1

PROJECT REPORT

THE LIMITATION ACT, 1963

“LIMITATION BARS THE REMEDY BUT

DOES NOT DESTROY THE RIGHT”

SUBMITTED TO: SUBMITTED BY:

Dr. Karan Jawandha Anshul Rana

BCOM.LLB (H)

8th Semester

Roll no. 272/15

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ACKNOWLEDGEMENT

I am using this opportunity to express my gratitude to everyone who supported me

throughout the course of this project. I am thankful for their aspiring guidance,
invaluably constructive criticism and friendly advice during the project work. I am
sincerely grateful to them for sharing their truthful and illuminating views on a number of
issues related to this project.

I express my heartfelt thanks to Ms. Karan Jawandha for her support and guidance and
for being a guiding light throughout.

I would also like to thank all the people who provided me with the facilities and
conducive environment for the completion of this project.

ANSHUL RANA
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“Limitation bars the remedy but does not destroy the

right”
The law of limitation, being a procedural law, merely bars the remedy. It does not destroy
primary or substantive right accrued in favour of a party. The judicial remedy available for
enforcement of such right is barred, but the substantive right survives and continues to be
available if there are other ways or means for enforcing it.1

The law of limitation only bars the remedy when the period of limitation expires, but it
doesn’t destroys the right that cannot be enforced by the judicial process. Thus, if any claim
is satisfied outside the court after the expiry of limitation period, it is not illegal.

Limitation Act protects the innocent persons from the stale claims being hung on their heads
for a long time, only a vigilant person or a bona fide claimant will come to the court within
the prescribed period for the enforcement of his right.

Hence, if a debtor pays to his creditor time-barred debt, he cannot claim it back on the ground
that the creditor could not have filed a suit against the debtor for recovery of the said amount.
Similarly, if a debtor owes several debts to a creditor, some of which are barred by limitation,
and makes payment of some amount without any specification and the creditor adjusts the
amount towards time-barred debt, the debtor cannot object nor he can claim such amount. A
creditor may obtain payment of time-barred debt by a permissible mode, e.g. a right of lien,
valid contract, etc.2

Section 27 of the Limitation Act is, however, an exception to the general rule that in personal
actions, the Limitation Act bars only the remedy and does not extinguish the right. In a suit
for possession of any property on the determination of the period of limitation not only the
remedy but the right also is extinguished under Section 27. But a debt does not cease to be
due, because it cannot be recovered after the expiration of the period of limitation provided
for instituting a suit for its recovery. After a debt becomes barred a person is till deemed to
owe.3

1
Bharat Barrel & Drum Mfg. Co. Ltd. v. ESI Corpn., (1971) 2 SCC 860; New Delhi Municipal Committee v.
Kalu Ram (1976) 3 SCC 407.
2
Ittyavira Mathai v. Varkey Varkey, AIR 1964 SC 907.
3
First National Bank Ltd. v. Seth Santlal, AIR 1954 Punjab 328.
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The rules of limitation are not meant to destroy the rights of the parties. They are meant to
see that the plaintiff does not use dilatory tactics but seeks remedy within the period
stipulated by the Legislature. The rules of limitation thus will only bar the remedy but does
not extinguish the right. The right continues and exists even though the remedy is barred by
limitation4.

The law of limitation bars the remedy in a court of law only when the period of limitation has
expired, but it does not extinguish the right that cannot be enforced by judicial process. Thus
if a claim is satisfied outside the court of law after the expiry of period of limitation, that is
not illegal.

The intention of the law of limitation is, not to give a right where there is none, but to impose
a bar after a certain period to institute suit to enforce an existing right. The object is to
compel litigants to be diligent in seeking remedies in courts of law by prohibiting stale
claims. It is to help the bona fide claimant and to prevent fraud being practiced by people
upon innocent persons by keeping actions hanging on them for a long time.

