Limitation is the most avoidable way to lose a good case. The Limitation Act, 1963 prescribes the period for each kind of proceeding in its Schedule, and a suit filed after it must be dismissed, whether or not the other side raises the point.
The periods that come up most
| Claim | Period | Runs from |
|---|---|---|
| Money due on a contract or for goods sold | 3 years | When the amount becomes due |
| Compensation for breach of contract | 3 years | Date of breach |
| Specific performance | 3 years | Date fixed for performance, or refusal |
| Recovery of possession of immovable property | 12 years | When possession becomes adverse |
| Enforcing payment secured by a mortgage | 12 years | When the money becomes due |
| Execution of a decree | 12 years | Date of the decree |
| Appeal to the High Court from a decree | 90 days | Date of the decree |
Section 18: a written, signed acknowledgement of liability made before the period expires starts a fresh period from the date of the acknowledgement. Section 19 does the same for a part payment recorded in the handwriting of, or signed by, the payer. On any long-running account, get a signed confirmation of balance every year. It is a two-line document that preserves the claim indefinitely.
What extends or suspends time
- Section 12: the time taken to obtain a certified copy is excluded when computing the period for an appeal.
- Section 14: time spent bona fide prosecuting the matter in a court without jurisdiction is excluded.
- Section 17: where the case is based on fraud or mistake, time runs from when it was, or could reasonably have been, discovered.
- Legal disability, such as minority or unsoundness of mind, postpones the start.
Has your time already run out? Three questions decide it
- Did the other side acknowledge the liability in writing and sign it, before the period expired? Section 18 restarts the clock from the date of that acknowledgement.
- Did they make a part payment before expiry? Section 19 restarts it from the date of payment, provided the payment is evidenced in the required manner.
- Neither? Then the period runs from when the right to sue first accrued, and for a suit it cannot be extended for sufficient cause. Section 5 rescues appeals and applications, not suits.
Condonation of delay
Section 5 permits condonation of delay in appeals and applications on sufficient cause. Note carefully that Section 5 does not apply to suits. A time-barred suit cannot be revived by explaining the delay, which is why the three-year period on a money claim is genuinely final.
The Articles behind that table, and the mortgage trap
Each row above comes from a numbered Article of the Schedule, and quoting the Article is what makes the argument precise. Specific performance is Article 54. Possession based on title is Article 65, twelve years running from when the defendant's possession becomes adverse, a fact to be pleaded and proved rather than the date of the sale deed. Execution of a decree is Article 136, and an appeal to the High Court from a decree Article 116. Where nothing else fits, the residuary Article is 113 for a suit and 137 for an application, both three years.
Mortgages are where most published summaries go wrong, because the period depends on what you are suing for. A mortgagor's suit to redeem or recover possession is Article 61, thirty years. A suit to enforce payment of money secured by a mortgage is Article 62, twelve years from when the money becomes due. A mortgagee's suit for foreclosure is Article 63, thirty years. So both figures given above are right, for different suits. Anyone who tells you mortgages are simply twelve years is wrong two times out of three.
For most claims, limitation bars the remedy and leaves the right alive, which is why a time-barred debt can still be set off or recovered from a security. Property is different. Section 27 provides that at the end of the period for instituting a suit for possession, the person's right to the property is extinguished. You do not merely lose the ability to sue; you lose the title. That is the mechanism by which adverse possession works, and it is why an encroachment left unchallenged for twelve years is not a nuisance to be dealt with one day but a loss of ownership.
What an acknowledgement actually has to look like
Because Section 18 saves so many claims, it is worth knowing how forgiving it is. The acknowledgement must be in writing, signed, and made before the period expires, but the Explanation makes clear it is good even if it omits the exact nature of the right, says the time for payment has not come, is coupled with a refusal to pay or a set-off claim, or is addressed to somebody other than the person entitled. So a letter disputing the balance while confirming the account can still restart the clock in your favour. Read the correspondence you already have before assuming a claim is dead.
The special periods that override the Schedule
Several statutes set their own clocks, usually shorter and stricter. An application to set aside an arbitral award must be made within three months, extendable by thirty days on sufficient cause and, in the words of the section, not thereafter. Where a special Act prescribes a period, that is the period.
Practical advice
Diarise the date the moment a dispute arises. If the period is close, file first and negotiate afterwards; a filed suit can always be settled, but a time-barred claim cannot be resurrected.
Filing early also preserves your options on route. A claim resting on a written contract, a promissory note or an acknowledged invoice can take the faster path in our note on the Order 37 summary suit; anything else follows the ordinary course in our guide to the money recovery suit. And winning is not the end of the clock: many decrees have a twelve-year execution period, subject to the distinct injunction rules, which is why our note on execution of a decree matters too.