NALINAKSHA GHOSH Vs. SULEMAN

JUDGEMENT

(1.) This is an appeal by the defendants under the Letters Patent from a decision of Ray J. sitting singly. The appeal arises out of a suit for recovery of dues on an instalment bond executed by the defendants on 29 chaitra 1343 B.S. which is equivalent to 14 April 1936. The bond provided for installments of Rs. 100 each to be paid from 1346 to 1350, and Rs. 150 in 1351. It also provided that, in the event of a default of payment of any instalment, the agreement regarding instalments would stand invalidated, and the plaintiff would be entitled to recover the balance with interest at 12 per cent. The first instalment was paid in 1345. No instalment was paid in 1346 or 1347. A payment of Rs. 100 in 1348 was stated to be in respect of the dues of 1346 and was credited for that year. On 17 May 1944, the plaintiff sued for the amount due under the bond. The first Court dismissed the suit, holding that it was barred by limitation. On appeal by the plaintiff the suit was decreed. The defendants appealed to this Court, and their appeal was dismissed by Kay J.

(2.) The appropriate Art. of the Limitation Act applicable to a suit of this nature is 75, which provides a period of three years from the time when the default is made, unless where the payee or obligee waives the benefit of the provision, and then, when fresh default is made in. respect of which there is no such waiver. The 1346 instalment became due in May 1940, so that the suit was not instituted within three years from the end of that month, and it is, therefore, contended that it is barred. It has been held, however, that where an instalment bond provides that on default the agreement for payment by instalments shall be cancelled or invalidated, then on the happening of a default, the whole unpaid balance of the debt becomes payable, and the agreement to pay by instalments no longer subsists, with the result that unless the obligor sues within three years from the date of the default, his remedy is barred, and he no longer has an option to waive the default and to treat each subsequent default as providing a cause of action: see Judhistir Patro V/s. Nobin Chandra Khela 13 Cal. 73. This was a case of an instalment decree which provided that on the happening of a default the agreement to pay by instalments should stand cancelled, and it was held that time ran against the decree-holder from the date of the first default. There is no difference in principle in this respect between an instalment decree and an instalment bond. It must, therefore, be held in the present case that time began to run against the plaintiff from the e May, 1940.

(3.) The plaintiff then relies on the payment of Rs. 100 in 1348 and contends that he has a fresh terminus a quo from that date. Section 20, Limitation Act provides that where part of the principal of the debt is, before the expiration of the prescribed period, paid by the debtor or by his agent, duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made, provided that an acknowledgment of the payment appears in the handwriting of, or in writing signed by, the person making the payment. In the present instance, the payment of Rs. 100 in 1348 was endorsed on the bond by the defendant who paid it. The provisions of Section 20, therefore, provided the plaintiff with a fresh starting point of limitation from 1942, which is within two years of the date of the institution of the suit. The suit was, therefore, instituted within time, with the result that the decision of Ray J. must be confirmed and this appeal dismissed with costs. Meredith J. I agree.