A money claim that is good on the merits can still fail for one reason that has nothing to do with who is right: it was filed too late. Section 3 of the Limitation Act, 1963 directs a court to dismiss a suit instituted after the prescribed period, even if the other side never raises the point. For most creditors, the period is shorter than they assume, and the question of when it began is often more contested than the period itself.
This guide sets out the general framework for civil money claims, the two provisions that most often restart the clock, and the documents worth looking for before you conclude a claim is alive or dead.
The general rule: three years for most money suits
The Schedule to the Limitation Act lists periods by type of claim. For ordinary money claims the period is usually three years, but the starting point differs from article to article. A few of the entries that come up most often:
| Type of claim | Article | Time usually starts from |
|---|---|---|
| Balance due on a mutual, open and current account with reciprocal demands | Article 1 | The close of the year in which the last item admitted or proved is entered in the account |
| Price of goods sold and delivered, with no fixed period of credit | Article 14 | The date of delivery of the goods |
| Price of goods sold on a fixed period of credit | Article 15 | When the period of credit expires |
| Money lent (not payable on demand) | Article 19 | When the loan is made |
| Money lent under an agreement that it is payable on demand | Article 21 | When the loan is made |
| Compensation for breach of contract | Article 55 | When the contract is broken |
| Any suit not provided for elsewhere in the Schedule | Article 113 | When the right to sue accrues |
Two things in that table surprise people. First, a loan “payable on demand” does not wait for a demand: under Article 21 time generally runs from the date the money was lent. Second, Article 1 applies only where the account is genuinely mutual — dealings in both directions creating reciprocal demands. An ordinary supplier ledger where one side only supplies and the other only pays is often not a mutual account, and each invoice may then carry its own starting date. Which article applies is a question of the facts and the documents, and it is worth settling before anything else.
Note also that other routes have their own clocks. A cheque-dishonour complaint under Section 138 of the Negotiable Instruments Act runs on a much shorter statutory timetable, set out in our guide on the Section 138 timeline. MSME supplier claims sit alongside a separate statutory framework, discussed in the MSME 45-day rule.
Section 18: a written acknowledgment starts a fresh period
Section 18 provides that where, before the period of limitation expires, the person liable acknowledges the liability in writing, signed by that person or an authorised agent, a fresh period of limitation is computed from the date the acknowledgment was signed. Several features of the section matter in practice:
- Timing. The acknowledgment must come while the original period is still running. An acknowledgment made after expiry does not revive the claim under Section 18.
- Writing and signature. Oral evidence of the contents of an acknowledgment is not admissible. The document itself has to be produced.
- It need not be a promise to pay. The Explanation to the section says an acknowledgment can be sufficient even if it does not specify the exact amount, says the time for payment has not yet come, is coupled with a refusal to pay, or is accompanied by a claim to set-off. What matters is that it admits a subsisting liability.
Whether a particular email or message qualifies depends on its wording, who sent it, and how authorship and signature can be proved. Courts have, in various cases, considered electronic communications and entries such as balance confirmations in this context, but there is no blanket rule that every message counts. A vague “we will look into it” is weaker than “we confirm the outstanding balance of the invoices listed below”.
Section 19: part-payment also restarts the clock
Section 19 provides that where a payment on account of a debt, or of interest on a legacy or debt, is made before the expiry of the prescribed period by the person liable or an authorised agent, a fresh period is computed from the time the payment was made.
There is a condition that is often missed. The proviso requires that the acknowledgment of the payment appear in the handwriting of, or in a writing signed by, the person making the payment (save for payments of interest made before 1 January 1928, which is now of historical interest only). A credit in the creditor’s own books is not, by itself, enough. A bank transfer narration, a covering letter, a cheque signed by the payer or a payer-issued confirmation may help, depending on what it records and who generated it.
