Deepak Bhandari Vs. Himachal Pradesh State Industrial Development Corporation Limited

Deepak Bhandari Vs. Himachal Pradesh State Industrial Development Corporation Limited
Limitation – Starting Point
Civil Appeal No.1019 of 2014 [Arising out of Special Leave Petition (Civil) No. 30825 of 2010]-Decided on 29-1-2014.
plea was taken by the defendants, including the appellant herein, that the suit was time barred as it was filed beyond the period of 3 years from the date of commencement of limitation period….. It is thus clear that merely because the Corporation acted under Section 29 of the State Financial Corporation Act did not mean that the contract of indemnity came to an end. Section 29 merely enabled the Corporation to take possession and sell the assets for recovery of the dues under the main contract. It may be that only the Corporation taking action under Section 29 and on their taking possession they became deemed owners. The mortgage may have come to an end, but the contract of indemnity, which was an independent contract, did not. The right to claim for the balance arose, under the contract of indemnity, only when the sale proceeds were found to be insufficient. The right to sue on the contract of indemnity arose after the assets were sold. The present case would fall under Article 55 of the Limitation Act, 1963 which corresponds to old Articles 115 and 116 of the old Limitation Act, 1908. The right to sue on a contract of indemnity/ guarantee would arise when the contract is broken….read more