The Limitation Act, 1963 (“the Act”) was enacted as an Act to consolidate and amend the law for the limitation of suits and other proceedings and for purposes connected therewith.
One of the fundamental principles when applying the law of limitation is that subject to the provisions contained in Sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed although limitation has not been set up as a defence.
In fact the law goes so far as to say that it is the duty of the Court to consider limitation even if not set up as a defence as held in Noharlal Verma v. Distt. Coop. Central Bank Ltd.:
“32. Now, limitation goes to the root of the matter. If a suit, appeal or application is barred by limitation, a court or an adjudicating authority has no jurisdiction, power or authority to entertain such suit, appeal or application and to decide it on merits.
33. Sub-section (1) of Section 3 of the Limitation Act, 1963 reads as under:
“3. Bar of limitation.—(1) Subject to the provisions contained in Sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed although limitation has not been set up as a defence.”
Bare reading of the aforesaid provision leaves no room for doubt that if a suit is instituted, appeal is preferred or application is made after the prescribed period, it has to be dismissed even though no such plea has been raised or defence has been set up. In other words, even in absence of such plea by the defendant, respondent or opponent, the court or authority must dismiss such suit, appeal or application, if it is satisfied that the suit, appeal or application is barred by limitation.”
The Act provides for specified periods of limitation for suits, applications and appeals and the specific periods of limitation are provided for in the Schedule to the Act.
Under the Act when time runs it continues to run and is not interdicted except as provided in the Act.
There are several sections providing for exclusion of periods of limitation; however, amongst the most common exclusions that we come by are the exclusions which resort to Sections 14, 18 and 19 of the Act.
The present article is a brief discussion and analysis of the ingredients of these sections and some relevant law relating thereto.
Before delving into the sections the first principle to bear in mind with regard to limitation is that it must be looked at dispassionately for there is no equity when it comes to limitation. If an action is barred it is so and one has to face the consequences. It is not open to a Court or authority to carve out any fresh period or exclusion otherwise than as provided in the Act. This has been the settled proposition in the judgements cited hereafter.
In Siraj-Ul-Haq Khan . v. The Sunni Central Board of Waqf, U.P.  it was held that equitable considerations are not material:
“The next question which calls for our decision is whether the Appellant’s Suit is saved by virtue of the provisions of Section 15 of the Limitation Act. That is the only provision … it is true that rules of limitation are to some extent arbitrary and may frequently lead to hardship; but there can be no doubt, in construing provision of limitation, equitable consideration are immaterial and irrelevant and in applying them effect must be given to the strict grammatical meanings of the words used.”
In Amar Nath v. Mul Raj a Full Bench of the Punjab & Haryana High Court held:
“20. Limitation is a matter of statute and unless the decree-holders could bring their case under any definite provision of the Limitation Act, equitable consideration that they are being deprived of the fruits of the decree cannot be allowed to prevail and the utmost which may be said is that they are unlucky to suffer the disadvantage, but the default in that respect lies on them as they had not been diligent in taking out execution of the decree within the time prescribed by Section 48 of the Code.”
A Full Bench of the Kerala High Court also emphasised the same proposition in Abdul Hameed v. Government of India:
“22… In our view in construing the provisions of the Limitation Act equitable consideration is out of place. The fixation of period of limitation in the Limitation Act, to some extent, may result in hardship. Even then the Limitation Act is to be construed by a court of law as the language of the statute in its plain meaning imparts. While dealing with the provisions of the Limitation Act the courts should not be concerned with the policy of the Legislature or with the result, however injurious it may be, in giving effect to the language used; nor it is the function of the court, where the meaning is clear, not to give effect to it merely because it would lead to hardship. Therefore, in our opinion a Judge cannot on equitable grounds extend the time allowed by the law of limitation or postpone its operation or introduce extension not recognised by the statute of limitation. The court should not also take into extraneous consideration, such as hardship in construing the provisions of the Limitation Act, in construing a statutory provision. There is no scope for adopting a liberal approach in the matter of condonation of delay.”
Thus, equity of the case is not relevant for the purposes of deciding the issue whether the plaintiff’s case for recovery is within limitation or not. No sympathetic or liberal view can be taken to extend limitation if the time has run out on the footing that the claimant otherwise might succeed on merits. The merits or justice of a case or sympathy for the litigant etc. are considerations which would arise only when considering condonation of delay, where applicable.
I now proceed with analysing the necessary law with regard to Sections 14, 18 and 19 of the Act which are frequently used as the basis for saving limitation.
