15.5 Acknowledgment, Part Payment, Extinguishment of Right & the Key Schedule Articles
Key Takeaways
- An acknowledgment under Section 18 of the Limitation Act, 1963 must be in writing, signed by the party against whom the right is claimed or by his agent, and made before the expiry of the prescribed period; a fresh period is then computed from the time when the acknowledgment was signed.
- Part payment of a debt or of interest on a legacy under Section 19 extends limitation only if the payment is made before the expiry of the prescribed period and an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making it.
- Section 27 is the only provision in the Act that extinguishes a right rather than merely barring a remedy: on the determination of the period limited for a suit for possession, the right to the property itself is extinguished.
- Article 65 of the Schedule gives twelve years for a suit for possession of immovable property based on title, running from the date when the possession of the defendant becomes adverse to the plaintiff.
- Ravinder Kaur Grewal v. Manjit Kaur held that a person who has perfected title by adverse possession may use it as a sword to sue for a declaration and for recovery of possession, and not merely as a shield in defence.
15.5 Acknowledgment, Part Payment, Extinguishment of Right & the Key Schedule Articles
Section 15.4 dealt with the framework of the Limitation Act, 1963 — the bar in Section 3, condonation under Section 5, legal disability under Sections 6 to 8, and the computation rules in Sections 12 to 15. This section takes up the two devices that restart the clock, the one provision that destroys a right rather than a remedy, and the Schedule articles that decide most limitation objections in a Maharashtra trial court.
Section 18: Effect of Acknowledgment in Writing
"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."
The Four Requirements
- The acknowledgment must be of liability in respect of the property or right in question — an admission of a jural relationship that is intended to be continuing.
- It must be in writing and signed by the party or his duly authorised agent.
- It must be made before the expiry of the prescribed period. An acknowledgment made after the period has run does not revive a time-barred claim, and this is the single most tested feature of Section 18.
- It creates a fresh period of the same length, running from the date of signature — not an extension of the old period.
The Three Explanations
- Explanation (a) — an acknowledgment may be sufficient though it (i) omits to specify the exact nature of the property or right; (ii) avers that the time for payment, delivery, performance or enjoyment has not yet come; (iii) is accompanied by a refusal to pay, deliver, perform or permit enjoyment; (iv) is coupled with a claim to set-off; or (v) is addressed to a person other than the person entitled to the property or right.
- Explanation (b) — the word "signed" means signed either personally or by an agent duly authorised.
- Explanation (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.
- What qualifies in practice: an entry in a balance sheet signed by a director acknowledging a creditor's dues, a statement in a written statement admitting a debt, a letter asking for time to pay. A mere entry in the creditor's own books, unsigned by the debtor, does not qualify.
Section 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, except in the case of a 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."
- Two conditions must both be met: the payment must be made before the prescribed period expires, and the acknowledgment of the payment must appear in the payer's handwriting or in a writing signed by him.
- Explanation — for the purposes of the section, "debt" does not include money payable under a decree or order of a court.
- The distinction between Sections 18 and 19: Section 18 requires a writing acknowledging the liability; Section 19 requires a payment, plus a writing evidencing the payment. A payment by cheque signed by the debtor, or an endorsement of the payment made by the debtor on the promissory note, satisfies the proviso; a receipt written and signed by the creditor alone does not.
Sections 22-24: Continuing Breaches, Special Damage and Fresh Cause
- Section 22 — continuing breaches and torts: in the case of a continuing breach of contract or a continuing tort, a fresh period of limitation begins to run at every moment of the time during which the breach or the tort continues. A continuing wrong such as a subsisting obstruction of a right of way is to be distinguished from a wrong completed once and for all whose damage merely continues.
- Section 23 — suits for compensation for acts not actionable without special damage: time runs from the time when the injury results.
- Section 24 — all instruments are for the purposes of the Act to be deemed to be made with reference to the Gregorian calendar.
