{"id":34335,"date":"2010-09-27T00:00:00","date_gmt":"2010-09-26T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/sharad-v-sampath-vs-karnataka-state-financial-on-27-september-2010"},"modified":"2016-05-13T05:44:26","modified_gmt":"2016-05-13T00:14:26","slug":"sharad-v-sampath-vs-karnataka-state-financial-on-27-september-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/sharad-v-sampath-vs-karnataka-state-financial-on-27-september-2010","title":{"rendered":"Sharad V Sampath vs Karnataka State Financial &#8230; on 27 September, 2010"},"content":{"rendered":"<div class=\"docsource_main\">Karnataka High Court<\/div>\n<div class=\"doc_title\">Sharad V Sampath vs Karnataka State Financial &#8230; on 27 September, 2010<\/div>\n<div class=\"doc_author\">Author: N.Kumar And Adi<\/div>\n<pre>INT?\ufb01CHKH\u00a7COURT(M?KARNATAKA\nCHKHHTBENCHATCRHBARGA\n\nDATED THIS THE 27m DAY OF SEPTE:MB\u00a3:R,.f2Oj1.O~v-V_\n\nPRESENT\n\nTHE HONBLE MR.JUS'F1CE.N.KiUMAi\u00e9\u00bb\u00ab    A'\n\nAND\n\nTHE HONBLE MR.JUSTI_CE SUEHASH'   \"\n\nMFA No.30O9.1\/2008  A_ \" O'\nMFA N'e_.13m 73\/2O':&gt;8;Sf'_.C1\nL 'A      =\nMISCCVL. 153316\/201-0 3: IA: \/'20Os-- FOR STAY\n\nIN MFA       \n\nSI1vLA.RAD\"\u00a7\u00a57;' SAMPATH   '\n\nS \/O VALLABE?fDAS_.   A \n\nAGED ABOUT  YEZARS\n\nR\/O L~\"'1.46, NiJA\u00a3_.IN~GAPPA COLONY\n\n \" \u00ab   LRs..\n\nA 1'{a)'-T'CO12Ar\u00a7 7.S;\"'SAMPATH\n\nA \/O_LA\"1jE SHARAD V. SAMPATH\nAGEI)  YEARS\nOCC::BUS1NESS\n\n A .-E;\/O\"NIJAI.INGAPPA COLONY\nV._R'A1CHUR\n\n\" W) PRAGNESH SSAMPATH\n\nS \/O LATE SHARAD V. SAMPATH\nAGED 40 YEARS\n\nOCC: BUSINESS\n\nR\/O NIJALINGAPPA COLONY\n\nRA_ICHUR\n\ni{\/\/\n\n\n\n'NJ\n\nANUSUYA S. SAMPATH\nW\/O LATE SHARAD V. SAMPATH\nAGED AEOIIT 68 YEARS\n\nOCC; SIISINESS\n\nR\/O NIJALINGAPPA COLONY\nRMCHUR\n\n3. RAJANIKANTH P. TOPPRANI\n\nS\/O PARAMANAND \n\nAGE: MAJOR\n\nOCC: BUSINESS   I .\nR\/O NIJALINGAPPA COLONY\nRAICHUR  .  \n\nDEAD BY LRs.,\n\n3(1) RAMABAI~IEN_  I   I \nW\/O LA\"I*E IA\u00bb III _ *'IKANT}:I TOPPRANI\nAGE:     \nR\/0.12., IvIA';;IAI.A,'&lt;IvII&#039; TE&#039;MPI;.E STREET\nBIIUEAEI-IAI&quot;EES;AIA;*--ABOI\\\/IEAY\n\n3&amp;1) KR&#039;\u00a3SHNAI?.AJ\u00ab &#039;A     M \nS \/O&#039; LATE I&quot;{AJANIK&quot;A_N&#039;TH TOPPRANI\nAGE: 40  * &quot;\nIa\/O, I2, 1&#039;viA_IfiALAXMI TEMPLE STREET\n..&#039; f:3~H_U_LABHAI DESAI, BOMBAY  APPELLANTS\n\n&#039;    I. :&#039;C{I\u00a7y*1I&#039;Sz\u00a7i: SHIVAKUMAR KALLOOR, ADV.,)\n\n  &#039;AIIARNATAKA STATE FINANCIAL COIRPORATION\n=  HAVING &#039;ITS HEAD OFFICE AT No.25\n &#039;M.Q.ROAD, BANGALORE\n IOj;R,EPRESENTED BY ITS MANAGER\n&quot;   (LEGAL RECOVERY}  RESPONIDENT\n\n{By Sri ASHOK S KINAGI, AD&#039;.\/&#039;.,)\n\nVI\n\n \n\n\n\nFINANCIAL\n\n3\n\nMFA FILED UNDER SECTION 32(9) OF STATE\nCODE PRAYING TO SET ASIDE_ THE\n\nJUDGMENT AND ORDER OATEO 26.7.2008 PASSED\nBY THE PRL. DISTRICT JUDGE. RAICHUR 1N._&#039;C;&#039;wr_rL\nMISC. No.30\/1993.   E  \n\nIN MFA No.30173\/2008:   \n\nBETWEEN\n\nI.\n\nJAYANTH V SAMPATH \nS\/O.VALLABHADAS   \n\nAGE: 54 YEARS \nOCC:BUs1NESS ,   \nR\/O.L- 143, NIJALI&quot;N_GAPP\u00a7&#039; YCQLONY \nRAICHUR V     &quot;\n\nW\/O.  