Exclusion of time for proceedings Bona Fide in a Court without Jurisdiction
Section 14 of the Act provides that in computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with diligence another civil proceeding, shall be excluded, where the proceedings relate to the same matter in issue and is prosecuted in good faith in a Court which from defect of jurisdiction or other cause of like nature is unable to entertain it.
The section comprises of the following cumulative ingredients:
- prosecuting civil proceedings with due diligence;
- the former proceeding was being prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of like nature, is unable to entertain it;
- earlier proceedings relate to the same mater in issue or are for the same relief.
This section is easily applied (in respect of the aforesaid three ingredients i.e. (i) to (iii) above) when saving limitation in cases where a prior suit is filed (between the same parties for the same relief) in a wrong court as in a court not having jurisdiction ie territorial or pecuniary. However, even then it must be shown that there was diligence in filing the prior suit in a wrong Court as for instance when it is possible that two courts have possible jurisdiction over the same dispute between the same parties. If then in such a case there is a finding to the effect that the prior suit is filed in the wrong court bona fide or the plaintiff satisfies the court in the subsequent suit that the prior suit was bona fide filed in a wrong court and then the plaint was returned, the section would apply.
In Globe Transport Corpn. v. Triveni Engg. Works time taken in contesting a litigation in a wrong Court was excluded by resort to Section14:
“4. …We accordingly allow the appeal, set aside the judgment of the High Court as also the order passed by the Civil Judge, Allahabad and taking the view that the Court of the Civil Judge, Allahabad has no jurisdiction to entertain the suit, we direct that the plaint may be returned to the respondents for presentation to the appropriate court in Jaipur City. We may make it clear that since the respondents have in good faith pursued their claim before the Court of Civil Judge, Allahabad which was found to have no jurisdiction by reason of Clause 17 of the Contract of Carriage the period during which they prosecuted their suit before the Court of Civil Judge, Allahabad, would be liable to be excluded in computing the period of limitation for filing the suit in the appropriate court in Jaipur City.”
In Mohinder Singh v. Paramjit Singh it was held:
“22…The purport of Section 14 of the 1963 Act has been delineated in Union of India v. West Coast Paper Mills Ltd. …. this Court observed thus: … to attract the applicability of Section 14 of the Limitation Act, the following requirements must be specified: (SCC p. 25, para 6)
‘6. (1) both the prior and subsequent proceedings are civil proceedings prosecuted by the same party;
(2) the prior proceedings had been prosecuted with due diligence and in good faith;
(3) the failure of the prior proceedings was due to a defect of jurisdiction or other cause of a like nature;
(4) both the proceedings are proceedings in a court.’…….. Any circumstance, legal or factual, which inhibits entertainment or consideration by the court of the dispute on the merits comes within the scope of the section and a liberal touch must inform the interpretation of the Limitation Act which deprives the remedy of one who has a right.”
“28. … While considering the provisions of Section 14 and its application, this Court observed that a proper approach will have to be adopted and the provisions will have to be interpreted so as to advance cause of action rather than abort the proceedings, inasmuch as the section is intended to provide relief against bar of limitation in cases of mistaken remedy or selection of a wrong forum.”
In a recent decision of the Supreme Court (delivered by Rohinton Fali Nariman, J.) in M.P. Steel Corpn. v. CCE the provision was explained and it was stated a liberal approach is required:
“49. The language of Section 14, construed in the light of the object for which the provision has been made, lends itself to such an interpretation. The object of Section 14 is that if its conditions are otherwise met, the plaintiff-applicant should be put in the same position as he was when he started an abortive proceeding. What is necessary is the absence of negligence or inaction. So long as the plaintiff or applicant is bona fide pursuing a legal remedy which turns out to be abortive….”… This example also goes to show that the expression “the time during which the plaintiff has been prosecuting with due diligence another civil proceeding” needs to be construed in a manner which advances the object sought to be achieved, thereby advancing the cause of justice.”
Following the decision in M.P. Steel Corpn. v. CCE (supra) the Supreme Court in Suryachakra Power Corpn. Ltd. v. Electricity Deptt. held:
“7. That the principles under Section 14 of the Limitation Act, 1963 can be applied even when Section 5 of the Act is not applicable, is no more res integra, in view of M.P. Steel Corpn. v. CCE .
8. The two main ingredients required for attracting the principles under Section 14 of the Limitation Act, 1963 are that the party should be prosecuting another civil proceedings with due diligence and that the prosecution should be in good faith. It is not enough that one part is satisfied. Both due diligence and good faith must be established.”
It is therefore clear that judicial decisions have taken a view to apply the provision to advance the cause of justice and in a liberal manner.
