In the landmark case decided by the Division Bench of the
Supreme Court of India, the principle that the Limitation Act bars
the remedy but does not extinguish the debt was reinforced. This
judgment addresses the contention surrounding time-barred debts and
their recoverability under specific recovery acts, examining the
interplay between the Limitation Act, 1963, and other statutory
mechanisms for debt recovery.
Case Background
The appellants, K.P. Khemka and another, had provided personal
guarantees for a loan taken by M/s Khemka Ispat Limited from the
Haryana State Industrial and Infrastructure Development Corporation
Limited (HSIIDC). M/s Khemka Ispat Limited also entered into a Loan
Agreement with HSIIDC Ltd. along with the personal guarantees of
the appellants. When the company defaulted, HSIIDC sought to
recover the debt under the Haryana Public Moneys (Recovery of Dues)
Act, 1979, read with the State Financial Corporation Act, 1951.
