Principal Borrower obtained term loan from nationalised bank with two guarantors. The bank got the loan documents renewed after three years from the principal borrower and only one guarantor. Now the bank has filed recovery proceedings before the DRT. Can the other guarantor claim the benefit of Limitation for not renewing the loan documents after three years.
If the borrower got the loan renewed after 3 year period, from the date of execution of the earlier loan, then the guarantor who is not a party to the second renewed loan, will not be liable to that loan. Whereas, if the second loan with the same conditions and amount was renewed within 3 years from the earlier loan, then he is also liable.
My Bank sanctioned credit facilities in Nov 2005 to my Pvt ltd Company. They classified accounts as NPA on 07.04.07 and invoked Sarfaesi act on 31.07.07. Since there was protracted dispute on NPA classification and also non upgradation of accounts to standard after clearence of all dues continously after NPA and sarfaesi and also selling mortgaged property under Sarfaesi act in Sept 2008, I refused to sign Acknowledgemnent of Debt which was being insisted by Bank in Oct 2008. They lodged OA at DRT in Aug 2009 for recoevery of balance amounts against Directors Personal guarantee.
Is the limitaion valid in Aug 2009 for Personal guarantee of Directors. Pls advice.
Is the limitation valid for our Pvt Ltd company at the time of filing OA at DRT. Please advice.