1. This appeal poses a very interesting, and at the same time, an important question of law pertaining to the interpretation which is to be accorded to Section 36 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Act, 2002 (hereinafter referred to as „SARFAESI Act?). This provision makes the following reading:

“36. Limitation No secured creditor shall be entitled to take all or any of the measures under sub-section (4) of section 13, unless his claim in respect of financial asset is made within the period of limitation prescribed under the Limitation Act, 1963 (36 of 1963).”

2. The issue as to whether action of the respondent bank invoking the provisions of SARFAESI Act by serving notice of Section 32 of the said Act is barred by limitation or not, which has arisen in the following background.

3. The respondent bank herein had given certain loans to one M/s. General Tyre House, a partnership firm in the year 1981. For securing this loan, the appellant was one of the guarantors. He also gave the security in the form of equitable mortgage in respect of house property bearing Municipal No.32/24, Pratap Nagar, Jagdigh Colony, Rohtak (Haryana). The loan could not be paid by M/s. General Tyre House, which forced the bank to file CS (OS) No.935 of 1984 for recovery of `7,75,283.60 against that firm as well as the appellant and other guarantors. The aforesaid proceedings are still pending adjudication and the Suit has not been decided so far.

4. The Parliament enacted SARFAESI Act which came into effect from 18.12.2002. This Act provides additional remedy to the financial institutions to recover their debts by enforcing the security. Mechanism for that is provided under this Act. The respondent bank chose to avail this additional remedy and thus, in February, 2003 served notice to the appellant under Section 13(2) of the SARFAESI Act for enforcing the aforesaid security in the form of said property mortgage to the bank. This provision reads as under:

“13. Enforcement of security interest (1) xxx xxx xxx (2) Where any borrower, who is under a liability to a secured creditor under a security agreement, makes any default in repayment of secured debt or any installment thereof, and his account in respect of such debt is classified by the secured creditor as non-performing asset, then, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities to the secured creditor within sixty days from the date of notice failing which the secured creditor shall be entitled to exercise all or any of the rights under subsection (4).”

5. Though no immediate action was taken on the basis of this notice, fresh notice dated 20.11.2004 under Section 13(2) was served on similar lines calling upon the appellant to pay the entire outstanding liability amounting to `3,84,59,807/-together with interest with effect from 21.11.2004. The appellant replied on 07.1.2005 questioning the validity of this notice on the ground that the action was time barred in view of the provisions of Section 36 of SARFAESI Act read with Article 62 of the Schedule to the Limitation Act. The bank, however, took the stand that notice was not time barred. The appellant again reiterated his plea vide letter dated 02.4.2005 asking the bank not to enforce the provisions of the SARFAESI Act as the proposed action was time barred. Since the notice was not in complied with on the aforesaid ground, i.e., the appellant did not discharge the purported liability within 60 days of from the date of notice, the respondent bank issued possession notice dated 13.4.2005 under Section 13(4) of the SARFAESI Act stating that it would take over the possession of the property in question.

6. At this stage, the appellant filed W.P.(C) No.7228 of 2005 against the aforesaid action of the bank taking the same plea, viz., the claim of the respondent bank was impermissible as the action was time barred. The said plea of the