. On a careful examination of the contents of the bond Ex. P-l, I find that the right to recover the whole amount of the bond accrued to the plaintiff only upon default of payment of all the instalments and he could not have brought the suit for the recovery of the whole amount before the expiry of ten months from the date of the bond. The present is not a suit for recovery of instalments having fallen due and, therefore, time could not run from the date on which each instalment fell due.
2. The plaintiff filed a suit for recovery of Rs. 700 principal and Rs. 300 interest, total Rs. 1,000 on the basis of the suit document dated 18-9-1966 Ex. P-1. It is not in dispute before me that the document in question was executed by the defendants for consideration. The only question canvassed before me is whether the suit for the whole of the principal amount is within limitation because the lower court has decreed the suit for Rs. 70 only in respect of what has been described by it as the last instalment
3. In order to appreciate the point of limitation argued before me it would be proper to narrate the conditions regarding repayment contained in the bond Ex. P-1:--
(1) that the amount shall be paid within ten months,
(2) the monthly interest on the amount will be Rs. 11 and this amount of interest will be payable till the whole amount is paid up and
(3) the amount will be paid by monthly instalments of Rs. 70 each.
4. The lower court has held that the suit document is a bond payable by instalments and since it does not provide that on default of one or more instalments the whole amount shall be due, the case will be governed by Article 36 and not by Article 37 of the Limitation Act, 1963. In this view of the matter it further held that the cause of action in respect of each instalment arose on the date it became due and was not paid. Hence since the suit was instituted on 17-1-1970, only the last instalment was held to be within limitation and the suit was decreed for Rs. 70 only.
5. The contention of the learned counsel for the petitioner is that the suit is governed by Article 37 of the Limitation Act and not Article
36. In the alternative he has argued that the case would be governed by Article 28 inasmuch as period of payment has been specified. His contention is that the cause of action for bringing the suit for the whole amount due on the bond accrued to the plaintiff on the expiry of ten months from the date of the execution of the document. Reliance has been placed on AIR 1963 All 278.
6. On the other hand Mr. R. D. Jain, learned counsel for the non-petitioner has supported the findings of the trial court.
7. On a careful examination of the contents of the bond Ex. P-l, I find that the right to recover the whole amount of the bond accrued to the plaintiff only upon default of payment of all the instalments and he could not have brought the suit for the recovery of the whole amount before the expiry of ten months from the date of the bond. The present is not a suit for recovery of instalments having fallen due and, therefore, time could not run from the date on which each instalment fell due. It would not be reasonable to hold from the terms of the bond that the creditor after having acquired the right to recover the whole amount waited till the date of the last instalment nor it is a case of there being an option to the creditor to bring the suit for the whole amount on default of payment of any one or more instalments.
8. The principle laid down in AIR 1959 Mad 82 relied upon by the learned counsel for the non-petitioner has no application to the facts and circumstances of the present case as there is no provision in the suit document in the nature of extension of the period of contract. On the other hand, in my opinion, the plaintiff had no right to bring the suit for the whole amount or a part of it before the expiry of ten months from the date of demand. In this view of the matter the cause of action accrued to the plaintiff after the expiry of ten months from 18-9-1966 that is on 18-7-1967 and the suit has been brought within limitation on 17th July, 1970.
9. As regards interest, the stipulation in the bond is that Rs. 11 will be payable as interest for each month irrespective of the fact whether any part payment is made or not. This is undoubtedly penal and the defendant is entitled to be relieved of the penal clause. The reasonable rate of interest, in the circumstances, would be 6 per cent, per annum.
10. Accordingly, I allow this revision application and modify the judgment and decree by the trial court by enhancing and decreeing the plaintiff's suit for Rs. 700 principal and interest at 6 per cent, per annum from the date of the bond that is 18th September, 1966 till realisation. I further direct that the defendant shall pay costs of the trial court to the plaintiff but the costs of this revision application will be easy.
