ORDER
1. The prized subscriber in a chit transaction is the petitioner herein.The respondent is the Foreman in the chit transaction.The petitioner, after a successful bid,executed two promissory notes on 20-7-1973 and 25-11-1973 respectively by way of security for regular payment of instalments.The chit was for a sum of Rs.4,000/- consisting of 40 instalments payable at Rs.100/- per month.The petitioner regularly paid up to 23rd instalment.He committed default from the 24th instalment which fell due on 23-12-1974.It is common ground that the chit terminated on 2-5-1976. The respondent issued a notice on 17-3-1978 calling upon the petitioner to pay the arrears,and finding no response,filed the suit O.S.No.112 of 1979, on the file of the court of the Additional District Munsif,Padmanabhapuram,for recovery of arrears from the 24th instalment onwards.The suit was resisted inter alia contending that it was barred by limitation.The trial Court,applying the ratio laid down by A Division Bench of the Kerala High Court in Nanoo Sukumaran v. Padmanabhan Sankaran reported in AIR 1978 Kerala 28, decreed the suit only in respect of four instalments which were due just prior to three years from the date of institution of the suit. The suit in respect of the balance amount was dismissed on the ground that it was time-barred.Aggrieved by the judgment of the trial Court, the respondent filed an appeal in A.S.No.45 of 1980,on the file of Sub Court, Padmanabhapuram.The Appellate Court,purporting to apply the ratio laid down by this court Lazer v.P.Selvamony reported in 1978 TLNJ page 60,has allowed the appeal and decreed the suit as prayed for.Hence the present Civil Revision petition by the petitioner.
2. Miss O.K.Sreedevi, learned counsel appearing for the petitioner,placing reliance on judgments of this court in M.Thirumalachariar v.S.P. Varadappa Chottiar and Sudarasan Chit Fund,rep.by its President, Branch Manager,Pollachi Branch v.Mrs. Jagadambal reported in 95 Law weekly page 682,submitted that the suit must have been dismissed in entirety as time-barred as it was not filed within three years from 23-12-1974, the date on which the default was committed.According to her, the decreeing of the suit for a sum of Rs.400/- on the basis of the ruling of the Kerala Court in AIR 1978 Kerala 28(supra) itself is not sustainable.She further submitted that the lower appellate court went wrong in assuming that the ratio laid down 1978 TLNJ 60 (supra) applies to the facts of this case.
3. Mr. Sreekumaran Nair,learned counsel appearing for the respondent,however, submitted that the ratio laid down in 1978 TLNJ 60(supra)will apply to the facts of this case,and in any event, in the light of the recent judgment of this court in S.Padpurangan reported in 1987 TLNJ 183,the judgment of the lower appellate court is sustainable.
4. In (supra), Veeraswami,J.,as the then was,in an identical case, has laid down the principle as follows(at page Madras 211):
“The main point urged by Sri K. S.Chempakesa Aiyangar,the learned counsel for the appellant,is that the lower appellate court was in order in supposing the waiver for purposes of the third column of Art.75 would be presumed in favour of the plaintiff.His contention is that plaintiff if he wanted to rely on it,must clearly plead waiver for purposes of the third column of that Article and prove the same just like any other fact by cogent evidence.His contention further is that the mere fact, that waiver might be to the benefit of the plaintiff,is not sufficient justification for the view that waiver can be presumed in favour of the plaintiffs and that the defendant should prove that there is no waiver.I think the learned counsel is right in his contention.Art.75 of the Limitation Act governs a suit inter alia,on a bond payable be instalments, which provides that if default be made in payment of one or more instalments,the whole shall be due.The period prescribed for that a suit is three years.The starting point as provided in column 3 is stated thus:
“When the default is made unless where the payee or the obligee waives the benefit of the provision and then when a fresh default is made in respect of which there is no such waiver.”
It is clear from this that the period of limitation commences the moment there is a default made in payment of the instalment due.A suit beyond three years from the date of such default would prima facie be out of time.It would be within time only if the plaintiff has waived the benefit of the default provision.Whether there is a waiver or not is a question of fact.Obviously 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 Art.75. The mere fact that a waiver will be to the advantage 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 on that basis the defendant who pleads to the contrary,should be called upon to establish the negative namely,that the plaintiff has not waived.”