The Indian limitation act prescribes periods after the expiry of which a claim in the form of
suit, appeal or application cannot be maintained in a court of justice to enforce a right but it
does not destroy the right itself, for example, A from time to time advances money to B and
each time he advances money to B, he enters the item advanced in his account book. Let us
suppose he has advanced six items of money on six different dates, each succeeding item
being separated from the previous one by a period of six months. Four years after the first
advance was made, the period of three years fixed for the filing of the suit for the recovery of
the first item of advance has expired and the remedy of A for filing a suit is barred by
limitation. Here although the remedy is barred, the right of A to recover the amount of the
first advance is not extinguished, but still survives although his right to file the suit for the
recovery thereof is barred by limitation. Therefore, if B, the debtor, pays the amount of the
first advance after it has become barred, or if he pays an amount without specifying towards
which of the six advances it might be credited and the creditor applies it, in the payment of
the first item of advance, the creditor will be fully justified in law in doing so and the
payment would not be allowed to be recalled on the ground of failure of consideration. a
barred debt is a good consideration for a written promise to pay it.

4
Hariraj Singh v. Sanchalak, AIR 1988 All. 246.
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LIMITATIONS PLACED OF REMEDIES

Concept of Time Barred:

Concept of time barred is incorporated in Section 3 of Limitation Act, 1963. According to

this section, every suit must be instituted, appeal must be preferred and application must be
made within the period of limitation as specified in the Schedule II of Limitation Act. The
provisions of this section are absolute and mandatory. The court will not proceed with the
suit, appeal or application made beyond prescribed period of limitation and is liable to be
dismissed when the suit, appeal or application has become time barred.

It may be noted that if the defendant does not raise the objection, the Court may entertain the
suit even after the expiry of limitation period. In that case, the decision of the Court cannot be
challenged on the ground that the suit was time-barred.

The Act mandates the court to dismiss a suit even though limitation is not set up as a defence.
Normally in actual practice the court frames a preliminary issue on the question of limitation
as the same relates to a bar of law, if the bar of limitation is apparent on the face of the plaint
it may also entail rejection under Order 7 Rule 11 of the Civil Procedure. Otherwise
evidences are taken, which leads to a dismissal or the suit continues.

Section 3 of the Act only bars the remedy, but does not destroy the right to which the remedy
relates to. The right to debt continues to exist notwithstanding the remedy barred by the
limitation. The right can be exercised in any other manner than by means of a suit. The debt
is not extinguished, but the remedy to enforce the liability is destroyed. What Section 3 refers
to is only to the remedy but not to the right of the creditors.

Punjab National Bank & Others v. Surendra Prasad Sinha 5: Bank had given a loan to Mr.
Dubey. The respondent and his wife had submitted a security to the bank in the form of FDR
and they stood as guarantors for Mr. Dubey. The bank adjusted loan amount from the
security. The respondent sued for criminal misappropriation. The court held that the bank was
entitled to appropriate the debt due from the FDR because the debt continues to subsist as
long as it is not paid. It is not obligatory to recover the debt by the suit. The rules of limitation
5
AIR 1992 SC 1815.
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are not meant to destroy the rights of the parties. Therefore, if the creditor is in possession of
the security the debt could be adjusted from security in his possession or custody.

It is pertinent to remember that Limitation Act does not extinguish the right but negatives its
remedial qualities by turning it into an imperfect right i.e. right without a corresponding
remedy. Since it seemingly is at cross purposes with the celebrated maxim of ubi jus ibi
remedium, courts have constantly held that when there are two views possible one that saves
the remedy should be preferred.

Doctrine of Sufficient Cause For Extension of Time or

Condonation of Delay:

The general rule is that the suit, appeal or application must be made within the prescribed
period of limitation. However, there is an exception to this general rule which provides that
the court may admit an application or appeal even after the expiry of prescribed period of
limitation, if it is satisfied that the applicant or the appellant has been prevented by some
sufficient cause, from not making the application or preferring the appeal within the
prescribed period of limitation.

It may be noted that doctrine of sufficient cause is not applicable in the following cases:

i) Application made under any of the provisions of Order XXI of CPC, 1908; and
ii) Suits.
The expression ‘sufficient cause’ had not been defined under The Limitation Act, 1963.
However, a cause in order to be a sufficient cause must be a cause which is beyond the
control of the party invoking this section. For example, illness of the party, mistake of the
counsel, mistake of law, and not ignorance of law, etc. are some of the instances of sufficient
cause.

