TaxTMI 
TaxTMI 
1992 (4) TMI 244
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....e respondent, an Advocate and Standing Counsel for the first appellant filed a private complaint in the court of Addl. Chief Judicial Magistrate, Katni in C.C. No.933/91 offences under s.409 and ss.109/114 I.P.C. The facts stated in the complaint run thus : The first appellant's branch at Katni gave a loan of ₹ 15,000 to one Sriman Narain Dubey on May 5, 1984 and the respondent and his wife Annapoorna stood as guarantors, executed Annexure 'P' "security bond" and handed over Fixed Deposit Receipt for a sum of ₹ 24,000 which would mature on November 1, 1988. At maturity its value would be at ₹ 41,292. The principal debtor committed default in payment of the debt. On maturity, the Branch Manager, 5th ....
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....nt reads the material parts thus : "We Confirm having handed over to you by way to security against your branch office Katni F.D. Account No. 77/83 dated November 1, 1983 for ₹ 24,000 in the event of renewal of the said Fixed Deposit Receipt as security for the above loan." "We Confirm...the F.D.R. will continue to remain with the bank as security here". "The amount due and other charges, if any, be adjusted and appropriated by you from the proceeds of the said F.D.R. at any time before, on or its maturity at your discretion, unless the loan is otherwise fully adjusted from the dues on demand in writing made by you...." "We give the bank right to credit the balance to our saving banks accou....
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....nt Article in the schedule, the right to debt remains. The time barred debt does not cease to exist by reasons of s.3. That right can be exercised in any other manner than by means of a suit. The debt is not extinguished, but the remedy to enforce the liability is destroyed. What s.3 refers is only to the remedy but not to the right of the creditors. Such debt continues to subsists so long as it is not paid. It is not obligatory to file a suit to recover the debt. It is settled law that the creditor would be entitled to adjust, from the payment of a sum by a debtor, towards the time barred debt. It is also equally settled law that the creditor when he is in possession of an adequate security, the debt due could be adjusted from the security....