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Chetan Padm (law)     31 March 2012

Loan recovery limitation

2 friends Amit and Vikram.

Jan 2005 Amit takes loan of Rs. 10,000 from Vikram.

Jan 2006 Amit takes another loan of Rs. 20,000 from Vikram.

Vikram do not return loan.

Technically Time to file legal suit of recovery expires in Jan 2008 & Jan 2009 respectively (3 Years)

Amit send the notice to Vikram in Jan- 2010 to return loan amount with 10 % interest.

Vikram issues cheque in Jan-2010 for amount of Rs. 50,000  ( total principal + interest)

Cheque bounces.


Question :

1.  Is Vikram liable to be procecuted for NI Act.

2. Can Amit file civil recovery cases against Vikram in Jan-2010.

3. What would be the applicability of limitation period  ( from date of loan  or from the date of cheque bounce i.e last payment made).


 8 Replies

sri kumar (proprietor)     31 March 2012

Vikram should have taken benifit of Limitation and should not have issued cheque.

Having issued cheque and subsequently bounced,he is liable under Sec 138.

Amit cannot file for recovery against Vikram.

Advocate Bhartesh goyal (advocate)     31 March 2012

It is now time barred  so  not legally enforceable debt .Neither Amit can recover the loan amount legally nor  vikram can be prosecuted for  the offence of cheque bounce . 

MohammedRaffiq Bijapur (Advocate)     15 April 2012

HEllo Chetan,

Take advantage of  cheque issued by Vikram in Jan-2010 for amount of Rs. 50,000  ( total principal + interest) and go ahead either filing N I case or recovery suit. Because by issuing cheque Vikram has acknowledged his debt. And therefore in law there has some effect of payment on account of debt which will give fresh period of limitation.

Advocate Bhartesh goyal (advocate)     20 April 2012


1I do not agree with the opinion expressed by Mr MohmeaRafiq.As per sec 18 of Limitation Act the acknoledgement must be in limitation period  but here limitation expired in 2009 and cheque was issued in 2010 so acknowledgement not in limitation period.Neither the case of cheque bouncing nor the suit for recovery of cheque amount is maintainable. see the sec 18 of limitation act::-8. Effect of acknowledgment in writing -


(1) Where before the expiration of the prescribed period for a suit or application in respect or 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 derived 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 thee acknowledgement 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

1 Like

Chetan Padm (law)     10 September 2012

Thankyou all.  With lots of positve and negative inputs from learned people finally  the issue realted to Limitation was decided in my favour.


Secondly in the above mentioned scenerio victim can file both Civil suit and Criminal Case u/s NI act against the defaulter.

I hope people will get benefited

Here is the analysis of the law:


1.                ARGUMENT No. 1:  That the suit for recovery of loan given without fixed period or date of repayment is a suit governed by Article 113 to the schedule of the Limitation Act, 1963 as per which the suit has to be filed within three years of arising of the cause of action.


a.            That the section 18 of Limitation Act, 1963 is not applicable in present suit as loans were given without fixed period or date of repayment is a suit and hence present suit is governed by Article 113 and not by Article 19 or 20 to the schedule of the Limitation Act, 1963.


Refer: judgment dated 02.03.2012 in Re: Virender Kumar Jain Vs. M/s Alumate (India) Pvt. Ltd (RFA No. 153/2004), Hon’ble High Court of Delhi


Technically limitation starts from the day when Amit send the notice to Vikram in Jan- 2010


AGRUEMENT No. 2: Even though the present suit is not barred by Limitation Act as argued in Argument No. 1 and for sake for argument if  Section 138 of N.I. Act deals with a cheque drawn by a person "for the discharge, in whole or in part, of any debt or other liability." and if by dishonour of cheque issued by drawer towards discharge of debt towards payee and third person, the drawer renders herself for prosecution u/s 138 of N.I. Act then issuance of such cheque for discharge of third person liability/ debt also become a promise for which emphasis should be given on Section 25 (3) of Indian Contract Act, 1972



Thus, even in a case where a claim for recovery through a civil suit has become barred by limitation, a promise made in writing and signed by the executant to pay becomes an agreement supported by consideration. Such an agreement is enforceable under law. Still further, by virtue of the provisions of Section 46 of the Negotiable Instruments Act, 1881 the delivery of a cheque completes the transaction. By the factum of delivery, the written promise matures into an enforceable contract. This is so despite the fact that the limitation for recovery of the amount may have expired before making of the written promise.




1. Re: Ramakrishnan v. Parthasaradhy (2003 (2) KLT 613),  Division Bench of Hon’ble High Court of Kerala


2. Re: Vijay Ganesh Gondhlekar vs. Indranil Jairaj Damale, (2008 CriLJ 657), Hon’ble High Court of Bombay


Ø                  Re: Narendra V. Kanekar vs. The Bardez-Taluka Co-Op. Housing (2006 CriLJ 3111), Hon’ble High Court of Bombay.

Ø                  Re: Purushottam Maniklal Gandhi vs. Manohar K. Deshmukh And Anr. (2007 (4) BomCR 404) , Hon’ble High Court of Bombay.

Ø                  Re: Ramakrishnan, C.C. 14/1416 vs. Gangadharan Nair (ILR 2006 (3) Kerala 657), Hon’ble High Court of Kerala.

Ø                  Re: Thomas Alias Tomy vs. K.C. Thomas (AIR 2005 Ker 129), Hon’ble High Court of Kerala.

Ø                  Re: C.P. Abraham vs. P.C. Abraham (Crl. Appeal No. 45 of 2003), Hon’ble High Court of Kerala.

Ø                  Re: Gopinathan vs. Sivadasan (2006(4) KTL 779), Hon’ble High Court of Kerala.

Ø                  Re: M.T. Thankachan vs. P.P. Kuriakose (CRL. R.P. No. 666 of 2006), Hon’ble High Court of Kerala.

Ø                  Re: S.A. Mamman Sakthimangalam vs. C.P. Gopalan, (Crl A. No. 225 of 2002), Hon’ble High Court of Kerala.




kvss.prabhakar rao (Advocate )     10 September 2012

good discussion 

Adv. Meenakshi S (Advocate-Sra and Mhada matters)     12 September 2012

I agree with chetan..:)

KONGMA TSANG OTHIK (Legal advises)     11 July 2014

The head officer Mr A of the Institution, took the unsold properties (including books and make up kids) from a dancing group herein after called B. A later bought the whole property and has not paid back the cost amount for 17 years.

Q 1) Can B file civil recovery cases against A in year 2014.

Advises me

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