LIMITATION LAW

LIMITATION ACT
Documents obtained for advances are to be kept alive at
all times and necessary action has to be taken to get them
renewed ,to enforce the same in a court of law, if need
arises for such a course.
Time-barred debt is the money consumer borrowed and
didn’t repay and which is no longer legally collectable
because a certain number of years have passed.
 Limitation period is the time limit within which action
can be taken in a court of law to enforce any legal right.
A suit filed after limitation period will not be accepted by
the court.
The limitation period bars the remedy of filing a suit but it
does not take away the right of recovering the debt.
There is no limitation period for recovering the debt by
exercising the right of lien, set-off or selling the goods
pledged to bank which does not involve filing of suits.
 LIMITATION ACT
 A)Period of Limitation
The Schedule to the Limitation Act 1963 specifies the period of limitation, the
time from which the period begins to run in respect of a large number of cases.
Important provisions of the schedule from Bank's point of view are as follows.

Sl.No Nature of Document/ Charge Limitation Period

1. Demand Promissory Notes 3 years from the date of execution

2. Bill of Exchange/ Promissory Notes

a.) Payable at sight 3 Years from the date of

presentation of bill.

b.) Payable at a fixed time after date 3 Years from the date when the
bill/note falls due.
 LIMITATION ACT
 A)Period of Limitation
Sl.no Nature of Document/ Charge Limitation Period

3 Cash Credit (Where there is frequent Three years from the close of the calendar year in which
transaction in the account ) the last entry is admitted or proved. The entry may be of
debit or credit but it must be an actual advances and not
an item of interest or bank charges

4 Cash Credit (Where there is only Three years from the date of each such advance
withdrawals &no deposit or deposit was
only towards repayment of interest on
money advanced Or Bank Charges)

5 Overdraft Limitation period is three years from the date of the

overdraft.

6 Loan payable in installments (Term Three Years from the date on which the relative
Loan) installment falls due.

7 Demand Loan Limitation period is three years from the date of the
loan.
 LIMITATION ACT
 A)Period of Limitation
Sl.no Nature of Document/ Charge Limitation Period

8. Mortgage
a) Money repayable by the 12 years from the date of mortgage deed.
mortgagor on demand and no
installment repayments are
agreed to.

b) Repayable in installments 12 years from the date on which the relative

installment falls due

c) In case of default of any 12 years from the date of default.

installment of principal or
interest, the whole of the
mortgage amount becomes
payable.

d) Personal liability of the 3 years from the date of demand promissory

mortgagor. note/acknowledgement of debt
 LIMITATION ACT

In computing the period of limitation for any suit, the date from which such
period is to be reckoned shall be excluded. In other words, the suit can be filed
on the anniversary day.
 If a pronote is dated 9.9.2015, 3 years will be complete on 8.9.2018. But
since the first date is to be excluded, the suit can be filed on 9.9.2018.
B) Extension of period of limitation :
 The period of limitation prescribed by the Limitation Act can be extended
by :
i) An acknowledgment of debt or
ii) A part-payment or
iii) A fresh promise to pay.
 Acknowledgment of Debt:
 Limitation period can be extended by an acknowledgment of debt
obtained in writing from the borrower(s).
 Acknowledgment means a definite admission of liability or debt. It must be
made with conscious intention of admitting the debt or liability.
 It can be express or implied. It should contain within itself the words
sufficient to indicate that the borrower admits the debt.
 LIMITATION ACT

 Acknowledgment of Debt:
 The date of acknowledgment and not the date as on which it admits the
debt, gives the fresh start to limitation period.
 A statement in a Company's balance sheet acknowledging a
debt is a good acknowledgment to save limitation. The balance
sheet should be signed as required by the Companies Act. The
date of the balance sheet and not its period gives a fresh start to
the limitation period.
 An acknowledgment should be signed by all borrowers and
guarantors and for partnership firms by the firm and all its
partners individually.
 If the borrower is deceased, efforts should be made immediately
to obtain acceptance of the liability by the legal heirs.
 An acknowledgment of debt should be obtained before the expiry of
the limitation period. It cannot save limitation, if obtained after the
expiry of the limitation period
 LIMITATION ACT

 Part-payment :
 If the debtor makes a part payment before the expiry of the
limitation period either by himself or by his agent duly
authorised in this behalf, in the handwriting of himself or such
agent, fresh period of limitation starts from the date of such
part payment.
 A credit entry by itself does not save limitation. It should be
accompanied by Pay-in-Slip signed by the borrower or his duly
authorised agent, amounts to part payment.
 A pay-in-slip signed by an employee of a partnership firm or a
Company does not save limitation.
In case of loans with tie-up arrangement, the remittance made
by procuring agencies viz., sugar mills, milk producers' co-
operative society can be taken as part payment for the purpose
of limitation.
 LIMITATION ACT

 Fresh promise to Pay:

 Even after the expiry of limitation, the liability can be enforced,
if there is a fresh promise to pay the outstanding debt already
barred by the limitation
As per contract act a time bareed debt is a valid consideration
for a fresh promise to pay.

