This petition raises an interesting point of limitation law applicable to a defaulting member of a chit fund.

The plaintiff was a stakeholder who conducted in Madura what is called an auction chit of the usual type. There were 100 chit subscribers who contracted to pay Rs.20 a month for a period of 50 months from 5th December, 1941. The chit auction was to be held on the 20th day of each Tamil month, the bid commencing from Rs.1,000. At the eleventh call the defendant who had subscribed only to a half share in the chit bought it for Rs.343 and executed an instalment bond on 9th October, 1942, for Rs.390, undertaking to pay future subscriptions as they fell due. The bond contained a clause that if default was made in the case of one instalment the whole sum would become payable with 12 per cent. interest. The defendant paid up to the 15th call but defaulted at the 16th call due on 3rd March, 1943. The plaintiff’s case is that subsequent to this the defendant paid only a sum of Rs.8 on 6th September, 1943. After the expiry of the chit period in 1945 the plaintiff sued to recover on the bond he had executed. The defendant pleaded the bar of limitation. The Subordinate Judge hel