1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH, NAGPUR SECOND APPEAL NO. 250 OF 1996 State Bank of India, Agricultural Development Branch, Amravati. ... ... APPELLANT VERSUS 1. Vasant s/o Gulabrao Patil, 2. Nana s/o Madhukar Mahure, ... ... RESPONDENTS Mr. V.V. Bhangde, Mr. Agrawal Advocates, for the petitioner. None for respondents. CORAM : Smt. Vasanti A. Naik, J. DATED : JUNE 10, 2008 ORAL JUDGMENT 1. When the second appeal came up for admission before this Court on 23/4/1998, this Court did not admit the second appeal on a substantial question of law and admitted it on ground nos. 3 and 4 in the memorandum of appeal. 2. Few facts giving rise to the present second appeal are stated thus- 2 The appellant is the original plaintiff. The plaintiff had filed a suit against the respondents/defendants for recovery of an amount of Rs. 14,122.10 paise. It was the case of the plaintiff that the plaintiff- Bank had advanced a loan of Rs. 7,275/- to the defendant no.1 for purchasing a thrasher machine. The loan was advanced in November,1983 and was repayable with interest @ 12% per annum with half yearly rests. The loan was repayable in yearly installments of Rs. 1460/-. The first installment was payable in March, 1984 and the last installment was payable in the month of March, 1988. According to the plaintiff, the liability of the defendant no.2 was co-extensive with that of the defendant no.1 and was a continuing one. As per clause (III) of Exh.22, i.e. agreement between the parties, in case of default in payment of any of the installments or any part thereof, or for any other irregularity on the part of the borrower, the entire balance then outstanding with interest etc. would, if the bank so chose, became due and payable at once. According to the plaintiff, as per the aforesaid term, even if one default was committed by the defendant in payment of any instalment, the plaintiff Bank was entitled to recover the whole sum due. Since the defendants failed to repay the loan, the Bank filed the suit for recovery of the amount of 3 Rs. 14,120.10 paise with interest thereon. 3. The defendant no.1 contested the suit and denied the claim of the plaintiff. According to the defendant no.1, he had neither executed the agreement nor had obtained loan as alleged by the plaintiff Bank. It was pleaded by the defendant no.1 that the plaintiff had obtained the signatures of the defendant on some papers without explaining the contents thereof. The defendant raised a plea that the suit filed by the plaintiff was barred by limitation and was liable to be dismissed. 4. On the rival pleadings of the parties, the issues were framed by the learned trial Court and after considering the oral and documentary evidence on record, the suit filed by the plaintiff was decreed in part. The defendants were directed to pay the installments due to the plaintiff in March, 1987 and March, 1988, along with interest accrued thereon. According to the trial Court, the suit was not filed within the prescribed period of limitation so far as the installments for the years 1984, 1985 and 1986 were concerned. The trial Court relied on the provisions of Article 37 of the Limitation Act, 4 1963 to hold that the amount due towards installments for the years 1984 to 1986 was barred by limitation. 5. Being aggrieved by the judgment passed by the trial Court, so far as it denied the claim of the plaintiff-Bank in part, the plaintiff- Bank preferred an appeal before the District Judge, Amravati, which was registered as Regular Civil Appeal No. 142/1992. The District Judge, Amravati, however, by the judgment dated 13th July, 1995, dismissed the appeal filed by the plaintiff-Bank by upholding the findings recorded by the trial Court. The appellant is aggrieved by the denial of the claim in respect of installments payable in March, 1984 to 1986 and, therefore, both the judgments are challenged by this second appeal so far as the denial of the claim for the aforesaid period is concerned. 6. I have heard the learned counsel for the appellant and have also perused both the judgments. On hearing the learned counsel for the appellant and after perusal of the judgments, it appears that the following substantial question of law arises for consideration in the instant second appeal: 5 (1) In the facts of the case, whether the provisions of Article 37 of the Limitation Act, 1963, have been correctly applied to deny the claim of the plaintiff in part ? 