An important aspect while applying Section 14 is often overlooked i.e. that the proceeding taken earlier of which exclusion is sought must relate to the same matter in issue. It is however not uncommon that a resort to Section 14 of the Act is taken, especially in cases where a suit has been filed for recovery of money subsequent to the filing and disposal of the winding up proceedings. However, the following judgments have held that the time that was spent in prosecuting a company petition cannot be excluded while computing the period of limitation.
Ajab Enterprises v. Jayant Vegoiles and Chemicals Pvt. Ltd.
This judgment holds that for application of Section 14 it is necessary to show that the civil proceedings, which were taken earlier by the plaintiff, were relating to the same matter in issue and that the said matter was prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of a like nature, was unable to entertain it. It also holds that if there are two possible remedies
“11. …According to the defendants, for application of Section 14(1) it is necessary to show that the civil proceedings, which were taken earlier by the plaintiffs, were relating to the same matter in issue and that the said matter was prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of a like nature, was unable to entertain it. It was contended that in a company petition what was sought was the winding up of the Company and though it could be said that ultimately if the winding up of the Company was ordered, some pro rata amount due to the plaintiffs could have been recovered in the said proceedings it does not necessarily mean that the matter in issue in the company petition was the same as in the present suit. …. When a suit is dismissed not because the Court had no jurisdiction to entertain it, or for any other cause of a like nature, but because it was misconceived or because the proceeding or the suit was not one recognised by law as legal in its initiation, then clearly Section 14 of the Limitation Act is not attracted to such a suit. Where the suit was dismissed because the proceedings according to the trial court were not recognised by law as legal in their initiation, then Section 14 has no applicability. In the present case, the petition under the Companies Act filed by the plaintiffs earlier was entertained and, therefore, it cannot be said that the said petition was not entertained by the Court or the Court was unable to entertain the same due to the defect of jurisdiction or other cause of a like nature.
12. …In the present matter also it could be that there are two remedies available to the plaintiffs; one of filing a company petition seeking winding up of the Company and the other of a suit for recovery of the amount due. Now, therefore, merely because the proceedings of winding up could not be granted for some reason or the other and the plaintiffs were directed to file a suit for recovery of the debts, it would not mean that the case would be covered by the provisions of Section 14 of the Limitation Act. Apart from this, as stated earlier, even if other conditions of Section 14(1) are satisfied, for giving benefit of the said Section 14(1) the Court must not have been able to entertain the proceeding for the reason of defect in jurisdiction or cause of a like nature. Supreme Court in (1977) 1 SCC 791 held that for proper interpretation of words “or cause of a like nature” the said words or clause would be required to be considered ejusdem generis with earlier words “of defect in jurisdiction” and therefore where the Court had jurisdiction to entertain the company petition, but for some other reason it does not do so, it cannot be said that the Court did not grant the application due to defect similar to the want of jurisdiction. In the result, Section 14 of the Limitation Act has no application to the facts of the present case and, therefore, the time that was spent in prosecuting the company petition by the plaintiffs cannot be excluded while computing the period of limitation. Even if the plaintiffs were pursuing a remedy of winding up proceeding under the Company Law, they ought to have filed suit for recovery of the amount due to them within the period of limitation”
Hassan Chand and Sons v. H.H. Maharaja Shri Gaj Singh
This judgment holds that where it is open to a litigant to adopt concurrent remedies, and he adopts one of those remedies, and fails on the merits, then when he later chooses to adopt the second remedy, he cannot be held entitled (save in the exceptional case of a review where such an application would properly lie) to the exclusion or condonation of time which has been spent by him on the prosecution of the first remedy, the ratio being that it was perfectly open to him to pursue the second remedy while he was prosecuting the other one.
9. The broad principle, that is deducible from the discussion made above, by pre-ponderence of judicial opinion in our country is, that where it is open to a litigant to adopt concurrent remedies, and he adopts one of those remedies, and fails on the merits, then when he later chooses to adopt the second remedy, he cannot be held entitled (save in the exceptional case of a review where such an application would properly lie) to the exclusion or condonation of time which has been spent by him on the prosecution of the first remedy, the ratio being that it was perfectly open to him to pursue the second remedy while he was prosecuting the other one, and that any other view would be productive of unnecessary delay in the administration of justice and lead to needless protraction of litigation. And on a balance of all the relevant considerations we respectfully agree with this view.”
Niyogi Offset Printing Press Ltd. v. Doctor Morepen Ltd.
This judgment holds that a company petition for winding up in which ultimately the petitioner may get the amount due to him or some amount on pro rata basis does not necessarily mean that the matter in issue will be the same as in a suit for recovery of amount, had it been filed.
