Annie John, J.

The petitioner, the Kerala State Financial Enterprises Ltd., has filed this writ appeal challenging the judgment of the learned single Judge holding that the debt has become time barred. The writ petition was filed by the first respondent challenging Exts. P1 and P2 notices issued by the first respondent Tahsildar and also for a direction not to initiate steps to recover any amount from the salary of the petitioner and to direct the first respondent to proceed against respondents 3 and 4.

2. The petitioner stood as a surety to one Leela K., who is the third respondent in the writ appeal. She had availed a loan as NCL 253 on 05.01.2000 for an amount of Rs.50,000/-. The petitioner as well as the 4th respondent were the sureties of the third respondent to avail the loan. The principal debtor, the 3rd respondent, after obtaining the loan had remitted Rs.666/- on 03.04.2000, Rs.666/- on 31.04.2000, Rs.833/- on 01.03.2000, Rs. 4000/- on 07.02.2000, Rs. 9881 on 21.06.2001, Rs. 3000/- on 31.07.2002, Rs.2000 on 31.12.2004. Subsequently, the respondent did not remit any amount. The chitty was auctioned on 19.02.2001. Due to default in paying the instalments, the prize money was adjusted to the future liability and the balance amount was adjusted towards the NCL account. On 03.11.2005, the District Collector, Thiruvananthapuram issued Revenue Recovery Certificate to recover NCL arrears of Rs.26,552/- with interest from 20.09.2001. The second respondent Tahsildar issued demand notice on 14.03.2006. Aggrieved by the same, the first respondent filed the writ petition.

3. The learned Single Judge observed that since the amount has become due on 20.09.2001 and the first requisition was made on 30.09.2005, the demand was made beyond the period of limitation. Accordingly, the learned single Judge as per judgment dated 18.07.2008, allowed the writ petition quashing Exts.P1 and P2 and directing that the respondents are restrained from effecting continuous recovery from the petitioner. Hence this writ appeal.

4. The appellant is seen to have initiated the RR proceedings on 03.11.2005 for Rs.2,65,52/- stating that the amount is in arrears from 20.09.2001 onwards. The RR request was initiated on 30.09.2005 and the RR certificate was issued on 03.11.2005. The learned single Judge allowed the writ petition filed by the first respondent observing that at the time when the requisition was made and Ext.P1 demand was issued, the debt which became due on 20.09.2001, had already become time barred and quashed Exts.P1 and P2. The appellant was also restrained from effecting continued recovery from the petitioner.

5. The loan amount had to be remitted as per the schedule of the appellant and if there was any failure on the part of the respondent, the appellant has to take necessary steps to recover the same within three years from the date of availing of the loan amount. If three years is calculated from the date of availing of the loan, it will expire on 05.01.2003. The last payment of Rs.2000/- was seen to have been made on 31.12.2004. Before that, the payment was made on 31.07.2002. The payment made on 31.07.2002 was within the prescribed period of limitation. The learned counsel for the appellant has argued that the three-year period will commence from 31.12.2004 i.e., on the last date of payment. So the recovery initiated is within the prescribed period of limitation. Per contra, the learned counsel for the respondent argued that the last payment made on 31.12.2004 is not within the prescribed period of limitation and therefore, the Revenue Recovery initiated is barred by limitation.

6. After availing the loan, the default was committed on 01.03.2000, but part remittances have been made from 31.01.2000. The chitty instalments were remitted upto 18.07.2001. The loanee has not turned up for settling the prize money after the chitty ha