The central legal point established in the judgment is the interpretation of Section 18 of the Limitation Act, 1963 and the application of the judgment in Syndicate Bank v. Channaveerappa Beleri to determine the starting point of limitation for a continuing bank guarantee.

R.K. GUPTA, J. (CHAIRPERSON)

1. The present appeal is preferred by the appellants under Section 20 of the RDDBFI Act, 1993 challenging the order passed by the Tribunal on 28th February, 2013 in original application No. 178/2009 by which the application filed by the Bank under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 has been allowed by directing to issue Recovery Certificate for a sum of Rs. 19,25,555/- with interest at 12.5% p.a. with monthly rests from 1st October, 2009 till the date of realization from defendant Nos. 1 to 3 who are jointly and severally liable to pay the same with costs. The relevant facts for adjudication of the present case are that the deceased appellant No. 1 was borrower and the appellant No. 2 was the guarantor who is also wife of the appellant No. 1. An application was moved during the pendency of the appeal that the appellant No. 1 has expired therefore, it was prayed that the name of the appellant No. 1 be deleted The appellant No. 2 survives and the appeal was pressed by the appellant No. 2 who was a guarantor.

2. There is no dispute in the present case that the deceased appellant No. 1 was granted loan facility by the Bank which was defaulted, therefore, the account was declared as NPA on 31st March, 1993. It was a case of continuing guarantee executed by the surviving appellant. The demand notice was served on 2nd March, 1994 and the original application was preferred by the Bank on 1st October, 2009.

3. It was the case where for the purpose of limitation under Section 18 of the Limitation Act, 1963 was relied upon as well as Article 62 of the Limitation Act, 1963 which provides twelve years period of limitation for recovery of dues from the date when the money sued for becomes due and the time is to run from the date when the demand notice is issued and the same is not honoured.

4. The Bank issued a notice of demand claiming the said amount from the borrower as well as guarantor and the said notice was issued on 2nd March, 1994. The said notice was not honoured and the amount as such was neither paid by the borrower nor by the guarantor.

5. The borrower from time-to-time issued certain acknowledgement on various dates i.e. 3rd April, 1990, 31st March, 1993, 30th March 1995 18th October, 1997, 14th October, 2000, 11th October, 2003 and lastly on 3rd October, 2006. Before the Tribunal a joint written statement by the borrower and the guarantor was filed being defendants. In the said written statement it was submitted by the appellants that the original application was barred by time as according to the defendants the original application was not filed within a period of 12 years and thus, the original application was barred by time.

6. It was the claim of the Bank before the Tribunal that since various acknowledgements from time-to-time were issued by the borrower, therefore, on the basis of the different acknowledgements the original application is not barred by time and is within limitation. The Tribunal decided the said controversy on the ground that as the defendant No. 1 borrower has extended the period of limitation as per Section 18 of the Limitation Act, 1963 by issuing acknowledgements and an the basis of the same the Tribunal held that the original application preferred by the Bank under Section 19 of the RDDBFI Act, 1993 is not barred by limitation. On the basis of the aforesaid this is to be seen that there is no dispute in the present case that since various acknowledgements from time-to-time were issued by the borrower acknowledging his liability to repay the dues therefore, so far as the borrower is concerned the Suit against him was not barred by time.

7. It was contended on behalf of the surviving appellant i.e. the guarantor that in the absence of any liability as per Section 18 of the Limitation Act the original application is barred by time so far as the guarantor is concerned. For the purpose of appreciating issues, it will be a