when the principal debtor did not repay the bank loan, the bank as creditor can adjust it at maturity of the Fixed Deposit Receipts deposited by the guarantor with the bank as security, though the debt became barred by limitation at the time of maturity of the said Fixed Deposit Receipts

Citation

AIR 1992 SUPREME COURT 1815

SUPREME COURT

(From : Madhya Pradesh)*

K. RAMASWAMY , J. and B. P. JEEVAN REDDY , J.

Criminal Appeal No.254 of 1992, D/- 20 - 4 - 1992

Punjab National Bank and others Appellants v. Surendra Prasad Sinha Respondent.

(A)Penal Code (45 of 1860), S.409 - Breach of trust - Bank loan - Recovery of - Debt barred by limitation - Adjustment of FDR securities deposited by guarantor thereafter by bank on maturity of said deposits - Not a criminal breach of trust. Banking - Loan recovery - Debt barred by limitation - Adjustment of securities deposited by guarantor towards debt thereafter - Permissible. 

Contract Act (9 of 1872), S.128 - Limitation Act (36 of 1963), S.3 - S.3 of the Limitation Act only bars the remedy but does not destroy the right which the remedy relates to. The right to the debt continues to exist notwithstanding the remedy is barred by the limitation. Therefore when the principal debtor did not repay the bank loan, the bank as creditor can adjust it at maturity of the Fixed Deposit Receipts deposited by the guarantor with the bank as security, though the debt became barred by limitation at the time of maturity of the said Fixed Deposit Receipts. It

is not obligatory to file a suit to recover the debt. Such adjustment would not amount to offences punishable under Ss.109, 114 and 409 of the Penal Code. (Para 4) 

(B)Criminal P.C. (2 of 1974), S.204, S.482 - Issue of process - Complaint case - Relevant facts and circumstances should be considered before issuing process - Process issued mechanically on basis of complaint filed as vendetta to harass persons - Compliant quashed.

Equivalent citations: 1992 AIR 1815, 1992 SCR (2) 528, AIR 1992 SUPREME COURT 1815, 1992 AIR SCW 2046, 1992 CALCRILR 165, (1992) 2 SCR 528 (SC), 1993 SCC(CRI) 149, 1993 (1) SCC(SUPP) 499, 1992 (2) SCR 528, (1992) 3 JT 46 (SC), (1992) SC CR R 612, (1992) 1 BANKLJ 429, (1993) EASTCRIC 483, (1992) JAB LJ 411, (1992) MADLW(CRI) 472, (1993) 2 MAHLR 747, (1992) 2 SCJ 531, (1992) 2 CURCRIR 103, (1992) 1 BANKCAS 579, (1992) 29 ALLCRIC 304, (1993) BANKJ 172, (1993) 1 CHANDCRIC 54, (1992) 2 ALLCRILR 47, (1994) 21 CRILT 219, (1992) 75 COMCAS 699, (1992) 2 CRIMES 297, (1992) 2 BANKCLR 123