1. This is a defendant's appeal in a suit for recovery of money on foot of a simple instalment bond. The defendant Chaube Rup Narain had on 6th September 1933 executed an instalment bond for RS. 5500 in favour of the plaintiff Babu Tirbeni Sahai alias Mangoo Lal son of Har Prasad Kayastha of Sarai Miran in the Farrukhabad district in lieu of the amount due to the creditor on a promissory note dated 25th September 1927, limitation in respect of which promissory note had been extended by a payment of Rs. 100 in cash on 22nd September 1930. The promissory note of 1927 had itself been executed in lieu of a promissory note dated 2nd October 1924. Under the provisions of the bond in suit the borrower, the present defendant, was to pay the amount of the loan in annual instalments falling due on Jeth Puranmashi of Sambat 1991 to 1997. The first five dates would be 27th June 1934, 16th June 1935, 5th June 1936, 23rd June 1937 and 12th June 1938. When limitation was about to expire in respect of the first instalment due on 27th June 1934, a payment was made by the borrower to his creditor of Rs. 100 on 15th May 1937, and two endorsements were made on the bond in respect of this payment. These endorsements will have to be discussed later but they make it clear, at any rate, that the payment was made and accepted for the purpose of extending limitation. No further payment having been made, the plaintiff on 4th July 1938, when five instalments had fallen due, instituted the present suit claiming the amount due up to date but disclaiming any intention to assert a right to recover the whole balance including the instalments which had not yet become due. It will be a point for consideration later whether he would have had really any right to claim those instalments which had not yet fallen due under the special terms of the bond in suit. The plaintiff evidently thought he had such a right and in this appeal it has been argued on behalf of the appellant defendant that this was a bond which gave the creditor such a right or option.
2. The defendant took a number of defences but the most important of these defences and the only ones which have come up for re-consideration in the argument of the appeal were, first, a plea that this bond and the promissory notes which it replaced had been obtained by the exercise of undue influence and, secondly, that the suit was barred by limitation. In the written statement, the defendant explained his defence of undue influence in this way that he said that in the year 1918, when he was still a minor, his creditor's father put pressure upon him to execute a promissory note Ex. L for Rs. 900 upon a threat that if the defendant did not execute that promissory note he, Babu Har Prasad, who was the legal adviser and mukhtar of the defendant, would cease to work for defendant in the Courts. In para. 9 which related to the various pronotes said to have been executed in renewal of the pronote of 1918 nothing was said about undue influence, but in para. 10 which related to the execution of the bond in suit it was again said that this was the result of undue pressure brought upon the defendant by the father of the plaintiff. The learned Civil Judge framed a number of issues but, as we have indicated already, the only issues with which we are concerned in this appeal are issues 2 and 3 which run as follows:
Issue 2. Was the original pronote for Rs. 900 executed by defendant under undue influence during minority and were the subsequent pronotes and the bond in question executed under similar undue influence ?
Issue 3. Is the claim barred by limitation ?
3. The learned Civil Judge discussed the questions which arose under issue 2 along with those which arose under issue 1, namely, is the bond in question, without consideration He devoted some seven pages of the printed paper-book to a discussion of these issues and he came to a clear finding that there was no proof that any undue influence was exercised at the time of the execution of any pronote which had come under consideration in this case or of the bond in question. On issue 3 relating to limitation he held that Article 75, Limitation Act, was applicable but that the plaintiff had clearly established waiver in respect of the right to sue for the whole amount of the bond including those instalments which had not yet become due. In respect of the first instalment he held that limitation had been extended by the payment of Rs. 100 mentioned earlier.
4. We proceed to consider first the question which arose upon issue 2. The evidence upon the record is singularly meagre. On behalf of the plaintiff only one witness was examined, his father Har Prasad, the person who was alleged by the defendant to have exerted undue influence upon him. On his own behalf the defendant examined himself and no other witness. Babu Har Prasad in his evidence denied that he had exercised any undue influence in order to get the pro-note of 1918 executed or in respect of the execution of any of the subsequent documents. It would, indeed, be difficult upon the evidence on the record to say that the subsequent documents were executed in substitution of the promissory note of 18th July 1918. This pronote was executed for Rs. 900 made up of two items of Rs. 295 required for payment of irrigation dues and Rs. 605 due to the father of the creditor on account of costs of suits. The intervening pronote of 1921, if there ever was any such document, was not produced by the defendant who alleged that it had been lost. The wording of the pronote of 2nd October 1924 suggests that there never was any intervening pronote because this latter pronote refers to an immediate borrowing of Rs. 2768, not with a view to paying off a pre-existing pro-note debt but for payment of parole debt and for purchasing zamindari property. No doubt the subsequent pronote of 1927 and the bond in suit are founded upon the pronote of 1924. (After going through the defendant's evidence his Lordship proceeded.) In our judgment, the learned Civil Judge was clearly right when he found that there was no proof of any undue influence exercised at the time of execution of any pronote which had come under consideration in this case or of the bond in question. We entirely agree with his finding on that point.
