1. ' The appellant has assailed the judgment and decree passed by learned Banking Court-V Karachi in Suit No,1821/2000, whereby the appellant filed suit for recovery was dismissed. Precisely, the facts leading to the appeal are that PICIC filed a winding up petition for enforcement of their charge bearing J. Miscellaneous No,145 of 1995 against Messrs. Casspak Industries Limited, in the High Court of Sindh which was allowed vide order dated 27-8-1996. The claims of the creditors were invited by the Official Liquidator, which was approved vide order dated 7-10-1997, the claim of the appellant was also approved, the plaintiff received Cheque No,0540606 for Rs,27,83,131, a sum of Rs,1,43,96,695 remained outstanding against respondent No,8 company recoverable from the guarantor detailed hereinbelow:- Principal Rs.26,20,169.00 Markup Outstanding Rs.86,00.159.00 TotalRs. 112,20,328.00 Amount of Three Banks Rs.31,76,367.00 Guarantees favouring Rs. 1,43,96,695.00 ' Respondents Nos.1 to 7 in lieu of demand finance facility granted respondent No,8, executed letter of guarantees dated 17-2-1994, undertaken to pay on demand Rs,91,75,036 therefore, appellant has prayed for a decree along with mark-up at the prevalent bank rate. Respondents were proceeded ex parte. Learned Banking Judge came to the conclusion that the suit suffers from non-rejoinder of necessary party as well as it is not explicitly provided when tho cause of action has accrued against the Guarantors as the suit was filed after two years of receiving the cheque in liquidation proceedings from Official Liquidator, who was necessary party to the suit. It is observed that the guarantees arising out of the finance agreement contained belated date of execution viz., 17-2- 1994 while the suit was filed on 7-6-2000, which was hopelessly time barred ' We have heard Mr. Hassan Akbar, learned counsel for the petitioner, perused the record of the case.
2. ' It is primarily contended that under Article 115 of the Limitation Act (IX of 1908) money lent payable by Guarantors in terms of contract on and after an actual demand is made no complete cause of action could accrue without prior demand, therefore, limitation will run from the date fixed for payment. In case no such demand is made under section 128 and Article 57 of Limitation Act, the period of limitation in case of guarantee would begin to run either from the date of demand and in absence of any prior demand from the date of filing of suit for liquidation of amount. In support of the above contention reliance has been placed in the case of United Bank Ltd v. Haji Bawa Company Ltd. And 3 others 1981 CLC 89, (ii) National Bank of Pakistan v. General Tractor and Machinery Co. Ltd. (1996 CLD 79). It is unfortunate that the respondents were ex parte before the trial Court. Guarantors at no occasion had repudiated their liabilities to attract commencement of limitation for filing suit for recovery of loan. In any view of the matter, time for enforcement of liability under guarantee would start from the date of revocation of guarantee under section 130 of the Contract Act (1872) or upon failure by Guarantor to make A payment in pursuance of notice of demand as held in case of United Bank Limited v. Aftab Ahmad (1998 M LD 1744), wherein it is observed that limitation for purpose of filing of suit for recovery of loan based on personal guarantee of defendant/ Guarantor had intimated his resignation from Directorship of defendant/borrowing company time for suit for recovery of loan would start from the date of notice of demand and filing of such suit would be deemed, therefore, suit filed by the Bank in the circumstances was not barred by time and defendant Guarantor will remain liable for renewed facilities and advances granted to the defendant/borrowing Company from time to time as guarantee executed by defendant/Guarantor was continuing guarantees. It is further held that the contract of guarantee to the extent of the amount mentioned therein is a continuing liability of the Guarantor unless guarantee was revoked. In the present case, however, the guarantee had continued to be operative and was not revoked at any point of time based on sections 133 and 145 of the Contract Act. As held in case of United Bank Ltd v. Shahrayar Textile Mills as well as in case of Mirza Anwar Ahmad v. Habib Bank Ltd. Faisalabad 1989 CLC 2441 following observations are made:- - ' The crux of a contract of a guarantee is that it binds the surety in a co-extensive manner and he cannot insist that the debt should be recovered in the first instance from the principal debtor for whom he might 'have stood as surety. The choice is that the creditor and if the creditor Bank considered it safe to proceed against the surety he cannot avoid it. It would be open to Mirza Anwar to run after the person for whom he stood surety to get the recompense, but the tripartite agreement enables the creditor to pursue his remedy against the appellant alone.
3. ' It is next urged, that the loan agreement is distinct from agreement of guarantee in this regard reliance has been placed on case of Ghulam Mustafa Jatoi v. Additional District and Sessions Judge/Returning Officer, N.A. 158, Naushero Feroz 1994 SCM R 1299.
4. ' The first three clauses contained in the letter of guarantee being relevant are reproduced hereinbelow:--
(1) My/our liability under this guarantee shall be that of principal debtor and you may at your option hold me/us primarily responsible for the liabilities of the Customer.
(2) This guarantee shall continue to remain binding on me/us until receipt by you of written notice of discontinuance thereof and notwithstanding such notice I/we shall continue to remain liable to you for all sums due and owing to you by the Customer whether certain or contingent at the time of receipt but you of such notice and also for any credits established for the Customer and or all instruments drawn on you or accepted by you, for the benefit of the Customer and purporting to be on a date on or .Before the date of receipt of such notice, even though actually paid or honoured after that date.
(3) This guarantee shall not be discharged or prejudiced by any partial payments or settlement of account or existence of a credit balance of the Customer at any time or by discharge of the Customer by 9peration of law or for any other reason.
5. On the basis of above terms guarantors would remain liable for the finance facilities advanced/granted to the respondent No,8. The contention of the learned counsel for the appellant seems to be tenable under the law. In the present case guarantees were not revoked at any point of time. The suit cannot be proceeded as against respondent No,8 company being ordered to be wound up as held in case of UBL v. Shaharyar Textile Mills (supra), the respondents became liable, to liquidate liabilities by virtue of guarantee, they would be entitled to claim payment from the liquidator of the company under section 318 of the Companies Ordinance, 1984.
6. ' For the foregoing reasons, impugned judgment is hereby set aside. Appeal stands allowed vide short order dated 15-2-2008, Suit No,1821 of 2000 is remanded back to the learned Banking Court, for adjudication on merits. These are the reasons in support of short order.