 Regularisation of Time-barred debt

If a Loan account is time-barred, it should be immediately
reported to Zonal Office. In consultation with Zonal Office
following remedial measures can be taken.
i) New loan account can be opened, after taking
fresh loan/security/guarantee documents in order
to close and transfer the debit balance in the time-
barred account to the new account.
 LIMITATION ACT

 Regularisation of Time-barred debt

ii) Without closing and opening the account, fresh
DPN along with covering letter should be taken
from the borrower and a fresh guarantee can be
taken from the guarantor.

LIST OF DOCUMENTS USED IN EXTENSION OF LIMITATION PERIOD

Sl.no Document Name Remarks

1 D-9A Acknowledgment of Debt to be obtained from legal
heir of the Deceased.
2 D-9B Acknowledgment within three years from the date of
TOD(Temporary Overdrawn)
3 D-11 Acknowledgment of Debt cum security
4 F-89 Covering letter for renewal of Timed barred DPN
The Consumer
Protection Act, 2019
01/13/2021
 INTRODUCTION
 The Consumer Protection Act, 2019 received the assent of the
President of India and was published in the official gazette on
9th August 2019.
 This new Consumer Protection Act has come into force wef
July 20, 2020 and completely replaces the old Consumer
Protection Act, 1986.
 The New Act aims to provide the timely and effective
administration and settlement of consumer disputes.
 It has provision of the establishment of the CCPA which will
protect, promote and enforce the rights of consumers.
 E-commerce/Direct selling has been brought under its purview.

01/13/2021
 Major Changes in the Act
 Establishment of Central Consumer Protection Authority
 Introducing Product Liability & penal consequences.
 Defining Consumer and Consumer rights
 Rules on Unfair contracts/Unfair Trade Practices.
 Penalties for Misleading Advertisement/Celebrity
Endorsement.
 Covers E-Commerce transactions.
 Enhancement of Pecuniary Jurisdiction.
 E-Filing of Complaints/No fee for filing cases up to Rs.5
lakh.
 Provision for Alternate Dispute Resolution mechanism

01/13/2021
 Objective of the Act
 Public benefit.
 Provide remedies.
 Recognize rights.
 Cheap remedies.
 Special machinery.
 No complicated proceedings.

01/13/2021
 Key features of New Act
 Definition of consumer/Rights of consumers
 Establishment of CCPA.
 Penalties for misleading advertisement.
 Consumer Disputes Redressal Commission.
 Jurisdiction of CDRCs/Structural reform/Appeal.
 Product liability.
 Unfair Contracts
 Mediation
 Offences/Penalties

01/13/2021
 Definition of consumer
 A consumer is defined as a person who buys any good or
avails a service for a consideration.

 It does not include a person who obtains a good for resale

or a good or service for commercial purpose.

 It covers transactions through all modes including offline,

and online through electronic means, teleshopping, multi-
level marketing or direct selling.

01/13/2021
 Rights of consumers
The following consumer rights have been defined in
the Act, including the right to:
 be protected against marketing of goods and services
which are hazardous to life and property;
 be informed of the quality, quantity, potency, purity,
standard and price of goods or services;
 be assured of access to a variety of goods or services
at competitive prices; and
 seek redressal against unfair or restrictive trade
practices.

01/13/2021
 Establishment of CCPA
 The central government will set up a CCPA to
promote, protect and enforce the rights of consumers.
 It will regulate matters related to violation of
consumer rights, unfair trade practices, and
misleading advertisements.
 The CCPA will have an investigation wing, headed
by a Director-General, which may conduct inquiry or
investigation into such violations.