5. We come now to the question of limitation. The first question which has to be considered in connexion with the issue is whether this was a bond to which the provisions of Article 75 of Schedule I, Limitation Act, were applicable or not. The case has proceeded upon the footing that Article 75 was applicable and that the bond was not one which fell within the scope of Article 74. We do not think that this point is entirely free from doubt and we think it necessary to consider the case under both aspects, that is whether it is case under Article 74 or one under Article 75. The question depends on the wording of the bond itself and it would perhaps be fair to say that the wording of the bond is not unequivocal but that it is, at any rate, a very possible and we think a probable construction that the bond is one to which Article 75 is not applicable and that had the plaintiff chosen to make a claim in the present suit for the whole amount of the bond, including the instalments which have not yet fallen due, he might have been successfully met with the plea that the bond does not contain a true default clause authorising the creditor on a default being made to recover the whole outstanding amount of the bond. The important passage in the bond runs as follows :
In case of default in payment of the instalment, the entire amount of the remaining unexpired instalments shall be payable in a lump sum and the creditor shall have power to institute a suit in a competent Court for the entire amount in a lump sum which may have, together with interest become due up to that time and realize the same from my person and property.
6. We note in connexion with this passage that in the original the word 'payable' does not actually occur and the translator has had to insert it in order to make a reasonable translation of the words actually found which are only 'ek musht hoga,' the words 'waji bul ada' not being found. This sentence in the bond begins by stating a right to recover the whole amount of the bond, including the instalments not yet due, in case of default of payment of any instalment and ends by authorising the creditor to sue only for the amount which, together with interest, has become due up to that time. There is, therefore, by no means an unequivocal default clause authorising the creditor to sue for the whole amount. Indeed, when we look to the next sentence, we again find a curious clause somewhat analogous to a default clause. This clause runs as follows :
I further covenant and authorise the creditor to bring a suit in respect of all the unexpired instalments with interest without any regard for the expiry of the term of payment of instalments, if, through any act or omission on the part of me the executant, he feels that I have turned dishonest or if he entertains any apprehension of a loss to or evasion in respect of, the realisation of the remaining amount of instalments and interest.
7. Taking these two sets of conditions together, we confess to feeling some doubt whether this is really a bond to which the provisions of Article 75 are applicable. For the purpose of argument however we are prepared to assume that this is a default clause which falls within the scope of that article and that it was open (a point which we have not got to decide in this case) to the creditor to have sued for the whole amount instead of suing only for the amounts which had accrued due at the date of institution of the suit. The learned Civil Judge was of opinion that the payment of Rs. 100 and the terms in which the endorsement was made, indicating the terms upon which the money was accepted, constitute a clear case of waiver of the option to sue for the whole amount which had arisen out of the debtor's default in respect of the first instalment and at the same time that by this payment limitation which was about to expire in respect of the first instalment was extended by the application of the provisions of Section 20, Limitation Act. Learned Counsel for the defendant-appellant has contended that Section 20, Limitation Act, has no application to cases which fall under Article 75 of Schedule I and he has sought to rely on Prabhatchandra Deb v. Moheshchandra Barma : AIR1931Cal157 ; but that case is no authority for the proposition that Section 20 is not applicable to cases to which Article 75 applies. What the learned Judges did hold in that case was that Section 20, Limitation Act, had no application to the case before them, the reason being that no question of extension arose at all. The plaintiff who had apparently sued to recover the entire amount by the application of the default clause was in the position that two instalments had become time barred. He was however able to show that those instalments had been paid and the Court held that he was entitled to prove that fact by oral evidence and thereby to show that there was no need for any waiver as the first two instalments had been paid. It followed that a fresh right of suit arose upon a subsequent default. Learned Counsel admits that he can cite no other case in support of this proposition, for which we think there is no authority whatever.
