Law:

Section:

(a) Financial Institutions (Recovery of Finances) Ordinance (XLVI of 2001)-------Ss. 9 & 10---Contract Act (IX of 1872), S.128---Limitation Act (IX of 1908), Art. 57---Constitution of Pakistan, Art. 10-A---Suit for recovery of loan amount surety's liability---Application for leave to defend suit by guarantor---Guarantor's pleas were that suit was time-barred; that court had granted leave to another defendant on similar ground of limitation; that statements of accounts found mentioned mark-up over mark-up and huge amount against penalties and that assets of principal company due to its winding up had been sold, but plaintiff had failed to file its claim thereagainst---Validity---Provision S.128 of Contract Act, 1872 would not affect application of statute of limitation---Point of limitation raised in the present case was a mixed question of law and fact---Such complicated questions raised by guarantor would require evidence---Wisdom and applicability of Art.10-A of the Constitution could not be ignored or overlooked in circumstances---High Court accepted the leave application unconditionally. National Bank of Pakistan v. F.S. Aitzazuddin and 2 others PLD 1982 Kar. 577; United Bank Ltd. v. Haji Bawa Company Ltd. and 3 others 1981 CLC 89; National Bank of Pakistan v. General Tractor and Machinery Co. Ltd. 1996 CLC 79; National Commercial Bank Ltd. Karachi v. Muhammad Tufail and another PLD 1975 Kar. 671; Sreenath Roy and others v. Peary Mohan Mookerjee AIR 1917 Cal. 154; National Bank of Pakistan v. Messrs Shoaib Corporation and others 2004 CLD 631 and Messrs Shaz Packages v. Messrs Bank Alfalah Limited 2011 CLD 790 rel. (b) Contract Act (IX of 1872)--- ----S. 128---Limitation Act (IX of 1908), Art. 58---Liability of surety---Scope---Recovery of loan amount from guarantor/surety---Limitation---Provision of S.128 of Contract Act, 1872 would not affect application of statute of limitation---Right of action against guarantor would generally arise at the same time as right of action against principal debtor---Principles. Under section 128 of the Contract Act, 1872 the liability of the surety is co-extensive with that of principal debtor, unless it is otherwise…

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