V V Y\n\nAGE: 33 YEARS C    \nOCC&#039;:&#039;EvBU:&#039;3INE:\u00a33&#039;S    \nR}iO.:_,Y143*;..N1JAL:NCAPpA COLONY\nRAICHUR Y _     \n\n    &#039;V \n\n  \n\n, S\/ O; VALLABHADAS\n _ V-.CAG;?:3: 35% YEARS&#039;&quot;&#039;\n&#039; V. 4&#039; &#039;OC,C:Y.BUS.INESS\n\nA &quot; Y.r, BANGALORE\n\nREPRESENTED BY ITS MANAGER  \n(LEGAL RECOVERY]  RESPQNE_IEN.T\n\n(By Sri ASHOK S KJNAGI, AD\\;,f'   A\n\nMFA FILED UNDER SECTI\u00bbO--N\u00a2 NOE GVSTATE A\n\nEINANCLAL CODE PRAYING  A.SI.D'E'Iw--LTHE\n\nJUDGMENT AND ORDER DATED *:26.'?.20_O8.PAE3_S'ED,\nBY THE PRL. DISTRICT J'U.QGE,'A.RAECH'{;JR.;vI.NWC;IVIL._*\n\nMISC. No.30\/1993.\n\nMISCCVL. 153316120 I.VAO\"\"FI.LED.._UNDER SECTION\n5 OF THE LIMITATION' ACT TO CONDONE\nTHE DELAY OF 16 DAYS*I5N _...PRF;FEERRING THE\nAPPEAL. V.   * \n\nIA4I'\/2Oof:3 F\"fLED'\u00bb.V'UNDERV ORDER 41 RULE 5\nPRAYING TO' EAGPASS ._I1'JTERIM ORDER THEREEY\nSTAYING  QPERATION*- AND EXECUTION OF THE\nJUDGIVIENT DATED\u00bb',\"2~6.?.2008 PASSED BY THE\nPRLDISTRICT JUDGE OF RAICHUR IN\nCIVL-L.M1SC.30\/._1993,V DURING THE PENDENCY OF\n\n *  THE  MFA.\" \"\"\" \n\n MISC.CVL.153316\/2010 3: IA-\n\nI\/2QO8,,-COMING ON FOR FINAL HEARING THIS DAY.\n\nU  J., IDELIVERED THE FOLLOWING:\n\nJUDGMENT\n<\/pre>\n<p>\u00a7VIiSCICV1.}53316\/2010 in MFA NO30173\/2008 is<br \/>\nfiieci to  the delay Of 16 days in preI13r&#8217;riI1gg tI1i.S<\/p>\n<p>E&#8217;:1ppE&#8217;;&#8217;.\u00a3:\ufb01. AppI_iCatiOI1  I101. Opposed. Acoepiilhg the ciause<\/p>\n<p><span class=\"hidden_text\">6<\/span><\/p>\n<p>gtinning unit&#8221;; and additional loan of ?&#8217;5.6 lakhs was also<br \/>\nsanctioned on 7.3.1984, as a guarantee for the<br \/>\nrepayment of the said loans, the Company exetiuted the<br \/>\nnecessary agreement and also executed<br \/>\nin favour of Corporation. At the request<br \/>\nrespondents No.1 to &#8220;7 gave their for-<br \/>\nrepayment of the said loan and<br \/>\ndated 31.3.1984. The oeea,,\u00a7r.,,guafantee,,lex\u00e9t\u00a7;it&#8217;ec1&#8217;i:is all<br \/>\ncontinuing deed of gu-arantee&#8221;&#8216;tor&#8217;&#8211;al}\u00bb,.an1oun&#8217;ts advanced<br \/>\nincluding the interim  &#8216;amounts to be<\/p>\n<p>advanced by.-lthe toij&#8217; the Company.\n<\/p>\n<p>Corporation Ad&#8217;e.manded._seyerail times the amount due by<br \/>\nthe Company, notices ,_\\yereVissued. lnspite of the same,<\/p>\n<p>Co11:pai&#8217;:y i&#8221;ai&#8217;ied&#8221;toV&#8217; pay the amount. Corporation<\/p>\n<p> power under Section 29 of S.F.C.Act has<\/p>\n<p> of Company. Ultimately, the assets<\/p>\n<p>.jree.oyered. on 21.10.1992. The said amount. was not<br \/>\n.&#8217;  sL.1lftiCfient. to satisfy the Claim of the Corporation. The<\/p>\n<p>~ &#8220;Corporation issued a iiotice on 20.10.1992 invcikixig the<\/p>\n<p>of the o,\u00a2%np&#8217;5,11y were sold and a sum of &#8216;(&#8217;17 lakhs was<\/p>\n<p>personal gua.ra11t:ee of respo1&#8217;1de.n_t.s l to 7 calling upon<\/p>\n<p>them to pay a sum of ?46,tiO,655.25 paise as the<\/p>\n<p>LL,\/&#8217;<\/p>\n<p><span class=\"hidden_text\">7<\/span><\/p>\n<p>arno1.111t due as on 20.9.1992 with interest at 15% pa.<br \/>\ncompounded at quart.erl_V rests till the date of<br \/>\nrealisation. The said notice was served on someof the<br \/>\nrespondents and some of the respondents hafvefi&#8221;&#8216;eift:i.gie.d.<br \/>\nBefore that, respondents I to 3 had\n<\/p>\n<p>0.S.No.48\/1986 on the file<br \/>\nwhich is re-numbered as<br \/>\nCivil Judge [Jr.Dr1] for a   it<br \/>\ndeed dated 31.3.1984:  &#8220;Cor}poration<br \/>\nis Contesting the still pending.