T.v. Seetharamayyar V.

Munisami Mudaliar And Another

High Court Of Judicature At Allahabad

Judgment Date:
21-10-1918

T.v. Seetharamayyar ..Petitioner

Munisami Mudaliar And Another ..Respondent

Bench:
{HON'BLE JUSTICE SESHAGIRI AIYAR, J ; }

Citation:

50 IND. CAS. 87 ; AIR 1919 ALL 263 ;

Seshagiri Aiyar, J.—The case has been very fully argued by the two 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 prize in the reffle 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.

3. 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.

4. The 5rst question argued before me by Mr. T.M. Krishnasami Aiyar was that the suit must be 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. Krishnasami Aiyar suggested that there can be no question of instalments 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 construction of the plaint, whether it is based upon the original cause of action or on the bond, I

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 T.v. Seetharamayyar V. Munisami Mudaliar And Another

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.

5. The next question is whether, under the bond, the right to the whole amount accrued on default of paying any
one of the instalments. Before dealing with the cases which have been quoted, I may refer to the language of the
document itself. The vernacular expression is (Thangal Vendumbodu) and when that expression occurs in reference
to the payment of the whole amount and not in regard to the payment of the instalments, it seems to me that it
was the intention of the parties that, if the promisee wanted to enforce his rights under the penal clause to
require the promisor to pay the whole of the amount, he must make a demand. The context and the language
employed are prima facie in favour of the view that there should be an antecedent demand before a suit is
brought. As regards the cases cited, the learned Vakil for the counter-petitioners invoked the very high authority
of Blackburn, J., for the proposition that whenever the words on demand" occur in any instrument, whether it be
a mercantile instrument or any other deed, they should be regarded as technical words indicating that the cause
of action arises at once. On examining the case quoted, namely, Brighty v. Norton (1863) 32 L.J.Q.B. 38 : 7 L.T.
422, I do not find that the learned Judge drew any distinction between mercantile transactions and other
transactions. The other English cases quoted do not take the matter any further. Before dealing with the Indian
cases I may refer to the decision in Brown's Estate, In re Brown v. Brown (1893) 2 Ch. 300, which seems to
indicate that, where a provision is made for payment of a larger amount on the happening of a contingency, that
contingency must be proved to have happened. That case has since been accepted as good law in Bradford Old
Bank Ltd. v. Sutcliff (1918) W.N. 295. Coming to the Indian cases, I shall confine my attention, as the learned
Vakil did, to he decisions of this Court. In Perumal Ayyan v. Alagirisami Bhagavathar 7 M.L.J. 222; and Perianna
Goundan v. Muthuvira Goundan 7 M.L.J. 315 where the words "on demand" occur, red in a mortgage document,
this Court held that they were technical words which meant that the money was payable at once. Having regard
to the later authorities, Mr. C.A. Seshagiri Sastri conceded that these cases can no longer be regarded as good
law. If we turn to Nettakaruppa Goundan v. Kumarasami Goundan 8 M.L.J. 167, I find that on a similar
expression used there, the Court held that there must be a demand before the suit is brought. Since then, except
for one authority to which I shall refer presently, the decisions in this Court have been practically uniform. In
Appeal No. 27 of 1916, in which I took part sitting with Ayling, J., we pointed out that except in transactions
connected with law merchant, the words "on demand" have meaning and that there should be a demand before
the cause of action arises. In that case, we accepted the proposition laid down in Karunakaran Nair v. Krishna
Menon 12 Ind. Cas. 57 and Kuttiassan v. Suppi 3 M.L.J. 1. 199. Subsequent to that decision, two learned Judges
of this Court in Second Appeal No. 121 of 1916 have taken the same view. As against these decisions, there is a
judgment of Sadasiva Aiyar, J., in Surayya v. Tirumalanadham Bapirazu (1916) M.W.N. 121. As was pointed out in
Appeal No. 27 of 1916 on the file of the High Court, the attention of the learned Judge does not seem to have
been drawn to the judgment of Abdur Rahim, J., in Karunakaran Nair v. Krishna Menon 12 Ind. Cas. 57. I may
say that if Surayya v. Tirumalanadham Bapirazu 31 Ind. Cas. 335 : (1916) M.W.N. 121 was rightly decided, this
case would be covered by that authority. But as that decision was given without reference to the other decisions
of this Court, I am unable to follow it sitting as a Single Judge. In my opinion, it is not right to hold, except in
the case of instruments coming under the Negotiable Instruments Act, that words of the parties which have been
deliberately inserted in a document have no meaning. In the present case, I think that the parties deliberately
used the expression, because, although there was a liability to pay each of the instruments separately, they
intended to make it a condition precedent that a demand should be made if the whole amount is to be asked to
be paid at once.

6. For these reasons, in my opinion, the judgment of the District Munsif holding that the suit is barred by
limitation is wrong and must be reversed. I reverse his judgment and remand the case to him for disposal
according to law. Costs will abide the result.

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