“18. One of the conditions required to be satisfied is that the proceedings taken earlier must be of same relief as claimed in the present proceedings as contemplated under Section 14(2) of the Act. …What is to be considered is whether the period of limitation to recover the amount shall be extended by filing a petition under Section 433 of the Companies Act, 1963.
19. For application of Section 14(1) it is necessary to show that the civil proceedings which were taken earlier by the petitioner were relating to the same matter in issue and the said matter was prosecuted in good faith in a Court which for the defect of jurisdiction or other cause of a like nature was unable to entertain it. A company petition for winding up in which ultimately the petitioner may get the amount due to him or some amount on pro rata basis does not necessarily mean that the matter in issue will be the same as in a suit for recovery of amount, had it been filed. In order to ascertain whether the claim of the petitioner is barred by time or not, what is to be considered is whether the petitioner can institute the suit for recovery of the amount claimed to be due from the respondent to the petitioner.
20. In Narayan Ambaji Chavan v. Hari Ganesh Navare,the High Court had refused to interfere on the ground that there was another remedy by way of suit in that matter and, therefore, it was held that in such a matter the condition necessary under Section 14 of the Limitation Act, 1963 were not satisfied. In the present matter it is apparent that two remedies are available to the petitioner. One was to file a civil suit for recovery of amount allegedly due to the petitioner and the other to file a winding up petition. No limitation is provided for winding up petition under Section 433 of the Companies Act, 1956 but filing a winding up petition will not save the limitation for filing the suit in the facts and circumstances if the claim of the petitioner for recovery has become barred by time.
I must however draw attention to the fact that in Maharashtra State Farming Corporation Ltd. v. Belapur Sugar and Allied Industries L and Pavan Om Prakash Kejriwal v. M/s Partap Steel Rolling Mills (1935) Ltd. exclusion of time under Section 14 was granted in the case of a winding up petition while permitting the filing of a suit on withdrawal of the Petition..
However in my humble view the decisions in the cases of Maharashtra State Farming Corporation Limited and Pavan Om Prakash Kejriwal (supra) cannot be considered a precedent, particularly under Section 14 of the Act, as they do not lay down any ratio nor even discuss how the ingredients of Section 14 are applicable while permitting the filing of a suit and excluding time taken in the Petition. These decisions did not consider the judgements referred to above.
Effect of an acknowledgment in writing
Section 18 provides that a fresh period of limitation shall be computed when before the expiration of the prescribed period of limitation an acknowledgment has been made in writing signed by the person. The word signed means signed either personally or by an agent duly authorised in this behalf.
The section applies to both cases where there are clear admissions of liability and promises to pay and also those cases where the correspondence discloses some ambiguity in the words used. To exclude time under this section the crucial ingredients of Section 18 are:
- The acknowledgement must be such as to establish a debtor and creditor jural relationship which can be seen from the document sought to be treated as an acknowledgment;
- the acknowledgement must be made in writing within the prescribed period of limitation; and
- such an acknowledgement must be in writing signed by the person himself.
If the correspondence or documents gleaned show the above ingredients are satisfied cumulatively the provision kicks in and will apply to extend limitation.
The position cannot be more clearly stated than in Food Corpn. of India v. Assam State Coop. Marketing & Consumer Federation Ltd. where it is held:
“14. According to Section 18 of the Limitation Act, an acknowledgement of liability made in writing in respect of any right claimed by the opposite party and signed by the party against whom such right is claimed made before the expiration of the prescribed period for a suit in respect of such right has the effect of commencing a fresh period of limitation from the date on which the acknowledgement was so signed. It is well settled that to amount to an acknowledgement of liability within the meaning of Section 18 of the Limitation Act, it need not be accompanied by a promise to pay either expressly or even by implication.
15. The statement providing foundation for a plea of acknowledgement must relate to a present subsisting liability, though the exact nature or the specific character of the said liability may not be indicated in words. The words used in the acknowledgement must indicate the existence of jural relationship between the parties such as that of debtor and creditor. The intention to attempt such jural relationship must be apparent. However, such intention can be inferred by implication from the nature of the admission and need not be expressed in words. A clear statement containing acknowledgement of liability can imply the intention to admit jural relationship of debtor and creditor. Though oral evidence in lieu of or making a departure from the statement sought to be relied on as acknowledgement is excluded but surrounding circumstances can always be considered. Courts generally lean in favour of a liberal construction of such statements though an acknowledgement shall not be inferred where there is no admission so as to fasten liability on the maker of the statement by an involved or far-fetched process of reasoning. (See Khan Bahadur Shapoor Freedom Mazda v. Durga Prosad Chamaria and Lakshmirattan Cotton Mills Co. Ltd. v. Aluminium Corpn. of India Ltd. ) So long as the statement amounts to an admission, acknowledging the jural relationship and existence of liability, it is immaterial that the admission is accompanied by an assertion that nothing would be found due from the person making the admission or that on an account being taken something may be found due and payable to the person making the acknowledgement by the person to whom the statement is made.”