\n<\/p>\n<p>When F\u20acSpOI1_d.63r1t&#8217;S No.1,&#8217;  tjomake payment<\/p>\n<p>inspite, of  -Way of a legal notice, the<br \/>\nCorporation was  to file the petition under<\/p>\n<p>Se(:tii)ii Slfii\u00e9aafiof State Financial Corporation Act, for<\/p>\n<p>e1&#8217;1Vforee_n1Aei1tA&#8221;o.f the liability on respondents \/ sureties. In<\/p>\n<p>A . zlppeared t.hro1,:gh their Advocate. Respondents No.4 to<br \/>\n&#8220;also appeared through their Advocate. However. it is<br \/>\n resporident No.2 has filed detailed St\u00a311L\u20ac1&#8217;11\u20ac3T1&#8217;\u00a3 of<\/p>\n<p> objections by (::(mt:est&#8217;.i.n.g the claim. some have filed<\/p>\n<p><span class=\"hidden_text\"> notice, respondents No.1 to 3<\/span><\/p>\n<p>sta.iem.ent of ohjedions. some others adopti1&#8217;1g the said<\/p>\n<p>Si&#8221;aiEEIIiel}i.. by reii.e::_&#8217;ai:.ir&#8217;1g whai.. has been said in the said<\/p>\n<p><span class=\"hidden_text\">8<\/span><\/p>\n<p>st.at:ement. They have raised the several ctontentions in<br \/>\nthe said stat.ernent denying the claim. They contended<br \/>\nthe deed of guarantee become enforceable, the moment<\/p>\n<p>there is a default in making the payments'&#8221;by-\u00ab._.t*he<\/p>\n<p>principai debtors. Therefore. the petition.-uhtiiedyjitn&#8217;theM&#8217;<\/p>\n<p>year 1993 is cleariy barred by: &#8220;th&#8211;e_1a%.iv <\/p>\n<p>Notice dated 20.10.1992 eannotibe <\/p>\n<p>computing the iimitation.Vt&#8221;3eeo\\nd1y, V_1&#8217;t&#8217;w:as dc:-ointendediii<\/p>\n<p>Section 31(1.)[aa] of th&#8211;ezSFCi. ._introdu&#8217;cedV: into the<br \/>\nAct by Act No.43 of   execution of<\/p>\n<p>guarantee deyediiyjdated  the said<\/p>\n<p>provisions .   ap_fi}ioa&#8211;b1e to them. if at 2111, the<br \/>\nCorporation iwan.ts&#8221;&#8221;to  the money, it is by way of<\/p>\n<p>a sepaiate everi otherwise. suit is not fiied within 3<\/p>\n<p> the date of said amendment. Therefore, on<\/p>\n<p>  the suit is barred by law of iimitation.\n<\/p>\n<p>  &#8216;denied the amount. claimed. T hey contended<\/p>\n<p> is sold behind their back and without:\n<\/p>\n<p>.  riotiee to them for the paltry sum, whereas the market<\/p>\n<p> &#8216;&#8221;V&#8217;al11e of the property  aroimd ?&#8217;5O lakhs. Thus_. they<\/p>\n<p>have been put to great loss. &#8216;1&#8217;heref()re. they sought for<\/p>\n<p>dismissal of the ap_pI.ieatio1&#8217;1.\n<\/p>\n<p>4. The District Court: on the basis of the<br \/>\naforesaid pleadings framed the foilowing two  for<br \/>\nconsideration:~<\/p>\n<p>enforce the Ziab\u00bbil\u00bbi\u00a3y&#8217; f or;'&#8221;*.\u00a7i&#8217;ii\u20ac-j&#8217;,<br \/>\nresp0ndents\/sureiies: &#8216;\/or Ai.h&#8221;e._ }:imoLJ;:t&#8217;t.___<br \/>\nciaimed in the pei&#8221;if,oiof:__ i  &#8220;re\u00a3:;uiI&#8217;ed &#8216;<br \/>\nunder Section; _31[I&#8217;j{aa;&#8217; q,;f7* 1Sic_1te<br \/>\nFinancial C0rpora_iio.Jji Act; I__95.l_?&#8217;, V&#8217; V i<\/p>\n<p>(1) Whether the appeliamfs are <\/p>\n<p>{2} &#8216;\/Vhai&#8217; order?\n<\/p>\n<p>5. The AV_CorpoAr217t:&#8217;i_on of its claim<br \/>\nexamined   Basavaraj &amp;<br \/>\n  and produced 17<br \/>\ndocunieritsii as Exs P1 to P17&#8242;. On<br \/>\nbehalf ofu\ufb01he one Rakesh Sampath was<\/p>\n<p>e&#8217;*am&#8217;ined as R&#8217;.Tf.V1vanci no documents were produced.