S. 18 Limitation Act| Acknowledgment Of Partial Debt Doesn't Extend Limitation For Entire Claim : Supreme Court

The Supreme Court observed that the acknowledgment of partial debt would not extend the limitation period for the entire debt under Section 18 of the Limitation Act, 1963.

The bench comprising Justices Sanjay Kumar and SC Sharma upheld the Chhattisgarh High Court's decision, which denied the benefit of Section 18 (extension of limitation on acknowledgement of debt) to the Appellant, upon noting that only part of the debt due to the Appellant was acknowledged by the debtor.

“there was no acknowledgment of the full amount claimed by the appellant, in terms of the requirement prescribed in Section 18 of the Act of 1963, the question of extending the period of limitation for the entire suit claim of the appellant did not arise.”, the court said.

The dispute arose when the Appellant filed a suit seeking for recovery of the sum of Rs. 3,07,115.85 (Rupees three lakhs seven thousand one hundred fifteen and eighty five paisa only) along with interest thereon at the rate of 18% per annum. However, the debtor acknowledged the debt of Rs. 27,874.10 (Rupees twenty seven thousand eight hundred seventy four and ten paisa only).

The Appellant sought the extension of limitation to the full amount. However, pursuant to dismissal of the suit by the trial court on limitation ground, the Appellant appealed to the High Court, which allowed the Appellant's claim with respect to the acknowledged amount, stating that the benefit of Section 18 cannot be extended to entire claim as the same was not acknowledged by the debtor.

Since the respondent's reply never admitted the appellant's full claim (₹3,07,115.85), and only explicitly disputed the contract value and acknowledged only ₹27,874.10 as due, thus, Section 18 could not revive the time-barred claim for the unacknowledged balance, the court said.

A reference was made to the case of J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd. & Anr., (2008) 2 SCC 444, where the Court held that the limitation is extended only for the admitted sum, not the entire claim.

Resultantly, the appeal was dismissed.

Cause Title: M/S. AIREN AND ASSOCIATES VERSUS M/S. SANMAR ENGINEERING SERVICES LIMITED

Citation : 2025 LiveLaw (SC) 745

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Appearance:

For Appellant(s) : Mr. Atul Shanker Mathur, Adv. Mr. Sarvapriya Makkar, Adv. Ms. Ghanistha Mishra, Adv. M/s. Khaitan & Co., AOR

For Respondent(s) : Mr. K.V. Mohan, AOR Mr. K.V. Balakrishnan, Adv. Mr. Devesh Khanduri, Adv.