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Searching Case Laws & Precedent on Legal Query.....!
Analysing the retrieved Case Laws
Scanned Judgements…!
Limitation Period for Money Recovery - The period of limitation is generally calculated from the date when the right to sue arises, such as the date of default or breach. In cases involving goods sold on credit or loan transactions, the limitation typically starts from the date the amount becomes due or the transaction is completed. For example, under Article 68 of the Limitation Act, the period is three years from the date the money becomes payable or the date of default ["M/s Sakthi Energy Pvt.Ltd vs M/s.Ind Barath Thermal - Madras"].
Absence of Prescribed Period in Certain Documents - If a document does not specify a time for repayment, courts often infer the limitation period based on the nature of the transaction, usually three years from the date of default or the last acknowledgment of debt ["2024 Supreme(Online)(MP) 7396"].
Recovery of Loan and Asset Sale - When recovery involves sale of assets (e.g., under SARFAESI Act or similar statutes), the limitation may start from the date of sale or realization of proceeds, not from the date of notice. For instance, in cases where assets are sold to recover dues, the limitation period is counted from the date of sale rather than the notice ["M/s Sakthi Energy Pvt.Ltd vs M/s.Ind Barath Thermal - Madras"], ["M/s Sakthi Energy Pvt.Ltd vs M/s.Ind Barath Thermal - Madras"].
Acknowledgment of Debt - Under Section 18 of the Limitation Act, acknowledgment of debt within the limitation period can renew the limitation clock for another three years. However, such acknowledgment must be clear and unambiguous ["ASSET RECONSTRUCTION COMPANY INDIA LIMITED VS PRABHU HIRA ICE AND COLD STORAGE LTD - Allahabad"].
Specific Articles and Limitation Periods - Different types of suits have prescribed limitation periods under Articles 70, 137, and others. For example, suits for recovery of movable property or money on a running account are typically within three years from the date of the last transaction or payment ["M/s Sakthi Energy Pvt.Ltd vs M/s.Ind Barath Thermal - Madras"], ["2022 Supreme(Online)(KER) 44708"].
Case Law and Application - Courts emphasize that limitation begins from the date when the debtor defaults or the debt becomes due, and partial payments or acknowledgments within the period can extend the limitation. In cases involving goods sold or loans, the suit must be filed within three years from the date the amount is payable or the last acknowledgment ["M/s Sakthi Energy Pvt.Ltd vs M/s.Ind Barath Thermal - Madras"].
Analysis and Conclusion:To calculate the limitation period in cases of recovery of money or goods sold on loan, identify the date when the debt became due or the default occurred. If the debtor acknowledges the debt within the limitation period, it can reset the clock for another three years. When recovery involves sale of assets, the limitation period generally starts from the date of sale or realization rather than the notice or default date. The applicable articles of the Limitation Act (notably Articles 68, 70, and 137) provide specific timeframes, mostly three years, for different types of suits. Proper documentation, acknowledgment, and the nature of the transaction are crucial in determining the precise limitation period.
In the world of banking and finance, timely recovery of loaned money is crucial for financial institutions. But what happens when a borrower delays repayment? A key question arises: What is the for Realisation of Money Given by Bank as Loan? Understanding this can make or break a bank's ability to enforce its rights legally. This blog post dives deep into the legal framework under India's , drawing from judicial precedents and key principles to guide you through the nuances.
Typically, banks and lenders must act within strict timelines to avoid their claims becoming . We'll explore how the limitation period is calculated, the role of last transactions, payments, and acknowledgments, and insights from relevant case laws. Note: This is general information based on legal principles and should not be considered specific legal advice. Consult a qualified lawyer for your situation.
The limitation period for recovering money lent by a bank, especially in cases akin to goods supplied on credit or , generally begins from the date of the last transaction or the last entry in the account1990 0 Supreme(Gau) 41 2005 0 Supreme(Bom) 1764. This is not from the date of the initial loan disbursement or the last payment, unless specific exceptions apply.