\n<\/p>\n<p> District Judge on appreciation of<\/p>\n<p>the Vaiforesaid; &#8216;oral and documentary evidence on record<\/p>\n<p>&#8216;and also taking into consideration the Various<\/p>\n<p> of the Apex Court as well a.s our High Court<\/p>\n<p>  on by the parties held i:hai:_. the suit: is in time, the<\/p>\n<p>(&#8216;application  in time and it is not barred. The cause of<\/p>\n<p>action in so far as the ;,\u00a7;1.:a1*a1&#8217;it,(&#8216;3rs are (.T()1&#8217;}C(:&#8217;I&#8217;I1\u20acCI arise<\/p>\n<p><span class=\"hidden_text\">12<\/span><\/p>\n<p>towards principal and the entire Claim is regarding<br \/>\ninterest and therefore it was ()O1&#8242;}i\u20ac}&#8217;1d(;&#8217;.d the statement of<\/p>\n<p>accounts produced in the case do not reflect&#8217; the &#8216;C&lt;_Jrr_ect<\/p>\n<p>state of affairs and the liability foisted on  H<\/p>\n<p>such Statement. of Accounts is illegal &#039;\u00bb<\/p>\n<p>be the basis for allowing the ap:plicatlig)_Th4.&#039;&#8211;ll,.&#039;i&#039; 1.ierei1:ire_, &quot;aria<\/p>\n<p>the aforesaid grounds, the,Or.der Ibassed <\/p>\n<p>Court requires to be set aside &#039;*a:hd theiapgjlicatfioiq is to<br \/>\nbe dismissed.\n<\/p>\n<p>8. Per.-Qcontija,  for the<\/p>\n<p>C0 ora~tior.1uS&#8217;u alerted-the ir:l1&#8243;&#8221;&#8216;1;1&#8243;&#8221;fi&#8217;1ed order.<br \/>\nT13&#8217;  PP,  _ 5<\/p>\n<p>9. ll  in  aforesaid facts and the<\/p>\n<p>rival ;c0&#8217;i&#8221;2tent,i0&#8217;11.s,&#8217;the })0ints that arise for consideration<\/p>\n<p>viii t.h&#8217;is a&#8221;p:pea&#8221;i._are as under:\u00ab<\/p>\n<p> }&#8217;v4:&#8221;&#8221;&#8216;_!2i:\/_liie:&#8217;ti&#8217;i.er the claim by the State F&#8217;inanc1&#8217;al<br \/>\n ~ Corporatioii is barred by time as<\/p>\n<p> coritended by the appellants?\n<\/p>\n<p> &#8216;{2} Whet&#8217;her the appellants are liable to pay<br \/>\nthe an&#8217;1ounf: as claimed in the<\/p>\n<p>application?&#8217; 3<\/p>\n<p>1.5<\/p>\n<p>amount arose, on such idefault, both against the<br \/>\nprincipal debtor as well as against the guarantors.\n<\/p>\n<p>Therefore, for the purpose of eom_p1.:iat.ionH <\/p>\n<p>Limitation. that date which has to be  _<\/p>\n<p>consideration and not the date of seconci-\u00bb..n:otiC&#8211;e: datedw it<\/p>\n<p>20.10.1992 as per EX P10. C3ou_r:t___:I&#8217;iasl<\/p>\n<p>taken 20.10.1992 as the starting   <\/p>\n<p>so far as the guarantors are therefore it<br \/>\nrequires to be set aside:   __on the day. the<br \/>\nguarantee deedwas   1984, and as<br \/>\non that d.a_,\\\/to Y   under the Act<br \/>\nenabliiJ_:&#8217;v1li\u00a7&#8217;&#8211;V__  [to proceed against the<br \/>\nguarantlorsll before  Court. Such a provision<\/p>\n<p>Was&#8217;;ii1t.1&#8217;odue&#8217;e.d&#8221;oriiy in the year 1985 by way of<\/p>\n<p>\u00bbam&#8217;e&#8217;1:dn1e.ntL\u00ab.._even if the said amended provision is<\/p>\n<p> three years from the said date, these<\/p>\n<p>21p}:i&#8217;Iieai:.i:onv:-itought: to have been filed. Admittedly, these<\/p>\n<p>[applications are filed in the year 1993. Seen from any<\/p>\n<p>.  angle. the applications are barred by time.\n<\/p>\n<p>12. Reliance was placed on the Judgrrierit: of ihe<\/p>\n<p>Apex Court in the case of MAHARASHTRA STATE<\/p>\n<p>A &#8216; = .. _V ttatailityijvo}&#8221;&#8221;_sureties had crystaiised t.hen.