1. This is an appeal by the plaintiff. Plaintiff is a Bank. The suit was for recovery of an amount of Rs. 71,986.50. Plaintiff claimed that defendants are liable to pay the said amount.

2. There are three defendants in this case First defendant is the principal debtor. Defendants 2 and 3 are guarantors. They have executed a continuing guarantee taking up the responsibility that they will also be liable to pay the. amount to the Bank. It seems that the amount was advanced for the purchase of a fishing boat and the boat was also hypothecated by the first defendant to the Bank, by the hypothecation goods agreement dated 21-8-1970. The defendants did not re-pay the amount due to the Bank. The Bank instituted the suit against the defendants for recovery of the amount found due as per the accounts. There is no serious contention about the quantum of liability. The first defendant did not hold out any serious contentions. After considering the contentions raised by the first defendant the court below found that the plaintiff is entitled to a decree for the amounts claimed. Thus the court below decreed the suit as against the first defendant.

3. Defendants 2 and 3 took up the contention that they are not liable to pay the amount even though they have executed a continuing guarantee. The continuing guarantee was executed on 21-8-1970. According to the Bank, the debt was kept alive on account of the acknowledgement of the liability of the debt by the first defendant. The plea of defendants 2 and 3 was that the acknowledgement made by the first defendant is not binding on defendants 2 and 3 and so as regards defendants 2 and 3, there is no cause of action for the Bank since the same has been barred by limitation.

4. The trial court considered this question in Para.11 of its judgment under issues 4 and 6. Issue No.4 is "whether the suit is barred by limitation" and issue No.6 is "whether the 2nd and 3rd defendants are liable as sureties." Considering these issues, the court below held that the fundamental principle is that the liability of the surety is co-extensive with that of the principal debtor. Therefore the suit is clearly barred against defendants 2 and 3 since they have not acknowledged the liability and so they are not liable for the plaint claim. The court below further held that the liability of the first defendant is not barred because of various acknowledgements proved in the suit Ext.A11 series. The Bank took the view that the sureties are also liable for the debt and that the court below has gone wrong in not decreeing the suit against the sureties defendants 2 and 3. Now the plaintiff Bank appeals.

5. From the narration of facts, it is clear that the only question that has to be considered in this appeal is whether a decree can be passed against the sureties respondents 2 and 3 in this appeal. Learned counsel for the appellant submitted before us that the question is practically covered by the ratio of the decisions reported in A.I.R. 1979 SC. 102 (Margaret Lalitha v. Indo Commrl. Bank Ltd.), 1961 KLT 434 (Popular Bank Ltd. v. Union Coir Factories) and 1979 KLT. 566 (W.J. Chits v. Mathew).

6. Now what is the theory underlying the doctrine of acknowledgement. Taking stock of the human behaviour and conduct, English Law presumed, if a right or claim has not been exercised or asserted for a long time, the cessation of that right or satisfaction of the claim. In such cases, the English Law adopted such a presumption of payment or satisfaction of the claim and further held that if one wants to rebut that presumption, the only legal method is getting an acknowledgement of liability by the debtor. It was held by a series of English cases that a promise by the debtor to pay the debt, if given within the statutory period of limitation, was sufficient to create a new contract and so to take the case out of the operation of the statute of limitation, the existing debt being a sufficient consideration to support the promise. I