T V SEETHARAMA AIYAR Vs. MUNISWAMI MUDALIAR

JUDGEMENT

(1.) The case has been very fully argued by the learned vakils who appeared for the petitioner and the counter petitioners. I shall therefore proceed to give judgment at once.

(2.) The suit is for instalments due in respect of a chit fund. The plaintiff calls himself the agent and proprietor of the fund. The 1st defendant was a subscriber in it. He obtained the price in the raffle and received the full amount. Thereupon Exhibit A was executed by him and his surety to the plaintiff. One sentence in it which has given rise to much comment is this: "We shall severally or jointly without setting up proportionate liability pay in lump on demand the balance due with interest at one per cent per mensem from the date of default." After the execution of the bond, the 1st defendant paid sums of money although he did not pay them on the due dates according to the rules of the fund. The present suit was brought for the balance. It is admitted that if the claim is made for the subscription and not based on the bond, subject to other defences if any, the suit will be in time. The District Munsif has held that the suit was barred by limitation.

(3.) The first question argued before us by Mr. T.M. Krishnaswami Aiyar was that the suit must de deemed to have been based on the original cause of, action and not on the bond and as the plaintiff is only claiming whatever is due to him within the period of limitation, no question of limitation can arise. I was at first inclined to agree with him, but on considering the matter more fully, I think that Mr. C.A. Seshagiri Sastriar s contention is well founded in regard to this matter. In paragraph 13 of the plaint, it is stated he " (the plaintiff) has not therefore enforced the penal clause of the bond and has waived his right. " There can be no question of waiver unless it be a suit on the bond itself. Nowhere is it stated that the suit is based upon the liability under the rules of the fund. Mr. T.M. Krishnaswami Aiyar suggested that there can be no question of instalment under the bond, Exhibit A because there are no instalments provided in it expressly. I do not think that this contention is well founded, because the bond refers back to the receipt containing the bye-laws and the receipt containing the bye-laws would undoubtedly have given the various dates on which instalments are due. Therefore if the question turns solely upon the contention of the plaint, whether it is based upon the original cause of action or on the bond, I would have agreed with the lower Court that the suit is based upon the bond; and as there has been a default in the payment of the instalments, it would be barred by limitation.