\n<\/p>\n<p><span class=\"hidden_text\">16<\/span><\/p>\n<p>FINANCIAL CORPORATION v. ASHOK KAGARWAL 8:<br \/>\nOTHERS reported in 2006 SAR (Civil) 399, xarhefte on<br \/>\nthe facts of the case, the Apex Court held as    p<br \/>\n&#8220;&#8216;5. Article 137 of the I.iI}1iI(1._I,t&#8217;_t\u00a7)E1?;VV  ._ it<br \/>\napplies in thefacts of the pre\u00e9ercttc case;<br \/>\nArticle 13 7 is applied, the  &#8216;:ntto,ved&#8217;<br \/>\nby the Appettant Corpor&#8217;a_tion on<br \/>\nI992for proceeding aggtaiiist &#8216;VtheV&#8221;sts.retiesVVft.e.<br \/>\nthe respondents&#8217; ~herein}W  jctearlyh t\ufb01arred<br \/>\nby time and the   \u00abcorrect in<br \/>\nholding so..a vTo recat-tithe&#8217; present<br \/>\ncase, the   V  ment o f the<br \/>\narnoitnt   against the<br \/>\n &#8216;that&#8217;  &#8216; M\/s.V\u20acrystat Marketing<br \/>\nPrivate   &#8216;March, 1983 and the<br \/>\napplicatjon&#8217;v._tirtrier&#8221;}:&#8217;3ections 31 and 32 of the<br \/>\nState t4I3*tn_ar1ci-:it ACJovrporatior&#8217;r tuas filed against<\/p>\n<p>v_&#8217;:&#8221;3&#8217;\u00abthepAV&#8217;s-aid borrower on 25*&#8221; October, 1983. The<\/p>\n<p> V.  The amendment under Section 31 of<br \/>\n&#8220;t.he&#8217;W:_State Financial Corporation Act which<\/p>\n<p>V &#8221; &#8216;authorises the State Financiat Corporations to\n<\/p>\n<p> &#8211;take action under Section 3] of the Act. _for<br \/>\nenforcing the liability again.i~&#8217;;t: the suret&#8221;ies.<br \/>\nwas brought about in the g_.;ear 1985 by<\/p>\n<p>intmditction of sub~seCtiori {aa} in Section<\/p>\n<p>31(1) Qf the Act. Even after thiss&#8217; aniendment<\/p>\n<p>kw\/.\n<\/p>\n<p> _ ll:  relying on these two Judgments, it was<br \/>\n we ::?.ontie_nded. when once a demand was made ag_\u00a7a1&#8217;nst the<\/p>\n<p>&#8220;Principal Debtor, the anaount. get. cirystalised and the<\/p>\n<p>.19<\/p>\n<p>by the industrial concern in paying any<br \/>\ninst&#8217;at&#8217;lrnent or the Corporation requires the<br \/>\nindustrial concern to make immediate<br \/>\nrepayment of any loan under Section 30 arid.&#8217;<br \/>\nthe industrial concern fails to make<br \/>\nrepayment&#8221;. In the case, both these  is<br \/>\nare specified inasrnuch as there is&#8221;&#8216;a&#8217;<br \/>\ncomrnitted by the industrial:iyeorlieern.2.:<br \/>\nCompany herein, in payiny.__ the instralllrnent  &#8221;<br \/>\ninasmuch as paymerit\u00ab,o_j?.all<br \/>\nare defaulted. Secoridlyi: &#8216;Qorporatioiihas<br \/>\ncalled upon the &#8216;in_dustriali.eoncernrto make the<br \/>\nrepayment by the year<br \/>\n1987&#8217; itsyeelfg &#8216;eoe&#8217;n&#8221;faccording to<br \/>\nthe  pre&#8217;S\u00a7;r&#8217;iptiO&#8217;ri:ft&#8217;ylaidlmdoum under<br \/>\nSlectioril.l3&#8243;1..&#8217;f-t&#8217;he,rigtht&#8211; to&#8221; proceed against the<br \/>\nsurety for  liability of the surety<br \/>\n_ has  upon-  breach being: corrJnit&#8217;t&#8217;ed<br \/>\n lo&#8221;an&#8217;ee~~-\u00abin paying the installment or<br \/>\n _vVwhen\u00ab.the___Corporation required or when the<br \/>\n called upon the Company to<br \/>\nn1al+ce_fthe payment&#8221; of the loan amount by<\/p>\n<p>issuing notice in the year 1987. &#8221;\n<\/p>\n<p>cause of action to proceed eig,{aiI&#8217;1st the S1,1.T(&#8216;f{&#8216;.I&#8217;CS under<\/p>\n<p>gv\/,<\/p>\n<p><span class=\"hidden_text\">20<\/span><\/p>\n<p>the Deed of Guarantee accrues and the period of three<br \/>\nyears has to be calculated from the said date i.e.. from<br \/>\n1985. the applicatiorl \ufb01led in the year 1993 is _c:_Iear1y<\/p>\n<p>barred by time&#8221;\n<\/p>\n<p>14. Per contra. learzzeti Cou_a.sejI&#8217;=,Vfor..  &#8216;V<\/p>\n<p>Corporation relied on the Judgijner;.t.&#8217;g&#8217;o1&#8243;\n<\/p>\n<p>in the case of    <\/p>\n<p>CHLANNAVEERAPPA BELEEI&#8217; oTHEI1usi_&#8217; reported in<br \/>\nAIR 2009 SC 1874i._._'&#8221;wi1ere  Court held as<\/p>\n<p>under\u00bb    _  V<\/p>\n<p> ~~~~   tiabitiiy depends upon<\/p>\n<p>the -.  &#8220;\u00a33-oritract. A continuing<br \/>\ngaarar1tee&#8221;v.   from an ordinary<\/p>\n<p>_ guarahtee.&#8217; There aiso a differerice between<br \/>\n&#8216;3\u00a5:.a3_._:g:.tarariiee &#8212;&#8212;&#8211; -\u00abwhich stipulates that the<br \/>\n  liable to pay only on a demand<br \/>\n  eifeditor. and a guarantee which does<br \/>\n not eoriiairsz such a condition. Further,<br \/>\ndepending on the terms of guarantee, the<\/p>\n<p>it &#8216;d&#8221;=,_liability of a guarantor may be limited to a<br \/>\n &#8220;bmt:ic&#8217;iiiar sum. Instead of the liability being<br \/>\nto the same extent as that of the principal<br \/>\ndebtor. The iiabitiiy to pay rnay arise. on the<br \/>\nprincipal debtor and gi.z.aran.ior. at the same<\/p>\n<p>time or at d if\/E:-?rer1i points of time. A claim<\/p>\n<p><span class=\"hidden_text\">21<\/span><\/p>\n<p>may be even time\u00abbarred against the principal<br \/>\ndebtor, but still ext\/&#8217;orceable against the,<\/p>\n<p>guarantor, The parties may agree that.\n<\/p>\n<p>liability of a guarantor shall arise at  1-\n<\/p>\n<p>point of ante than that of the__ T<\/p>\n<p>debtor. &#8221;\n<\/p>\n<p>15. In View of thelaforesaiti .legal&#8217;-.po,.\u00a7itionj, ash&#8217;<\/p>\n<p>enunciated by the  Court and<br \/>\nthis Court, the law onl_t}ie&#8217; well settled<br \/>\nwhen the prii1cipal  in payment<br \/>\nfor the    is made by the<br \/>\ncreditor  sai&#8217;ci&#8221;lamou11t as a rule i.e.,<br \/>\nstartiiig_poi_i1tVof against both principal debtor<\/p>\n<p>and the gi1aranto1f._ However, it is subject to<\/p>\n<p>  the parties. If the contract<\/p>\n<p>  against the guarantor before he<\/p>\n<p>islea&#8217;llled_u&#8217;plo::i&#8217; to pay the said amount, unless such a<\/p>\n<p>r.\u00a7iemai1*cl &#8220;:.;&#8217;s made, the cause of action against the<\/p>\n<p>&#8216;.gtiara&#8217;ntor would not arise till such demand. However.\n<\/p>\n<p>   on? the day, the demand was made to the gua1&#8217;ant.or, the<\/p>\n<p> ctause of action. against the principle borrower&#8217; should be<\/p>\n<p>live. if the loan is barter} by time on the date of<\/p>\n<p> &#8216;~  borrowe_r has mort<\/p>\n<p><span class=\"hidden_text\">22<\/span><\/p>\n<p>demand, the said demand would not revive a time<br \/>\nbarred debt: against the gizarantors. But on the day. the<\/p>\n<p>demand was made, if the loan was live. therea_fter=,&#8211;___even<\/p>\n<p>if the limitation prescribed for proceedingpag\u00e9amst<\/p>\n<p>principal debtor is time barred that would&#8221;-not   <\/p>\n<p>the way of enforcing the ciaim:&#8221;aga&#8217;i&#8217;i3st&#8211;.pthe.lgu_a.rai&#8217;itee&#8217;;.