Act reads as follows as reproduced in the above case: "a foreman shall not be entitled to claim consolidated payment of all the future subscription from a defaulting prized subscriber unless he shall have demanded the same in writing". In paragraph 4 at page 29 the following observations have been made: "in order that a case should be governed by Article 37 of the limitation Act, the cause of action for recovery of the entire balance amount should accrue to the creditor on the date of default of payment of the instalment. Such is not the position in cases governed by section 32 (1)of the Travancore Chitties Act, where the cause of action will accrue to the foreman only when a demand in writing is made on the subscriber for consolidated payment of all the future subscriptions. We are in respectful agreement with the view expressed by Raghavan, J. , in Kunjamma's case1, that Article 75 of the Limitation Act, 1908, which corresponds to Article 37 of the present Act cannot have any application to suits filed by foreman of chitties governed by the Travancore Chitties Act for recovery of the defaulted instalments from a prized subscriber and that in such cases unless a demand in writing is made by the foreman for consolidated payment of future instalments his right under the contract does not become enforceable and limitation cannot run against him regarding all the future instalments. " Nanoo Sukumaran v. P. Sankararn2 , is a Bench decision. It is the above decision and Kunjamma's case1, that have been referred to by Justice Padmanabhan and gave the above decision. Article 37 of the Limitation Act reads as follows: "on a promissory note or bond payable by instalments, which provides that, if default be made in payment, of one or more instalments, the whole shall be due. " And the period prescribed is three years from the date when the default is made. "on a promissory note or bond payable by instalments" the period of limitation is three years from the date of the expiration of the first term of payment as to the part then payable and for the other parts, the expiration of the respective terms of payment". Thus Article 37 of the Limitation Act, postulates that in a case of a promissory note or bond, which provides that the whole amount covered by the promissory note shall be due, if default be made in the payment of one instalment the "whole claim will be barred by limitation, if an action is brought beyond three years of the date of the default committed in the particular instalment.
(3.) IN M. Thirumalachariar v. S. P. Varadappa Chettiar3, the identical question arose and Article 75 of the old Limitation Act, which is in pari materia with the present Article 37 of the Limitation Act has been applied. Justice Veeraswamy, as he then was has held, after considering the starting point of limitation as provided in Column 3 to Article 75 (present Article 37), namely, when the default is made, unless where the payee or obligee waives the benefit of the provisions and then when fresh default is made in respect of which there is no such waiver, that the period of limitation commences the moment there is a default made in payment of the instalment due and a suit beyond three years from the date of such default would prima facie be out of time. IN that case, the waiver was presumed by the lower Courts in favour of the plaintiff and while dealing with that aspect, it was held "that the mere fact that waiver will be to the advtantage of the plaintiff inasmuch as that will save him from the bar of limitation, will not ipso facto be a proper basis for the view that he should be assumed to have waived the benefit and that it will have to be pleaded and established, if it is to be relied upon as a ground for the exemption from the bar of limitation provided by Article 75. IN this case there is no plea of evidence of waiver by the plaintiff. The question of waiver found in the third column as against Article 75 of the old Limitation Act, has been repeated in the present article 37 of the Limitation Act. Thus, the conditional benefit that had been granted to a plaintiff under Article 75 of the old Limitation Act has been affirmed in the present Article 37 of the new Limitation Act. The effect of the present Article 37 of the Limitation Act is that once a default is made by the debtor in the payment of any instalment payable under the promissory note or bond, which provides that the whole amount shall be payable if default is made in the payment of one instalment, the period of limitation begins to run from the date of such default and a suit brought beyond three years from the date of such default shall be barred by limitation. Section 25 (1) of the Tamil Nadu Chit Funds Act, 1961, hereinafter referred to as the Act. reads as follows:- "a foreman shall not be entitled to claim consolidated payment of all the future subscriptions from a defaulting prized subscriher unless he shall have demanded the same in writing". The plaintiff, namely, revision petitioner Company issued exhibit A-5, lawyer notice to the defendants on 29th June, 1973. The first defendant, who was a subscriber to the chit took the chit in auction held on 20th November, 1970, for Rs. 1,000 payable in forty instalments of Rs. 25 each at a discount of Rs. 250 and received Rs. 750 on 21st December, 1970, after executing the suit promissory note along with the sureties, namely, defendants 2 to 4 by way of security for the due repayment of the consolidated future instalments. The first defendant, according to the plaint averments, had repaid only a sum Rs. 130 towards the future subsriptipns upto 22nd July, 1971, and thereafter defaulted to pay the future subscriptions. It is not disputed that as per section 24 of the Chit Funds Act and according to the terms and conditions of the chit promissory note, the entire future subscriptions shall become payable when default is committed by the debtor in the payment of any one instalment. Both parties have proceeded on the basis that the default was committed in the payment of future subscriptions with effect from 23 rd July 1971. Therefore, Article 37 of the Limitation Act is attracted and the suit filed beyond three years from 22nd July, 1971, namelv, 20th July, 1975, shall be barred by limtation. ;