Assignment of debt does not reset limitation; the period runs from the original accrual of the cause of action.

The Respondent (Plaintiff) filed a suit seeking a declaration of ownership over 3,90,682 equity shares of the Appellant company and the recovery of USD 114,041 with interest

The Respondent claimed that its predecessor, Komtech Inc. (Canada), remitted USD 224,996.81 to the Appellant in 2008 for equipment that was never supplied

In 2009, the Appellant allotted 3,90,682 shares to Komtech Inc. in lieu of part of the debt, leaving a balance of USD 99,957 plus an additional invoice of USD 14,080

Through various assignments between 2011 and 2016 involving Komtech Enterprises Limited (KEL) and Mrs. Niti Mathur, the Respondent eventually acquired the rights to the shares and receivables

The Commercial Court decreed the suit in favor of the Respondent, holding the claim was within limitation as the period commenced from the date of the 2016 assignment

The Appellant challenged this, arguing the monetary claim was time-barred and share transfers were restricted by its Articles of Association (AoA)

1. Whether the claim for recovery of USD 114,041 was barred by the law of limitation.

2. Whether the period of limitation for a debt recovery suit commences from the date of assignment of that debt.

3. Whether the Respondent was entitled to an absolute declaration of ownership and mandatory injunction for the transfer of shares despite restrictive clauses in the Appellant's Articles of Association.

The court applied the Limitation Act, 1963, specifically noting that Article 58 (declaration) is inapplicable to recovery of money, which is governed by a three-year limitation period from the date the debt becomes due

Section 15(3) of the Limitation Act, which excludes time for suits by receivers or liquidators, was found inapplicable to private assignees

Section 18 regarding the acknowledgment of debt was applied, establishing that an acknowledgment must be made before the expiration of the limitation period to extend it

Finally, the court applied principles of Company Law, holding that the Articles of Association of a private company constitute a binding contract regarding the pre-emption rights of existing members during share transfers

The High Court held that the trial court's conclusion—that limitation begins from the date of assignment—was "ex facie erroneous"

The right to a refund accrued in September 2009 when the Appellant issued shares for only part of the remittance; thus, the limitation expired in 2012

Assignment of a receivable does not reset or extend the limitation period

Furthermore, emails from 2016 cited as acknowledgments of debt were irrelevant under Section 18 because they were sent after the original limitation period had already lapsed

On the merits of the debt, the Respondent failed to produce audited financial records proving the debt was repayable rather than being payment for services

Regarding the shares, while the Respondent proved the chain of assignment, the court found that the Appellant’s AoA (Clause 4) required shares to be offered to existing members at a fair value before being transferred to an outsider

Consequently, the Respondent could not be declared an "absolute owner" with a right to immediate registration without following the pre-emption procedure

The declaration regarding share ownership was modified: the Respondent is recognized as having the rights to the shares via assignment, but the Appellant cannot be forced to rectify the Register of Members unless the pre-emption process in the Articles of Association is followed

The Appellant was directed to hand over the original or duplicate share certificates to the Respondent to facilitate a formal transfer request in accordance with the Companies Act and the AoA