Fresh periods of limitation commence with payments made on account of debts or interest, and the demand for payment of dues must be within the period of limitation.

I.A. Ansari, J.

1. I have heard Mr. G.N. Sahewalla, learned senior counsel, appearing on behalf of the appellant. None has appeared on behalf of the respondent.

2. This is an appeal against the judgment and decree, dated 30.5.1994, passed by the learned Assistant District Judge, Tinsukia, in Title Suit No. 21/1988, whereby the respondent's suit has been decreed, on contest with cost, for Rs. 5,16,367.08 with interest @ Rs. 6% per annum from the dale of institution of the suit until recovery of the entire decretal amount with further declaration that the respondents shall have a charge on the hypothecated goods, debts and movable assets of the defendants and shall be entitled to resale thereof for the purpose of recovery of their decretal dues.

3. The respondent-bank instituted Title Suit No. 21/1988 aforementioned, its case being, in brief; thus : The bank had, on 21.4.1975, sanctioned to the defendants overdraft limit of Rs. 40,000 and facilities for purchase of cheques up to a sum of Rs. 10,000. The defendants executed, on 23.4.1975, a promissory note for the said sum of Rs. 40,000, a letter of continuity, a letter of lien, deed of hypothecation of plant and machinery and deed of hypothecation of debts and movable assets. On the same day, i.e., on 23.4.1975, the defendants also executed a deed of guarantee making themselves jointly and severally liable for the debts so incurred. In course of time, on the request made by the defendants, the plaintiff-bank raised the overdraft limit and cheque purchase facilities up to the sum of Rs. 85,000 and Rs. 25,000 respectively on 19.10.1976 and 22.2.1977. In terms of the enhancement of the overdraft limit and the cheque purchase facility, the defendants executed, on 22.2.1977, a letter of continuity, a letter of lien, deed of hypothecation of plant and machinery and deed of hypothecation of debts and movable assets. The defendants availed the facilities, so sanctioned, by the plaintiff-bank; but...in making payment of the amounts drawn by them. As a result of their failure to pay their dues, the defendants incurred, in all, a sum of Rs. 5,14,968.68 as debt. The defendant No. 1, on various dates, issued letter of confirmation admitting the liabilities, these letters having been issued on 1.1.1979, 1.7.1985, 18.7.1987 and 2.2.1988. The defendants also executed a demand promissory note for Rs. 65,000 on 18.7.1987 and deed of hypothecation and deed of guarantee. Though the plaintiff-bank issued notice to the defendants demanding payment of their outstanding dues, the defendants failed to clear their debts. The plaintiff-bank accordingly instituted the suit for recovery of Rs. 5,16,367.08 with cost and future interest and for declaration of charges on the hypothecated goods allowing the plaintiff-bank to sale the same for recovery of their dues.

4. The defendants contested, the suit by contending, infer alia, that the suit was not maintainable, there was no cause of action and that the suit was barred by limitation. The defendants also denied sanction of the overdraft limit and also the cheque purchase facilities having been granted by the plaintiff-bank in favour of the defendants. The case of the defendant was, thus, a case of complete denial of liability.

(1) Based on the pleadings of the parties, following issues were framed:

(2) Is the suit maintainable ?

(3) Whether the plaintiff has rigid to sue or cause of action against the defendants?

(4) Is the suit barred by limitation ?

(5) Whether the defendants received the loan on condition of hypothecation of Automobile spare parts etc.

(6) Whether the documents executed by the defendants enforceable in law?

(7) Whether the liabilities of the guarantor are co-extensive with the principle debtors what are their respective liabilities to the plaintiff-Dank?

(8) Whether the plaintiff is entitled to the decree as prayed for ?

5. In support of their case, the plaintiff examined two witnesses. The defendants adduced no evidence. As the learned trial c