1. The question referred is in the following terms:

Is the claim for a supplemental decree in a suit for sale barred by time where the bond provides that the mortgage money shall be paid whenever demanded and the suit is brought more" than six years from the date of the bond but within six years from notice of demand?

The reference arises out of an application to the District Court of South Arcot for a personal decree in a mortgage suit. The property hypothecated had been sold, but the amount realised was not sufficient to discharge the full liability. The application was opposed on the ground that the personal remedy had become time barred and this plea was accepted. The mortgage was executed on the 2nd June, 1931, and the suit to enforce payment was not filed until the 22nd February, 1938. In the order of reference the relevant portion of the deed has been translated as follows :

I shall pay before the 31st March of each year the interest accruing on this sum of Rs. 9,000 at three-fourths per cent, per mensem from this day. In default of payment of interest before the due date I shall add the balance interest due to the principal and shall pay the aggregate amount together with interest thereon at three-fourths per cent per mensem. I shall pay the principal and outstanding interest when required by you. In default of payment as aforesaid, I agree to your proceeding against the hypotheca and against me and my other properties and recovering the amount of the principal and interest.

The District Judge considered that there was here an agreement to repay the loan " "on demand " which meant that it became repayable on the date of the deed. As more than six years had elapsed he held that the application for a personal decree had been filed out of time. The mortgagee appealed to this Court. The appeal came before Wadsworth and Patanjali Sastri, JJ., who had held in the unreported case of Pattapparayi Venkatasubbarao v. Thayi Narasappa Appeal No. 417 of 1941 that the expression " on demand " or words of similar import when used in a mortgage bond should be understood as requiring a demand to be made for repayment and that time only ran from the date of demand. The learned Judges based their decision on S'wami Rao v. Official Assignee, Madras (1925) 49 M.L.J. 474: I.L.R. 48 Mad. 703. Seetharama Iyer v. Muniswami Mudaliar (1918) 37 M.L.J. 613 and Sivasubramania Pillai v. Nagappa Pillai (1936) 52 M.L.J. 636. When the present case was before them, other judgments of the Court were brought to their notice and as these revealed a conflict of opinion they have made this reference.

2. All the decisions of this Court which have bearing on the question have been examined in the course of the arguments addressed to us and we shall refer to them presently in the order of date, but before doing so we think it necessary to emphasise what the Limitation Act has to say in this connection and to draw attention to the judgment of the Privy Council in Lasa Din v. Gulab Kunwar5.

3. Article 57 fixes the period of limitation in a suit for money payable for money lent at three years from the date on which the loan is made. In a suit for money lent under an agreement that it shall be payable on demand the period is the same and time again runs from the date when the loan is made. This provision is contained in Article 59. If the suit is, however, based on a contract in writing registered, the period is, by virtue of Article 116, six years from the date of the loan. In Ratnasabapathi Chetti v. Deivasigamani Pillai (1928) 56 M.L.J. 10 : I.L.R. 52 Mad, 105 (F.B.) a Full Bench of this Court held that Article 116 applies to a claim based on a personal covenant to pay the balance due to the mortgagee after the sale of the mortgaged property should anything remain owing. Article 75 states that for a suit on a promissory note or bond payable in instalments which provides that if default be made in one or more instalments the whole shall be due, the period of limitation is three years from the day when the default is made, unless the payee or obligee waives the benefit of the provision. Article 116 again extends the period to six years if the bond is registered. Article 132 provides that in a suit to enforce payment of money charged on immovable property the period is twelve years from the time when the money sued for becomes due.

4. In Lasa Din v. Gulab Kunwar (1932) 63 M.L.J. 187 : L.R. 59 I.A. 376 : I.L.R. 7 Luck. 442 (P.C.) the Judicial Committee held that under Article 132 the money becomes payable only when the stipulated period has expired or a default having occurred the mortgagee has exercised his option to enforce the mort-gage. In that case the principal money was payable at the end of six years, but there was a clause which empowered the mortgagee to realise before the expiration of the stipulated period the principal and interest by sale of the mortgaged property 1 in default of payment of interest as agreed. The mortgagor defaulted in the payment of interest for the first year and it was contended for the defendants that on this default the principal money became due and therefore the suit had to be filed within twelve years from the date of default. Their Lordships rejected the argument and held that the default clause merely gave the mortgagee an option to enforce the mortgage at the earlier date. If he did not exercise the option the money secured became payable only at the end of the stipulated period.

