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High Court Of Madhya Pradesh
Shiv Dayal Shrivastava, J.
DEVIDAS DHANIRAM - Appellant
Versus
PARMA GOKALIA - Respondents
Civil Revn. 40 Of 1957
Decided On : 07/03/1959
LIMITATION ACT, 1908 - ARTICLE 75 - WAIVER - MEANING AND SCOPE - EXIGIBILITY CLAUSE - EFFECT ON CAUSE OF ACTION - WAIVER MUST BE INTENTIONAL AND MANIFEST - MERE ABSTINENCE FROM SUING OR ALLOWING A BENEFIT TO PASS UNNOTICED DOES NOT CONSTITUTE WAIVER - WAIVER MUST BE SPECIFICALLY PLEADED AND PROVED - LASADIN'S CASE APPLIES ONLY TO MORTGAGE SUITS, NOT TO BONDS UNDER ARTICLE 75.
Fact of the Case:
Plaintiff filed a suit to recover the principal amount and interest due on an instalment bond executed by the defendants. The bond contained an exigibility clause allowing the creditor to recover the entire amount due upon default in payment of any monthly instalment or interest for 3 months. The plaintiff alleged that the defendants had made some payments but had defaulted on the last instalment. The defendants pleaded limitation, arguing that the period of limitation started from the first default.
Finding of the Court:
The court held that the exigibility clause came into operation upon the first default, causing the cause of action for the recovery of the whole amount due to accrue. The court further held that waiver of the right to bring a suit at once on the happening of the default must be intentional and manifest, and that mere abstinence from suing or allowing a benefit to pass unnoticed does not constitute waiver. The court also held that waiver must be specifically pleaded and proved, and that the onus of proving waiver is on the creditor.
Issues: 1. Whether the exigibility clause in the bond accelerated the cause of action for the recovery of the entire amount due upon default in payment of any monthly instalment or interest for 3 months? 2. Whether the plaintiff's inaction to enforce the right given to him in the bond on the default of earlier instalments amounted to 'waiver'? 3. Whether the plaintiff was entitled to the benefit of his waiver within the meaning of Article 75 of the Limitation Act?
Ratio Decidendi: 1. The court held that the exigibility clause came into operation upon the first default, causing the cause of action for the recovery of the whole amount due to accrue. This is because the exigibility clause was exclusively for the benefit of the creditor, and interpreting it otherwise would turn it into a handicap. 2. The court held that waiver of the right to bring a suit at once on the happening of the default must be intentional and manifest, and that mere abstinence from suing or allowing a benefit to pass unnoticed does not constitute waiver. This is because waiver is the abandonment of a right, and it must, therefore, be intentional. 3. The court held that the plaintiff was not entitled to the benefit of his waiver within the meaning of Article 75 of the Limitation Act because he had not specifically pleaded and proved waiver.
Final Decision: The court dismissed the plaintiff's suit as barred by limitation.
( 1 ) THIS revision is directed against the judgment and decree of the Small Cause judge, Gwalior, dismissing the plaintiff's suit as barred by time.
( 2 ) THE suit was based on an instalment Bond executed by the defendants Parma, hariram and Tillu on July 24, 1952 in favour of Devidas. Defendants Kama and devi were the sureties. The bond was for a sum of Rs. 350/ which was repayable as follows:
(a) The debtors were to repay Rs. 200/- out of the principal amount and rs. 40/- by way of interest, totalrs. 240/-, within one year by monthly instalments of Rs. 20/- each. (b) The balance of Rs. 150/- was to be paid within one year together with interest thereon at Rs, 2 per cent, per month. (c) In case there was default in the payment of any monthly instalment or interest for 3 months, the creditor was given the right to recover the whole amount at once.
( 3 ) IT was alleged in the plaint that the defendant paid in all Rs. 136/- between september 13, 1952 and July 11, 1956. The claim in the suit was for Rs. 350/- the principal amount, and Rs. 32/8/- as interest total Rs. 382/s/ -. This suit was instituted on July 20, 1956.
( 4 ) THE learned trial Judge held that the period of limitation for the present suit started from the first default whence it was time-barred,
( 5 ) SHRI Pataukar, learned counsel for the petitioner, contends that the plaintiff was entitled to the benefit of his waiver within the meaning of Article 75 of the limitation Act. According to the learned counsel the plaintiff's inaction to enforce the right given to him in the bond on the default of earlier instalments amounted to 'waiver' and the plaintiff had the right to bring this suit on the default in respect of the last instalment. He relies on the decisions reported in Lasa Din v. Mt. Gulab kunwar, AIR 1932 PC 207: (59 Ind App 376); Dada-rao Krishnaji v. Jatanbai bhikamchand, ILR (1943) Nag 331 : (AIR 1943 Nag 284); Swavamber Singh v. Ghasiley Ram, AIR 1052 All 479; Mahomed Hus-sain v. Sanwal Das, AIR 1934 All 397 (FB) and Mt. Shashikantabai. v. Rajkishan, 1959 MPLJ 23: (AIR 1959 Madh-Pra 336 ).
( 6 ) IT is true that in the case reported in 59 Ind App 376: (AIR 1932 PC 207), the privy Council held that the default clause was exclusively for the benefit of the mortgagee and their Lordships held that if by a breach of the contract committed by the mortgagor the mortgage money became immediately due, the intention of the parties was clearly defeated and that what was agreed to by them as an option in the mortgagees' was converted into 'an option in the mortgagor'. The mortgagor could not in that way take advantage of his own default and acquire thereby a right to redeem before the period fixed in the bond expired. It must, however, be remembered that the same principle cannot be applied to a simple money bond and that has been the consistent view of the Nagpur High Court.
( 7 ) SHRI Patankar has strongly relied in support of his argument on a decision of vivian Bose J. (as he then was) in Gulabrao v. Canpat, ILR (1943) Nag 630 : (AIR 1942 Nag 138 ). There it was no doubt observed that the exigibility clause was for the benefit of the creditor and to interpret it otherwise would turn it into a handicap. Bose J. , found support for his view in Lasadin's case which he applied to the case before him. But on a careful perusal of the whole judgment it becomes obvious enough that the decisions in Vishwanath's case and Sham Rao's case were neither dissented from nor distinguished; on the contrary, they were noticed and on their basis it was observed that the question had been 'set at rest'. In the case before Bose J. the creditor had already brought suits for defaulted instatments and that fact was held to amount to a waiver of the benefit under the default clause. It was further observed that in case of a double cause of action it was for the plaintiff to elect. ( 8 ) THEN the case of Firm Hardeo Dwarkadas v. Firm Binjrai Hariram, ILR (1948)Nag 3
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