The burden to prove sufficient cause for delay in filling an application or appeal lies on the
party applying for condonation of delay under section 5. However, it is the discretion of the
court to grant extension of time or not.

Filing After the Expiry of Prescribed Period:

Section 5 is a principle of exceptions which allows filing after the expiry of prescribed period
if sufficient cause is shown. The phrase ‘sufficient cause’ has to be interpreted liberally,
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keeping in mind at all times that a litigant normally does not stand to benefit from delay. On
the contrary there is always a chance of his losing his right altogether. Hence an interpretation
that advances substantial justice has to be accorded. In this regard, barring a few decisions,
courts have repeatedly refused to make special exceptions in favour of government,
notwithstanding the impersonal machinery. The court has discretion to admit or refuse to
admit the proceeding, even if sufficient cause is shown, as is made clear by the words “may
be admitted” used in the section.

PRINCIPLES FOR EXTENSION OF TIME UNDER SECTION 5: The principles for

extension of time under Section 5 may be summed up as follows:

(a) The party seeking relief has to satisfy the court that he had sufficient cause for not
preferring the appeals, etc., within the prescribed time;
(b) The explanation has to cover the entire period of delay;
(c) A litigant should not be easily permitted to take away a right which has accrued to his
adversary by lapse of time;
(d) The proof of sufficient cause is a condition precedent for the exercise of the
discretionary jurisdiction vested in the Court by Section 5. After sufficient cause is
shown then the Court has to enquire, whether in its discretion it should condone the
delay.
(e) The discretion conferred in the Court is a judicial discretion and must be exercised to
advance substantial justice;
(f) No liberal view should be taken merely because the defaulting party is Government;
(g) Even sheer indifference of the Advocate cannot stand in the way of condoning the
delay when there is no laches on the part of the litigant.

Period Of Limitation In The Case Of Persons Under Legal

Disability (Sec 6,7 & 8):

The period of limitation starts from the date on which the cause of action has arisen but in the
case of persons suffering from some legal disability, the period of limitation runs from the
date of the cessation of disability. The rules to this effect are contained in sections 6, 7 and 8.
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Section 6: Section 6 excuses an insane person, minor and idiot to file a suit or make an
application for the execution of a decree within the time prescribed by law and enables him to
file the suit or make an application after the disability has ceased counting the period of time
from the date on which the disability ceased.

Section 6 provides that a person is under a legal disability if such person is a minor, (the term
minor includes child in the womb) insane and idiot. In such cases, the persons will be entitled
to fresh starting point of limitation from the date on which the legal disability ceases to exist
subject to the following conditions:

i) Such a legal disability must be existing at the time from which the period of limitation is to
be commenced; and
ii) The person under legal disability must be entitled to institute the suit or make an
application. Section 6 further provides the following:
a) If a person is affected by several disability at one point of time, then the person
may institute a suit or make an application after all disabilities have ceased.
b) If one legal disability is followed by another legal disability, then the person may
institute a suit or make an application after all disabilities have ceased.
iii) If the legal disabilities continue up to the death of the person under such disability, then
his legal representative may institute the suit or make the application within the same period
after the death, as would otherwise have been allowed from the time specified in the Schedule
II to the Act.
iv) It may be noted that section 6 does not apply to appeals.

Section 7:

Section 7 is applicable where several persons are jointly entitled to institute the suit or make
an application for execution of a decree and out of the several persons, one or some of them
are affected by ‘legal disability‘.

The period of limitation in such a case is to be reckoned, depending upon whether discharge
can be made with or without the consent of the person under Legal disability, If the discharge
can be given with the consent of such person, the period of limitation will start only after the
disability is removed. On the other hand, where consent of the person under legal disability is
not required, time will run against them all. It may be noted that section 7 is not applicable to
appeals.
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Section 8:

Section 8 is an exception to Sections 6 and 7 and controls both these sections. According to
Section 8, the period of limitation cannot extend beyond three years from the date of
cessation of legal disability.

However, if the ordinary period of limitation computed from the original accrual of the cause
of action expires more than 3 years after the cessation of disability, such period will be
allowed. Thus, if the normal limitation period is more than the limitation period computed in
accordance with the Sections 6, 7 and 8, then the normal limitation period shall apply.