\n<\/p>\n<p>Therefore, in order to find out  a claini&#8217; -is <\/p>\n<p>by limitation or not, what isv-vr.t&#8217;o&#8211;i,be seen is _&#8221;&#8216;\u00a3:he&#8217;.;cont1&#8217;act<br \/>\nbetween the parties -and depeiiidirullxg-._Qn snlch&#8221; contract<br \/>\nentered into the periodlof:  be Computed<\/p>\n<p>under Article: the  V<\/p>\n<p>116. l&#8217; in  the loan was advanced<br \/>\nin the year&#8221;-\u00ab1l9&#8217;84l.  in dispute that the principal<\/p>\n<p>.&#8217;.*.&#8217;..r.\\.\n<\/p>\n<p>gaged his properties as a security for<\/p>\n<p> due-v.repa}:fnient. of the loan. It is in 1986 as per Ex<\/p>\n<p>P.l*l__Da  is made against the principal debtor<\/p>\n<p>&#8216;V.,CEl1lll&#8217;1g&#8221;&#8216;]v.1\u00a3}f;0T1 him to pay the installment, which are due.<br \/>\n clear in the said legal notice, if those<br \/>\n de?fault.ed installments are not made. the Corporation<\/p>\n<p> would be constrained to invoke Section 29 of the Act to<\/p>\n<p>recall the entire loan and thereafter to proceed under<\/p>\n<p><span class=\"hidden_text\">24<\/span><\/p>\n<p>&#8220;1. If at any time c::lefault&#8217; shall be<br \/>\nmade by the Company in the payment of the<br \/>\nprincipal sums of ?&#8217;10.18.000\/&#8211; &amp; \u20ac356,000\/~<br \/>\nand interests commitment charges and\/<br \/>\nother moneys for the time being due<br \/>\nCorporation under the Security Dotrujnertt&#8217;$_&#8217;:&#8221;<br \/>\nthe Guarantors on demcmcimshall pay<br \/>\nCorporation the whole ofsych:pri.r1ctpal&#8217;  C<br \/>\ninterest. commitment vcharye__s1&#8243;and\/orig other<br \/>\nmoneys, which shall  be<br \/>\nCorporation as ajoresaict  xuwill. C irtdenirtyy<br \/>\nand keep inderrtrttfted  C&#8217;orpora~t&#8217;tori against<br \/>\nall loss of principal <\/p>\n<p>charge orjotrhergj n1oneys4V&#8221;s.;\u00e9(;ttre\u00e9t&#8217; under the<\/p>\n<p> &#8220;all costs charges and<br \/>\ne9;pe&#8217;n-sest&#8221;&#8216;Lo-hatsoeyer {as between attorney<br \/>\nand client)   &#8220;JCorporat&#8217;ion may incur<br \/>\nby reagaron anyhalejault on the part of the<\/p>\n<p>Wgcoriwpany &#8220;or.,.in..ftling any legal proceedings<\/p>\n<p>  aglainst&#8217;*~tI1e company and\/ or the Guarantors<\/p>\n<p>V  _for.V4the reccvvery of the aforesaid amounts. &#8220;&#8216;<\/p>\n<p>1&#8217;7.,y__A3 &#8216;l&#8217;herefore, it is clear. it is only on the<\/p>\n<p>   debtor committing default, in payment of<\/p>\n<p>u&#8221;-_mo1r1ey due to the Corporation and after 2:1 demand is<\/p>\n<p>\u00ab made to the guarantors to make t.h\u00a33 said paymer1t. if the<\/p>\n<p>_g&#8217;1.1arar1t,&lt;&#039;)rs failed to make pay&#039;me:1t.. the cause: of.:a1&lt;:tio:1<\/p>\n<p>  brought. to sale. sold in public auction<\/p>\n<p>mi. a   ?l7 lakhs is recovered, it is after<\/p>\n<p>h  ,.demandvV&#039;was made against the guarantors. For the first<br \/>\n_&#039; i:i1ne on 20.10.1992 as per EX P10, the said demand is<\/p>\n<p>inade in conformiizy with clause {1} of the Guarantee<\/p>\n<p><span class=\"hidden_text\">25<\/span><\/p>\n<p>to proceed against. the guarantors, would arise.<br \/>\nTherefore. under the terms of contract, the cause of<br \/>\naction to proceed against the principal debtor and the<br \/>\nguaraiuor is not one and the same and cause<br \/>\nagainst the guarantors is depend on a<br \/>\nagainst, the principal debtor and&#8217;~t.he<br \/>\nconf1rnit.t,ing a default and after<br \/>\nCorporation making a derna.n:d._\u00bbagai11st&#8217;<br \/>\nand only when the giiarantors ddefa&#8211;V1lt~LVE it could<br \/>\nbe said the Cause   against the<\/p>\n<p>guarantors. lt.:i;s.