The main legal point established in the judgment is the applicability of the Limitation Act to proceedings under the Kerala Revenue Recovery Act and the elements of novation of contract, including the discharge of debt, substitution of new debt, and mutual consent.

PATNAIK, J. :- The sixth respondent in O.P. No. 7098/94 is the appellant herein. By the impugned judgment, the learned single Judge upheld the contention of the first respondent herein, the Kerala Financial Corporation and directed the continuance of revenue recovery proceedings agianst the appellant herein to recover the loan amount together with interest advanced by the first respondent to purchase and ply a transport vehicle.

2. The first respondent Corporation sanctioned a loan of Rs. 1,26,900/- to one Gopinatha Menon on 21st September, 1974 for purchase of a transport vehicle. The loan was to be repaid by instalments. But the said Gopinatha Menon defaulted to pay the amount. In consequence of default in payment, the vehicle was seized by the Corporation on 11th November, 1980. The appellant thereafter executed an equitable mortgage in respect of 62 cents of land on 2nd December, 1980. On that day, he confirmed the deposit of title deeds with the Corporation. In pursuance of the agreement, the vehicle in question was released and handed over to the sixth respondent. Subsequently, the appellant also committed default in payment of the loan. The vehicle was thereafter seized and proceedings were initiated under Kerala Revenue Recovery Act, 1968 for recovery of the amount due. The appellant preferred an appeal before the Collector under Section 72(i) of the Kerala Revenue Recovery Act. By Ext. P1 order dated 7-7-1992 the appeal was dismissed. He preferred a revision before the Board of Revenue. By Ext. P2 order dated 27-11-1992 the revision was allowed on the ground that the case is barred by limitation as has been held by a decision of this Court in A.K. Nanu v. State of Kerala, (1987) 2 Ker LT 921. It was also observed that Gopinatha Menon as the principal debtor being discharged, the surety namely the appellant also stands discharged. The land was sold at a very low price. The Corporation preferred a revision against it under Section 83(2) of the Kerala Revenue Recovery Act before the State Government. The State Government by the order dated 16-2-1994 (Ext. P4) confirmed the findings of the Board of Revenue. The Corporation therefore filed the original petition to quash Exts. P2 and P4 order. It was cotnended that the finding in Exts. P2 and P4 on the question of limitation is illegal and the Limitation Act is not applicable to the proceedings under the K.R.R. Act. The appellant herein along with the seventh respondent had undertaken the liability of Gopinatha Menon under the new loan transaction. Though the original agreement executed by the appellant and the seventh respondent is not available, yet the subsequent events after entering into the agreement on 1-12-1980 prove beyond reasonable doubt that the appellant and the seventh respondent accepted the liability of Gopinatha Menon in toto and the said Gopinatha Menon no longer became the principal debtor. It is also contended that the appellant having deposited the title deeds with the Corporation and having remitted a considerable amount towards the loan, he discharged his liability in part as a debtor and not as a surety.

The appellant herein and the seventh respondent resisted the O.P. on the ground that there was no novation of contract at any time replacing the original contract between Gopinatha Menon and the Corporation. The appellant and the seventh respondent stood as sureties for Gopinatha Menon under the original contract. The Corporation failed to produce the alleged agreement between the appellant and the Corporation to show that Gopinatha Menon was discharged from his liability. Further it was contended that the proceedings under the K.R.R. Act having been initiated more than three years after the loan transaction between the Corporation and Gopinatha Menon, the same is barred by limitation.

3. Learned single Judge on a consideration of the facts and circumstances of the case agreed with the findings given by the Collector in Ext. P1 order and quashe