1. Initiated by the unsuccessful plaintiff-bank, this Appeal seeks the correctness of the judgment and decree dated 27.11.99 drawn by the First Addl. District Judge (Bank Cases) Jammu, in an action instituted by the plaintiff-bank for the recovery of Rs.354558.18 paisa against the defendants-respondents on account of loan and advance for the purchase of TATA Truck. In culmination of the trial of the suit, the court below dismissed the claim of the plaintiff-bank for the recovery of the suit amount in declaring it as barred by period of limitation.

2. The appellant J&K Bank Ltd. (in short The Bank) commenced a suit for recovery of Rs.354558.18 paisa, due under the pronote and guarantee deed, against defendants namely S. Surjit Singh, S. Prem Singh and Sh. Behari Lal Gupta, respectively.

3. According to the plaintiff-bank, an amount of Rs.2,20,000/- as loan was sanctioned in favour of defendant No. 1 for the purchase of new TATA truck who agree to repay the same in seventy equal monthly installments of Rs.4354/- each. A Hundi dated 12.08.1981 for the loan amount was executed by defendant No. 1, besides the deed of hypothecation whereby defendant No.1 hypothecated the purchased truck, trust receipt, irrevocable power of attorney, letter of undertaking and an affidavit in favour of bank by way of security of the loan amount advanced by the Bank. Whereas, the defendants 2 and 3 executed guarantee agreement dated 12.8.81 for the said amount and guaranteed repayment of the loan amount along with interest, at the rate of 3.50% p.a. OBR with minimum rate of 12%p.a. or any other rate of interest prescribed by the Reserve Bank of India from time to time. However, failure of defendants No. 1 (borrower) to discharge his obligation to pay the installments of the loan amount in terms agreed to by the parties rendered the loan account irregular and sticky. This led the bank to raise a demand notice dated 4.2.87 issued to the defendants requiring the repayment of the loan amount with interest accrued thereon. Further case of the bank is that the defendant No.1 (borrower) again approached the bank and sought some time to repay the loan amount. The borrower further stated to have executed a D.P. Note wherein he admitted and acknowledged the liability of past debt existing and outstanding against him of a sum of Rs.299865.52 NP and thus, thereby, extended the period of limitation. It is further, stated that the borrower defendant No. 1 promised to repay the amount at the rate of 2-1/2% OBR with minimum of 12-1/2% p.a. Failure of the defendant to repay the amount of loan along with the agreed interest despite various demands, the plaintiff-bank, preferred the suit for recovery of Rs.354,558.18 NP, both on account of principal and interest accrued thereon.

4. Resistance to the suit has been made on a blend of objections both preliminary and on merits. The preliminary objection taken was that the suit being time barred is liable to be dismissed. On merits, while admitting the amount of Rs. 220,000/- advanced as loan for the purchase of vehicle by the plaintiff-bank, defendant No. 1 asserted that the rate of interest on the loan was 11% p.a. It was further stated that the loan was advanced by the bank under 20 Point Economic Programme floated by the Central Government for working people. The defendants claim to have signed number of blank papers at the time of sanction of the loan. Thereafter the defendants have denied to sign any paper/document with the bank. It was also admitted that the defendants 2 and 3 signed certain documents with the assurance that it is only a formality. The defendant No.1 further expressed inability to pay the remaining amount by installments as the bank did not issue No. Objection Certificate when demanded by him. The vehicle is also stated to have remained off the road on account of riots of 1984. The defendants emphatically denied to have executed or signed any document of the nature of Hundi in favour of the plaintiff-ban

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