VALI VENKATASWAMI CHETTIAR Vs. MINOR RAMALINGAM

JUDGEMENT

(1.) The question referred is in the following terms: Is the claim for a supplemental decree in a suit for sale barred by time where the bond provides that the mortgage money shall be paid whenever demanded and the suit is brought more" than six years from the date of the bond but within six years from notice of demand? The reference arises out of an application to the District Court of South Arcot for a personal decree in a mortgage suit. The property hypothecated had been sold, but the amount realised was not sufficient to discharge the full liability. The application was opposed on the ground that the personal remedy had become time barred and this plea was accepted. The mortgage was executed on the 2nd June, 1931, and the suit to enforce payment was not filed until the 22nd February, 1938. In the order of reference the relevant portion of the deed has been translated as follows : I shall pay before the 31 March of each year the interest accruing on this sum of Rs. 9,000 at three-fourths per cent, per mensem from this day. In default of payment of interest before the due date I shall add the balance interest due to the principal and shall pay the aggregate amount together with interest thereon at three-fourths per cent per mensem. I shall pay the principal and outstanding interest when required by you. In default of payment as aforesaid, I agree to your proceeding against the hypotheca and against me and my other properties and recovering the amount of the principal and interest. The District Judge considered that there was here an agreement to repay the loan " "on demand " which meant that it became repayable on the date of the deed. As more than six years had elapsed he held that the application for a personal decree had been filed out of time. The mortgagee appealed to this Court. The appeal came before Wadsworth and Patanjali Sastri, JJ., who had held in the unreported case of Pattapparayi Venkatasubbarao V/s. Thayi Narasappa Appeal No. 417 of 1941 that the expression " on demand " or words of similar import when used in a mortgage bond should be understood as requiring a demand to be made for repayment and that time only ran from the date of demand. The learned Judges based their decision on S wami Rao V/s. Official Assignee, Madras . Seetharama Iyer V/s. Muniswami Mudaliar (1918) 37 M.L.J. 613 and Sivasubramania Pillai V/s. Nagappa Pillai (1936) 52 M.L.J. 636. When the present case was before them, other judgments of the Court were brought to their notice and as these revealed a conflict of opinion they have made this reference.

(2.) All the decisions of this Court which have bearing on the question have been examined in the course of the arguments addressed to us and we shall refer to them presently in the order of date, but before doing so we think it necessary to emphasise what the Limitation Act has to say in this connection and to draw attention to the judgment of the Privy Council in Lasa Din V/s. Gulab Kunwar5.

(3.) Art. 57 fixes the period of limitation in a suit for money payable for money lent at three years from the date on which the loan is made. In a suit for money lent under an agreement that it shall be payable on demand the period is the same and time again runs from the date when the loan is made. This provision is contained in Art. 59. If the suit is, however, based on a contract in writing registered, the period is, by virtue of Art. 116, six years from the date of the loan. In Ratnasabapathi Chetti V/s. Deivasigamani Pillai (1928) 56 M.L.J. 10 : I.L.R. 52 Mad, 105 (F.B.) a Full Bench of this Court held that Art. 116 applies to a claim based on a personal covenant to pay the balance due to the mortgagee after the sale of the mortgaged property should anything remain owing. Art. 75 states that for a suit on a promissory note or bond payable in instalments which provides that if default be made in one or more instalments the whole shall be due, the period of limitation is three years from the day when the default is made, unless the payee or obligee waives the benefit of the provision. Article 116 again extends the period to six years if the bond is registered. Art. 132 provides that in a suit to enforce payment of money charged on immovable property the period is twelve years from the time when the money sued for becomes due.