Effect of Payment on Account of Debt or of Interest on Legacy on the Period of Limitation

Section 19 of the Limitation Act,1963 deals with part-payment on account of debt. As a general rule contained under Section 3 of the Act, any cause once barred by limitation shall be dismissed and no time will be extended. Section 19, however, is one of the exceptions to this general rule. According to it, where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period, a fresh period of limitation shall be computed from time when the payment was made. However, it is to be noted that the payment must have been made by the person liable to pay the debt or legacy or his agent duly authorised in this behalf.

Essential Conditions:

The following are the essential conditions of a valid payment:

1. The payment must have been made before the expiry of the period of limitation.
2. The payment must be evidenced in writing.
3. The payment must have been made by the person liable to pay debt or legacy or his agent duly authorised in this behalf.

Provided that, save in the case of payment of interest made before the 1^st day of January,1928, an acknowledgement of the payment should appears in the hand-writing of , or in a writing signed by the person making the payment.

It is to noted that payment may be made in any form, i.e., payment by cash or currency or cheque, are all capable of extending the period of limitation.

Principle: The principle on which this section is based is that any part payment implies an admission of a right and an acknowledgement of corresponding liability. Similarly, payment of interest implies that there is principal amount due.

Computation of Period of Limitation: In the case of part-payment , the fresh period of limitation is computed from the day of payment and not from the date of writing and evidencing such payment.

Application: Section 19 applies to any payment on account of a debt by the debtor without any distinction as to whether the payment was made towards principal or interest amount.

Distinction between Section 18 and Section 19 of the Limitation Act

	Section 18	Section 19
1.	This section deals with acknowledgement in writing	This section deals with part-payment of debt or interest.
2.	This section applies to suits and applications in respect of any property of right.	While this section applies only to suits on debts of legal legacy.
3.	An acknowledgement in writing need not be addressed to the person entitled to the property of right.	A payment under this section must be made to the person entitled to payment.
4.	In the case of acknowledgement in writing, a mere writing containing an admission of liability is enough.	Under this section, payment made must be evidenced in writing.

 

Effect of Acknowledgment or Payment by Another Person

Section 20 of the Limitation Act deals with the effect of acknowledgement or payment by another person. For the purpose of Sections 18 and 19 of the Act, an acknowledgement signed or a payment made in respect of any liability by the person or by the duly authorised agent of any limited owner of property, who is governed by Hindu law, shall be a valid acknowledgement or payment, as the case may be, against a reversioner succeeding to such liability; and where a liability has been incurred by, or on behalf of a Hindu undivided family as such, an acknowledgement or payment made by, or by the duly authorised agent of the manager of the family for the time being shall be deemed to have been made on behalf of the whole family.

The expression agent duly authorised in this behalf in Sections 18 and 19 shall, in the case of a person under a disability, include his lawful guardian, committee or manager or an agent duly authorised by such guardian, committee or manager to sign the acknowledgement or make the payment.

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Dr. Deepak Miglani, Email id.:- legalbuddy@gmail.com