Judgment :- 1. A question of limitation, of general application arising for frequent consideration is the substantial question of law involved in this second appeal. In particular, the scope of Art.37 of the Limitation Act of 1963 arises for decision on the facts, hereinafter stated. 2. The appellant is the 1st defendant. He joined a kuri, a chitty transaction conducted by the plaintiff. He received the amount from the plaintiff on 25-1-1971 on executing an agreement assuring the payment of future instalments. He continued to pay the future instalments till 15-11-1974. He then defaulted. He did not pay any further instalment. The plaintiff filed the suit for the balance amount due from the date of default. The suit was filed on 17-6-1978. 3. The agreement, Ext. Al, executed by the 1st defendant, when he was anxious to receive the prize amount on 25-1-1971 provided thus:- "In case of default of any one of the installments, the foreman firm is entitled to sue for the entire balance defaulted and future instalments at the rate of Rs. 100/- (one hundred) per instalment, and the parties agree that the foreman firm shall have the right to proceed against the persons and properties movable and immovable of the parties simultaneously".' 4. The trial court decreed the suit for the amounts which fell due within three years of the filing of the suit on 17-6-1978. In appeal, the District Court confirmed this decision. The Second Appeal is filed against these two concurrent decisions. 5. Notice was issued in the Second Appeal on the following questions: "as to whether in view of Ext. B1 notice, is it not Art.37, of the Limitation Act, 1963 that governs this case, and as to whether the obligee under Ext. Al has or has not waived the benefit of the provision as regards default-clause". 6. On these facts, will Art.37 (corresponding to Art.75 of the Limitation Act of 1908) apply or is it Art.36 or the residuary Art.113? 7. Art.37 reads thus: Table:#1 And Art.36 which is also relevant, says thus:- And the residuary Art.113, also relevant, state thus:- 8. The questions raised are not res integra. Art.36 applies to promissory notes and bonds payable by instalments. Art.37 also applies to those promissory notes and bonds payable by instalments but which provide that if default is made in payment of one or more instalments, the whole shall be due. The questions raised are not res integra. Art.36 applies to promissory notes and bonds payable by instalments. Art.37 also applies to those promissory notes and bonds payable by instalments but which provide that if default is made in payment of one or more instalments, the whole shall be due. The period of limitation, even in that case is three years which runs "when the default is made". If, however, the payee or obligee waives the benefit of the default clause and fresh default is made subsequently, time will run from the date of that fresh default in respect of which there is no waiver. This is the plain content of Art.37. In its application, however, it raises several problems and has given rise to a conflict of decisions of various High Courts. I shall try to simplify the issue so far as this case is concerned. 9. Art.36 applies to all promissory notes and bonds, payable by instalments. If, however, there is a default clause Art.37 is attracted and Art.36 is excluded. But Art.37 can apply only when there is default. If there is no default in the payment of the instalments, in a case where penalty for default is provided, Art.37 also does not apply. In such cases, the residuary provision Art.113 is attracted and time will run when the right to sue for the balance amount arises. The amounts due within 3 years of the institution of the suit are not barred. 10. Where there is a default provision in an instalment bond and the default clause is not enforced, can the payee still plead that the claim is barred? In other words, if there is option to enforce or not to enforce the default clause, will Art.37 apply? In such cases, cannot Art.113 be invoked? 11. Some decisions state that the default clause is inserted for the benefit of the creditor. He has the option to enforce the default clause or not. If he does not choose to exercise the option, this bond, becomes an ordinary instalment bond to which Art.36 applies. Some other decisions take the view that the option of the creditor is immaterial. It is in this context that the provision of waiver, expressly provided in Art.37 assumes importance. If he does not choose to exercise the option, this bond, becomes an ordinary instalment bond to which Art.36 applies. Some other decisions take the view that the option of the creditor is immaterial. It is in this context that the provision of waiver, expressly provided in Art.37 assumes importance. Even if there is default, when the payee or obligee waives the benefit of the default clause, time runs not from the first default, but only from the fresh default in respect of which there is no waiver. Waiver is a question of fact, to be pleaded and proved. The insertion of the provision for waiver in this article indicates the limits of the applicability of the period of limitation. I shall refer to some of the relevant and important decisions on this aspect before reaching my conclusion. 