Vibhav 29 August 2024

Section 23 of limitations act

If a lender breaches the same provision in a contract repeatedly, say in year 2017, then in 2019, then in 2023 would all these be actionable if the loan is called in 2024 or only the breaches which occurred in the last three years, which in this case is only the one in 2023? Which Section of the Limitation Act applies?

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P. Venu (Advocate) 29 August 2024

Section 23. Suits for compensation for acts not actionable without special damage.—In the case of a suit for compensation for an act which does not give rise to a cause of action unless some specific injury actually results therefrom, the period of limitation shall be computed from the time when the injury results.

The query is short of material facts.

Vibhav 29 August 2024

Yes it appears that Section 23 applies, but why?

The loan was for a total of X. First the borrower borrowed 0.3X but then later as I found out that he had no intention to repay, the remaining .7X that he requested at various times were denied. Now he is refusing to repay the 0.3X. Will Section 23 save him and doom my claim?

T. Kalaiselvan, Advocate (Advocate) 29 August 2024

Section 23 of the Limitation Act of 1963 in India covers suits for compensation for acts that are not actionable without special damage. The period of limitation for these suits begins when the injury occurs. This applies to acts that do not give rise to a cause of action unless a specific injury results.

From your contents it can be seen that the borrower borrowed loan more than three years ago.

The limitation period for recovering a loan in India is three years from the day of the claim. If a suit is filed after the limitation period has expired, it will be dismissed. However, there are some exceptions to this rule:

Acknowledgment of debt:

If the debtor acknowledges the debt during the limitation period, the limitation period is extended for three more years from the date of acknowledgment.

Term loans:

For term loans payable in installments, the limitation period is three years for each installment, starting on the due date of each installment.

Now you have to say whether the loan is barred by limitation or not since the lender did not entertain anymore loan after the first loan