(Para 4)
Of course,the above judgment was with reference to Art.75 of the old Limitation Act which corresponds to Art.37 of the new Limitation Act.The judgment in (supra),has ben followed and applied by M.Fakkir Mohammed,J. in 95 Mad Law Weekly page 682 (supra).The learned Judge, after referring to the decision in AIR 1978 Kerala 28 (supra) and 1978 TLNJ page 60(supra),has held as follows:
“Article 36 of the New Limitation Act read with Art.37 will clearly rule out the possibility of the argument that the period of Limitation will begin to run only from, the date when the notice of demand was sent by the foremar.Under Art.26,in the case of a promissory note or bound payable by instalments,the suit can be filed beyond three years for the remaining instalments,which are within the period of three years and no suit can be filed for recovery of the whole of the instalments within three years when a default is committed in the payment of any one instalment.But under Art.37 it is not so.The suit has to be filed for recovery of the whole of the future instalments as soon as the default is committed in the payment of any one instalment.The only condition for filing the suit under S. 25 of the Chit Funds Act read with Art. 17 of the New Limitation Act is that the creditor should send a notice of demand before claiming the whole of the future instalments. In the present case, the plaintiffs have not sent any notice demanding the whole amount as contemplated under S. 5 of the Act as soon as the first default was committed by debtor.The Rulings relied on by the learned counsel for the petitioners are not applicable to this case and it is the decision of the Madras High Court in Thirumalachariar v.Varadappa Chettiar, that is applicable.Therefore,the concurrent findings of both the courts below are correct and there is absolutely no irregularity or illegality in them for being interfered with under the revisional jurisdiction of the High Court.”
(Para 14)
It is possible to argue don the basis of the above two rulings of this court that the suit in its entirety is barred by limitation.But,however, I am not called upon to decide that issue in this case as the decree for Rs.400/- has not been challenged by the petitioner herein when the respondent preferred an appeal on the Lower appellate Court.Therefore, that has become final.The only question for consideration is, whether the assumption of the lower appellate court that the ruling report in 1978 TLNJ page 60(supra) will apply to the facts of this case is correct.I am of the view that the assumption is not correct.The facts of the case in 1978 TLNJ 60(supra) are the following:– The prized subscriber in that case executed two promissory notes on 13-2-1970 and 15-5-1970.He committed default on 15-7-1970.The chit terminated on 15-1-1972.The suit was filed on 15-7-1973.The learned Judge has held as follows:
“…..In this particular case, the entire amount became payable in one lumpsum only on 15-7-1970.Necessarily therefore the first respondent will have three years from the date on which the liability of the appellant became enforceable.I, therefore, find that the suit having been filed within 3 years of the date of Ex.A.5 notice,is not barred by limitation.
Even without relying on Section 25 of the Act,it can be held in this case that the suit is not barred by limitation.As already stated,the default occurred with effect from, the instalment which fell due on 15-7-1970.The suit has been filed within three years from the date thereof.”
It will be seen from the above that on facts, the learned Judge has found that the suit was filed within three years from the date of first default committed by the prized subscriber.In such an event, there is no room for an assumption that the learned Judge has rules that the suit can be filed within 3 years of the date of termination of the chit.Even assuming that there is a possibility of construing the judgment in that way, I am of the view that judgement having been decided on facts, cannot be taken as laying down the law to the effect that suit can be filed within three years from the date of termination of the chit, particularly,in the light of the judgment in 95 Mad LW 682(supra).In AIR 1978 Ker 28 (supra),a Division Bench of that High Court has taken the view that the foreman can recover only those instalments which will fall due within three years prior to the date of filing of the suit.As pointed out earlier, the correctness of this decision or the decree passed by the trial Court on the basis of this decision dogs not arise before me.In 1987 TLNJ 183(supra),the question in the present form did not arise,nor was considered.
5. For the foregoing reasons,the Civil Revision petition is allowed.However, there will be no order as to costs.The judgment of the Appellate Court is set aside,and that of the trial Court is restored.
6. Revision allowed.