Under , which governs suits for the price of goods sold and delivered, the period is three years from the date of the last transaction 2005 0 Supreme(Bom) 1764. Courts have consistently held: the suit for recovery of the balance amount in transaction of sale and purchase of goods is governed by the provisions of Limitation Act, basically and or . The suit itself is based on the recovery of the amount of goods sold and delivered. The will commence from the date of the transaction, lastly entered into between the parties 2005 0 Supreme(Bom) 1764.
For bank loans structured as or credit facilities for goods, this principle applies similarly, emphasizing the last active entry over mere payments.
A common misconception is that any payment resets the clock. However, payment alone does not extend the limitation period unless it qualifies as an under 2000 4 Supreme 243. Mere partial payments post-transaction do not suffice; they must be accompanied by a written acknowledgment relating to a , signed by the debtor or liable party 2000 4 Supreme 243.
For instance: an acknowledgment under , can be by a mortgagee also, and such acknowledgment will extend the limitation for a suit against the mortgagee 2006 3 Supreme 245. Without this, the three-year window from the last transaction remains unchanged 1990 0 Supreme(Gau) 41.
Bank loans often involve under statutes like the , or proceedings before (DRT). While the base limitation is three years, procedural steps can influence timelines.
In one case involving a bank's sale of secured assets: The bank sold the Ludhiana property on for Rs. 1.61 crores... The bank took over the physical possession of the factory premises and some movable goods lying therein in under SARFAESI Act
. Here, limitation for balance recovery adjusted post-asset realization, highlighting that recovery steps like asset sales can recalibrate the period.
Similarly, for financial corporations: Therefore, the is to be counted from the date when the assets of the Company were sold and not when the recall notice was given 2025 Supreme(Online)(MAD) 1611. The right to sue under (for indemnity or guarantees) arises post-sale, extending timelines for guarantors even after principal debtor liquidation. Courts affirmed: The right of a financial corporation to recover dues from guarantors persists post-liquidation of the principal debtor, and such claims are not barred by limitation 2025 Supreme(Online)(MAD) 1611.
In DRT contexts: A issued years after default may still be pursued if within extended periods via acknowledgments or restructuring
ASSET RECONSTRUCTION COMPANY INDIA LIMITED VS PRABHU HIRA ICE AND COLD STORAGE LTD
. The Respondent submits that according to the provisions of , the gets extendedASSET RECONSTRUCTION COMPANY INDIA LIMITED VS PRABHU HIRA ICE AND COLD STORAGE LTD
.While the default is three years from the last transaction, exceptions include:- Written Acknowledgment: A signed statement admitting the debt before expiry restarts the period 2000 4 Supreme 243.- : For mutual, open accounts, limitation runs from the last payment or entry closing the year, e.g., Being a mutual, open and running account, the last transaction is the payment of Rs.15,00,000/- on . The Limitation starts from the end of that financial year
.- Guarantor Liability: with the principal borrower, surviving liquidation 2025 Supreme(Online)(MAD) 1611.- SARFAESI/DRT Proceedings: Limitation for balance dues starts post-adjustment of sale proceeds
, where the limitation period for recovery of the balance amount would start only after adjusting...
.
However, suits filed beyond three years from due date for goods sold are barred: The suit for recovery of money towards goods sold and delivered ought to have been filed within 3 years from the date of money payable
.
To safeguard recovery rights:- Track Last Transactions: Document the final entry meticulously 2005 0 Supreme(Bom) 1764.- Secure Acknowledgments: Obtain written admissions before limitation expires 2000 4 Supreme 243.- Initiate Proceedings Early: File suits or SARFAESI notices within three years; DRT applications may extend via certificates
.- Handle Guarantees Separately: Pursue guarantors independently, as their liability persists 2025 Supreme(Online)(MAD) 1611.- Asset Realization Impact: Adjust limitation post-sale of securities
.
