Surety limitation runs separately from the principal debtor; payment of interest by the debtor did not extend time against the surety.

A promissory note payable on demand was treated as a present debt, so limitation against the surety began from the date of the note when the surety's liability arose. The court held that section 20 of the Indian Limitation Act applies only when payment is made by the person liable for the particular debt or by a duly authorised agent. Because the principal debtor's and surety's liabilities are distinct for limitation purposes, payment of interest by the principal debtor did not, even with the surety's knowledge or consent, create a fresh period of limitation against the surety. Section 128 of the Indian Contract Act did not alter this position, and the suit against the surety was barred.

---

---

Issues: Whether the claim against the surety was barred by limitation, and whether payment of interest by the principal debtor, with the surety's knowledge and consent, gave rise to a fresh period of limitation against the surety.

Analysis: A promissory note payable on demand was treated as a present debt, so that default occurred from the date of the note and the surety's liability under the guarantee arose at once on that basis. The relevant limitation period for a suit against the surety was held to run from that date under the applicable articles of the Indian Limitation Act. Section 20 of the Indian Limitation Act was construed as operating only where the payment was made by the person liable to pay the particular debt or by his duly authorised agent. The Court held that the liabilities of the principal debtor and the surety were distinct for this purpose, and that a payment of interest by the principal debtor did not, merely because the surety knew of it or consented to it, extend limitation against the surety. Section 128 of the Indian Contract Act, 1872 was held not to alter the law of limitation.

Conclusion: The suit was barred against the surety, and the appeal succeeded.

Ratio Decidendi: For purposes of limitation, the debt of the principal debtor and the liability of the surety are distinct, and a payment of interest by the principal debtor does not extend limitation against the surety unless the payment can properly be treated as made on behalf of the surety.

---