Section 5 condonation does not apply to suits
Many people assume a court can simply excuse a late filing for good reason. Section 5 of the Limitation Act allows delay to be condoned on “sufficient cause”, but it applies only to appeals and applications (other than applications under Order XXI of the Code of Civil Procedure). It does not apply to the filing of a suit. A time-barred money suit cannot be rescued by an application for condonation, which is why the starting date and any acknowledgments need to be established before filing rather than argued about afterwards.
Separately, Section 25(3) of the Indian Contract Act, 1872 recognises that a written, signed promise to pay a debt that is already time-barred can itself be an enforceable agreement. That is a different route from Section 18, with its own requirements, and whether a document amounts to such a promise depends on its terms.
The COVID-19 exclusion period
By its suo motu orders on extension of limitation, the Supreme Court directed that the period from 15 March 2020 to 28 February 2022 be excluded in computing limitation. Where limitation would have expired within that window, a period of 90 days from 1 March 2022 was allowed, or the actual balance period remaining from that date if longer. For claims whose original period overlapped those dates, the computation needs care; for claims arising well after 2022, the exclusion will usually not matter.
Documents worth looking for
Before deciding whether a claim is in time, it helps to gather everything the debtor has written or signed since the debt arose. In our experience the useful material is often already sitting in an inbox or a phone:
- Emails or letters from the debtor that refer to the outstanding amount, ask for time, or propose instalments.
- WhatsApp or other messages admitting the dues, together with details that help establish who sent them.
- Ledger or balance confirmations signed or issued by the debtor, including year-end confirmations sent for audit.
- Records of every part-payment, with anything the payer wrote or signed alongside it.
- The original contract, invoices, delivery records or loan documents that fix the starting date.
- Any cheques given towards the debt, which may also open a separate route (see our guide on security cheques and Section 138).
Arrange them in date order. The question is simple to state: counting from the correct starting date, was there a qualifying acknowledgment or payment before each three-year period ran out? Answering it is less simple, and it turns on the exact wording of the documents.
Where this fits in a recovery
Limitation is the first filter for any route, including a civil money recovery suit or an Order XXXVII summary suit on a written debt. Establishing the timeline first avoids spending on a notice or a plaint for a claim that the law no longer allows, and it identifies whether action is urgent because a period is close to running out.
Not sure whether your claim is still in time?
Send the contract, invoices, payment record and any messages from the debtor — the timeline is mapped to your documents, and an advocate advises on the route before anything is filed.
See Money Recovery deskFAQs
What is the limitation period for recovering money in India?
For most civil money claims the period under the Limitation Act, 1963 is three years, but the date from which it runs depends on the type of claim, such as the date of a loan, delivery of goods, or breach of contract. The applicable article is identified from the facts and documents.
Does a WhatsApp message or email acknowledging the debt extend limitation?
It can, if it is a written acknowledgment of a subsisting liability, made before the period expires and signed or otherwise attributable to the person liable, as Section 18 requires. Whether a particular message qualifies depends on its wording and how authorship can be proved.
Does a part-payment restart the limitation period?
Under Section 19, a payment on account of the debt made before the period expires starts a fresh period, but the acknowledgment of that payment must appear in the handwriting of, or a writing signed by, the person making it. A credit entry in the creditor's own books is not enough by itself.
Can a court condone delay in filing a money recovery suit?
No. Section 5 of the Limitation Act allows condonation of delay only for appeals and applications, not suits. A suit filed after the period expires is liable to be dismissed, so the timeline should be checked before filing.
Related guides
- Order XXXVII summary suits — the faster civil route for debts based on written instruments and contracts.
- The Section 138 timeline explained — the much shorter clock for a dishonoured cheque.
- MSME Samadhaan and the 45-day rule — the statutory route for registered micro and small suppliers.
The desks these connect to: money recovery and civil dues for unpaid invoices, loans and written debts, and cheque bounce under Section 138 where a cheque has been dishonoured.
This guide is general and informational — not legal advice, not a solicitation, and no substitute for professional advice on your facts. Outcomes depend on facts, documents, forum, limitation and applicable law.