Article 37 of the Limitation Act, 1963, applies to a promissory note or bond payable by installments, and provides that the period of limitation is three years from the date of default, unless 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.

K.M. Agarwal, J.

1. This first appeal by the plaintiff Bank is directed against dismissal of the suit on the ground of limitation.

2. It is not in dispute that the appellant is a nationalised Bank. On 30-8-1973 it had advanced a loan of Rs. 6,800/- to the respondent No. 1 Ishwar Prasad Tiwari for purchase of a three wheeler auto rickshaw. The loan was repayable in 36 equal monthly instalments, commencing from 30-9-1973. It was to carry interest at the rate of 12 per cent per annum with quarterly rests. The respondent No. 2 Suresh Chandra Mishra was the guarantor for repayment of loan. The loan was not discharged and, therefore, a suit for recovery of a sum of Rs. 29,992.75 paise was filed on 28-7-1984. The suit was resisted by the respondents, inter alia, on the ground of limitation. All the issues, except that on the point of limitation, were decided in favour of the appellant and the suit was dismissed as barred by time. Being aggrieved, the plaintiff Bank has preferred this appeal.

3. Having heard the learned counsel for the parties, I am of the view that the entire suit of the plaintiff could not have been dismissed as barred by time. Admittedly, the loan was taken on 30-8-1973 and it was repayable "in equal monthly instalments so that the entire loan and interest shall be repaid within a period of 3 (Three) years; the first monthly instalment shall be paid after one month of the date of the loan" as per clause 3 of Hypothecation Agreement dated 30-8-1973 (Anncxure P. 3). The alleged acknowledgment dated 5-1-1976 (Ex. P. 17) may be excluded from consideration as it appears to have been fabricated by interpolating the date "5-1-1976" in place of "5-1-1978" by overwriting. But there are other acknowledgments dated 5-1-1978 (Ex. P. 18 to Ex. P. 21) and others made on 7-8-1978 (Ex. P.22), 4-2-1980 (Ex. P. 23), 11-2-1981 (Ex. P. 24), 4-6-1982 (Ex. P. 25) and 12-12-1982 (Ex. P. 26). Accordingly instalment that was payable on 30-1-1975 and those payable thereafter were within time on the date of first acknowledgment dated 5-1-1978, it being within 3 years from the due date for payment of instalment for the month of January 1975. As the first instalment after the date of loan fell due on 30-9-1973, the 16th instalment would have been payable on 30-12-1974. The 17th instalment was due on 30-1-1975. Accordingly, on the face of acknowledgments dated 5-1-1978, the claim for the 1st to 16th instalments must be held to be barred by time and that for the 17th to 36th instalments must be held to be in time on the date of these acknowledgments. The other 5 acknowledgments made on 7-8-1978, 4-2-1980, 11-2- 1981, 4-6-1982 and 12-12-1982 (Ex. P. 22 to Ex. P. 26) being correspondingly within three years from one another and from that of 5-1-1978 and the suit having been filed within 3 years from the date of the last acknowledgment, the claim for 17th and subsequent instalments must be held to be in time.

4. In paragraph 15 of its impugned judgment, the trial Court came to the conclusion that Article 36 of the Limitation Act, 1963, would be applicable in the present case, as there was no pleading or recital in the promissory note (Ex. P. 1) that in case of default in payment of any instalment, the whole amount of loan would become recoverable. However, in clause 3 of the Hypothecation Agreement (Ex. P. 3), it has been specifically mentioned that in case of default in payment of "three consecutive instalments it shall be lawful for the bank to recall the entire outstanding loan" and that the debtor shall "pay the same notwithstanding the period of instalments fixed as aforesaid." In this view of the matter, I am of the view that Article 37 of the Limitation Act would be applicable in the present case, which provides as follows :-

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Art. Description of suit Period of Limitation Time from which period begins to run

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