Once a jural relationship is expressed in the document sought to be treated as an acknowledgement the law will treat it as an acknowledgement and extend time from the date of the acknowledgement. In absence of this no amount of writing by a person to his creditor will take the matter any further.
In Hansa Industries (P) Ltd. v. MMTC Ltd. the necessary tests were well set out:
“15. In Shapoor Freedom Mazda v. Durga Prosad Chamaria ,the Supreme Court while interpreting corresponding Section 19 of Limitation Act, 1908 which was identically worded, held that the relevant essential requirement of valid acknowledgment are: (a) It must be before the relevant period of limitation has expired, (b) it must be in regard to the liability and respect of the right in question and (c) it must be in writing and must be signed by the party against whom such right is claimed.”
The following ingredients of the section have been elucidated in decisions hereafter:
- it must be prior to expiration of limitation.
- the acknowledgement must be expressed in writing and not orally;
- it must be by the person who is liable to pay the amount or someone authorised on his behalf.
Valliama Champaka Pillai v. Sivathanu Pillai
“19… Under Section 18, Limitation Act, one of the essential requirements for a valid “acknowledgement” is that the writing concerned must contain an admission of a subsisting liability. A mere admission of a past liability is not sufficient to constitute such an “acknowledgement. Hence a mere recital in a document as to the existence of a past liability, coupled with a statement of its discharge, does not constitute an “acknowledgement” within this section.”
Sampuran Singh v. Niranjan Kaur
“9…Thus, the acknowledgment, if any, has to be prior to the expiration of the prescribed period for filing the suit, in other words, if the limitation has already expired, it would not revive under this section. It is only during subsistence of a period of limitation, if any, such document is executed, that the limitation would be revived afresh from the said date of acknowledgment.”
Ashwini Satish Bhatt v. Jeevan Diwakar
“6… The contention of learned advocate for the appellant is that this cheque dated 19th July 1996 itself is an acknowledgement of debt and, as such, there is no merit in the submission of the defence that the liability under dishonoured cheque is not account of legally enforceable debt. Insofar as the dishonoured cheque is concerned, the stand taken by the respondent is that the cheque was not written by him and it is not in his handwriting and that he had, in fact, issued a blank cheque in favour of the appellant for certain purpose. This stand was specifically taken by the Respondent in the course of the trial and, as such, it was necessary for the complainant to have sought the opinion of handwriting expert in case her case was that the cheque in question was in the handwriting of the respondent, so as to rebut the theory of blank cheque taken by the respondent. It is in these circumstances that the Magistrate had come to the conclusion that the dishonoured cheque in question cannot be treated as acknowledgment under Section 18 of the Limitation Act, since the acknowledgement should be before the period of limitation is over and that it should be in writing. In view of this position, the Magistrate was right in coming to the conclusion that it had not been proved that the dishonoured cheque was in relation to a legally enforceable debt or liability in law. The dishonoured cheque admittedly was issued after 5 years of the said Agreement dated 13th June 1991.”
Rajendra Valechav. Satpal
“9. A bare perusal of the aforesaid provision reflect that the acknowledgment should be executed before the expiry of prescribed period for a suit in respect of any property or right and such acknowledgment 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. If both these requirements are met then a fresh period of limitation shall be computed from time when the acknowledgment was so signed. The Supreme Court in J.C. Budh Raja v. Chairman Orissa Mining Corporation Ltd. has held that acknowledgment of liability under Section 18 of the Limitation Act must be made prior to the expiry of the period of limitation of suit.”
Another question which may often arise now with the use of emails as a means of communication is whether an acknowledgment by an email (as opposed to written communications) would amount to an acknowledgment as envisaged under Section 18 of the Act.
The issue stands covered by the decision in Sudarshan Cargo Pvt. Ltd. v. Techvac Engineering Pvt. Ltd. :
“8. Having heard the learned advocates appearing for the parties and on perusal of annexures appended to the company petition as well as examination of the plea put forward by respondent counsel, I am of the considered view that following point would arise for my consideration:
“Whether e-mail/s acknowledging the debt would constitute a valid and legal acknowledgement of debt though not signed as required under Section 18 of the Limitation Act?”