Together represent a well knit legislative scheme wherein limitation period is excluded
during period when litigant could not have sued on account of minority/insanity/idiocy.
However, such disability should be present at the time from which the period of limitation is
to be reckoned. Subsequent disability/inability would not stop the continuous running of time.
However, strict application of this rule would have done injustice to other party, insofar as
their rights would be uncertain for long periods of time. To counter this full period of
limitation to be accorded after disability ceases is elongated to a maximum of 3 years. This
strikes a perfect balance of conflicting interests of the disabled and the other party.

Continuous Running of Time:

Section 9 of the Limitation Act, 1963 provides that where the limitation period has started, no
subsequent disability or inability to institute a suit or make an application can stop it. The
section embodies the principle that once the time for filing suit or an application starts
running, it will continue to run till it has exhausted the full prescribed period. The running
process can only be stopped or suspended by express statutory exceptions.

‘Disability’ connotes legal disability. It is want of legal qualification to act i.e., want of
capacity to act. It is the state of being minor, insane and idiot. ‘Inability’, on the other hand,
connotes want of physical power to act. Illness, poverty, ignorance, etc. are some of the
instances of inability. It may be noted that section 9 is applicable only to suit and
applications. It does not apply to appeals.

The bar of limitation arises only where a suit is instituted, an appeal is preferred or an
application is made after the prescribed period of limitation. Thus, the bar only applies where
a proceeding has been instituted after the period of limitation. The bar does not apply to steps
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which constitute a mere continuation of pending proceeding. Thus, where an application for
execution has been filed within the period of limitation, but subsequently, an application is
made to continue the execution proceeding, the latter application is not subject to any period
of limitation. Similarly, where a suit is validly instituted, but the plaint is returned for some
purpose and represented, such representation is only a continuation of the suit and does not
affect the question of limitation.

Exclusion of Time In Legal Proceedings:

Section 12 gives the following periods shall be excluded in computing the period of
limitation for various proceedings mentioned:

1) In computing the period of limitation prescribed for a suit, the day on which the time
begins to run shall be excluded.

2) In computing the period of limitation prescribed for an appeal, the following periods shall
be excluded:
a) the day on which the period begins to run;
b) the day on which the judgment was pronounced;
c) the time required for obtaining the copy of decree, sentence, order; and
d) the time required for obtaining the copy of judgement.
3) In computing the period of limitation prescribed for an application for revision or review
or leave to appeal, the following shall be excluded
a) the day on which the period begins to run;
b) the day on which the judgment was pronounced;
c) the time required for obtaining the copy of decree; and
d) the time required for obtaining the copy of judgement.

4) In computing the period of limitation prescribed for an application to set aside an award,
the following period shall be excluded:
a) the day on which the period begins to run; and
b) the time required for obtaining a copy of the award.

5) In computing the period prescribed for any other application, only the day on which the
time begins to run shall be excluded.

Postponement of Limitation:
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Section 16-23 of the Limitation Act, 1963 provide for postponement of limitation. For
application of law of limitation, there must be a completed cause of action. In other words,
there must be a person who can sue, a person who can be sued, and a cause of action on
which a suit, appeal or application can be filed. Moreover, such person should be in a
position to institute such proceeding without any hindrance, obstruction or impediment.

In the following cases, there is postponement of limitation, i.e. the period of limitation will
not start running:

(i) The period of limitation will not start running till there is a person who can sue or who can
be sued.

(ii) In case of fraud or mistake, the period of limitation will not start running till such fraud or
mistake is discovered.

(iii) In case of right or liability, a fresh period of limitation will start running from the date of
acknowledgment in writing of such right or liability by the party.

(iv) In case of debt, payment will provide for fresh period of limitation from time of such
payment.

(v) Where after the institution of suit, a new plaintiff or defendant is added or substituted, the
suit shall be deemed to be instituted against him when he was made a party. But if the court is
satisfied that such omission was due to bona fide mistake, the suit shall be deemed to have
been instituted on any earlier date.

(vi) In case of continuing breach of contract or tort, fresh period of limitation begins to run
every moment till breach or tort continues.

