9911796707
|
Home
Issues:
1. Suit claim barred by limitation Analysis: The judgment arose from a suit decree against the Defendants for a sum of Rs. 10,70,760.25 along with interest. The Respondent had obtained cash credit and other facilities from the Plaintiff bank, with various movables hypothecated. The original Defendant, amalgamated with the Appellant during the suit, making the Appellant fully liable for the Bank's dues. The Appellant executed a continuing guarantee in 1974 and a promissory note in 1978, indicating an unambiguous guarantee for repayment. The Trial Court decreed in favor of the Plaintiff, which the High Court upheld. The main issue raised by the Appellant was that the suit claim was barred by limitation as the renewal of facilities occurred in 1978, not in 1977. However, the High Court found that the Appellant had executed a continuing guarantee in 1974, supported by a Board resolution, and further documents in 1975 and 1978, confirming the liability. The balance sheets of the Appellant until 1981 also reflected the liability. The Court dismissed the limitation argument based on the clear terms of the executed documents and the continuous nature of the guarantee. Referring to a Supreme Court judgment, the High Court emphasized the nature of a continuing guarantee, stating that as long as the account is live and there is no refusal by the guarantor to fulfill obligations, the period of limitation does not commence. The Court highlighted the importance of the terms of the guarantee bond in determining liability. In this case, the continuing guarantee was found to be subsisting, and the Appellant remained liable. Consequently, the High Court dismissed the Appeal, ruling that the suit claim was not barred by the law of limitation. In conclusion, the High Court found no merit in the Appellant's contention that the suit claim was time-barred. The Appeal was dismissed, with no order as to costs, and parties were directed to act on an authenticated copy of the order.
|
