The main legal point established is that the execution of a demand promissory note can operate as an acknowledgment of an existing debt, extending the period of limitation under Section 19 of the Jammu and Kashmir Limitation Act.

Dhiraj Singh Thakur, J.

1. The present Letters Patent Appeal has been preferred against the judgment and order dated 26.2.2004 passed in Civil 1st Appeal No. 3 of 2000 by a Single Bench of this Court. Briefly stated the material facts are as under:

2. The respondent No. 1 obtained a loan for an amount of Rs. 2,20,000/- from the appellant-Bank in the year 1981. A Hundi dated 12.8.1981 for the loan amount was executed by respondent No. 1 whereas, defendants No. 2 and 3 executed a deed of guarantee dated 12.8.1981 for the said amount.

3. Failure on the part of the defendant No. 1 to discharge his obligation led the bank to raise a notice of demand dated 4.2.1987 against the defendants requiring them to discharge the loan amount with interest which had accrued thereupon.

4. The defendant No. 1 is then stated to have approached the appellant-Bank and executed a demand promissory note purporting to acknowledge the liability of the past debt for a sum of Rs. 2,99,865.52/-.

5. Failure on the part of the respondent No. 1 to repay the amount of loan along with the interest forced the plaintiff-bank to file a suit for recovery of Rs. 3,54,558.18/- both on account of principal and interest accrued thereupon.

6. A preliminary objection was raised by the defendants in the suit, who claimed that the suit was time barred.

7. Upon consideration of the pleadings, as many as five issues were framed by the trial court, one of which was with regard to limitation. These issues were as under:

(a) Whether the suit is time barred? OPD

(b) Whether the rate of interest agreed between the parties is 11% PA and not 12-1/2%? OPD

(c) Whether the plaintiff bank refused to issue NOC to the defendant No. 1 for the renewal of Route Permit, if so, what is its effect on the suit?

(d) Whether the plaintiff bank is entitled to recover the suit amount of Rs. 3,54,458.18 NP? OPD

(e) Relief. OPP

8. While issues No. 2 to 4 were decided in favour of the plaintiff-Bank, issue No. 1 was decided against it by holding that the suit was barred by limitation.

9. A Civil 1st Appeal was preferred by the Bank against the aforementioned judgment and decree which too was dismissed vide judgment and order dated 26.2.2004. A single Bench of this court while dismissing the appeal filed by the Bank upheld the finding recorded by the trial court on the issue that the same was barred by limitation. The reasoning given by the learned Single Judge for such a finding was that the demand promissory note executed on 24.4.1987 did not mention that the amount indicated therein pertained to an outstanding debt and therefore, was held not amounting to an acknowledgement of any past liability or outstanding debt.

10. In addition to this, the learned Single Judge held that the demand promissory note dated 24.4.1987 was for an amount of Rs. 2,99,865.52/-, which did not tally with the entries recorded in the original statement of accounts duly certified by the concerned Branch Manager according to which an amount of Rs. 3,09,865.52/- was outstanding as on 24.4.1987. The court further took notice of the fact that on the same day, an amount of Rs. 10,000/- plus 22,000/- stood deposited in cash and after crediting the aforesaid amount, the outstanding amount would be Rs. 2,77,865.52/-, which certainly was not the amount reflected in the demand promissory note.

11. It was thus held that the said DP note could not be treated as an acknowledgement of the outstanding liability by defendant No. 1 so as to extend the period of limitation under Section 19 1 of the J & K Limitation Act.

12. It is in the background of the aforementioned facts that the present Letters Patent Appeal has been preferred.

13. Learned counsel for the appellant reiterated the stand of the Bank that the limitation period for filing the suit stood extended in terms of Section 19 of the Limitation Act on account of the execution of the Demand Promissory Note on 24.4.1987.

14. Heard learned counsel for the parties.

15. The short controversy that fa