1. This case raises an interesting point on the law of limitation. The facts that are material are simple: The suit is on a debt secured by a bond. The date of the bond is 22nd January 1930. The date of the suit is 24th April 1933, and the question arises as to whether the suit is in time. In order to resolve that question, it is necessary to consider Articles 66, 67 and 80 and also to glance at Article 68. As the question to some extent tarns on the wording of the bond, it is desirable to set out the bond in extenso in its translated form:
Accounts have been made and Rs. 9,091-0-3 is due from us to you….. The following agreement has taken place between you and us that if we pay you Rs. 7,000 by 23rd May 1930, and if we pay this amount by the date fixed, you will give up the balance of Rs. 2,091-0-3 and pass a receipt in full satisfaction of the bond, but if we do not pay you Rs. 7,000 by the date fixed, we shall be liable to pay the whole of the amount of Rs. 9,091-0-3, and we shall pay you compound interest at 10 annas percent, per mensem on this amount from the date of the bond.
2. It is urged, on behalf of the appellants, by Mr. Bobde in an ingenious argument that such a bond is a single bond, and being a single bond either Article 66 or Article 67 applies, and those Articles being specific and together exhaustive, exclude the application of the general Article 80.
3. It is said that the Article applicable to this case is Article 67, for here no date is fixed for payment. If that be so, the starting point for limitation is the date of the execration of the bond, that is to say 22nd January 1930, and therefore the suit is time-barred. In our opinion, that argument fails unless this bond is a single bond. Farther we observe that we are not to be taken as deciding that in this bond any date is fixed for payment. That is another point which does not arise in view of the conclusions we have arrived at as to the kind of bond here in question. Bonds can be divided into two classes, single and double, or unconditional and conditional. The learned authors in Halsbury's Laws of England, Vol. 3 (Hailsham edition) at page 92, Article 163, state the matter as follows:
The ordinary form of bond now in use is one accompanied by a condition in the nature of a defeasance, the performance of the condition generally being secured by a penalty. This form of bond is called a double or conditional bond, and consists of two parts: first, the obligation, and secondly the condition. The condition which may be contained in the same or another instrument, or may be endorsed on the back, specifies the real agreement between the parties, that is to say, the money to be paid or acts or duties to be performed or observed, the payment, performance, or observance of which is intended to be secured by the bond—and provides that on due performance of the condition the bond shall be void.
4. In a footnote there is a reference to an old case (1670) 2 Saund 78, 1 decided as long ago as 1670, which laid down that the omission of words providing that the obligation shall be void does not affect the validity of the condition. In our opinion, on a true construction of the bond in this case, it provided that if on or before 23rd May 1930 the person under obligation should pay Rs. 7,000, then the bond would become void, that is to say, no farther sum was due to, and no farther remedy remained in the creditor. That being so, this is not in our opinion a single bond, and either Article 68 or Article 80 applies. Article 68 provides that on a bond subject to a condition it is three years from the time when the condition is broken, and Article 80 provides that in the case of a bond not therein expressly provided for, it is three years from the time when the bond becomes payable. In our opinion, before 23rd May 1930 the holder of the bond could not have sued upon it; for, in our view, the true nature of the agreement between the parties was that the debtor was given time until 23rd May 1930 to pay; if he then paid Rs. 7,000, he need pay no more; if he failed to pay Rs. 7,000 by then, be would have to pay the whole, that is to say Rs. 9,091-0-3. On that view we are of the opinion that whether Article 68 or Article 80 applies, the date when limitation begins is 24th May 1930.
5. The learned counsel for the appellants raised a further objection on the ground that the learned trial Judge, after having held that the agreement to pay the whole amount of Rs. 9,091-0-3 was penal, has yet refused relief against the penalty and has given a decree for the Rs. 9,091-03. In our opinion, however, that point fails because what the learned Judge says is not that the Rs. 9,091-0-3 was penal but that the provision for Rs. 9,091-0-3 with compound interest at 10 annas percent per month from the date of the bond on failure to pay Rs. 7,000 by the date fixed was penal being that the learned Judge only gave a decree for Rs. 9,091-0-3 allowing nothing whatever for interest, compound or otherwise, we certainly cannot see that the defendants have anything to complain about. On this point also the appeal fails. We therefore arrive at the same conclusion as the learned trial Judge though for different reasons, and the result is that the appeal is dismissed with costs.
D.S/R.K
6. Appeal dismissed.