5. The earliest case of this Court to which reference is necessary is Perianna Goundan v. Muthuvira Goundan (1897) 7 M.L.J. 315 : I.L.R. 21 Mad. 139. This was a suit to recover money due under a mortgage executed before the Transfer of Property Act was passed. The deed provided that I the loan should be payable on demand. The suit was filed more than twelve years after the date of the bond. It was held that no demand was necessary and that the I starting point of limitation was the date of the deed. Consequently the suit was timebarred by reason of Article 132. The Court considered that to hold otherwise would lead to an anomaly for which there was no justification. If it was intended that money lent on the security of immovable property, though payable on demand, should not be subject to the general rule as to money lent and payable on demand, the language of the third column of Article 132 would have been so framed as to make this clear.

6. In Nettakaruppa Goundan v. Kumaraswami Goundan (1898) 8 M.L.J. 167 : I.L.R. 82 Mad. 20, a mortgage bond dated 9th October, 1880, provided for payment on 9th October, 1883, but it was stipulated that if interest was not paid as agreed, the loan should be repaid with interest at an increased rate when the obligee required it. There was default in the payment of interest, but the mortgagee did not call in the loan. The suit was filed within twelve years of the 9th October, 1883. The Court held that it was within time. Karunakara Menon v. Krishna Menon (1911) I.L.R. 36 Mad. 66, Mama v. Ammani Animal (1916) 31 M.L.J. 865 : I.L.R. 39 Mad. 981 and Ramadh Bibi Ammal v. Kandaswami Pillai (1919) M.W.N. 82 embody the same principle.

7. We now come to the earliest of the three cases on which Wadsworth and Patanjali Sastri, JJ., based their opinion that where the mortgage bond makes the money payable on demand a demand must be made in order to start limitation running. ) It is Seetharama Iyer v. Munuswami Mudaliar (1919) 37 M.L.J. 613. There a subscriber to a chit fund executed an instalment bond in favour of the proprietor of the fund. The bond contained this provision:

We shall severally or jointly without setting up proportionate liability pay in lump on demand the balance due with interest at one per cent per mensem from the date of default.

It was held by Seshagiri Aiyar, J., sitting alone, that this provision disclosed an intention that if the promisee wanted to enforce his rights under the default clause by requiring the promisor to pay the whole of the amount he must make a demand. The learned Judge considered that except in transactions connected with the law merchant, the words " on demand " meant that there should be a demand before a cause of action arose. We certainly do not share the view that where the words " on demand " are used there must be a demand except in cases with which the law merchant is concerned. The view expressed by Seshagiri Aiyar, J., conflicts with the provisions of Article 59 of the Limitation Act. There may be an agreement in writing for money lent which has got nothing to do with the law merchant. Any agreement for money lent payable on demand makes the money payable at once and time begins to run from the date of the loan. As we have indicated, this was the view accepted in cases decided by Division Benches of this Court until Seshagiri Aiyar, J., struck this note of dissent.

8. The next in order of date of the other two decisions on which the learned... Judges who made this reference relied when deciding Pattapparayi Venkatasubbarao v. Thayi Narasappa Appeal No. 417 of 1941 is Swami Rao v. Official Assignee, Madras (1925) 49 M.L.J. 474 : I.L.R. 48 Mad.703., which came before Coutts-Trotter, C.J. and Krishnan,. J. The question there was not one of limitation but of the application of Order 2, Rule 2 of the Code of Civil rrocedure. A mortgage bond contained an independent personal covenant to pay interest every month besides providing for payment of principal with interest on demand. The mortgagors defaulted in paying interest and the mortgatee wrote stating that if they did not pay the amount due for interest the matter would be placed in the hands of his vakil with instructions to file a suit against them, not only for the recovery of the interest, but also for principal and any expenditure that might be incurred on this account. Notwithstanding this notice the interest was not paid and the mortgagee instituted a suit in the Court of Small Causes, Madras, to recover merely the sum of Rs. 416 which was due for interest. A decree was passed. Subsequently the mortgagee sued on his mortgage and it was contended that the suit was barred by Order 2, Rule 2. The Court refused to accept this contention. The mortgage bond contained these provisions:

We and our heirs shall pay severally and jointly the said amount of rupees five thousand with interest at one per cent, per mensem to you and to your heirs whenever demanded. We shall pay the interest of the said debt every month, within the 5th of that month, commencing from the 5th of the current month May. We and our heirs shall pay the principal amount, rupees five thousand (Rs. 5,000) and the interest due therefor, to you and to your heirs whenever demanded. In default of our doing so, you and your heirs shall legally proceed upon us and on our heirs and on the mortgaged properties, mentioned in schedule A below and on our other properties, and shall realise the amount.