Sections 25-27: Easements, Adverse Possession and Extinguishment
- Section 25 — acquisition of an easement by prescription: where access and use of light or air, a way, a watercourse, the use of water or any other easement has been peaceably enjoyed as an easement, as of right, without interruption, for twenty years, the right becomes absolute. Where the property belongs to the Government, the period is thirty years. The period of twenty or thirty years must end within two years immediately before the institution of the suit in which the claim is contested.
- Section 26 deals with the exclusion in favour of a reversioner of servient tenement, and Section 27 is the crucial one:
"At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished."
- Section 27 is the only provision in the Act that destroys a substantive right. Everywhere else, limitation bars the remedy but leaves the right alive — which is why a time-barred debt may still be validly paid, may be set off, and may support an acknowledgment for other purposes.
- Adverse possession is the doctrine that flows from Section 27 read with Article 65. Possession must be nec vi, nec clam, nec precario — peaceful, open and without permission — and must be hostile to the true owner and to his knowledge for the statutory twelve years, with animus possidendi.
- Ravinder Kaur Grewal v. Manjit Kaur, (2019) 8 SCC 729 is the modern authority. A three-Judge Bench held that a person who has perfected title by adverse possession may use it as a sword and not merely as a shield: he may sue for a declaration of title and for recovery of possession if he is subsequently dispossessed, and his suit is governed by Article 65. Once the true owner's right is extinguished under Section 27, it vests in the adverse possessor.
The Schedule Articles a Civil Judge Uses Most
| Article | Description | Period | Time Runs From |
|---|---|---|---|
| 54 | Specific performance of a contract | 3 years | The date fixed for performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused |
| 55 | Compensation for breach of contract | 3 years | When the contract is broken, or where there are successive breaches, when the breach in respect of which the suit is instituted occurs |
| 58 | To obtain any other declaration | 3 years | When the right to sue first accrues |
| 59 | To cancel or set aside an instrument or decree, or for rescission of a contract | 3 years | When the facts entitling the plaintiff to have the instrument or decree cancelled or set aside first become known to him |
| 64 | Possession of immovable property based on previous possession and not on title, where the plaintiff has been dispossessed | 12 years | The date of dispossession |
| 65 | Possession of immovable property or any interest therein based on title | 12 years | When the possession of the defendant becomes adverse to the plaintiff |
| 113 | Any suit for which no period is provided elsewhere in the Schedule | 3 years | When the right to sue accrues |
| 116 | Appeal under the CPC to a High Court from a decree or order | 90 days | The date of the decree or order |
| 117 | Appeal under the CPC to any other court from a decree or order | 30 days | The date of the decree or order |
| 119 | Application under the Arbitration Act for the filing of an award, or for setting aside an award | 30 days | Date of service of notice of the making of the award |
| 120 | Under the CPC, to have the legal representative of a deceased plaintiff or defendant made a party | 90 days | The date of death |
| 121 | To set aside an abatement | 60 days | The date of the abatement |
| 123 | To set aside a decree passed ex parte, or to re-hear an appeal decreed ex parte | 30 days | The date of the decree, or, where the summons was not duly served, when the applicant had knowledge of the decree |
| 136 | For the execution of any decree (other than a mandatory injunction) or order of a civil court | 12 years | When the decree or order becomes enforceable |
| 137 | Any other application for which no period is provided | 3 years | When the right to apply accrues |
[!IMPORTANT] Article 54 is the one candidates misread. The three years runs from the date fixed for performance where a date is fixed. Only where no date is fixed does time run from the plaintiff's notice of refusal. A plaintiff who pleads that no date was fixed, in a contract that plainly fixed one, is usually pleading himself out of court.
A debt becomes due on 1 January 2020 and the prescribed period is three years. On 1 March 2024 the debtor writes and signs a letter admitting the liability. What is the effect of the letter under Section 18 of the Limitation Act, 1963?
Which provision of the Limitation Act, 1963 extinguishes a substantive right rather than merely barring the remedy?
A suit for possession of immovable property based on title is governed by which Article of the Schedule to the Limitation Act, 1963, and from when does time run?
In Ravinder Kaur Grewal v. Manjit Kaur, what did the Supreme Court hold about a plea of adverse possession?