Valmiki J. Mehta, J. (Oral)

1. In the present Regular Second Appeal, the following substantial question of law was framed on 27.1.2012:-

“Whether the acknowledgment of debt by principal debtor would not extend limitation qua the guarantor?”

2. Appellants are the guarantors. Respondent no.1/plaintiff gave a loan to the principal borrower in the year 1991 for which the appellants signed the deed of guarantee on 31.10.1991. The principal borrower/defendant no.1 signed the balance confirmatory cum acknowledgment on 21.7.1994 and suit was filed by the respondent no.1/bank within three years thereafter on 6.6.1997.

3. Appellants who are guarantors contended that the suit against them is barred by limitation inasmuch as prior to the acknowledgment given by the defendant no.1/principal borrower on 21.7.1994 demands were raised upon the appellants by the respondent no.1/bank and therefore suit not having been filed within three years from such demands the same is barred by limitation.

4. In the present case, the guarantee in question which has been executed by the appellants, contains the following clauses:-

“2. We the undersigned Sh. Gulab Chand, Subhash Chand and Faujdar hereby guaran