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Thanuvan Velayudhan Vs. Velayudhan Mudaliar Appavu Mudaliar and anr. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtKerala High Court
Decided On
Case NumberC.R.P. No. 667 of 1961
Judge
Reported inAIR1964Ker234
ActsLimitation Act, 1908 - Schedule - Articles 75 and 116; Travancore Chitties Act, 1120 M.E. - Sections 32(1)
AppellantThanuvan Velayudhan
RespondentVelayudhan Mudaliar Appavu Mudaliar and anr.
Respondent Advocate P. Subramonian Potti,; S.A. Nagendran and; N.K. Sukumara
DispositionRevision allowed
Cases ReferredKunjamma George v. P. R. Kesava Pillai
Excerpt:
- - in that view i hold that article 75 of the limitation act cannot apply to a case like this. according to me, article 75 of the limitation act cannot apply to a case like this......act is different from a bond executed by a prized subscriber to secure the payment of the future instalments. in the former the amount covered by the bond or promissory-note is immediately payable, but for the instalment clause; and the instalment clause suspends as it were, that immediate liability. if by defaulting to pay the instalments in time that suspension is removed, the liability to pay the entire sum immediately resumes or resettles. in the latter case the prized subscriber's liability is only to pay the future instalments as and when they fall due; but the foreman is given the right by the default clause to claim all the future subscriptions in a lump, or, if i may use the expression, to telescope or consolidate all the future instalments into one, in the event of.....
Judgment:
ORDER

T.C. Raghavan, J.

1. In this case the advocate on record of the petitioner has not appeared, nor has anybody else appeared on his behalf. Being a Civil Revision Petition on a question of law, I do not think it is proper to dismiss the case for default. Moreover, when I look into the judgment, I feel that the judgment is also not correct. Therefore, I propose to dispose of the case on merits.

2. Two questions arise for consideration in the case. One is whether the foreman of a chit fund can claim a period of limitation of six years in a suit against a prized subscriber for arrears of defaulted subscription, on the ground that the variola of the chit is registered. The next question is whether Article 75 of the Limitation Act applies to the case.

3. On the first question Mr. S. A. Nagendran the learned advocate of the respondents, has brought to my notice two decisions, one of this Court and the other of the Travancore High Court. The decision of the Travancore High Court laid down in a case, where there was a registered variola, that if the suit itself was based on an unregistered security bond, the six years rule did not apply. The case is Kesava Pillai Velayudhan Pillai v. Krishna Pillai Velayudhan Pillai, 1948 Trav L. R. 162. That decision has been followed by my learned brother Vaidailingam J. in Chellamma Jagadamma v. Parameswaran Nair, 1960-1 Ker LR 320. In the case before me, though there is a registered variola, the security bonds on which the suit is based were not registered. Therefore, applying the above ruling I hold that the decision of the learned Munsif on this question is correct.

4. But, on the other question, as to whether Article 75 of the Limitation Act applies to the case, I am afraid I cannot agree with the view of the learned Munsif. A bond or a promissory note payable by instalments coming within Article 75 of the Limitation Act is different from a bond executed by a prized subscriber to secure the payment of the future instalments. In the former the amount covered by the bond or promissory-note is immediately payable, but for the instalment clause; and the instalment clause suspends as it were, that immediate liability. If by defaulting to pay the instalments in time that suspension is removed, the liability to pay the entire sum immediately resumes or resettles. In the latter case the prized subscriber's liability is only to pay the future instalments as and when they fall due; but the foreman is given the right by the default clause to claim all the future subscriptions in a lump, or, if I may use the expression, to telescope or consolidate all the future instalments into one, in the event of default. By the mere default of one or more of the future instalments the entire amount does not immediately and automatically fall due. By the default of the subscriber what the foreman gets is a right to claim the entire future subscriptions in a lump; and until he exercises that right by claiming the entire amount it does not become due and therefore limitation cannot run against him. In that view I hold that Article 75 of the Limitation Act cannot apply to a case like this.

5. But, a decision of Madhavan Nair J. in I. Gopala Menon v. Kallingalakath, AIR 1935 Mad 303 dealing with a chit fund transaction has been brought to my notice. Recently I had occasion to consider that case in Kunjamma George v. P. R. Kesava Pillai, 1963 Ker LT 68 and I expressed doubt regarding the correctness of that decision. More thought bestowed upon the question has only confirmed my doubt and my considered opinion is that the Madras decision does not lay down the correct law. According to me, Article 75 of the Limitation Act cannot apply to a case like this.

6. In addition, Section 32 (i) of the Travancore Chitties Act of 1120 is also a bar against the running of time against the foreman until he claims in writing all the future subscriptions in a lump from the defaulting prized subscriber. The sub-sec. lays down that a foreman shall not be entitled to claim consolidated payment of all the future subscriptions from a prized subscriber until he shall have demanded the same in writing. Therefore, until such a demand in writing is made, the amount does not become payable and limitation cannot also run against the stake-holder. In that view also the decision of the lower court that the suit is barred cannot be sustained.

7. The result is the stake-holder will be entitled to all the instalments accrued due within three years immediately prior to the filing of the suit. The Civil Revision Petition is allowed and the suit is remanded with a direction that the Tower court will fix the amount and pass an appropriate decree. Since there has been no appearance for the petitioner, I direct the parties to bear their respective costs.


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