In the course of his judgment, Coutts-Trotter, C.J., said that it was clear that there was an independent covenant for payment of interest and that the principal actually became payable not on failure to pay the current monthly instalment of interest but on failure to comply with the demand to pay the principal and interest together. Wadsworth and Patanjali Sastri, JJ., construed this as deciding that a demand must be made before the principal became due. Coutts-Trotter, C.J. and Krishnan, J., had not before them the question before us. It was not suggested that that the suit was timebarred and the discussion was confined to the effect of Order 2, Rule 2. The judgments in Perianna Goundan v. Muthuvira Goundan (1897) 7 M.L.J. 315 : I.L.R. 21 Mad. 139 and Nettakaruppa Goundan v. Kumaraswami Goundan (1898) 8 M.L.J. 167 : I.L.R. 22 Mad. 20 were not referred to. Therefore we do not regard the case as an authority for the proposition that a demand must be made when the deed provides that the mortgage money shall be payable on demand. If it were to be so regarded we should feel compelled to express dissent.

9. In Sivasubramania Pillai v. Nagappa Pillai (1926) 52 M.L.J. 636, the third case relied on by Wadsworth and Patanjali Sastri, JJ., there was a mortgage bond which contained these provisions:

As I have to pay to you in cash the said mortgage amount of Rs. 10,000 (which is) the balance of the sale amount due to you in the matter of the purchase by me, of the said properties from you on this date, I shall pay the interest accruing thereon at the rate of 1 per cent, per mensem from this date, on the 12th Chitrai of each year, and shall pay the principal amount in cash on the 24th April, 1924, on which the stipulated period of two years expires. Even if there be default on any one of the due dates in respect of the payment of principal or interest, compound interest will be added on the principal and interest once in twelve months at the rate of Rs. 1-4-0 per cent, per mensem from the date of default, irrespective of other due dates and the interest accruing and the principal will, when required by you, be paid (by me) in cash. Till the entire payment of the principal (which is) this mortgage amount and the interest, the undermentioned properties are put to remain as hypotheca.

It was held that the default clause was for the benefit of the mortgagee and that he could waive it, but the Court also held that where there was a power given to the mortgagee to claim payment of the whole amount due on the mortgage deed on the occurrence of a single default and where it was also provided that to exercise that power a demand by the mortgagee was necessary, money did not become payable until a demand was actually made. Undoubtedly the parties to a mortgage deed can agree that the principal sum shall not become payable until a demand is Actually made; but this must be clearly expressed. Whether a demand is necessary when the deed says that the money shall be payable " when required " is another matter.

10. It remains to mention two other judgments of this Court, Kamalabai v. Purushottam Naidu (1934) 67 M.L.J. 499 and Balasubramania Chetti v. Manicka Chetti (1938) M.W.N. 113. In the former of these cases it was held that where a mortgage bond is payable on demand, the period of limitation begins to run from the date of the execution of the bond. In the latter case it was held that the words "on demand " ordinarily mean forthwith.

11. Without hesitation we accept as being correct the decisions of this Court which say that when a mortgage bond provides that the mortgage money shall be payable on demand it becomes repayable at once and limitation starts from the date of the bond. The question then is whether the position is altered when the words used are " when required by you " or " whenever demanded." In our judgment such expressions mean " on demand." They are usually literal translations of words used in bonds written in the vernacular, the vernacular expression being intended to convey the same meaning as the English expression " on demand." We consider that there must be something more in a mortgage deed than this to justify the Court in holding that the cause of action on the bond only arises when a demand has in fact been made. To construe the words " when required by you " as meaning something more than " on demand " would in our judgment be putting a forced construction on the words and would run counter to the intention of the Legislature when it inserted Article 59 in the Limitation Act.

12. When the present case was before Wadsworth and Patanjali Sastri, JJ., it was argued that the stipulation for payment of interest on the 31st March of every year indicated that the parties intended that the mortgage money could not be demanded until interest had accrued up to 31st March, 1932, and therefore the right to sue was excluded until that date. The learned Judges ware unable to accept this interpretation and held that the provision merely meant that if the mortgage money was left outstanding till 31st March, 1932, the interest accrued would be paid on that date. The stipulation did not imply that the money should n&t be called in before that date, and that the clause could not be taken to control or modify the clear provision that the principal and interest should be paid when required by the mortgagee. That being the case, the contention that time here would run only when a demand was made rests entirely on the use of the words "when required by you" in the next sentence. It follows from what we have said that the bond was in effect one payable on demand and that a demand was not necessary to commence time running. We answer the reference in this sense.

13. The costs of the reference will be made costs in the appeal.