__jn   issue of Ex: P1,<\/p>\n<p>admitt.edly._AVpriiicipai&#8217;-debt.or did not pay the amount<br \/>\ndue under the  It is on record, proceedings<\/p>\n<p>are initiated under Section 29 of the Act, assets of the<\/p>\n<p>dedt&#8217;ictio.n.to&#8221;:?17 lakhs, it is for the balance amount, a<\/p>\n<p>Deed. Wheii. the g;\u00a71,i:\u00ab.u&#8217;ai&#8217;itc1)i&#8217; did not make the paynierit.\n<\/p>\n<p>_l_993 appiication is filed ll.I&#8217;idf:?I&#8217; Sections 30 and $31 of<\/p>\n<p><span class=\"hidden_text\">26<\/span><\/p>\n<p>the Act. Therefore, applying the principles enunciated<\/p>\n<p>in the aforesaid Judgments. the cause of action in far<\/p>\n<p>as the guarantors are Concerned, did arise<br \/>\nyear l992 and in the year 1993, the<br \/>\nbeen filed is well within t.:t1ree&#8217;\u00ab.yearsr A<br \/>\ncontemplated under Article<br \/>\nOn the day, the demand<br \/>\nthe principal debtor&#8221; date of<br \/>\nborrowing is 1984!&#8217; it  mortgaged.\n<\/p>\n<p>Therefore, tog. 316 Principal<\/p>\n<p>debtor, thew  . &#8216;off;li&#8217;mi,ta&#8217;tioi&#8217;1A was upto 1996.\n<\/p>\n<p>&#8216;l&#8217;herefore,_  in the year 1992, the loan<br \/>\nwas live.&#8217; Even the application is filed for<\/p>\n<p>recon-ferye..agairistthe guarantor, the loan was live and<\/p>\n<p>attliereforeitheiDistrict Court on a proper appreciation of<\/p>\n<p>Cr_a&#8217;I&#8217;._ :arid.l&#8221;&#8221;~dooi,ir15ent.ary evidence on record and also<\/p>\n<p> _  iilind, the law laid down by the Apex Court<br \/>\nH  \u00bb%:tIi(lst&#8217;h\u20acVvI:&#8221;llgl1 Court and correctly applying the law to the<br \/>\nf\u00e9ir.?;ts&#8217;of the case. has come to the c:o1&#8217;1e1usior1 that the<\/p>\n<p>&#8221; \u00e9ipplieat:ioI1 is in time. V<\/p>\n<p><span class=\"hidden_text\">30<\/span><\/p>\n<p>23. In View of the fact: that, the appealw<br \/>\nI\\\/IFA30173\/2008 it:s&lt;3if is dismissed on merits, IA-<br \/>\nI\/ZOO8 for stay does not survive for cionsideljatioia.\n<\/p>\n<p>Accordingly, IAwI\/2008 for stay is also dismissedjf<\/p>\n<p>     sa\/#<br \/>\ns-JUDGE<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Karnataka High Court Sharad V Sampath vs Karnataka State Financial &#8230; on 27 September, 2010 Author: N.Kumar And Adi INT?\ufb01CHKH\u00a7COURT(M?KARNATAKA CHKHHTBENCHATCRHBARGA DATED THIS THE 27m DAY OF SEPTE:MB\u00a3:R,.f2Oj1.O~v-V_ PRESENT THE HONBLE MR.JUS&#8217;F1CE.N.KiUMAi\u00e9\u00bb\u00ab A&#8217; AND THE HONBLE MR.JUSTI_CE SUEHASH&#8217; &#8221; MFA No.30O9.1\/2008 A_ &#8221; O&#8217; MFA N&#8217;e_.13m 73\/2O&#8217;:&gt;8;Sf&#8217;_.C1 L &#8216;A = MISCCVL. 153316\/201-0 3: IA: \/&#8217;20Os&#8211; [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,20],"tags":[],"class_list":["post-34335","post","type-post","status-publish","format-standard","hentry","category-high-court","category-karnataka-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Sharad V Sampath vs Karnataka State Financial ... on 27 September, 2010 - Free Judgements of Supreme Court &amp; 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