JUDGMENT
S.N. Kapoor, J.
(1) In this revision, a short question relating to limitation is involved. It is ; When does limitation start in case of failure to pay the instalment of chit fund under Madras Chit Fund Act ?
(2) The plaintiff started a chit Regd. No. 7 of 1974-75 known as class C series 74 with 30 subscribers running for 30 months. Each subscriber was to contribute Rs. 50.00 p.m., thus each contributing Rs. 1500.00. It commenced on 30,5.74 and was to terminate in October 1976. The monthly subscription due in each month was to be paid by non-prized members on or before the date of draw or auction and by prized subscribers on or before 10th of that month. Deft No. 1 Mr. Bhanu Prasad applied and entered into a chit agreement and was given ticket No. 21 He was a successful bidder at auction held on 21.7.74 having bid at a discount of Rs. 525.00 and the prize amount of Rs. 979.00 was paid to him. Defts. Kirpal Singh and Bhagwati Prasad offered security for due payment of future instalments by deft. Bhagwati Prasad. They executed a promissory note as a collateral security on 4.9.74. Subscription was paid by the deft. upto and inclusive of 22nd instalment. The last instalment was paid on 14.6.76. But he defaulted in payments of eight future instalments plus Rs. 19.22 with interest at the rate of 12% p.a. In this regard, the relevant p
(3) On this basis the plaintiff filed suit for recovery of Rs. 561.66. on 18.10.79.
(4) The learned Judge, Small Cause Court dismissed the suit on the ground that it was barred by time.
(5) Feeling aggrieved by the said order, the present revision has been filed.
(6) I have heard learned counsel for the parties and gone through the record.
(7) The chit in question is governed by Madras Chit Fund Act, 1961 which has been extended to Delhi. The relevant sections are 24 and 25(1) of the Act. They read: “24. Prized subscriber to pay the subscription regularly Every prized subscriber shall pay his subscriptions regularly at the time and place and on the date mentioned in the chit agreement and on his failure to do so, he shall be liable to make a consolidated payment of all the future subscriptions at once.” “25. Foreman to demand future subscriptions by written notice (1) 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.”
(8) It was common case of the parties that last instalment was paid on 14.6.76 while the suit was filed on 18.10.79. As the date of commencement of chit was 30.5.74 and subscriber has entered into the agreement on 14.574 and as the payment of instalments of the chit were to be made by or before the 10th of every month by prized subscribers, it might have been logical to infer that the first instalment would have been paid on or before 10.6.74 but from the account of deft. No. 1 filed by the plaintiff Ex. Public Witness . 1, it appears that the first instalment was paid on 22.4.76 and last instalment was paid on 14 6.76 and next instalment was to be paid by 0 7.769 The plea of the learned counsel for the petitioner was that the time would start running in such a matter only from the date of service of notice of demand as required u/S. 25(1) of the Act. His contention was that the foreman was not entitled to claim consolidated payment of all the future subscriptions from defaulting prized subscriber unless he had demanded the same in writing. As the notice was served on July 17, 1979, the suit could be filed within a period of three years from the date of service of notice on the deft. It may be mentioned that the notice was served on 3rd August on Kripal Singh while it was not served on Bhanu Prasad Uniyal. In support of his contention, the learned counsel relied upon Thanuvan vs. Velayudhn . [Para 4 & 6 are reproduced in which it is held that limitation would begin from the date of notice of demand]. 11. Shri B.B. Sawhney, the learned counsel for the respondent relied upon Air 1978 Kerala 28. Nanu Sukumar vs. Padmanabha Shankaran, in which D.B. took the following view: ‘ In order that case should be governed by Article 137 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.”
(9) In am in respectful agreement with the above whether one applies Article 137 or 113, the period of limitation for the purpose would remain three years and the limitation would start running from the date of failure to pay the instalments as and when it became due. Section 25(1) would apply only in respect of future instalments and would certainly not apply in respect of the instalment which had fallen due in view of the language of subsection (1) of Section 25 for it speaks of only “payment of all the future subscribtions”. Consequently limitation for the subscriptions payable before the demand in writing was made, would start from the date of instalment falling due. It is notable that notice in this case is dated 13.7.79 and the date of termination of the chit was October, 1976. Consequently, on the date of notice “no payment in respect of any future subscription” was to be made. As such, notice given on l7th July 1979 or letter dated 2nd May 1978 Ex. Public Witness 1/14 would not be of any help to the petitioner.
(10) Lam further fortified in my view by a full Bench judgment in Jawahar Lal vs. Mathura Prasad & anr. .
(11) Learned counsel for the petitioner incidentally also argued that at least in respect of one instalment the suit was within time as the last instalment was to be paid on 10.11.76 and suit had been Pled on 18th October 1979. In view of the Chit Agreement Ex. P. 3, the date of commencement of the chit was 30th May 1974. It was for 30 months though the date of termination of the chit is mentioned as October 1976. The last instalment could possibly be by 10th November 1978. But there are two reasons not to accept this conteption. Firstly, as the date of termination of the chit is October 1976, the last instalment could be paid only by 10th October 1976. Secondly, from Ex. P. 5 it is apparent that the first instalment was paid on 22nd April 1974. Therefore, it cannot be accepted that the last instalment could be paid on 10th November 1976. If the last instalment was to be paid on 10th October 1976 and the suit has been filed on 18th October 1979, the plaintiffs claim is totally barred by time.