(vii) In a suit for compensation for an act not actionable without special damage, the period
of limitation will be computed from the time the injury result.
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EXCEPTION TO THE PRINCIPLE

The general principle is that limitation act in personal actions bars only the remedy and does
not extinguish the right itself.

Section 27 is an exception to this general principle so far as suits for possession of property
are concerned and lays down that after the expiry of the period thus prescribed for instituting
a suit for possession of any property the person o should have instituted such suit, but has
failed to do so, shall cease to have any right to the property. After the expiry of its period, the
law declares not simply that the remedy is barred but that the tile is extinct in favour of the
possessor. But this section is confined to suits for possession only and does not apply as suit
by a mortgagee for recovery of the money due to him by sale of the mortgaged property. The
mortgagee's remedy may be barred if he omits to sue within the statutory period but his right
is not extinguished.

Therefore, except in cases when the right itself if extinguished by lapse of time, the remedy
only is barred. So a debt does not cease to exist only because its recovery is barred by the
statute of limitation.6 But although the existence of the right is not affected by the remedy
becoming barred by limitation, the fact that remedy is barred may prevent the right being
availed of in some other way also. However, in what ways the right can be availed of or
whether the availability of the right in a particular manner is preserved by the suit being
barred by limitation depends upon other branches of law and not to be looked into in the
statute of limitation. If a barred debt can be recovered by any other means than by suit, the
Limitation Act does not prevent anybody form recovering such debt.7

Sections 25 and 26 deal with the direct acquisition of rights to easement by adverse
possession. Section 27 deals with the indirect acquisition of the ownership of corporeal
property by possession or rather with the extinction of the right to property by prescription.
The right that is extinguished by the operation of this section is the right of a particular
person, whose suit for possession of the property has been barred. If the right of a Hindu
widow is extinguished by limitation. It does not follow that the right of the reversioner shall
also be extinguished. Similarly, if after the grant of a simple mortgage, the mortgagor is
dispossessed of the mortgaged property, the mortgagor is the person entitled to institute a suit

6
Nur Din v. Allah Ditta, AIR 1932 Lah 419.
7
First National Bank v. Seth Sant Lal, Air 1959 Punj 328.
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for possession of the property and consequently, if he does not sue within 12 years, his right
is extinguished. but the simple mortgagee's right to bring the property to sale is not affected.

Adverse possession: the concept of adverse possession contemplates a hostile possession,

i.e., a possession which is expressly or impliedly in denial of the title of the true owner.
Possession to be adverse must be possession by a person who does not acknowledge the
others' rights, but denies them. The principle of law is to firmly establish the person who
basis his title on adverse possession must show by clear and unequivocal evidence that his
possession was hostile to the real owner and amounted to a denial of his title to the property
claimed. For deciding whether the alleged acts of a person constituted adverse possession the
animus of the person doing those acts is the most crucial factor.

A person is said to hold the property adversely to the real owner when that person in
denial of the owner’s right excluded him from the enjoyment of his property. Where a
stranger is in possession, it is not necessary to do so to the knowledge of the true owner, but it
is sufficient if the possession is hostile, notorious, and exclusive, so that the owner could
perceive the same.

 Some essential requirements to be proved for claiming under adverse possession are:

Hostile possession: The intention of the possessor of the property must be to acquire rights
through means of adverse possession. These rights are acquired at the expense of the rights of
the original owner. There must be an express or implied denial of the owner's title by the
possessor. Constructing a boundary wall around the property can be means of asserting this
possession.

Public knowledge: The public at large must be aware about the possession of the claimant.
This condition is put in place so that the actual owner has adequate means to know that
someone is in possession of his property and gets reasonable time to act. However, one is not
bound to inform the original owner about it.

Actual possession: There must be actual possession throughout the period of limitation.
Physical acts like harvesting crops, repairing the building, planting trees, erection of shed,
etc, could be means through which actual possession can be determined. The possessor could
not claim possession over the property without being physically possessing it.
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Continuity: The possessor must be in peaceful, unbroken, uninterrupted and continuous

possession of the property. Any break in the possession will extinguish his rights.

Exclusivity: The possessor must be in sole possession of the property. The possession cannot
be shared by different entities or persons for the claimed time duration.

