SUKUMARAN Vs. SANKARAN

JUDGEMENT

(1.) In this civil revision petition filed under S.22 of the Small Cause Courts Act the petitioners, who were defendants 1 and 2 in the court below, contend that the suit claim was barred by limitation and that the lower court has acted erroneously and illegally in granting a decree in the plaintiff's favour. The plaintiff is a chitty foreman. The 1st defendant had taken one C class ticket in the chitty run by the plaintiff and he prized the chitty at the 11th instalment and drew the chitty amount after executing a chitty kychit on 7-10-1970. The 2nd defendant had joined in that bond as surety for the 1st defendant. Under the terms of the said chitty bond the defendants had undertaken to pay the full amount of future subscriptions in lump in case of default being committed in payment of any of the instalments. The 1st defendant defaulted payment of the 20th instalment which fell due on 10-6-1971 and no amounts were remitted by him towards the chitty thereafter. The term of the chitty came to a close on 10-5-1973. It was only thereafter that the foreman (plaintiff) issued a notice of demand to the defendants on 14-2-1974 calling upon them to remit the full amount of the defaulted instalments. Since the defendants failed to pay in spice of the said notice the plaintiff instituted the suit on 8-10-1974. The main plea put forward by the defendants before the court below in defence to the suit was that the plaint claim was barred by limitation. It was contended by them that under Art.37 of the Limitation Act, 1963 (Act 36 of 1963), hereinafter referred to as the Act, the period of limitation for the suit has to be computed from 10-6-1971 on which date default was committed in payment of the 20th instalment and the entire amount of future instalments became payable in lump. Since more than three years calculated from that date had expired before the institution of the suit it was urged that the suit should be dismissed as barred by limitation. The lower court took the view that under the terms of the chitty kychit the prized subscriber becomes liable to pay the entire future instalments in lump only when a demand is made in that behalf by the foreman and if no such demand is made the cause of action for recovery of the entire amount in lump would accrue only on the date of termination of the chitty. Accordingly it was held by the court below that since the suit was instituted within three years of the date of termination of the chitty no portion of the plaint claim was barred by limitation. It therefore passed a decree in favour of the plaintiff entitling him to recover the amount of Rs. 315/- representing all the defaulted instalments with interest and costs. Defendants No. 1 and 2 have come up with this revision petition challenging the legality and correctness of the said decision rendered by the court below.

(2.) Counsel for the petitioners contended before us that since the suit is based on the chitty security bond which while providing for payment in instalments contains also a stipulation that if default be made in payment of one or more instalments the entire balance amount shall be payable in lump, it is Art.37 of the Act that applies to the case and the starting point for limitation is the date when default was committed by the defendants in paying the 20th instalment. Developing this argument it was further urged by counsel for the petitioners that since there is neither pleading nor evidence to the effect that there was any waiver by the foreman of the benefit of the provision empowering recovery of the full amount of future instalments in lump after the default was committed by the 1st defendant in payment of the 20th instalment the period within which the suit could be instituted expired on 10-6-1974 In support of the above contention reliance was placed by the learned advocate on the decision of our learned brother Bhaskaran, J. reported in Krishnan Madhavan v. Narayanan Jayadevan, 1974 KLT 534

(3.) In reply to the above arguments it was submitted by the counsel appearing for the respondent plaintiff that Art.37 of the Act does not govern the present suit since the provisions of chitty kychit which was executed in the erstwhile Travancore area must be regarded as subject to the provisions of S.32 of the Travancore Chitties Act, 1120 and the liability for payment of all the future instalments in lump does not automatically accrue on default being committed in payment of any of the instalments but only when a demand is made by the foreman as prescribed in the said Section. Counsel sought to derive support for this contention from the observations of Raghavan, J., as he then was, in Kunjamma George v. Kesava Pillai. ( 1963 KLT 68 ).