Madhya Pradesh High Court
Bhagwantrao Deorao Patil vs Mohammad Khan Asgar Khan on 6 January, 1977
Equivalent citations: AIR 1977 MP 270
1. This is a plaintiff's revision against the judgment and decree dated 23rd September, 1971 by the Second Additional District Judge, Gwalior exercising the powers of Small Cause Court.2. The plaintiff filed a suit for recovery of Rs. 700 principal and Rs. 300 interest, total Rs. 1,000 on the basis of the suit document dated 18-9-1966 Ex. P-1. It is not in dispute before me that the document in question was executed by the defendants for consideration. The only question canvassed before me is whether the suit for the whole of the principal amount is within limitation because the lower court has decreed the suit for Rs. 70 only in respect of what has been described by it as the last instalment
3. In order to appreciate the point of limitation argued before me it would be proper to narrate the conditions regarding repayment contained in the bond Ex. P-1:--
(1) that the amount shall be paid within ten months,
(2) the monthly interest on the amount will be Rs. 11 and this amount of interest will be payable till the whole amount is paid up and
(3) the amount will be paid by monthly instalments of Rs. 70 each.
4. The lower court has held that the suit document is a bond payable by instalments and since it does not provide that on default of one or more instalments the whole amount shall be due, the case will be governed by Article 36 and not by Article 37 of the Limitation Act, 1963. In this view of the matter it further held that the cause of action in respect of each instalment arose on the date it became due and was not paid. Hence since the suit was instituted on 17-1-1970, only the last instalment was held to be within limitation and the suit was decreed for Rs. 70 only.
5. The contention of the learned counsel for the petitioner is that the suit is governed by Article 37 of the Limitation Act and not Article
36. In the alternative he has argued that the case would be governed by Article 28 inasmuch as period of payment has been specified. His contention is that the cause of action for bringing the suit for the whole amount due on the bond accrued to the plaintiff on the expiry of ten months from the date of the execution of the document. Reliance has been placed on AIR 1963 All 278.
6. On the other hand Mr. R. D. Jain, learned counsel for the non-petitioner has supported the findings of the trial court.
7. On a careful examination of the contents of the bond Ex. P-l, I find that the right to recover the whole amount of the bond accrued to the plaintiff only upon default of payment of all the instalments and he could not have brought the suit for the recovery of the whole amount before the expiry of ten months from the date of the bond. The present is not a suit for recovery of instalments having fallen due and, therefore, time could not run from the date on which each instalment fell due. It would not be reasonable to hold from the terms of the bond that the creditor after having acquired the right to recover the whole amount waited till the date of the last instalment nor it is a case of there being an option to the creditor to bring the suit for the whole amount on default of payment of any one or more instalments.
8. The principle laid down in AIR 1959 Mad 82 relied upon by the learned counsel for the non-petitioner has no application to the facts and circumstances of the present case as there is no provision in the suit document in the nature of extension of the period of contract. On the other hand, in my opinion, the plaintiff had no right to bring the suit for the whole amount or a part of it before the expiry of ten months from the date of demand. In this view of the matter the cause of action accrued to the plaintiff after the expiry of ten months from 18-9-1966 that is on 18-7-1967 and the suit has been brought within limitation on 17th July, 1970.
9. As regards interest, the stipulation in the bond is that Rs. 11 will be payable as interest for each month irrespective of the fact whether any part payment is made or not. This is undoubtedly penal and the defendant is entitled to be relieved of the penal clause. The reasonable rate of interest, in the circumstances, would be 6 per cent, per annum.
10. Accordingly, I allow this revision application and modify the judgment and decree by the trial court by enhancing and decreeing the plaintiff's suit for Rs. 700 principal and interest at 6 per cent, per annum from the date of the bond that is 18th September, 1966 till realisation. I further direct that the defendant shall pay costs of the trial court to the plaintiff but the costs of this revision application will be easy.
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