GOPINATHAN Vs. NEDUNGADI BANK LTD.

JUDGEMENT

(1.) The effect and extent of a continuing guarantee so far as the law of limitation is concerned, is the question raised for a decision in this Second Appeal. It arises at the instance of the 3rd defendant in O.S. No. 3 of 2000 of the Munsiff-Magistrate's Court, Pattambi and the confirmation of that judgment and decree by the learned Sub Judge, Ottapalam in A.S. No. 112 of 2006. First respondent filed the suit for recovery of money. It alleged that the 2nd respondent/1st defendant availed a loan of Rs. 25,000/- from it undertaking to repay the said amount with interest at the rate of 12.5% per annum or the interest which prevailed during the period of the debt. The second respondent also executed a demand promissory note in favour of the 1st respondent. The appellant and deceased second defendant (whose legal representatives are respondents 3 to 6) executed a continuing guarantee (Ext. A3) in favour of the 1st respondent on 18.1.1994 undertaking to pay the amount notwithstanding the discharge of the principal by operation of law, etc. The 1st respondent claimed that on 25.12.1995 the second respondent/1st defendant executed a revival letter (Ext. A5) keeping his liability alive and hence also, the appellant, second respondent and deceased second defendant are liable to pay the amount.

(2.) The second respondent/first defendant remained ex parte. Appellant and respondents 3 to 6 contended that the second respondent has not executed any revival letter and that the suit has become wholly time barred not only against the second respondent but also against the deceased second respondent and the appellant. They contended that the revival letter allegedly executed by the 2nd respondent is a concocted document.

(3.) Trial court based on the evidence of CW 1, the expert and Ext. C1, his report and on a perusal of the admitted signature of the second respondent with the disputed signature in Ext. A5 came to the conclusion that due execution of Ext. A5 is not proved and hence liability of the second respondent/1st defendant has become barred by limitation by the time the first respondent instituted the suit. However, based on Ext. A3, continuing guarantee appellant and the legal representatives of the deceased second defendant were held liable to pay the amount.