Limitation for demand loans runs from first demand, not disbursement, so the recovery suit was within time.

A loan advanced without a fixed date of repayment is treated as repayable on demand, so limitation runs from the first pleaded demand rather than from the dates of disbursement or related receipts. On the facts stated, the legal notice dated 14.12.2001 was the first demand, and the suit filed on 8.2.2002 was within the three-year residuary period under Article 113 of the Limitation Act, 1963. The claim was therefore not time-barred, and the appellate court set aside the dismissal and decreed recovery with interest and costs.

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Issues: Whether the suit for recovery of a loan, given without any fixed date of repayment, was barred by limitation.

Analysis: The plaint disclosed that the loan was advanced without stipulating any date for repayment, so the obligation was one repayable on demand. In such a case, limitation does not run from the dates of the cheques or receipts, but from the date when a demand is first made. The legal notice issued on 14.12.2001 constituted the first demand pleaded by the plaintiff, and the suit filed on 8.2.2002 was therefore within three years. Article 113 of the Limitation Act, 1963 governed the claim, and the suit could not be rejected as time-barred.

Conclusion: The suit was not barred by limitation and was liable to succeed in favour of the appellant.

Final Conclusion: The appellate court set aside the dismissal of the suit and decreed recovery with interest and costs.

Ratio Decidendi: A suit for recovery of a loan advanced without a fixed date of repayment is governed by the three-year residuary period of limitation from the date of demand or accrual of cause of action, not from the date of disbursement.

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