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15. However, the Information Technology Act, 2000 (hereinafter referred to as ‘IT Act, 2000’ for brevity) provides for legal recognition for transactions carried out by means of electronic data/electronic communication which involve the use of alternatives to paper based methods of communication and storage of information…Section 4 of The IT Act, 2000 provides that if information or any other matter is to be in writing or in the typewritten or printed form, then, not withstanding anything contained in such law, the requirement is deemed to have been satisfied if such information or matter is rendered or made available in an ‘electronic form’ and same is accessible to be used for a subsequent reference.
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21. A harmonious reading of Section 4 together with definition clauses as extracted hereinabove would indicate that on account of digital and new communication systems having taken giant steps and the business community as well as individuals are undisputedly using computers to create, transmit and store information in the electronic form rather than using the traditional paper documents and as such the information so generated, transmitted and received are to be construed as meeting the requirement of Section 18 of the Limitation Act, particularly in view of the fact that Section 4 contains a non obstante clause.”
Part Payment on Account of Debt
Section 19 of the Act provides that a fresh period of limitation will commence when before the expiration of the prescribed period payment on account of debt is made by the person liable to make it or an authorised agent of such a person and that acknowledgment of the payment is made in the handwriting or writing signed by the person making the payment.
The section poses no difficulty in application when a payment is made as for example by a covering letter enclosing a cheque sent prior to expiry of limitation. However, as is discussed subsequently when there is only a payment made within limitation expiring and there is no evidence of an acknowledgment of the payment by the person owing the debt there would be difficulty in claiming extension of time on the basis of mere payments. The crucial ingredients required to invoke Section 19 of the Limitation Act are:
- the payment must be made within the prescribed period of limitation; and
- an acknowledgment of the payment appears must be in the handwriting of or in a writing signed by the person making payment.
What is required is two aspects, one the payment within limitation followed by the evidence of such payment (in writing) which though necessary need not be shown to be within the expiry of limitation. It is also necessary that there must be a writing acknowledging the payment is a part payment in the handwriting of or in a writing signed by the person making payment.
The aforesaid is elaborated in Sant Lal Mahton v. Kamala Prasad:
“8. Admittedly in the case before us, none of the payments specified above were endorsed on the bond itself and there was no acknowledgment either in the handwriting of or sighed by, the debtor prior to the institution of the suit. What the Subordinate Judge relied upon, is the admission contained in para 15 of the written statement filed on behalf of Defendants 1 to 3 in the present suit where the defendants admitted not only that the payments specified in the plaint were actually made on the respective dates but asserted that there were other payments besides these, which reduced the debt still further and for which the plaintiffs did not give any credit to the defendants. In the opinion of the Subordinate Judge as the written statement was signed by these defendants, it would fulfil all the requirements of a sighed acknowledgment as is contemplated by the proviso to Section 20. The short point for our consideration is : whether the view taken by the Subordinate Judge is correct ?
9. It would be clear, we think, from the language of Section 20 of the Limitation Act that to attract its operation two conditions are essential : first, the payment must be made within the prescribed period of limitation and secondly, it must be acknowledged by some form of writing either in the handwriting of the payer himself or signed by him. We agree with the Subordinate Judge that it is the payment which really extends the period of limitation under Section 20 of the Limitation Act; but the payment has got to be proved in a particular way and for reason of policy the legislature insists on a written or signed acknowledgment as the only proof of payment and excludes oral testimony. Unless, therefore, there is acknowledgment in the required form, the payment by itself is of no avail. The Subordinate Judge, however, is right in holding that while the section requires that the payment should be made within the period of limitation, it does not require that the acknowledgment should also be made within that period. To interpret the proviso in that way would be to import into it certain works which do not occur there. This is the view taken by almost all the High Courts in India and to us it seems to be a proper view to take (see Md. Moizuddin v. Nalini Bala, Lal Singh v. Gulab Rai, Venkata Subbhu v. Appa Sundaram, Ram Prasad v. Mohan Lal, Viswanath v. Mahadeo).
