SHANMUGA KONE Vs. TSRAMALINGAM PILLAI

JUDGEMENT

(1.) The only point that has been argued in this case on behalf of the appellants, though several points have been raised in the case, is one with regard to the plea of limitation. The lower appellate Court has found against the defendants (appellants) on that plea and granted a decree.

(2.) The facts necessary to understand the question under discussion may be briefly set out. There was a chit fund conducted by a registered company of which there were two secretaries, one chief and another an assistant. Defendants 1 and 2 who held chits in this fund bid for and obtained the prize on 5 April 1902, and as security for payment of the remaining chits to be paid by them gave an hypothecation bond dated 28 June 1902. There have been disputes as to how many chits were continued to be paid thereafter by the mortgagors, but some time afterwards, though the point of time has not been definitely ascertained, the company ceased to work and thereupon the Chief Secretary purported to assign this hypothecation bond to some third party, and it is in evidence that a suit was instituted against the defendants on that bond; a decree was passed in spite of the objection and plea raised on behalf of the defendants that the assignment was not valid in law as being on behalf of the company and that the decree had been paid and satisfied by the defendants. On the same bond the present plaintiffs have instituted against the defendants a suit for recovery of the amount thereof. They claim as purchasers at a Court sale of the right, title and interest of the company under this bond on the ground that the assignment purported to be made by the secretary was not binding on the company and, therefore, on the date of the attachment, there were vested in the company all the rights of the mortgagee under the deed. The result has, therefore, been that in these proceedings the defendants have been decreed to pay over once again to the plaintiffs in this action the amount already paid up by them.

(3.) I, for my part am not at all by any means sorry to have come to the conclusion that the plaintiff's action is barred by the law of limitation. The bond in question is an instalment bond. It provides for the regular payment by the executants of the amount of the chit payable, namely, Rs. 20, on the 5 of every month. There is also a provision with regard to default which has been translated thus: In the case of default we shall pay within the next instalment adding interest at 2 pies per rupee per week from the date of default; in case of failure to pay even as aforesaid we shall not only forgo the premium gain due to us from the date of prior default and also the same due to us for the subsequent instalments but also pay on demand by you the total amount due at Rs. 20 per chit for the remaining obits up to the termination of the chit without reference to the subsequent instalments adding interest to the same at the rate specified above and you shall recover the same by proceeding against the property mentioned hereunder and by proceeding against the properties belonging to us and ourselves.