Any acknowledgement of debt by the principal borrower is also considered an acknowledgement by the guarantor under the Limitation Act, 1963 – State Bank of India Vs. Gourishankar Poddar and Anr. – NCLAT New Delhi

The Hon’ble NCLAT held that the liability of the Corporate Debtor and the guarantor are co-terminus. Thus, liability for guarantor would arise only when amounts became and went due by the Corporate Debtor. Consequently, any acknowledgement of debt by the principal borrower is also considered an acknowledgement by the guarantor under the Act of 1963. The period of limitation against the guarantor starts only when a demand is raised from the guarantor specifically. In case of continued payments by a principal borrower, no demand would be raised against a guarantor and thus limitation does not commence.

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