Limitation against guarantor extends through acknowledgment and mortgage security; suit held within time under the Limitation Act.

A suit against a guarantor was held to be within limitation because the borrowers' timely acknowledgment of liability, executed under an authority contained in the guarantee agreement, attracted Section 18 of the Limitation Act, 1963 and gave a fresh starting point of limitation against the guarantor. The claim was also supported by immovable property mortgaged as collateral security, so Article 62 of the Limitation Act, 1963 applied to the enforcement of money secured by mortgage, carrying a twelve-year period. On this footing, the limitation applied by the trial court was incorrect and the claim against the guarantor could not be dismissed as time-barred.

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Issues: Whether the suit against the guarantor was barred by limitation, and whether the borrowers' acknowledgment of liability and the mortgage of immovable property saved the claim against the guarantor.

Analysis: The guarantor had executed a guarantee agreement authorising the borrowers to confirm the balance and acknowledge liability on his behalf, and the borrowers had signed a balance and security confirmation letter within time. Such acknowledgment attracted Section 18 of the Limitation Act, 1963 and operated as a fresh starting point of limitation against the guarantor as well. The suit also sought enforcement against immovable property mortgaged as collateral security, so the claim was governed by Article 62 of the Limitation Act, 1963, which provides a twelve-year limitation for a suit to enforce payment of money secured by mortgage of immovable property. In these circumstances, the limitation applied by the trial court was erroneous.

Conclusion: The suit against the guarantor was within limitation and the dismissal of the claim against him could not be sustained.

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