10. But while it is not necessary that the written acknowledgment should be made prior to the expiry of the period of limitation, it is, in our opinion, essential that such acknowledgment, whether made before or after the period of limitation, must be in existence prior to the institution of the suit… To claim exemption under Section 20 of the Limitation Act the plaintiff must be in a position to allege and prove not only that there was payment of interest on a debt or part payment of the principal, but that such payment had been acknowledged in writing in the manner contemplated by that section. The ground of exemption is not complete without this second element, and unless both these elements are proved to exist at the date of the filing of the plaint the suit would be held to be time-barred. In the plaint as it was originally filed in this case, the prayer was only for a mortgage decree in the usual form. After the hearing was closed, the plaintiffs, it seems, were apprehensive that the court might not hold the bond to be properly attested. In these circumstances, they prayed for an amendment of the plaint which was allowed by the court. By the amended plaint the cause of action was stated to arise from the different payments made on different dates as were stated in Para 7 of the plaint and at the end of paragraph the following words were added :
The suit is saved from limitation so far as the personal remedy is concerned and the payments were made by the defendants on different dates as mentioned Schedule A below.
11. These amendments must be deemed in the eye of law to be a part of the original plaint, and obviously there is neither any averment nor proof that any of these payments was acknowledgment in writing prior to the institution of the suit. This being the position, the suit treated as one for obtaining a money decree against the defendants must be held to be barred by limitation at the date on which it was instituted and the courts below consequently were not justified in giving the plaintiffs a money decree in this suit.”
Again in Maiz Uddin Miya v. Nalini Bala Debee the above ingredients are restated.
In a recent decision of the Supreme Court in Shanti Conductors (P) Ltd. v. Assam SEB the aforesaid view was reiterated:
“16. We may notice the judgment of this Court dealing with Section 20 of the Limitation Act, 1908, which was akin to present Section 19 of the Limitation Act, 1963. In Sant Lal Mahton v. Kamla Prasad , this Court held that for applicability of Section 20 of the Limitation Act, 1908, two conditions were essential that the payment must be made within the prescribed period of limitation and it must be acknowledged by some form of writing either in the handwriting of the payer himself or signed by him. This Court further held that for claiming benefit of exemption under Section 20, there has to be pleading and proof.”
The following are cases where the Courts, after analysing the provisions of Section 19, have regarded mere payments as not amounting to payments which extend limitation under Section 19 of the Act.
Rajendra Valecha v. Satpal
In this case payment made in cash did not and was not found to be in writing and was made beyond the expiration of limitation.
“12. Having considered the facts of the present appeal in the light of the statutory provisions and judgment of the Supreme Court in J.C. Budh Raj case (supra), it is to be noted that after acknowledgment dated 25.02.2009, the alleged payment of Rs. 1 lakh and Rs. lakhs of 06.04.2010 and 13.02.2015 were made by cash by the respondents to the appellants and Rs. 3 lakhs by cheque dated 25.12.2015. Admittedly, the limitation of three years for filing the suit for recovery from the last acknowledgment dated 25.02.2009 had expired on 25.02.2012. There is no written acknowledgment of the cash payment of Rs. 1 lakh on 06.04.2010 before expiry of limitation i.e. 25.02.2012. Therefore, benefit of Section 19 cannot be extended to the appellants on account of alleged payment made on 06.04.2010. The admitted payment of Rs. 3 lakhs made on 13.12.2015 is after expiry of 3 years from acknowledgement dated 25.02.2009 and therefore it is of no help to the appellant in getting period of limitation extended. The payment of Rs. 3 lakhs by cheque dated 25.12.2015 is also after expiry of three years from 25.02.2009. Therefore, these payments do not fulfil the requirement of Sections 18 and 19 of the Limitation Act, 1963.”
K.C.Pangunni v. Official Liquidator, Wandoor Jupiter Chits Pvt. Ltd.
In this case the Court reemphasised the requirement that the payment to amount to a valid part payment must be in the handwriting or writing signed by the person making it.
“2… Under Section 19 of the Limitation Act it is not every part payment that would save limitation but only payment the acknowledgment of which appears in the handwriting of, or in a writing signed by the person making the payment. There is no case that any of the payments were of that nature. Therefore, section 19 of the Limitation Act would not operate.”
Dalichand Jugraj Jain v. Madhu Wool Spinning Mills
Here the fact that the part payments being made alone is not sufficient to extend limitation is re-stated.
“5. Section 19 of the Limitation Act is as below:…It is clear that in case an acknowledgment of payment appears in the handwriting of or in a writing signed by the person claiming payment then alone the said payment can be pleaded for the purpose of extension of period of limitation. Mere making payment before the expiration of the prescribed period is not sufficient. In this case there is no pleading that the acknowledgment of payment was obtained in the handwriting of the defendants or any person authorised by them. It is also clear from Ext. H. In view of this the learned counsel for the plaintiff was not in a position to point out as to how by mere payment the period of limitation got extended.”