01/13/2021
 Penalties for misleading advertisement
 The CCPA may impose a penalty on a manufacturer or an
endorser of up to Rs 10 lakh and imprisonment for up to
two years for a false or misleading advertisement.
 In case of a subsequent offence, the fine may extend to Rs
50 lakh and imprisonment of up to five years.
 CCPA can also prohibit the endorser of a misleading
advertisement from endorsing that particular product or
service for a period of up to one year.
 For every subsequent offence, the period of prohibition
may extend to three years

01/13/2021
 Consumer Disputes Redressal Commission
 CDRCs will be set up at the district, state, and national
levels.
 A consumer can file a complaint with CDRCs in relation
to: unfair or restrictive trade practices; defective goods or
services etc.
 Complaints against an unfair contract can be filed with
only the State and National. Appeals from a District
CDRC will be heard by the State CDRC.
 Appeals from the State CDRC will be heard by the
National CDRC. Final appeal will lie before the Supreme
Court.

01/13/2021
 Jurisdiction of CDRCs
 The District CDRC will entertain complaints where
value of goods and services does not exceed Rs one
crore.

 The State CDRC will entertain complaints when the

value is more than Rs one crore but does not exceed
Rs 10 crore.

 Complaints with value of goods and services over Rs

10 crore will be entertained by the National CDRC.

01/13/2021
 Structural reform
Particulars District Commission State commission National
Commission

Composition 1 President and 1 President and 1 President and

atleast 2 members atleast 4 members atleast 4 members

Location In district of the In each state At NCR

State

Filing Complaint By Central By Central By Central

Authority; may be Authority; may be Authority; may be
filed electronically filed electronically filed electronically

Where the Where the ---

Place of Suing complainant resides complainant resides
or works or works

01/13/2021
 Appeals
From orders of District From State Commission to From National Commission
Commission to State National Commission to Supreme Court
Commission

Within 45 Days (earlier 30 Within 30 Days Within 30 Days

days)

Fees shall be 50% of Pre- Fees shall be 50% of Pre- Fees shall be 50% of Pre-
deposit (earlier 25,000 deposit (earlier 35,000 INR) deposit (earlier 50,000 INR)
INR)

No appeal applicable if
decision passed through
mediation

01/13/2021
 Product liability
 Product liability means the liability of a product
manufacturer, service provider or seller to compensate
a consumer for any harm or injury caused by a
defective good or deficient service.

 The harm should be caused by the defective goods

which results in injury, death, mental agony, loss of
consortium or any other harm.

 The harm must be real and does not include any

economic loss.

01/13/2021
 Unfair Contracts
 An unfair contract shall mean a contract between
manufacturer/trader/service provider and a consumer
which causes harm to the consumer or significant
change in the rights of the consumer.
 One of such examples can be unilateral termination
of the contract without any prior information.
 For the same purpose a complaint can, be filed in the
State Commission up to 10 Crore INR and in National
Commission above 10 Crore INR.

01/13/2021
 Mediation
(Alternate dispute Resolution)

 The new Act provides facility for mediation which

shall be voluntary and not binding on the parties.
 Mediation shall make the process quicker, simpler and
help with speedier resolution of disputes.
 The Consumer Mediation Cell (CMC) shall be
attached to each district, state and national level.

01/13/2021
 Filing of Complaint
• The complaint can be filed by the consumer himself or
the parents and legal guardian of the consumer.
• The new Act allows the consumer to file a complaint at
the place where he/she resides or at the place he/she
works.
• The complaint can also be filed electronically and
heard via video conferencing in certain circumstances.

01/13/2021
 Offences and Penalties

Penalties for non-compliance of orders:-

District/State/National Commission Central Authority

Imprisonment from 1 month to 3 years Imprisonmentup to 6 months

Fine from Rs. 25,000/- to Rs. 1,00,000 /- Fine up to Rs. 20,00,000/-

Or Both Or Both

01/13/2021
 Offences and Penalties

Punishment (Products Containing Adulterant):-

Does not result in injury Imprisonment: Up to 6 months

Fine: Up to Rs. 1,00,000/-
Injury not amounting to grievous hurt Imprisonment: Up to 1 Year
Fine: Up to Rs. 3,00,000/-

Injury resulting in grievous hurt Imprisonment: Up to 7 years

Fine: Up to Rs. 5,00,000/-

Death of Consumer Imprisonment: 7 years to life

Fine: Up to Rs. 10,00,000/-

01/13/2021
 Offences and Penalties

Punishment (Spurious Goods):-

Injury not amounting to grievous hurt Imprisonment: 1 year

Fine: Up to Rs. 3,00,000/-

Injury resulting in grievous hurt Imprisonment: 7 years

Fine: Up to Rs. 5,00,000/-

Death of Consumer Imprisonment: 7 years to life

Fine: Up to Rs. 10,00,000/-

01/13/2021
THANK YOU
01/13/2021