A promise to pay a time-barred debt constitutes a valid contract and can serve as a fresh cause of action.

1. This is an appeal filed by the Bank against the judgment and decree dated 14.05.1999 passed in Civil Suit No. 34 - A / 1999 by the Court of Additional District Judge, Bilaspur, whereby the suit filed by the Bank was dismissed as barred by limitation.

2. According to the plaint allegations, the deceased Ramu Singh Thakur had applied to the Bank to obtain the loan under the agricultural heads. It was also pleaded that different documents were executed and further the re - payment of loan was further secured by the guarantor and a deed of guarantee was also executed by one Badri Prasad Agrawal. After examining the documents and application, the Bank sanctioned the loan to the borrower under different heads and loan Rs. 40,000/- was for tubewell, Rs. 12,000/- for fencing of the field and Rs. 14,000/- for the crops. Thereby, in all, total loan of Rs. 66,000/- was sanctioned.

3. As per the pleadings, the loan was sanctioned after execution of the necessary documents on 19.02.1990 and the interest was levied at the rate of 10% & 12' % according to the variable rate declared by the Reserve Bank of India. In order to secure the loan, a deed of hypothecation was also executed whereby all the movable assets were hypothecated in favour of the Bank and mortgage in respect of the land at village Selar admeasuring 14.31 acres was also created. It was the case of the plaintiff / appellant - Bank that after availing the loan, the defendants failed to re - pay the loan according to the terms of the agreement and thereafter the Bank initially served them with a legal notice and subsequently on 22.11.1995 filed a suit for recovery of an amount of Rs.1,36,765/-.

4. In reply to the pleadings made, the legal heirs of Ramu Singh Thakur namely Anju Singh Thakur and Megha Singh Thakur stated that only Rs.14,000/- loan was availed under the cash credit for crops and rest of the averments were denied. It was also stated in the reply that the Branch Manager did not have the power to file the suit and prayer was made for dismissal of the same. Whereas, the guarantor had also refuted the claim and it was stated that since the mortgage was created, therefore, the Bank should have first followed the property created under the mortgage and sale it thereafter the recovery from guarantor could have been made.

5. On the basis of the pleadings of the parties, the learned trial Court had framed the issues and in finding to such issues, the learned Court below came to a conclusion in order to avail the loan, the documents were executed by the borrower and the guarantor. Accordingly, the execution of documents were affirmed. The Court relied on the statement of PW 1 and it was held that the borrower deceased - Ramu Singh Thakur had availed the loan on different heads from the Bank i.e. Rs.40,000/- for tube - well, Rs.12,000/- for fencing of the field and Rs.14,000/- for the crops. The learned Court below had also held that the defendants borrower and guarantor had failed to prove the fact that the signatures were obtained on the blank documents, which was not explained to them and accordingly, it was held that before signature, the documents were explained to the borrower and the guarantor. Therefore, with respect to such finding that the documents were executed and the loan was availed, the same is not under challenge. As a result, such finding arrived at by the learned Court below are affirmed. The said finding is also not under challenge in the appeal and accordingly, it is also affirmed.

6. The learned Court below has dismissed the suit on the ground that the suit was barred under the law of limitation. In this aspect, to examine such finding, the documents which were executed were perused. Ext. P1