12. The Privy Council decision rendered in 1932 in Lasa Din v. Mt. Gulab Kumar (AIR 1932 P. C. 207) should naturally be the first of the decisions which should guide our thought. In that suit, the mortgage was dated 26th July, 1912; the mortgage money was due on 26th July 1918; suit was filed on 28th February 1928, within 12 years. Interest was fixed at 12 per cent per annum and if the interest for any year was not paid, it has to be added to the principal. This was followed by a default clause which read as follows: "In case of default, the said creditor shall, at all times, within and after the expiry of the stipulated period of six years aforesaid, have the power to realise the entire mortgage money and the remaining interest land compound interest due to him, in a lumpsum, through court, by attachment and sale of the said mortgaged share as well as from my person and all other kind of my property both movable and immoveable, together with costs of Court, and I, my heirs, relations and representatives shall nave no occasion for objection and refusal; that the aforesaid rate of interest, fixed by me, shall stand within and after the stipulated period and after the decree till payment of the entire demand hereunder and that I shall at no time demand reduction in interest". The mortgagor defaulted in the payment of interest for the first year and it was contended that the entire principal amount became due on the first default and consequently the 12 years period expired before the suit. The Privy Council noted that there has been a considerable divergence of judicial opinion and then held thus: "...a proviso of this nature is inserted in a mortgage deed "exclusively for the benefit of the mortgagees" and that it purports to give them an option either to enforce their security at once, or, if the security is ample to stand by their investment for the full term of the mortgage. If on the default of the mortgagor in other words, by the breach of his contract the mortgage money becomes immediately "due" it is clear that the intention of the parties is defeated and that what was agreed to by them as an option in the mortgagees is in effect converted into an option in the mortgagor. For if the latter after the deed has been duly executed and registered finds that be can make a better bargain elsewhere, he has only to break his contract by refusing to pay the interest and "eo instanti," as Lord Blanesburg says, he is entitled to redeem. If the principal money is "due" and the stipulated term has gone out of the contract it follows in their Lordships' opinion that the mortgagor can claim to repay it, as was recognised by Wazir Hasan, J., in bis judgment in the Chief Court. Their Lordships think that this is an impossible result. They are not prepared to bold that the mortgagor could in this way take advantage of bis own default: they do not think that upon such default he would nave me light to redeem and in their opinion the mortgage money does not "become due" within the meaning of Art.132, Lim. Act. until both the mortgagor's right to redeem and the mortgagee's right to enforce his security have accrued. This would of course, also be the position if the mortgagee exercised the option reserved to him". 13. Act. until both the mortgagor's right to redeem and the mortgagee's right to enforce his security have accrued. This would of course, also be the position if the mortgagee exercised the option reserved to him". 13. The Madras High Court, as early as 1949 in Ayyathurai v. Ibramsa Rowther (AIR (36) 1949 Madras 592) held thus: "In the case of an instalment bond, containing a default clause that if default was made in the case of one instalment, the whole sum would become payable with certain interest. Art.75 is no bar to a suit on the instalment bond itself either after or before the expiry of the instalment period for the recovery of the instalments which the debtor has contracted to pay and which have not become themselves time-barred under Art.74. The two remedies are co-existent and open to the creditor and he has choice either to wait and sue for the instalments in default under Art.74, or to enforce the default clause, (in a suit contemplated by Art.75. A suit filed under Art.75 may be dismissed on the debtor proving waiver by the creditor of the default which entitles the creditor to file such a suit, in which case the creditor can of course still fall back on bis right to sue for instalments within the time limits prescribed by Art.74. He also has the other alternative of suing to enforce the default clause for a subsequent default which he has not waived within the period prescribed by Art.75. Reading the two Articles together, the contention that because the whole amount becomes payable on default, the creditor must sue on the whole bond within three years of such default cannot be accepted. Thus, the plaintiff has the option of enforcing the default clause in Art.75. and if he does not do so, he must be deemed to have waived the benefit of the provision, and he then can fall back on his ordinary right of suit on the covenant to pay by instalments under Art.74". 