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Fresh period of Limitation
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Fresh period of Limitation
Fresh period of Limitation

The limitation period is the amount of time the law permits an individual to bring an action, or "claim", against another party in court.

Section 18 of the Limitation Act, provides for a fresh period of limitation from the date of acknowledgement of debt. The conditions for a valid acknowledgement under Section 18 of the Limitation Act of 1963 are as follows:

  1. There must be recognition or admission.
  2. Such acceptance must be of an ongoing obligation related to possession or legal right.
  3. It must be submitted in writing, bear the signature of the party being sued, and be submitted prior to the statute of limitations expiration.
  4. A new term of the restriction shall be computed from the time the acknowledgement was signed if all the aforementioned requirements are met.

According to Section 19 of the Limitation Act of 1963, a new period of limitation shall be computed from the time the payment was made in cases where the person liable to pay the debt or legacy or by his agent duly authorized on this behalf makes payment on account of a debt or of interest on a legacy before the expiration of the prescribed period. Therefore, in accordance with this Section, a new period of limitation becomes available to the creditor when the debtor makes a partial payment of the obligation prior to the period of limitation's expiration. The above provision is not applicable for the payment of obligation made after the period of limitation.

In case of Rajinder Valecha & Anr Vs. Satpal & ANR, by addressing Sections 18 and 19 of the Limitation Act, 1963, the Honourable Delhi High Court held that an acknowledgement should be executed before the expiration of the prescribed period for a suit in respect of any property or right and that such an acknowledgement of liability in respect of such property or right should be in writing signed by the party against whom such property or right is claimed. A new term of limitation shall be calculated from the time the acknowledgement was so signed if both of these conditions are satisfied.

The equitable notion that equity favours the industrious and not the indolent is the foundation of the law of limitation. It encourages the claimants to file their requests for relief quickly. The law of limitations does not annihilate a right that must be the basis of the lawsuit; it only forbids the remedy once the limitation period has passed. In all personal activities, even when a remedy is no longer possible, the right still exists. Therefore, the Limitation Act does not prevent a creditor from recovering his debt if he has any means of realizing and enforcing his claim by any method other than by filing a lawsuit. Therefore, it is not against the law to settle a time-barred obligation outside of court. If the debtor settles the obligation without realizing that the statute of limitations has run, he cannot sue the creditor to get his money back because the claim is time-barred.

Under section 25 of the Indian contract act, Agreements without consideration are void unless they are in writing, contain a commitment to make good on a debt that is legally barred by the law of limitation, or promise to recompense for something. After defining consideration in Sec. 2(d), this section emphasizes that "consideration is the important part of a legal contract" and lists certain exceptions to the norm it sets. In these exceptions, the contract cannot be declared void even if it lacks consideration.

The exclusions include:

  1. when a written agreement is registered
  2. when someone is being paid in exchange for past voluntary services they have provided to the promisor.
  3. When the individual or his agent promises in writing to pay all or part of a debt that is extinguished by the statute of limitations.

A promise to pay a time-barred debt is a sort of no-consideration contract that is covered by Section 25(3). In order to use this provision, the following conditions must be met:

  1. A person or his designated agent must sign a written promise.
  2. There must be a pledge to pay the obligation in whole or in part.
  3. For the duration of the limitation period, the creditor had to have enforced the debt.
  4. Under Section 25 (3), a debtor may engage in a written agreement to pay a portion of the total amount, and a lawsuit may be admissible in these circumstances if there is a written pledge to pay the obligation.

The term "debt" refers to a determined sum of money that is due in response to a demand for payment and that may be collected through legal action. Only in cases where the statute of limitations is applicable and can be used to recover the obligation against the defendant does section 25 (3) apply. When the defendant is not required to pay the debt due to other circumstances, Section 25(3) does not apply.

Application of this section is subject to the promise to pay. The commitment must be clear and unambiguous; it cannot be qualified in any way that could cause confusion.

When a proposal is accepted, it becomes a promise, and in this situation, the promisor may make a proposal that is accepted prior to the occurrence of an action. Promises to pay debts that are banned by the statute of limitations may be limited to paying a portion of the amount or may extend to paying the entire debt.

The Limitation Act does not recognize the debt in the sense of Section 18 of the limitation law when both parties to the contract set a date for repayment of the loan or debt that is after the period of limitation. Additionally, the offer of performance is not regarded as a promise for purposes of Section 25 (3) of the ICA, where it was rejected by one of the parties.

In the case of Sri Kapaleeswarar Temple vs T. Tirunavukarasu, the facts were Sri Kapaleeswarar Temple by Chairman is the claimant. The Board of Trustees sued the respondent in order to recover Rs. 324 in rent arrears that were owed from the respondent from March 1960 to December. 1968 with an Rs. 3/- rent payment. The respondent contested the suit's assertions, arguing first that the claim was time-barred and, second, that two payments totalling Rs. 30 made by him were not given credit for. The plaintiff cited an explanatory letter as evidence in support of his claim. The respondent signed P-1 on 2/11/1968. The trial judge determined that Exhibit P-1 can only preserve the rent for a period of three years prior to the date of its execution. Based on this conclusion, the trial judge held that the plaintiff was only entitled to recover rent arrears from the respondent as of the month of October 1965 and rejected the plaintiff's claim for rent for the period before October 1965 as being time-barred. The plaintiff chose New Trial Application No. 82 of 1971 because he was dissatisfied with the scant relief that had been granted to him in the original lawsuit. The plaintiff has chosen revision in order to contest finding.

The court decided that a creditor who has the benefit of a contract as contemplated in Sub-clauses (11 to (3) of Section 25 from the debtor is entitled in law to enforce the contract against the obliger and seek recovery of the amount agreed to be paid by the debtor under the contract. Section 25 clearly states that all cases referred to in Sub-clauses (1) to (3) of Section 25 are contracts. Whether there is a new consideration for the promise or not, subparagraph (3) of Section 25 forms a legitimate agreement for the purposes of suing, and it is irrelevant whether the debts covered therein are limited or not.

The date a debtor entered into a new obligation with a creditor may have been when the debt became time-barred, but if the new obligation meets the requirements of Section 25(3) of the Indian Contract Act, it will be considered a new contract in the eyes of the law and will undoubtedly be the basis for a lawsuit to recover the amount promised and acknowledged therein by the debtor. While the contractual obligation that a debtor enters into under the terms of Section 25(3) has no relation to whether the acknowledged debt is within time or not, Section 18 of the Limitation Act deals with an acknowledgement made by a debtor within the period of limitation.


In this regard, the recognition envisioned in Section 18 of the Limitation Act is far more limited in scope than the provision included in Section 25(3). The contract entered into pursuant to Section 25(3) is a stand-alone agreement that is enforceable.

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