Limitation Period for Suits Relating to Contracts under the Limitation Act, 1963
Part II of the First Division of the Schedule to the Limitation Act, 1963 contains Articles 6 to 55. These Articles prescribe the limitation period for specified suits relating to contracts, wages, goods, loans, bills, bonds, insurance, contribution, rent, specific performance and breach of contract.
Articles 6 to 55: Limitation for Contract-Related Suits
| Article | Description of suit | Limitation period | Time from which period begins to run |
|---|---|---|---|
| 6 | For a seaman's wages | Three years | The end of the voyage during which the wages are earned. |
| 7 | For wages in the case of any other person. | Three years | When the wages accrue due. |
| 8 | For the price of food or drink sold by the keeper of a hotel, tavern or lodging-house. | Three years | When the food or drink is delivered. |
| 9 | For the price of lodging. | Three years | When the price becomes payable. |
| 10 | Against a carrier for compensation for losing or injuring goods. | Three years | When the loss or injury occurs. |
| 11 | Against a carrier for compensation for non-delivery of, or delay in delivering, goods. | Three years | When the goods ought to be delivered. |
| 12 | For the hire of animals, vehicles, boats or household furniture. | Three years | When the hire becomes payable. |
| 13 | For the balance of money advanced in payment of goods to be delivered. | Three years | When the goods ought to be delivered. |
| 14 | For the price of goods sold and delivered where no fixed period of credit is agreed upon. | Three years | The date of the delivery of the goods. |
| 15 | For the price of goods sold and delivered to be paid for after the expiry of a fixed period of credit. | Three years | When the period of credit expires. |
| 16 | For the price of goods sold and delivered to be paid for by a bill of exchange, no such bill being given. | Three years | When the period of the proposed bill elapses. |
| 17 | For the price of trees or growing crops sold by the plaintiff to the defendant where no fixed period of credit is agreed upon. | Three years | The date of the sale. |
| 18 | For the price of work done by the plaintiff for the defendant at his request, where no time has been fixed for payment. | Three years | When the work is done. |
| 19 | For money payable for money lent. | Three years | When the loan is made. |
| 20 | Like suit when the lender has given a cheque for the money. | Three years | When the cheque is paid. |
| 21 | For money lent under an agreement that it shall be payable on demand. | Three years | When the loan is made. |
| 22 | For money deposited under an agreement that it shall be payable on demand, including money of a customer in the hands of his banker so payable. | Three years | When the demand is made. |
| 23 | For money payable to the plaintiff for money paid for the defendant. | Three years | When the money is paid. |
| 24 | For money payable by the defendant to the plaintiff for money received by the defendant, for the plaintiff's use. | Three years | When the money is received. |
| 25 | For money payable for interest upon money due from the defendant to the plaintiff. | Three years | When the interest becomes due. |
| 26 | For money payable to the plaintiff for money found to be due from the defendant to the plaintiff on accounts stated between them. | Three years | When the accounts are stated in writing signed by the defendant or his agent duly authorised in this behalf, unless the debt is, by a simultaneous agreement in writing signed as aforesaid, made payable at a future time, and then when that time arrives. |
| 27 | For compensation for breach of a promise to do anything at a specified time, or upon the happening of a specified contingency. | Three years | When the time specified arrives or the contingency happens. |
| 28 | On a single bond, where a day is specified for payment. | Three years | The day so specified. |
| 29 | On a single bond, where no such day is specified. | Three years | The date of executing the bond. |
| 30 | On a bond subject to a condition. | Three years | When the condition is broken. |
| 31 | On a bill of exchange or promissory note payable at a fixed time after date. | Three years | When the bill or note falls due. |
| 32 | On a bill of exchange payable at sight, or after sight, but not at a fixed time. | Three years | When the bill is presented. |
| 33 | On a bill of exchange accepted payable at a particular place. | Three years | When the bill is presented at that place. |
| 34 | On a bill of exchange or promissory note payable at a fixed time after sight or after demand. | Three years | When the fixed time expires. |
| 35 | On a bill of exchange or promissory note payable on demand and not accompanied by any writing restraining or postponing the right to sue. | Three years | The date of the bill or note. |
| 36 | On a promissory note or bond payable by instalments. | Three years | The expiration of the first term of payment as to the part then payable; and for the other parts, the expiration of the respective terms of payment. |
| 37 | On a promissory note or bond payable by instalments, which provides that, if default be made in payment of one or more instalments, the whole shall be due. | Three years | When the default is made, unless the payee or obligee waives the benefit of the provision and then when fresh default is made in respect of which there is no such waiver. |
| 38 | On a promissory note given by the maker to a third person to be delivered to the payee after a certain event should happen. | Three years | The date of the delivery to the payee. |
| 39 | On a dishonoured foreign bill where protest has been made and notice given. | Three years | When the notice is given. |