14. It has however, to be stated that there is an earlier single Bench decision in Gopala Menon v. Kallingalakath (AIR 1935 Madras 303) which takes a contrary view. 15. The Allahabad High Court in Mokhey Lal v. Swarup Narain (AIR 1953 All. 14. It has however, to be stated that there is an earlier single Bench decision in Gopala Menon v. Kallingalakath (AIR 1935 Madras 303) which takes a contrary view. 15. The Allahabad High Court in Mokhey Lal v. Swarup Narain (AIR 1953 All. 761) took the same view as would be seen from the following passage: "But where the creditor, completely ignored the default clause and. though no instalments were over paid, he did not enforce the default clause, and claimed merely the instalments due to him and recoverable at the time when the suit was filed there was no reason to apply Art.75 and the mere fact that he claimed all the instalments that had fallen due and were not time-barred, did not make any difference". There is, however, an earlier Full Bench ruling of the Allahabad High Court in Jawahar Lal v. Mathura Prasad (AIR 1934 Allahabad 661). 16. Chief Justice Sulaiman held that "the cases of mortgages are entirely distinct and similar considerations do not arise in case of ordinary bonds" and thus distinguished the Privy Council ruling in 1932. But even then, the learned Chief Justice observed thus: "To my mind, when there is an option either to sue for the whole or to wait and the creditor exercises the option the whole amount becomes due, and the question of a right to recover the instalments only does no longer arise. Cases where the whole amount has not become due, are, of course, different, but where there is no question that the whole amount has become due by reason of the exercise of the option of the creditor, I am of opinion that the creditor cannot fall back on the alternative right of recovering instalments only after their successive dates". "I would guard myself against holding that in the case of every bond with a default clause the whole amount would necessarily become due. The answer would depend on the particular language of the document employed. But I would certainly hold that even if it be held that money does not become due immediately on the occurrence of a default, it would certainly become due if the creditor exercises his option by demanding the amount and by serving notice on the defendant to pay the whole sum". But I would certainly hold that even if it be held that money does not become due immediately on the occurrence of a default, it would certainly become due if the creditor exercises his option by demanding the amount and by serving notice on the defendant to pay the whole sum". "In the present case I would still hold that by serving the notice of demand on the defendant, the creditor exercised his option and made the amount become payable on that date. When once the amount became payable within the meaning of Art.80, limitation began to run, and it cannot be stopped merely because the creditor sues for a part of that amount and bases his claim on another Article which would have been applicable if the amount had not become payable and limitation had not already run out". Justice King agreed with the Chief Justice and wrote a separate judgment and discussed the impact of option by the creditor on Art.75 of the old Act thus: "I think, that too much has been made of the so-called "option" given to the creditor in the present case. The only option given is to sue for the whole sum either within the stipulated period or after it. It appears to me that this practically amounts to no option at all. I think it only amounts to this, that the creditor was to be entitled to sue for the whole sum even within the stipulated period as soon as default was made in the payment of two successive monthly instalments. As the creditor was given by law a period of 3 years from the time when the default was made for instituting his suit, it would follow necessarily that he might institute his suit either within the stipulated period or afterwards. The stipulated period would expire long before the expiry of the period of 3 years allowed by law. It seems to me, therefore, that there was practically no option given to the creditor". The stipulated period would expire long before the expiry of the period of 3 years allowed by law. It seems to me, therefore, that there was practically no option given to the creditor". Justice Mukerji dissented and the relevant observations are these: "I am prepared to concede that to some extent the law of limitation must be arbitrary, but we have no right to assume that it is absolutely a mad law with no method in its madness, and the legislature were out to take away all his rights from the creditor simply because he had one among them which could not be enforced. If we can read the rules as to limitation as consistent with our notions of justice, we ought to read them accordingly and should not read them as an invincible force compelling as to take away the other rights of the creditor. Art.74 deals with a suit for recovery of money on a bond payable by instalments and the period of limitation is the expiration of the respective term of each instalment. In the bond before us, 21 instalments are payable month by month and ordinarily therefore, Art.74 would apply. But we find over and above the stipulation as regards payment of the instalments month by month that the plaintiff took an additional covenant for his own benefit, namely, that he shall not wait for one year and 9 months, if the defendants did not abide by their part of the contract, namely, if they did not pay the instalments month by month as agreed upon. This