Section 18 of Limitation Act, 1963

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Section 18 of the Limitation Act, 1963 deals with 'Effect of acknowledgment in writing'.

Contents

From the Act

(1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

(2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.

Explanation

For the purposes of this section,-

(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right,

(b) the word "signed" means signed either personally or by an agent duly authorised in this behalf, and

(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.

Notes

  • Acknowledgement must be in writing. Oral acknowledgements are not valid under law.
  • Acknowledgement need not promise to pay.
  • Acknowledgement must be made before the expiration of prescribed period for a suit or application
  • Acknowledgement must be signed by the person or his agent duly authorized on his behalf for the specific purpose.
  • Acknowledgement does not require a stamp as per the Stamp Act. However, the original document should be as per the provisions of the law and might require a stamp and registration as per the Stamp Act and the Registration Act.
  • Telegram is not a valid acknowledgement because it does not have the signature.
  • The Day of acknowledgement is excluded in computing the period of limitation.
  • Balance sheet of a company acknowledging indebtedness is a sufficient acknowledgement.
  • Acknowledgement need not be addressed to the creditor
  • An Acknowledgement made by a legally disabled person is invalid.
  • An Acknowledgement can be coupled with a set off.
  • A bare signature at the back of a promissory note is note an acknowledgement

Recent Cases / Related Cases / Case Laws

  • December 2011: [2011] 16 LNIN 350 (Delhi): Disclosure of debt by assessee company in its balance sheet of accounts of sundry creditors amounts to an acknowledgement of debts in their favour for purposes of section 18 of the Limitation Act and assessee's liability to creditors, thus, would subsist and would not cease nor would it stand remitted by creditors for purpose of invoking provisions of section 41(1)

See Also

  • Section 19: Effect of payment on account of debt or of interest on legacy
  • Section 20: Effect of acknowledgment or payment by another person
  • Section 21: Effect of substituting or adding new plaintiff or defendant
  • Section 22: Continuing breaches and torts


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