8. Learned Counsel has gone on to rely upon a Pull Bench case of this Court, Jawahar Lal v. Mathura Prasad : AIR1934All661 ; but on consideration of that case, we have been unable to see in what way it is able to help him. That was a case of a suit instituted on an instalment bond more than three years after the date on which the default was made which entitled the plaintiff to sue for the whole amount. The plaintiff had deliberately at one stage given notice of his intention to apply the default clause. It was ultimately held that it was a finding of fact binding upon this Court in revision that there had been no waiver. In these circumstances really no question arose for consideration as, if we may say so with the greatest possible respect, the suit was prima facie time-barred unless a waiver could be proved and, there being a finding of fact that there had been no waiver, the suit must necessarily be barred. Prima facie, if we may say so, the only point which was laid down in this decision was a point which has no bearing on the present case, namely that the principle laid down by their Lordships of the Privy Council in Lasa Din v. Mt. Gulab Kunwar , regarding the necessity of the mortgagee choosing to exercise his option under the default clause in order to make the mortgage money due and the limitation to start, should not be extended to cases of money bonds falling under Article 75. The case of a mortgage is peculiar and stands on a different footing; and the reasoning in Lasa Din v. Mt. Gulab Kunwar , is applicable only to cases of mortgage and inapplicable to money bonds. Further, each article of the Limitation Act has to be interpretated according to the particular language employed in that article and the starting point of limitation under Article 75 is definitely laid down to be the date of default, and not, as in Article 132, the date 'when the money becomes due.'
9. There is a plethora of cases relating to the provisions of Article 75, Limitation Act, including this Full Bench case, which incidentally is a case really of two Judges against one. We do not think it necessary to enter into a discussion of these cases because the question which is really for decision here is a question rather of fact than of law. In view of the fact that admittedly no suit was filed within limitation dating from the default of the first instalment, the question which has to be decided is whether there was or was not a waiver of the right to sue for the whole amount which arose out of the first default. For the consideration of this question, we have to turn to the terms of the endorsement dated 15th May 1937. It should rather be said that there are two endorsements separately written and signed by the debtor defendant. The first endorsement runs as follows:
Paid Rs. 100 towards the amount of the first instalment of this document falling due on Jeth Sudi 15, Sambat 1991=(27th June 1934) to Babu Mangu Lal, through his father Har Prasad Mukhtar. The remaining amount of the instalment could not be paid at present. The sum of Rs. 100 has been paid so that the limitation may not expire.
10. This endorsement clearly indicates that the debtor was threatened with a suit and that he was paying this sum of Rs. 100 in order to avoid the institution of a suit and also in order to avoid the bar of limitation becoming applicable to the first instalment due under the bond. The second endorsement runs as follows :
All the remaining instalments shall be payable on their due dates. The creditor too accepted the money paid by me towards the principal and interest of the first instalment as suggested by me.
11. The word which has been translated 'suggested' is 'kaha' which would perhaps more properly in this instance have been translated 'requested' or 'proposed.' The wording of this second endorsement again clearly indicates an agreement between the parties whereby a fresh contract, or perhaps one might say an amended contract, is being substituted for the original contract. The first sentence of this endorsement clearly implies that the creditor is not to sue now for the whole amount, including the instalments not yet due, but is to hold his hand and to allow those remaining instalments to become payable on their due dates despite the fact that he has acquired a right to sue for the whole outstanding amount, including the instalments not yet due.
12. Considering the nature of the wording of these two endorsements and the conduct of the plaintiff whereby he did, as these endorsements imply, hold his hand and took no action until two further defaults had occurred on 27th June 1937 and 12th June 1938, we cannot but agree with the learned Civil Judge that there was in this case as nearly as possible an express waiver--a waiver so clearly implied that one can feel no doubt about. There can be no doubt that after such a waiver the creditor was entitled to wait until there had been a further default or defaults in respect of which he was not prepared to sit idle and in respect of which he might either sue for the whole amount on the strength of the default clause or do as he has actually done, namely, institute a suit which itself implied a fresh waiver of his option under the default clause, that is a suit to recover only the amounts which had at-ready accrued due to him. Before leaving this point, it is necessary to deal with an argument which has been put forward to the effect that mere abstinence from instituting a suit or mere acceptance of a part payment cannot be accepted as proof of a waiver. In this connexion reference has been made to a Patna case in Gokhul Mahton v. Sheo Prasad Lal ('39) 26 A.I.R. 1939 Pat. 433. One of the notes in the head-note is as follows :
Mere abstention from suing in the case of an instalment bond or an acceptance of a portion of an overdue instalment does not amount to a waiver.