additional covenant is for the benefit of the creditor. Now we have no reason to hold that the Limitation Act regards with disfavour an additional stipulation like this and lays down that where an additional stipulation like that of the "penalty clause" is made, the period of limitation granted to the plaintiff under Art.74 will be 'taken away from him and that the period must be curtailed and the plaintiff must sue as soon as there is a default". Article 75 of the old Act as in the case of Art.37 of the new Act speaks of waiver. Article 75 of the old Act as in the case of Art.37 of the new Act speaks of waiver. In bis inimitable style, if I may say so with respect, Justice Vivian Bose (as his Lordship then was) in the decision in Gulabrao Dada v. Ganpathi Tukaram (AIR (29) 1942 Nagpur 138) observed thus: "The article itself merely says: "unless where the payee or obligee waives the benefit of the provision". But there are cases which state that waiver is not a unilateral act which can be exercised at the choice of one side alone. It can only be availed of when there is consent, express or implied, of the other side, or when the bond confers the option. That however is only another way of saying the same thing, because there the consent is given in advance. The Limitation Act does not lay down substantive law, and so the exception made in Art.75 in favour of the creditor, who waives, cannot, I think be construed as conferring a right which does not exist under the ordinary law. I think clearly the article refers to cases in which the creditor; is entitled to exercise the privilege and that it cannot [apply when under the ordinary law, or by reason of a special contract, he is precluded from doing so. That at once reconciles the class of cases which holds that there can be no waiver when the terms of the bond preclude it. The real point, as I see it, is whether under the ordinary law the right must be specially conferred or whether it can be assumed to exist unless and until it is specially taken away. In my opinion, it is not taken away in this bond. I think the general trend of the law is that these provisions are primarily for the benefit of the creditor. That that is so in mortgage cases is indisputable. Their Lordships of the Privy Council have settled that in 7 Lack. 442 and Art.75 apart, I think their reasoning applies with equal force to bonds and promissory notes. As their Lordships say there is no reason in principle why the person in default should be allowed to take advantage of his own wrong. Their Lordships of the Privy Council have settled that in 7 Lack. 442 and Art.75 apart, I think their reasoning applies with equal force to bonds and promissory notes. As their Lordships say there is no reason in principle why the person in default should be allowed to take advantage of his own wrong. Of course, considerations of this kind cannot override the plain provisions of a statute, and their Lordships say so at page 453 where they distinguish cases falling under Art.75 and where they point out that that Article is very special in its terms. But I see no reason for unnecessarily restricting the scope of the article. It recognizes the right of a creditor to waive irrespective of the terms of the bond, and imposes no restrictions whatever. As I say, I do not think that that should be construed as conferring a right because that is not the purpose of the Limitation Act, but it assumes that such a right exists. Therefore, in that the article imposes no restrictions, the matter of restrictions must be determined under the ordinary law. Under that, as I see it, the general principle is that the person in default should not be allowed to take advantage of his own wrong and that these clauses are generally inserted for the benefit of the creditor. It follows that unless the bond specially takes away the privilege it must be taken to exist. It will be observed that Art.75 assumes that the exigibility clause exist for the benefit of the creditor because it says "unless the payee or obligee waives the benefit of the provision." It would, therefore. I think, be wrong to turn what was intended to be a benefit into a handicap." 17. It is unnecessary to cite the other decisions and refer to all the decisions taking a different view. I am not, therefore, referring to Debi Prasad v. Sarabjit Singh (AIR 1947 Oudh.128), Mandi v. Gaya Prasad (AIR 1947 Oudh 235), Devidas v. Parma Gokalia (AIR 1959 M.P. 413) Bhadurmal v, Bizaatunnisa Begum (AIR 1964 A. P. 365) and Thirumala chariar v. Varadappa (AIR 1962 Madras 210)referred to with considerable force by the counsel for the appellant. 18. There are three decisions of this Court to which reference has to be made. 19. 18. There are three decisions of this Court to which reference has to be made. 19. In Madhavan v. Jayadevan (1974 K. L. T. 534) Justice Bhaskaran (as His Lordship then was) observed thus: "From the wording of the Article it appears that where in a bond in the nature of Ext. P1 which provides for payment in instalments by the executant, and, in default of one or more instalments, also for his liability to pay the instalments in default with all the future instalments in lump at once, the period of limitation is three years when the deficit 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." 