| 40 | By the payee against the drawer of a bill of exchange, which has been dishonoured by non-acceptance. | Three years | The date of the refusal to accept. |
| 41 | By the acceptor of an accommodation-bill against the drawer. | Three years | When the acceptor pays the amount of the bill. |
| 42 | By a surety against the principal debtor. | Three years | When the surety pays the creditor. |
| 43 | By a surety against a co-surety. | Three years | When the surety pays anything in excess of his own share. |
| 44 | (a) On a policy of insurance when the sum insured is payable after proof of the death has been given to or received by the insurers. (b) On a policy of insurance when the sum insured is payable after proof of the loss has been given to or received by the insurers. | Three years | For clause (a): the date of death, or where the claim is denied partly or wholly, the date of denial. For clause (b): the date of the occurrence causing the loss, or where the claim is denied partly or wholly, the date of denial. |
| 45 | By the assured to recover premia paid under a policy voidable at the election of the insurers. | Three years | When the insurers elect to avoid the policy. |
| 46 | Under the Indian Succession Act, 1925, section 360 or section 361, to compel a refund by a person to whom an executor or administrator has paid a legacy or distributed assets. | Three years | The date of the payment or distribution. |
| 47 | For money paid upon an existing consideration which afterwards fails. | Three years | The date of the failure. |
| 48 | For contribution by a party who has paid the whole or more than his share of the amount due under a joint decree, or by a sharer in a joint estate who has paid the whole or more than his share of the amount of revenue due from himself and his co-sharers. | Three years | The date of the payment in excess of the plaintiff's own share. |
| 49 | By a co-trustee to enforce against the estate of a deceased trustee a claim for contribution. | Three years | When the right to contribution accrues. |
| 50 | By the manager of a joint estate of an undivided family for contribution, in respect of a payment made by him on account of the estate. | Three years | The date of the payment. |
| 51 | For the profits of immovable property belonging to the plaintiff which have been wrongfully received by the defendant. | Three years | When the profits are received. |
| 52 | For arrears of rent. | Three years | When the arrears become due. |
| 53 | By a vendor of immovable property for personal payment of unpaid purchase-money. | Three years | The time fixed for completing the sale, or where the title is accepted after the time fixed for completion, the date of the acceptance. |
| 54 | For specific performance of a contract. | Three years | The date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused. |
| 55 | For compensation for the breach of any contract, express or implied, not herein specially provided for. | Three years | When the contract is broken or, where there are successive breaches, when the breach in respect of which the suit is instituted occurs or, where the breach is continuing, when it ceases. |
Meaning of Period of Limitation and Prescribed Period
Section 2(j) of the Limitation Act, 1963 defines the "period of limitation" as the period prescribed for a suit, appeal or application by the Schedule. The "prescribed period" means the period of limitation computed in accordance with the provisions of the Act.
Section 3: Bar of Limitation
Section 3 provides that, subject to sections 4 to 24, every suit instituted, appeal preferred and application made after the prescribed period shall be dismissed even if limitation has not been raised as a defence. For an ordinary suit, institution generally occurs when the plaint is presented to the proper officer.
Sections 18 and 19: Acknowledgment and Part Payment
Section 18 provides for a fresh period of limitation where, before expiry of the prescribed period, an acknowledgment of liability concerning the relevant property or right is made in writing and signed by the party against whom the right is claimed or by an authorised person. The fresh period is computed from the time when the acknowledgment was signed.
Section 19 deals with payment on account of a debt or interest on a legacy made before expiry of the prescribed period. Subject to the statutory requirements, a fresh period of limitation is computed from the time when the payment was made.
Article 54: Specific Performance of a Contract
Article 54 prescribes three years for a suit for specific performance. Where a date is fixed for performance, limitation runs from that date. If no date is fixed, limitation begins when the plaintiff has notice that performance is refused.
Article 55: Compensation for Breach of Contract
Article 55 applies to compensation for breach of a contract, express or implied, where the Schedule does not otherwise specifically provide for the suit. The limitation period is three years from the breach. For successive breaches, it runs from the breach sued upon; for a continuing breach, it runs when the breach ceases.
Contracts Entered into Outside India
Section 11 addresses suits on contracts entered into outside the territories to which the Act extends. Such suits instituted within the territories to which the Act extends are subject to the limitation rules contained in the Limitation Act, 1963, subject to the qualifications stated in section 11.
The correct starting date for limitation depends on the nature of the claim, the applicable Article and the facts of the transaction. Sections 4 to 24 may affect computation in an appropriate case.