BALUSERRY BENEFIT CHIT Vs. BHANU

JUDGEMENT

(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 portion of clause 14 of Ex. P. 3, the chit agreement is being reproduced here for proper appreciation of the issue. It reads as under : "Prized subscriber failing to pay his subscription or the chit instalment by the due date (i.e. the 10th) in any month pay the same on or before the end of that month with a nominal penalty of Re. 0.50 P. If he fails to do so, the Foreman will be entitled to demand in addition the payment of said nominal penalty plus a further penalty of Re. 0.50P only provided the dues are paid before the end of the next subsequent calender month In case the payment of the dues is delayed futher, the prized subscriber and the ecutants of security bond or sureties lose the future dividends and benefit of payment the future subscriptions in instalments and they shall become liable to make a consolidated payment of all the defaulted instalments with interest at the rate of 12% per annum from the date of default."

(3.) On this basis the plaintiff filed suit for recovery of Rs. 561.66. on 18.10.79.