DEKARAJU VENKATARAMANA RAO Vs. BYSANI BALARAMAIAH SETTY

JUDGEMENT

(1.) This revision petition raises an interesting question of law relating to the applicability of Order 2 rule 2 Civil Procedure Code to the suits for the recovery of instalments due and payable as stipulated under promissory notes.

(2.) The Defendants borrowed a sum of Rs. 8000/- from the plaintiff and executed a promissory note dated 23-9-1963 whereunder tbey had undertaken to pay the amount due in ten equal instalments of Rs. 800/-each on 23rd of every month from the date of the execution of the promissory note. Thereafter, the defendants paid as per the agreement six instalments upto 31-3-1964 and defaulted in payment of three subsequent instalments. Thereupon the plaintiff filed a suit O. S. No.326/54 for the recovery of the moneys due under the three instalments and the defendants paid Rs. 2450/- and the suit was dismissed. As the defendants failed to pay the tenth and final instalment, inspite of repeated demands the plaintiff filed O.S.No.182 of 1966 on the file of the Additional District Mansif's Court, Madanapalle. Defendants 2 and 3 remained exparte. But the 1st defendant, while admitting the exacution of the promissory note, contended that in the prior suit O. S. No.326 of 1964, accounts were look" ed into and the entire debt was settled and the amount was paid and nothing more was due and also further contended that in the prior suit as the plaintiff did not claim the entire amount due under the promissory note but claimed only the amount due under the three instalments, he is barred under Order 2 rule 2 from filing a separate suit. On both these contentions, the Court held against the defendants and decreed the suit. Hence this petition.

(3.) The only point urged in this petition is that the present suit for the last instalment is barred by Order 2 Rule 2 C. P. C. as it was not claimed in the prior suit ? Order 2 C. P. C, deals with the frame of suits. The underlying principle in the framing of suits as stated in rule 1, is that the suit must be so framed as to afford ground for final decision upon the subjects in dispute and to prevent further litigation concerning them. The object is obviously to prevent splitting up of claims resulting in multiplicity of suits and proceedings and vexatious litigation. It is in this view Rule 2 says that every suit shall include the whole of the claim in respect of a cause of action, but the option is given to the party to relinquish a portion but in respect of what he has relinquished, the rule places an embargo on his embarking on further litigation by filing a separate suit for the claims relinquished, unless it be that part of the relief is reserved with the leave of the Court, This provision obviously is so framed as to enable parties to litigate at one and the same time for the entire claim based on any transaction, But, even a single transaction can lead to several causes of action. If the cause of action is single the embargo contemplated by the provision and the penalty that follows will be attracted but if the said transaction leads to several causes of action, the plaintiff will be at liberty to file different suits on the different causes of action that arise at different times In the instant case, on the execution of a pronote for a certain sun the promisee has a cause of action to recover the entire sum due if on demand, the promissor fails to pay. His cause of action is based on this promise and the subsequent failure to pay. That is a single cause of action and he cannot therefore split it up. If on the other band there are certain stipulations agrfed to by the parties, the parlies will be bound by the agreement with regard to the reliefs claimed. In this case, it was stipulated that the defendant should repay the debt due under the promissory note in ten equal monthly instalments each instalment to be paid on 23rd of every month. If therefore is default in payment with regard to any one or more instalments there is cause of action only with regard to that default as the other instalments would not have fallen due and he will hiva no right to claim them. If four or five instalments have fallen due and he filed a suit for money due under only one of the instalments, then it can be contended that cause of action with regard to four or five instalments had already arisen and by reason of his filling the suit for recovery of only one instalment, he has relinquished his claim with regard to the rest, But it cannot be said that with regard to instalments that are payable in future also, there is such a relinquishment. In default of payment of each instalment a cause of action arises. It is not the plaintiff who will be splitting up the cause of action in a contract of this type. The splitting up is inherent in the agreement itself. If the plaintiff in the first suit filed had included the amounts due under the future instalments also, it would have been open to the defendant to contend that the plaintiff had no cause of action with regard to that part of the claim as they had not yet fallen due and the defendant cannot be considered to be in arrears with regard to those instalments. Under Article 74 of the Old LIMITATION ACT, 1963, the period of limitation on a promissory note or bond payable on instalments is three years from the expiration of the first term of payment as to the part then payable and for the other parts three years from the expiration of the respective term of payment. This provision recognises the principle of different causes of action arising in instalment bonds as and when the instalments fall due. On the other band, if there is only one cause of action, the starting point of limitation should be one and only one and cannot split up or arise at different points of time. The cause of action in respect of each instalment in default would arise on the date of default only, and consequently the plaintiff could lecover only those instalments which had fallen due within three years before suit. Therefore, it follows that for future instalments, no suit can lie until the expiration of the time when they become payable and by that reason they become arrears.