ORDER
V. Bhaskara Rao, J.
1. Rayalaseema Grameena Bank filed these two revision petitions challenging the orders in S.C.S.R. No. 2141 of 1993 and S.C.S.R. No. 2142 of 1993 on the file of Subordinate Judge, Rajampet dated 19-7-1993 rejecting the plaints on the ground of bar of limitation.
2. The case of the revision petitioner is that the respondents in both the cases have taken loans as ‘Crop Loan’ for the purpose of raising banana/ maintenance of mango and banana crop under a single bond dated 1-12-1989. Under the terms of the bond interest is payable on 31st March, 30th June, 30th September and 31st December of each year, while the principal is agreed to be paid on 30-5-1990 as per Schedule-II appended to the bond. In case of default of payment of interest on the aforesaid dates, it is agreed that overdue interest is chargeable from time to time and it shall bear compound interest until interest or principal is paid. It has been averred in the plaint that the respondents-defendants failed to discharge the debtby 30-5-1990 as mentioned in Schedule-II of loan agreement and hence the suits are filed on 5-6-1993 after summer vacation and thus they are in time.
3. The learned Subordinate Judge took up the objection relating to maintainability of suit on the ground of limitation for consideration and held that the suits are governed by Article 29 of Limitation Act and that the period of three years begins to run from the date of the bond. Accordingly he held that the suits are not presented within three years from 1-12-1989 i.e., by 1-12-1992, whereas they are presented on 5-6-1993 and hence they are barred by limitation. Accordingly both the plaints have been rejected.
4. Sri K. Ranga Rao, learned Counsel for the revision petitioner has taken me through the entire plaint and the memoranda of agreements in both the cases and contended that Clauses (1) and (2) and the Schedule-II are relevant to these cases and accordingly the terms therein clearly go to show that it is a bond where a day is specified for payment and that it is 30-5-1990 and therefore, it is Article 28 that is applicable. The day from which the limitation begins to run is the day so specified i.e., 30-5-1990. He therefore contended that the limitation of three years expired during the summer vacation and hence the plaints have been presented on the reopening day i.e., 5-6-1993 and therefore they are within limitation. He assailed the impugned order, wherein it held that Article 29 is applicable by referring to the relevant clause which is applicable to term loan.
5. The respondents-defendants have been served and they have not entered appearance in this Court.
6. I carefully considered the contentions of Sri K. Ranga Rao, learned Counsel for the revision petitioner. I perused the entire bond and sub-clauses (1) and (2) as well as the Schedule-II thereof. Undoubtedly these are bonds where date for payment is fixed as 30-5-1990 and it is distinguishable from a bond where no date for payment is fixed and a term loan. It is no doubt true that certain dates are fixed for payment of interest and the consequences of default are also mentioned therein. It is noteworthy that the default clause in term loan is altogether different from the default clause in respect of payment of interest in the cases on hand. In the former the consequence is that all the instalments become due in the event of default being committed in payment of any one instalment and there is any amount of difference between the date from which the limitation begins to run in such cases. Whereas in the latter cases where default in payment of interest is committed the consequence is that overdue interest or compound interest is chargeable and it has nothing to do with the schedule of repayment as mentioned in Schedule-II. In other words, the schedule of payment of the principal remains as 30-5-1990 despite default being committed in payment of interest. Therefore, it is only Article 28 of the Limitation Act that is applicable to these cases. It would be beneficial to extract Article 28 of the Limitation Act for ready reference:-
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Article Description Period of Time from which
of suits limitation period begins to run
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28 On a single bond, Three The day so
where a day is years. specified
specified for payment.
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A perusal of the above Article shows that the date from which the period begins to run is 30-5-1990 and in that case the period of limitation expired on 30-5-1993. As the Court of Subordinate Judge was closed for summer vacation and it happened to reopen on 5-6-1993, the suits were filed on the very same day and therefore, the suits are perfectly within limitation. The learned Subordinate Judge has landed himself in error in applying Article 29 of the Limitation Act which is applicable to a bond where no date for payment of the principal is fixed. The orders of the learned Subordinate Judge in both the cases are therefore, liable to be set aside.
7. In the result the revision petitions are allowed and the impugned orders are set aside and the cases are remanded to the lower Court with a direction to register the suits, if they are otherwise in order and to proceed with the same in accordance with law. There will be no order as to costs.