JUDGMENT
Balakrishna Eradi, J.
1. In this civil revision petition filed under Section 22 of the Small Cause Courts Act, the petitioners, who were defendants 1 and 2 in the court below, contend that the suit claim was barred by limitation and that the lower court has acted erroneously and illegally in granting a decree in the plaintiff’s favour. The plaintiff is a chitty foreman. The 1st defendant had taken one C class ticket in the chitty run by the plaintiff and he prized the chitty at the 11th instalment and drew the chitty amount after executing a chitty kychit on 7-10-1970. The 2nd defendant had joined in that bond as surety for the 1st defendant. Under the terms of the said chitty bond the defendants had undertaken to pay the full amount of future subscriptions in lump in case of default being committed in payment of any of the instalments. The 1st defendant defaulted payment of the 20th instalment which fell due on 10-6-1971 and no amounts were remitted by him towards the chitty thereafter. The term of the chitty came to a close on 10-5-1973. It was only thereafter that the foreman (plaintiff) issued a notice of demand to the defendants on 14-2-1974 calling upon them to remit the full amount of the defaulted instalments. Since the defendants failed to pay in spite of the said notice the plaintiff instituted the suit on 8-10-1974. The main plea put forward by the defendants before the court below in defence to the suit was that the plaint claim was barred by limitation. It was contended by them that under Article 37 of the Limitation Act, 1963 (Act 36 of 1963), hereinafter referred to as the Act, the period of limitation for the suit has to be computed from 10-6-1971 on which date default was committed in payment of the 20th instalment and the entire amount of future instalments because payable in lump. Since more than three years calculated from that date had expired before the institution of the suit it was urged that the suit should be dismissed as barred by limitation. The lower court took the view that under the terms of the chitty kychit the prized subscriber becomes liable to pay the entire future instalments in lump only when a demand is made in that behalf by the foreman and if no such demand is made the cause of action for recovery of the entire amount in lump would accrue only on the date of termination of the chitty. Accordingly it was held by the court below that since the suit was instituted within three years of the date of termination of the chitty no portion of the plaint claim was barred by limitation. It therefore passed a decree in favour of the plaintiff entitling him to recover the amount of Rs. 315/- representing all the defaulted instalments with interest and costs. Defendants Nos. 1 and 2 have come up with this revision petition challenging the legality and correctness of the said decision rendered by the court below.
2. Counsel for the petitioners contended before us that since the suit is based on the chitty security bond which while providing for payment in instalments contains also a stipulation that if default be made in payment of one or more instalments the entire balance amount shall be payable in lump, it is Article 37 of the Act that applies to the case and the starting point for limitation is the date when default was committed by the defendants in paying the 20th instalment. Developing this argument it was further urged by counsel for the petitioners that since there is neither pleading nor evidence to the effect that there was any waiver by the foreman of the benefit of the provision empowering recovery of the full amount of future instalments in lump after the default was committed by the 1st defendant in payment of the 20th instalment the period within which the suit could be instituted expired on 10-6-1974. In support of the above contention reliance was placed by the learned advocate on the decision of our learned brother Bhaskaran, J. reported in Krishnan Madhavan v. Narayanan Jayadevan, 1974 Ker LT 534 : (AIR 1975 Ker 18).
3. In reply to the above arguments it was submitted by the counsel appearing for the respondent-plaintiff that Article 37 of the Act does not govern the present suit since the provisions of chitty kychit which was executed in the erstwhile Travancore area must be regarded as subject to the provisions of Section 32 of the Travancore Chitties Act, 1120 and the liability for the payment of all the future instalments in lump does not automatically accrue on default being committed in payment of any of the instalments but only when a demand is made by the foreman as prescribed in the said section. Counsel sought to derive support for this contention from the observations of Raghavan, J., as he then was, in Kunjamma George v. Kesava Pillai, 1963 Ker LT 68.
4. Section 32 (1) of the Travancore Chitties Act, 1120 was in the following terms:–
“A foreman 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.”
This provision which is mandatory in character will apply to all chitty transactions entered into in the area wherein the Act was applicable irrespective of the stipulations that may be contained in the security bond executed between the parties and it has got to be read into every contract or chitty security bond as forming an integral part thereof. Such being the position, it is not possible to bring cases like the present one governed by Sub-section (1) of Section 32 within the scope of Article 37 of the Act which will cover only cases where the contract is to the effect that the entire balance amount will become due and payable immediately on default being committed in payment of any one of the instalments. In order that a case should be governed by Article 37 of the 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 1963 Ker LT 68 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.
5. In the case before Bhaskaran, J. 1974 Ker LT 534 : (AIR 1975 Ker 18) the foreman had issued a notice demanding payment of the consolidated future subscriptions and the suit was instituted beyond three years from the date of service of that notice. Hence the learned Judge pointed out that even if it is Article 113 and not Article 37 that applied to the case the suit was barred. However, there are some observations in the judgment of the learned Judge to the effect that even in respect of a chitty transaction governed by the provisions of the Travancore Chitties Act the period of limitation for a suit instituted by the foreman to recover from a prized subscriber the amount of defaulted instalments due under a chitty security bond would be governed by Article 37. In the light of the conclusion already expressed by us on this aspect those observations cannot be regarded as embodying the correct legal position.
6. Counsel for the revision petitioners is well-founded in the further contention advanced by him that even if it is Article 113 and not Article 37 of the Act that governs the case, the plaintiff can recover in this suit only the amount of such of the instalments as had fallen due within three years prior to the date of institution of the suit. As already noticed, the suit, was instituted on 8-10-1974 and the plaint claim is for all the instalments that had accrued due from 10-6-1971 onwards. Under the scheme of the chitty the instalments were payable on the 10th of each month. Instalments Nos. 20 to 23 (inclusive) fell due on 10-6-1971, 10-7-1971, 10-8-1971 and 0-9-1971 respectively. Since the suit has been instituted only after the expiry of three years from the aforementioned dates the plaintiff is not entitled to recover the amounts payable in respect of the aforesaid instalments. He can get a decree only for the instalments beginning from the 24th instalment which fell due on 10-10-1971. Hence, in substitution of the decree passed by the court below the plaintiff is granted a decree only for recovery of a sum of Rs. 255/- with interest at 12% from 14-2-1974 till date of plaint and future interest at 6% per annum till date of realisation.
7. The civil revision petition is allowed to the extent indicated above and dismissed in other respects. The parties will bear their respective costs in this court.