Difference between Limitation and Prescription

Limitation is negative in operation. And in this nobody else get the remedy. In case of
prescription, lapse of time accrues right to some other person.

1. A law of limitation prescribes the time after which a suit or other proceedings cannot
be instituted in a court of law.
A law of prescription prescribes the time at the expiration of which some substantive
right may be acquired or may become extinguished. Prescription has, therefore, a
twofold aspect: as creating a right and extinguishing a right.

2. A law of limitation merely affects the remedy, it does not touch the right of a person
to the debt, damage, goods, person, property, etc. but prescription extinguishes the
right of action. Limitation is considered to be a species of prescription.

3. A law of limitation, as merely bars the remedy, is a part of the procedural or adjective
law. A law of prescription, as it affects the substantive right itself, is a part of the
substantive law.

A law of prescription lays down the period at the expiry of which a substantive or primary
right is, under certain circumstances, acquired or extinguished. The term 'prescription' as used
in the limitation act, excludes, and is opposed to limitation. A person's right is extinguished
by prescription when he cannot assert it either judicially or extra-judicially. It perishes so far
as he is concerned. But since a mode of losing rights is also often a mode of acquiring them
the right is virtually, though not expressly or directly, transferred to the person who claims it
by prescription. Where prescription extinguishes the substantive right itself, the remedy is
necessarily lost or barred. a prescription such as that dealt with by section 27 is an distinctive
prescription. Where prescription not only bars the remedy, and extinguishes the right of the
original holder, but directly transfers his right to the opposing claimant, the latter acquires a
title against the entire world. Such a prescription is called acquisitive prescription. A
prescription such as that referred to in section 25 belongs to this class.
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CONCLUSION
Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do
not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy
is to repair the damage caused by reason of legal injury. The law of limitation fixes a life-span for
such legal remedy for the redress of the legal injury so suffered. Time is precious and wasted
time would never revisit. So, a life-span must be fixed for each remedy. Unending period for
launching the remedy may lead to unending uncertainty and consequential anarchy. The law
of limitation is thus founded on public policy. It is enshrined in the maxim interest re
publicae ut sit finis litium (it is for the general welfare that a period be put to litigation). The
idea is that every legal remedy must be kept alive for legislatively fixed period of time.8

Law of limitation is not meant to be an aid to unconscionable conduct, although, if a claim is

clearly barred, the Court must unhesitatingly dismiss the suit. It is a law of repose, peace and
justice which bars the remedy after the lapse of a particular period by way of public policy
and expediency without extinguishing the right except in certain cases. Therefore, the Court
must lean against limitation and in favour of the subsistence of the right to sue where two
views are clearly possible. When there is the benefit of a reasonable doubt in the matter of
construction of a statement relied upon to serve as an acknowledgment to save limitation, the
benefit of that doubt should go to the plaintiff.

The object of the law of limitation is not to crate or define cause of action but simply to
prescribe the period within which existing right can be enforced in Courts of law. It based
upon the principles that the law aids the diligent and not the indolent; that a man who has
negligently slept over his right for an undue length of time will not be allowed to litigate in
respect of them; and a person who has been in the enjoyment of property, or of a right, or of
an immunity from a demand by another, for a period of them which the law has prescribed,
will be allowed to enjoy that property and will not be harassed by unexpected litigation. 

BIBLIOGRAPHY
8
Popat and Kotecha Property v. State Bank of India Staff Association, (2005) 7 SCC 510.
 16

1. C.K. Takwani, ‘Civil Procedure with Limitation Act, 1963’, Eastern Book Company.
2. J.D. Jain, ‘Indian Limitation Act’, Allahabad Law Agency.

WEBLIOGRAPHY
3. https://www.makaan.com/iq/legal-taxes-laws/what-is-adverse-possession
4. http://www.shareyouressays.com/knowledge/the-law-of-limitation-bars-the-remedy-but-
does-not-destroy-the-right-section-3-and-27/111624
5. https://lawstudyhelp.blogspot.in/2015/01/the-objects-and-development-of.html
6. https://www.netlawman.co.in/ia/limitation-act-1963
7. http://www.lawyersclubindia.com/articles/A-Bird-s-eye-view-of-the-Law-of-
Limitation-4534.asp