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TMI Blog2014 (11) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. There again, the period of three years is to be reckoned from the date on which the right to sue has accrued. If the date on which the third consecutive default in payment of instalments is taken into account, the suit becomes barred by limitation even under that article. Though it is pleaded that the suit is not based upon promissory note, it is clear that a reference has been made in para 4 of the plaint to the agreement of guarantee dated 05-12-2000 as well as the promissory note of the same date, for a sum of Rs. 92,500/- executed by the respondents herein. Further, in the absence of any promissory note, and the guarantee from respondent Nos. 2 to 9, there would not have been any occasion for the appellant to implead at least resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... One of the defences taken by the respondents was that the suit is barred by limitation. The trial Court decreed the suit through judgment dated 30-07-2013. The 1st respondent i.e. the prized subscriber filed A.S. No. 6 of 2002 before the Court of Principal District Judge, Warangal. The appeal was allowed through judgment dated 12-08-2013 and the decree passed by the trial Court was set aside. Hence, the plaintiff in the suit filed this Second Appeal. 3. Notice was ordered at the stage of admission itself and after the respondents entered appearance, the matter was heard at length. In the course of hearing of the Second appeal, the learned single Judge felt that the judgment of this Court in Vastava Chit Funds (Private) Ltd., Vijayawada v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned chit has been closed. He pleads that the trial Court has examined all these aspects and decreed the suit, whereas the lower Appellate Court reversed the decree on an erroneous view of facts and law. 5. Sri G. Ramachandra Reddy, learned counsel for the respondents on the other hand, submits that the transaction under a chit, is almost a combination of a promissory note and bond and that even otherwise, the appellant has obtained a promissory note from the prized subscriber as well as the sureties i.e. respondents 2 to 6 for repayment of the amount. He contends that the fact that the suit is based upon the promissory note is evident from the very impleadment of respondents 2 to 6, and if the suit were to have been based upon the ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower Appellate Court framed the following points for its consideration: 1) Whether the suit under the appeal is barred by limitation? If so, what is its effect? 2) Whether there are any grounds to interfere with the judgment and decree passed by the trial Court in O.S. 340/2006 dated 4.11.2008? It answered all of the subsidiary questions pertaining to point No. 2, in favour of the appellant herein. However, the first point relating to limitation was answered against the appellant and thereby, the suit was dismissed. 7. The learned single Judge admitted the Second Appeal on finding that the following question of law arises for consideration: Whether the limitation for recovery of arrears of installments payable by a subscri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omes clear that the prized subscriber who received the entire amount would not only forego the future dividends, but also would become liable to make the consolidated payment of future instalments as well as the defaulted instalments, if the default continues for three months. The default on the part of the 1st respondent which commenced on 10-04-2001 continued uninterruptedly. Therefore, she became liable to pay the entire amount covered by the chit on expiry of three months from the date of default, i.e., 10-07-2001, apart from foregoing the right to be paid the dividends. From then onwards, the appellant got a corresponding right to recover the entire amount. For that purpose, the suit ought to have been filed on or before 09-07-2004. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been filed against the 1st respondent alone. 14. We have perused the judgment rendered by the Kerala High Court in Nanoo Sukumaran's case (supra). Firstly, the judgment is in relation to an enactment of that State. Assuming that the provisions are in pari materia with the Chit Funds Act, we find it difficult to cull out any principle to the effect that the limitation for filing the suits for recovery of amount from a prized subscriber commences from the date on which the chit is concluded. In the instant case itself, the appellant made a mention in the paragraph pertaining to cause of action to 05-12-2000, the date on which the promissory note and the agreements of guarantee were executed and 10-04-2001, the date on which the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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