Limitation for loan recovery: demand notices and an unsupported continuing guarantee did not extend time or revive the debt.

A recovery suit on a loan was held time-barred because the three-year limitation period had expired without any post-disbursement payment or written acknowledgement of liability. Demand notices alone did not extend limitation, and Section 19 of the Limitation Act, 1963 applies only where part-payment is made before expiry of the prescribed period. The asserted continuing guarantee was not supported by evidence and was insufficient to constitute acknowledgement of debt. The limitation objection therefore succeeded, and the suit remained barred.

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Issues: Whether the suit for recovery was barred by limitation and whether the alleged continuing guarantee or demand notices extended limitation under Section 19 of the Limitation Act, 1963.

Analysis: The appeal challenged the dismissal of the suit on limitation grounds. The Court noted that limitation for recovery of the loan amount was three years and that there was no evidence of any payment by the defendants after disbursement of the loan or any written acknowledgement of liability within the limitation period. It held that mere issuance of demand notices did not extend limitation and that Section 19 of the Limitation Act, 1963 applies only where there is payment on account of debt before expiry of the prescribed period. The contention based on a continuing guarantee was found unsupported and insufficient to amount to acknowledgement of debt.

Conclusion: The suit was correctly held to be barred by limitation, and the challenge to that finding failed.

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