Limitation in chit recovery runs from default, and a mere part-payment receipt does not revive a barred debt.

In a chit transaction, limitation for recovery runs from the date of default under Article 37 of the Limitation Act, not from termination of the chit. A receipt showing part payment was treated as genuine and binding because the defendants offered no convincing rebuttal to the signature and payment evidence. However, the receipt did not contain a clear written promise to pay a time-barred debt, so it did not satisfy Section 25(3) of the Indian Contract Act. As a result, the part payment did not revive limitation and the suit filed in 2005 was barred by time.

---

---

Issues: (i) Whether Ex. A-9 receipt dated 29.04.2002 was valid, genuine and binding on the defendants. (ii) Whether the part payment reflected in Ex. A-9 amounted to a promise under Section 25(3) of the Indian Contract Act, 1872 and whether the suit was barred by limitation.

Issue (i): Whether Ex. A-9 receipt dated 29.04.2002 was valid, genuine and binding on the defendants.

Analysis: The defendants alleged forgery, but none entered the witness box and no expert evidence was taken to disprove the signature appearing on the receipt. The receipt showed payment of Rs. 5,000/- on behalf of the first defendant, and the plaintiff's evidence remained unshaken on this aspect. In the absence of convincing rebuttal, the document was accepted as proved.

Conclusion: Ex. A-9 was held to be genuine and binding on the defendants.

Issue (ii): Whether the part payment reflected in Ex. A-9 amounted to a promise under Section 25(3) of the Indian Contract Act, 1872 and whether the suit was barred by limitation.

Analysis: Under Article 37 of the Limitation Act, 1963, limitation for recovery in a chit transaction runs from the date of default, not from termination of the chit. The default occurred on 04.04.1998, so the suit had to be filed within three years. Ex. A-9 was only a receipt for part payment and did not contain any specific written promise to pay the barred debt, as required by Section 25(3) of the Indian Contract Act, 1872. Therefore, the receipt did not save limitation, and the suit filed in 2005 was beyond time.

Conclusion: The part payment did not amount to an enforceable promise under Section 25(3), and the suit was barred by limitation.

Final Conclusion: The decree of the trial court was set aside and the defendants succeeded in the appeal on the ground of limitation.

Ratio Decidendi: In a chit transaction, limitation for recovery starts from the date of default under Article 37 of the Limitation Act, 1963, and a mere part-payment receipt without a written signed promise does not revive or extend limitation under Section 25(3) of the Indian Contract Act, 1872.

---