IMPORTANT POINT
When the parties to a hire purchase agreement agree that the agreement shall be determined forthwith on default in payment of installment and hirer shall be entitled to take possession and remove the vehicle, the period of limitation shall start form the date of default.

JUDGMENT :

Ashok Bhushan, J.

The plaintiff-appellant has filed this appeal against the judgment dated 10th April, 2002 in A.S. No. 388 of 1992 of Kerala High Court by which the High Court dismissed the appeal filed by the plaintiff-appellant in which appeal the judgment of the trial court dated 29.05.1991 dismissing the suit was assailed.

2. The brief facts necessary to be noted in this appeal are :

The plaintiff-appellant is a public limited company carrying on a business of extending hire purchase facilities for commercial vehicles. The plaintiff and the first defendant had entered into an agreement dated 20.09.1983 by which plaintiff had financed an amount of Rs.1,47,000/-. The first defendant, the hirer was to clear off entire amount due in 36 monthly instalments. The first defendant committed default in payment of instalments with effect from 20th May, 1984. The plaintiff seized the vehicle No. KLI2447 on 9th February, 1985. Thereafter, the plaintiff vide letter dated 12th February, 1985 called upon the defendants to settle the contract within 10 days from the date of the receipt of the notice. The defendants did not make any payment. The plaintiff on 30th May, 1985 sold the vehicle and after adjusting the amount received from sale of vehicle balance of Rs.40,138/- was further demanded. Notice dated 12th July, 1985/22.07.1985 was sent by the plaintiff. Reply to the notice was given on 30th July, 1985. The plaintiff filed Original Suit No.148 of 1988 on 25.5.1988 praying for decree of sum of Rs.40,138/- along with interest. The second defendant, the husband of first defendant was also impleaded as guarantor. A written statement was filed by the first defendant where execution of hire purchase agreement was admitted. The default in payment of instalments was admitted. It was further pleaded that provisions in Clause 4 of hire purchase agreement regarding termination without notice is contrary to the statutory provisions. It was further stated that the vehicle was not sold on best price. The defendant pleaded that plaintiff is not entitled for any relief. The trial court framed 8 issues. One of the issues, issue No.7 was: “whether the suit is barred by limitation”. The trial court after considering the facts held that suit is barred by limitation. It was held that default is from 20th May, 1984 the suit ought to have been filed within 20.5.1987. Suit was filed on 25th May, 1988 being beyond three years was to be dismissed.

3. The plaintiff filed an appeal in the Kerala High Court. The Kerala High Court also affirmed the judgment of the trial court and held that suit is barred by limitation. Plaintiff has come in this appeal questioning the correctness of the judgment of the High Court.

4. The only question which needs to be considered was as to whether suit filed by the plaintiff was barred by limitation. Relevant provisions of Limitation Act, 1963 are Article 55 and Article 113 which are to the following effect:

5. The submissions which have been pressed by the learned counsel for the plaintiff that last instalment was to be paid on 20th September, 1986 and the balance liability of the defendant could be ascertained only after the sale of the vehicle which took place on 30th May, 1985 and the suit was filed within three years from th