20. That was a case arising under the Travancore Chitties Act and the Act itself provided that the amount became due only after a demand was made when the default was committed. But the learned judge held in this case that the claim was barred as the suit was filed beyond three years after the date of the default. It was also held that the claim was barred under Art.113 also even if Art.37 does not apply. 21. This case came up for consideration in a subsequent decision of a Division Bench in Sukumaran v. Sankaran (1977 K. L. T. 833). It was also held that the claim was barred under Art.113 also even if Art.37 does not apply. 21. This case came up for consideration in a subsequent decision of a Division Bench in Sukumaran v. Sankaran (1977 K. L. T. 833). Justice Balakrishna Eradi, (as His Lordship then was) speaking for the Bench, held thus: "We are in respectful agreement with the view expressed by Raghavan, J., in 1963 K. L. T. 68 that Art.75 of the Limitation Act, 1908 which corresponds to Art.37 of the present Act cannot have any application to suits filed by foreman of chitties governed by the Travancore Chitties Act for recovery of the defaulted instalments from a prized subscriber and that in such cases unless a demand in writing is made by the foreman for consolidated payment of future instalments his right under the contract does not become enforceable and limitation cannot run against him regarding all the future instalments." Referring to the observations of Bhaskaran, J. in the earlier decision, it was held thus: "However, there are some observations in the judgment of the learned judge to the effect that even in respect of a chitty transaction governed by the provisions of the Travancore Chitties Act the period of limitation for a suit instituted by the foreman to recover from a priced subscriber the amount of defaulted instalments due under a chitty security bond would be governed by Art.37. In the light of the conclusion already expressed by us on this aspect those observations cannot be regarded as embodying the correct legal position." Later on, the Division Bench proceeded to hold that there could be a decree for the amounts due within three years of the date of the suit applying Art.113. 22. This Division Bench ruling has been followed in a subsequent Division Bench ruling in Kuriakose v. Cherian (1984 K. L. T. 744) (Justice Bhat and Justice Varghese Kalliath). There also the court gave a decree for instalments which fell due within three years of the date of the suit. 23. As I understand the provisions and the decisions, Art.37 applies to all cases where there is an exigibility clause in an instalment note or bond where the whole of the amount "shall be due" if there is default. If by the mere default, the entire amount is due, this article is attracted. 23. As I understand the provisions and the decisions, Art.37 applies to all cases where there is an exigibility clause in an instalment note or bond where the whole of the amount "shall be due" if there is default. If by the mere default, the entire amount is due, this article is attracted. But if the entire amount is not due when there is default, but only at the option of the payee, this article can have no application. When the option is not exercised, the whole amount does not become due. The amount thus becomes due not because of the default but because of the exercise of the option. 24. It is on the same principle that the two Division Bench decisions of this court, 1977 K. L. T. 833 and 1984 K. L. T. 744, held that even if there was default in payment of one of the instalments in a Chitty bond governed by the Travancore Chitties Act, the amount is not due till there is a demand made. The demand and not the default furnishes the title to claim the entirety and this Article was not applied or invoked. 25. In the present case also, the Chitty bond does not provide that the entire amount falls due immediately the default is committed. The option of the foreman is material and relevant. He may or he may not enforce the default clause. In this case, he did not so enforce. If so, the entire amount did not fall due immediately the default was committed. 26. It is, in fact, basically on this principle that the courts have held that the debtor cannot take advantage of his own default and the Article also expressly provides for waiver. If therefore, the clause in a bond or a note expressly or by necessary implication provides for an option to be exercised, waiver, for the purpose of Art.37 is implicit in the claim for the entire amount when the option is not exercised. Thus all amounts which fell due within 3 years of the suit can be claimed either under Art.113, the residuary article or even under Art.36 treating it as an ordinary instalment bond or note. 27. The courts below did not decree for the entire amount claimed in the plaint. Thus all amounts which fell due within 3 years of the suit can be claimed either under Art.113, the residuary article or even under Art.36 treating it as an ordinary instalment bond or note. 27. The courts below did not decree for the entire amount claimed in the plaint. A decree was given only for the amounts that fell due within 3 years of the filing of the suit. The courts below rightly held that the suit claim was not barred by limitation and there are no grounds to interfere under S.100 C.P.C. The second appeal is dismissed with costs.