The Limitation Act, 1963

What it does

The Act sets time limits. A Schedule lists the periods for suits, appeals and applications, by the kind of claim, and states from what point each period begins to run. Section 3 provides that a suit, appeal or application made after the prescribed period must be dismissed, although limitation has not been set up as a defence. The Act replaced the Limitation Act, 1908.

The periods the Schedule gives are the ones most often met. A suit for money lent, or on a contract, generally has three years. A residual provision gives three years where no other period is stated. A suit for possession of immovable property based on title has twelve years. A claim may be brought later in a case where the Act extends or suspends time, and most of the contested ground in practice is in those provisions and not in the Schedule.

Who it binds

Every person who brings a civil claim in a court or tribunal to which the Act applies, and the courts themselves, which must apply it to the proceedings before them. It reaches proceedings under special statutes unless the special statute excludes it, which the Act itself addresses in section 29(2). Arbitration is an example of a proceeding where the Act is applied through the law on arbitration, and the right question is whether the claim was in time when the arbitration was commenced.

What has changed, and when

The Act has been amended from time to time, but its structure is that of 1963. The change that most affects dispute work in recent years was not an amendment. During the pandemic the Supreme Court passed a series of orders, between 2020 and 2022, which excluded a stretch of that period from the computation of limitation for proceedings before courts and tribunals. A claim whose limitation expired or would have expired in that stretch has to be tested against those orders, and not against the Schedule alone.

What turns on it in practice

The civil disputes practice area, which acts in commercial suits, shareholder disputes and civil litigation before trial, commercial and appellate courts, begins a matter by dating it. The questions that matter recur.

The first is accrual. Time runs from the date the right to sue accrued, which for a contract is generally the date of breach, and for a continuing wrong may be later. The second is extension. Under the Act, a fresh period may begin from a written acknowledgment of liability signed before the period ends, and from a part payment in the way the Act provides. A bare reply to a notice that does not admit the debt will not do. The third is exclusion. Time spent in good faith prosecuting a claim in a court without jurisdiction may be excluded, which is why a plaint returned for want of jurisdiction does not always end the claim. The fourth is condonation. Section 5 allows the court to admit an appeal or application after the period if there is sufficient cause, but it does not extend to suits, and a suit that is late stays late.

For a shareholder or a creditor, the choice of forum and the date of filing must be thought of together. A commercial claim that would have been in time as a suit may be barred if it is brought in a special forum that applies a different period, and a claim that is an obligation under a continuing arrangement may be split across periods. A document that records a debt, such as a ledger confirmation or a letter of acknowledgement, can matter more to the outcome than the contract it relates to.

The practice does not advise a party to rely on the period running in its favour. It dates the claim, notes the last date, and treats extension as an exception that the other side will contest.