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CS Executive · Jurisprudence, Interpretation and General Laws · Law relating to Limitation

A debtor signs a letter before the limitation period for recovery expires. The letter admits the debt but says that the time for payment has not yet come and that he will not pay now. What is the effect under Section 18?

A fresh limitation period is computed from the date the letter was signed. Under the Explanation to Section 18, an acknowledgment remains sufficient even if it says the time for payment has not come or is accompanied by a refusal to pay.

  1. ANo effect, because the letter refuses to pay
  2. BNo effect, because the time for payment has not arrived
  3. CA fresh period of limitation is computed from the date of signing, since such an acknowledgment may still be sufficientCorrect
  4. DA fresh period begins only if the letter is registered

Explanation

Explanation (a) to Section 18 states that an acknowledgment may be sufficient even if it says the time for payment has not yet come or is accompanied by a refusal to pay. So a fresh period runs from the date of signing. Registration is not required.

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