Mamta Ghosh v. Tapas Kumar Ghosh
The Court held that in absence of the signed acknowledgement, the requirement of Section 19 is not met.
“11. The proviso ordains that an acknowledgement of the payment must appear either in the handwriting of the person making the payment or in a writing signed by such person to extend the period of limitation to be computed from the date the payment is made. Sant Lal Mahton (supra) requires that the said signed acknowledgement must exist on the date the suit is instituted; even acknowledgement of payment in the written statement would not be sufficient to extend limitation.”
Municipal Council v. Muhammad Shaban
In this case the Court held that mere payments made without the prescribed writing as required in Section 19 do not extend limitation.
“5. The main question for consideration in this appeal is whether or not the suit was within time. … This contention of the learned counsel for the appellant cannot be accepted inasmuch as mere payments made by the defendant would not save limitation unless it is shown that there was an acknowledgment of the payments in the hand writing of the defendant or under a writing signed by him.
It is argued that applications were made by the defendant from time to time acknowledging payments and seeking further concessions from the plaintiff and that the recitals in these applications amounted to acknowledgment of the debt due, which, according to Section 20 of the Limitation Act, saved limitation. We do not see any force in this contention. It may be mentioned here that no evidence has been adduced by the plaintiff to prove these applications, nor has it been proved that the defendant had acknowledged the payments made by him in his hand writing, or in a writing signed by him.Under these circumstances it cannot be said that the payments made by the defendant in the year 2005 and 2006 amounted to acknowledgment of debt within the meaning of Section 20 of the Limitation Act.”
* Advocate, High Court, Bombay. Assisted by Mayur Agarwal, Arjun Prabhu and Sheetal Parkash. Author can be contacted at email@example.com
 Section 3
 (2008) 14 SCC 445
 Section 2(j) “period of limitation” means the period of limitation prescribed for any suit, appeal or application by the Schedule, and “prescribed period” means the period of limitation computed in accordance with the provisions of this Act.
 Section 9. Continuous running of time.—Where once time has begun to run, no subsequent disability or inability to institute a suit or make an application stop it.
 1959 SCR 1287
 1975 SCC OnLine P&H 42
 1999 SCC OnLine Ker 655
 14. Exclusion of time of proceeding bona fide in court without jurisdiction.–
(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
(3) Notwithstanding anything contained in Rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under Rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature.
Explanation.—For the purposes of this section,—
(a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;
(b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;
(c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.
 (1983) 4 SCC 707
 (2018) 5 SCC 698
 (2004) 3 SCC 458
 (2015) 7 SCC 58
 (2016) 16 SCC 152
 (2015) 7 SCC 58
 1990 SCC OnLine Bom 28
 Gurdit Singh v. Munsha Singh, (1977) 1 SCC 791
 1961 SCC OnLine Raj 125
 2007 SCC OnLine Del 358
 1930 SCC OnLine Bom 129
 2004 SCC OnLine Bom 136
 1992 SCC OnLine P&H 802
 18 Effect of Acknowledgement in writing.–
(1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.
(2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.
Explanation.—For the purposes of this section,—
(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right,
(b) the word “signed” means signed either personally or by an agent duly authorised in this behalf, and
(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.
 Section 18(1), Limitation Act
 Section 18 Explanation (b)
 (2004) 12 SCC 360
 (1962) 1 SCR 140
 (1971) 1 SCC 67
 2004 SCC OnLine Del 551
 (1962) 1 SCR 140
 (1979) 4 SCC 429
 (1999) 2 SCC 679
 1999 SCC OnLine Bom 69
 2018 SCC Online Del 6936
 (2008) 2 SCC 444
 2013 SCC OnLine Kar 5063
 19. Effect of payment on account of debt or of interest on legacy.-
Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made:
Provided that, save in the case of payment of interest made before the 1st day of January, 1928, an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.
Explanation.—For the purposes of this section,—
(a) where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of such land shall be deemed to be a payment.
(b) “debt” does not include money payable under a decree or order of a court.
 Section 19
 1952 SCR 116
 1937 SCC OnLine Cal 20
 1932 SCC OnLine All 265
 ILR (1894) 17 Mad 92
 1922 SCC OnLine MP 10
 Vishwanath Raghunath Kale v. Mahadeo Rajaram Saraf, 1933 SCC OnLine Bom 3
 1937 SCC OnLine Cal 329
 (2020) 2 SCC 677
 1952 SCR 116
 2018 SCC Online Del 6936
 1980 SCC OnLine Ker 296
 2000 SCC OnLine Bom 92
 2011 SCC OnLine Cal 990
 1961 SCC OnLine J&K 16