7. It is submitted on behalf of the learned counsel for the appellant that the Courts were not justified in holding that the claim relating to the installments of 1984 to 1986, was barred by time on the ground that the plaintiff had not pleaded the waiver of the benefit of the provision which entitles the plaintiff to recover the whole sum due on the default of any single installment. According to the learned counsel for the appellant, clause (III) of Exh.22 would not disentitle the appellant from claiming the entire amount due from the respondents as silence of the plaintiff showed that the plaintiff had waived its right to recover the whole amount due from the defendants on the defendant no.1 making the first default. It was submitted on behalf of the appellant that both the Courts had not interpreted the provisions of Article 37 of the Limitation Act, 1963, in a judicious manner and the judgments passed by the Courts are liable to be set aside on a true and correct interpretation of Article 37 of the Limitation Act, which favours the case of the plaintiff. 6 8. To evaluate the submissions made on behalf of the appellant and to answer the substantial question of law framed in this second appeal, it is necessary to consider the provisions of Limitation Act, 1963, and the pleadings of the parties. Article 37 of the Limitation Act, 1963, which is relevant for considering the issue in question, reads thus: Description of Suit Period of Limitation Time from which period begins to run Art.37. On a promissory note or bond payable by instalments, which provides that, if default be more in payment of one or made instalments, the whole shall be due. Three years When the default is made, unless where 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. The provision states that when the default is made in payment of one or more installments and the bond or the promissory note stipulates that the whole sum shall be due on the default of one or more installments, the period of limitation for filing the suit on the basis of a promissory note is three years. According to the provisions of Article 37 of the Limitation Act, the time starts running from the date of the default made unless the payee or the obligee waives the benefits of the provisions and then in that case when a fresh default is made in respect of which there is no such waiver. In the instant case, 7 in view of Clause (III) of Exh.22, if one default was committed by the defendant in payment of any installment, plaintiff-Bank was entitled to recover whole sum due. The plaintiff Bank which is the payee or obligee, had not waived the benefit of the provision and, therefore, it was held by both the Courts that the time started running when the first default was made in the year 1984. Perusal of the plaint pleadings reveal that the plaintiff has not pleaded that it had waived the benefit of the provision to recover the whole sum due from the defendants when the defendant made the first default in the year 1984, or for that matter, in the year 1985 also. 9. It is a settled position of law that waiver by the obligee or the payee is a mixed question of law and fact and it is necessary for the obligee or a payee to allege and prove the same. Since waiver is abandonment of a right, it must be intentional and the waiver must be reflected either from some express term or can be implied from the conduct of the payee. The plaint is conspicuously silent in this regard. It is not pleaded by the plaintiff that the plaintiff had waived its right to recover the whole amount due and payable when the defendant no.1 committed the first default in the year 1984. Mere 8 silence on the part of the plaintiff, as rightly held by the trial Court, does not mean that plaintiff had waived its right. Unless there is a clear pleading of waiver by the plaintiff, the suit filed beyond three years of the date of first default would be barred by limitation. Since the plaintiff had not pleaded any waiver in respect of installments payable in the year 1984, 1985 and 1986, both the Courts rightly held that the suit filed by the plaintiff for recovery of the amount due and payable in the year 1984, 1985 and 1986, was barred by the provisions of the Limitation Act, though the claim in respect of installments payable in the year 1987 and 1988 was within limitation as the suit was filed in the year 1989. 10. Since the installments became due and payable in March, 1984, 1985 and 1986, and since the plaintiff had not filed the suit within the prescribed period of limitation to recover the amount due and payable, as rightly held by both the Courts, the claim of the plaintiff for recovery of the amount due and payable for the three years, was barred by time, in the absence of any pleadings or proof about the waiver of the benefit available to the plaintiff in terms of clause (III) of Exh.22 to recover the entire amount due, in case of 9 default in payment of any of the installments. The provisions of Article 37 of the Limitation Act 1963 have rightly been applied by both the Courts to the facts of the case, to hold that the plaintiff's claim was partially not maintainable. The substantial question of law is answered in the affirmative and against the appellant. 11. For the reasons aforesaid, the second appeal is dismissed with no order as to costs. (Smt. Vasanti A. Naik) JUDGE RMP