Limitation for instalment loans with acceleration clauses runs from first default unless waiver is specifically pleaded and proved.

A loan repayable in instalments with a default clause accelerating the whole debt falls within the specific limitation article for such transactions, not the residuary article. Limitation begins from the first default unless the creditor's right to accelerate is intentionally waived, and that waiver must be specifically pleaded and proved. Mere delay or inaction is insufficient to infer waiver. On the facts stated, no waiver was pleaded or established, so the suits filed more than three years after the first default were time-barred.

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Issues: (i) Which article of the Limitation Act governed suits for recovery of loan payable in instalments where the loan documents, read together, provided that on default in payment of an instalment the whole amount would become due; (ii) whether the suits were barred by limitation in the absence of any pleaded or proved waiver by the creditor.

Issue (i): Which article of the Limitation Act governed suits for recovery of loan payable in instalments where the loan documents, read together, provided that on default in payment of an instalment the whole amount would become due.

Analysis: The loan transaction had to be gathered from the application, promissory note and hypothecation bond read together. The governing feature was the contractual term that, on default in payment of any instalment, the entire balance would become immediately due and payable. That brought the suits within the description of suits covered by the specific limitation article dealing with instalment loans with a default clause. The residuary article had no application where the suit squarely fell within the specific article.

Conclusion: Article 37 governed the suits, and not the residuary article.

Issue (ii): Whether the suits were barred by limitation in the absence of any pleaded or proved waiver by the creditor.

Analysis: Under the default clause, limitation began to run from the date of the first default, unless the creditor intentionally waived the right to treat that default as accelerating the whole debt. Waiver is a mixed question of fact and law and must be pleaded and established. Mere inaction or delay in suing is not enough to infer waiver. As no waiver was pleaded or proved, the creditor could not postpone the starting point of limitation. The suits were filed more than three years after the first default.

Conclusion: The suits were barred by limitation.

Final Conclusion: The second appeals succeeded on the limitation issue and the suits were held time-barred, while the connected bank appeal did not survive.

Ratio Decidendi: Where a loan payable in instalments contains a default clause accelerating the whole debt on non-payment of an instalment, limitation runs from the first default unless waiver of that right is specifically pleaded and proved; the residuary article cannot be invoked when the suit falls within the specific article.

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