In goods-sold-on-loan scenarios mirroring bank credit: Ensure suits align with Article 14 1990 0 Supreme(Gau) 41.
.
Navigating limitation periods requires precision. For tailored guidance on bank loan recoveries, engage legal experts familiar with the Limitation Act and banking laws. Stay informed, act decisively, and protect your financial interests.
References:1. 2005 0 Supreme(Bom) 1764 - Limitation from last transaction in sale suits.2. 2000 4 Supreme 243 - Acknowledgment under Section 18.3. 1990 0 Supreme(Gau) 41 - Recovery from last account entry.4. Additional cases:
,
, 2025 Supreme(Online)(MAD) 1611, etc. #BankLoanRecovery #LimitationPeriod #LimitationActIndia
Another important fact as observed by the trial court in Para-9 is that no period is prescribed for returning the money. Now again this is not a normal practice. Some period is given in such type of document so as to calculate the period of limitation to file suit if required. ... transactions of loan are believed, then the plaintiff becomes Money Lend....
Act was sold in the instant case. ... We thus, hold that when the Corporation takes steps for recovery of the amount by resorting to the provisions of Section 29 of the Act, the limitation period for recovery of the balance amount would start only after adjusting ... Therefore, the period of limitation is to be counted from the date when the ....
Referring to Section 172 of the Contract Act, the court held that the bailment was with a promise to pay hire charges and therefore the period of limitation for recovery of the machinery falls under Article 70 of the Limitation Act. ... Neither the plaintiff Company nor its Managing Director had ever sold the machinery which had been hypothecated to the bank from where the loan had been ....
is an application for recovery of money, whereas the present Petitioner filed u/s. 7 of IB code is not the suit for recovery and/or can't be equated with suit for recovery of money but is it process for resolution of the Insolvency. ... Act, the period of limitation gets extended. ... The Respondent submits that according to the provisions of Section 18 of the #....
The suit for recovery of money towards goods sold and delivered ought to have been filed within 3 years from the date of money payable, even according to the plaint, the money payable became due on the expiry of 60 days i.e., 17.08.2014. ... The transaction between the parties is for goods sold and suit is for recovery of mo....
The bank sold the Ludhiana property on 27.09.2005 for Rs. 1.61 crores. ... The bank took over the physical possession of the factory premises and some movable goods lying therein in April, 2005 under SARFAESI Act and value of which goods was being claimed by the review petitioners to be Rs. 1,53,36,776/-. ... of Debts Due to Banks and Financial Institutions Act, 1993(now renamed as the Recovery of Debts and Ba....
Therefore, the period of limitation is to be counted from the date when the assets of the Company were sold and not when the recall notice was given.” 15. ... The right to sue on the contract of indemnity arose after the assets were sold. The present case would fall under Article 55 of the Limitation Act, 1963 which corresponds to old Articles 115 and 116 of the old Limitation....
The suit for recovery of money ought to have been filed within three years period from the date due and payable. Being a mutual, open and running account, the last transaction is the payment of Rs.15,00,000/- on 09.08.2017. The Limitation starts from the end of that financial year. ... Therefore, the suit is deemed to have been filed within the period of Limitation. ... However, the def....
In the instant case, it can be seen from the facts of the given case the default occurred as on 31.03.2009 or on 28.06.2012, a recovery certificate issued by the Debt Recovery Tribunal (DRT) on 22.11.2016, the restructuring package as on ... The repayment of money had to be paid by the internal generation only and interest had to be paid in case of delay. CP(IB)1166 MB/2020 ....
This is a suit for recovery of price of goods sold. ... 2. The Plaintiff is a limited company registered under the Companies Act 1956, having its registered office at J - 2 MIDC. Industrial Area, Chikalthana, Aurangabad, Maharashtra. ... In case the Defendant defaults in making payments within the stipulated time, the Defendant would be liable to pay interest at a rate of 24% per annum. ... 5. Pursuant to the agreement....
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