Law of Limitation

Though the money has been entered in the balance sheet or income tax returns there must be a repayment to the interest or principal must be with proof of ackowlegement .  In your case the transaction being oral one. It may be in document form.  But the details you have said not come under the negotiable instrument act.  Any how taking it into a statement of accounts  the limitation starts from date the date of last payment.  In your case there is no renewal or fresh payment .  so three years limitation period already lost.  Your claim is barred.  If C's wife gave a written acknoledgemnt that she will pay the amount recevied your claim will be secured. 

Thank You for your reply.
Sir, I missed the detail that the payments were made by cheque and that it appears even in the passbook.
I also came across this article, please let me know if it is applicable in this case as the assistance was denied in 2009.

"Period of limitation starts only after fraud or mistake is discovered by affected party. [section 17(1)]. In Vidarbha Veneer Industries Ltd. v. UOI - 1992 (58) ELT 435 (Bom HC) , it was held that limitation starts from the date of knowledge of mistake of law. It may be even 100 years from date of payment. - - - - The cardinal principal enshrined in section 17 of Limitation Act is that fraud nullifies everything. Thus, appeal against the party can be admitted beyond limitation, if party has committed fraud (in submitting non-genuine documents at adjudication in this case) – CC v. Candid Enterprises 2001(130) ELT 404 (SC 3 member bench)."

Also, can it be shown as a family arrangement and can be used in a set off for assets of family?

YES