13. In this case separate judgments were delivered by three learned Judges and in the body of the judgment of Verma J., we find a reference to Mohesh Chandra Banerji v. Prosanna Lal Singh ('04) 31 Cal. 83, where it was held as follows :
Where an instalment bond gives the creditor the right to sue for the whole amount due under the bond on default of payment of a single instalment, there is no waiver of that right by acceptance of part of an overdue instalment, or by receipt of interest.
14. The same point has been made in the judgment of Manohar Lall J. who has distinguished between cases of payment of whole instalments and eases of payment of part of the instalments. We do not think it necessary to discuss the proposition that acceptance of a part of an overdue instalment per se, that is standing by itself, would be insufficient to establish that there has been a waiver. But, as Manohar Lall J. himself says, the question of waiver is a mixed question of law and fact and, as we think, in the, main a question of fact and we are quite clear that in the present case the facts fully establish that there was a waiver on the part of the creditor of the right which had accrued to him on the occasion of the first default to sue for the whole amount of the bond.
15. Learned Counsel for the defendant appellant has however contended that in the case of a bond to which Article 75 is applicable, the creditor is bound to sue to enforce the default clause, that is, he is not entitled to institute a suit only for those amounts which have accrued due but is bound to sue for the whole amount due under the bond, including those instalments which have not yet fallen due. This is a proposition which cannot be maintained for a moment in the face of the consistent course of decisions of this Court. In Maharaja of Benares v. Nand Ram ('07) 29 All. 431 it was held that:
Where money secured by a bond is payable by instalments, with a condition that the whole amount secured will become due upon non-payment of any instalment, the creditor is not bound to enforce this condition, but he may accept payment of instalments after due date--thereby, impliedly waiving his right to sue for the whole amount due -- and, may sue upon a subsequent default in payment of any future instalment.
16. In the body of the judgment of this case the learned Judges said--we quote the passage rather with reference to what we have said earlier than to this particular question.
There was no express waiver, but waiver may be implied and it is implied when a person entitled to anything does or acquiesces in something else which is inconsistent with that to which he is so entitled ; for instance, a landlord by acceptance of rent after a forfeiture of the tenancy is deemed to have waived his right to insist on a forfeiture. Here, it appears to us, the plaintiff impliedly waived his right to insist upon payment in a bulk sum of all the instalments remaining due when the first instalment was not paid on 4th June 1898, and he accepted payment of the instalments for two years in various sums at various dates. It would be very unfortunate if it were otherwise. It would be to punish a creditor for forbearance shown to his debtor, and compel him to press his demands at the earliest opportunity and insist upon speedy and full satisfaction of his claim.
17. There are remarks in the body of the judgment implying that the creditor was only suing for and was allowed to sue for some instalments and not for the whole outstanding amount. This point has been brought out even more clearly in the later case in Ajudhia v. Kunjal ('08) 30 All. 123, That was a case of a bond payable by instalments which contained a provision that in default of the payment of any one instalment it would be in the power of the creditor to sue for the whole amount due under the bond without waiting for the period provided for the payment of other instalments. It was held that
this provision did not mean that the creditor should be compelled to sue for the whole on default of payment of one instalment, nor did limitation in respect of the whole debt commence to run from the date of the first default.
18. The plaintiff was successful therefore in getting a decree for the recovery of three instalments only out of the whole series due under the bond. This case has been followed in a subsequent Single Judge case in Mohan Lal v. Tika Ram ('18) 5 A.I.R. 1918 All. 55 We have no doubt whatever that it is open to a plaintiff to do exactly what the plaintiff has done in the present case, namely to sue for the amounts which have accrued due at the date of the institution of the suit. A creditor who so institutes a suit by implication, even if he does not state the fact in the plaint (as the plaintiff has done in the present case) waives his right to avail himself of the option to recover the whole amount. In such a suit we can see no difficulty about the application of Section 20 to the amount which was outstanding out of the first instalment. It is true that Article 74 does not become applicable, but it appears to us that under the general law there is nothing which prevents the application of Section 20 to a payment made on account of an instalment which has fallen due under an instalment bond. Learned Counsel for the defendant-appellant has not argued' any other point in this appeal. On the points put before us, we are satisfied that the decision of the learned Civil Judge is a correct decision. We accordingly dismiss this appeal with costs.