Part-payment made after limitation expires does not revive a time-barred claim under Section 19.

The plaintiff-cooperative society owned land at Bharuch and agreed to sell parcels of land to auction purchasers for ₹3.30 crore.

The purchasers subsequently assigned their rights and liabilities to the defendant company.

Disputes arose regarding delayed payment and interest, and the matter was referred to arbitration.

By award dated 8 March 1999, the time for payment was extended up to 15 April 1999, with interest stipulated on default; the defendant was also held liable in respect of amounts payable by an assignee, Gajendra Nanalal Betwala.

The society went into liquidation on 19 April 2001 and the Official Liquidator instituted Special Civil Suit No. 111 of 2005 for recovery of ₹19,74,653 as unpaid consideration and ₹4,25,347 as interest.

The plaintiff relied on a payment of ₹3,60,000 allegedly made by cheque on 30 October 2002 to contend that limitation recommenced from that date.

The Trial Court dismissed the suit, principally holding that the claim was not proved and was barred by limitation; it also found non-joinder of necessary parties.

The plaintiff preferred the present first appeal.

1. Whether the suit for recovery of unpaid sale consideration was barred by limitation, particularly whether the payment dated 30 October 2002 extended limitation under Section 19 of the Limitation Act, 1963.

2. Whether the plaintiff proved its entitlement to recover ₹19,74,653 as unpaid consideration and ₹4,25,347 as interest from the defendant.

3. Whether the Trial Court was justified in dismissing the suit on the grounds of non-joinder and lack of proof of the outstanding amount.

The Court applied Article 53 of the Schedule to the Limitation Act, 1963, under which a suit for unpaid purchase money must be filed within three years from the date fixed for completion of the sale or, where applicable, the date of acceptance of title.

It further applied Section 19 of the Limitation Act, which permits a fresh limitation period only where payment towards the debt is made before expiry of the prescribed limitation period and the payment is acknowledged in the handwriting of, or in a writing signed by, the person making the payment.

Relying on Shanti Conductors (P) Ltd. v. Assam State Electricity Board, 2020 (2) SCC 677, the Court reiterated that both conditions—payment within limitation and written acknowledgment by the payer—must be satisfied.

The Court also applied the evidentiary principle that a monetary claim based on accounts must be supported by duly proved books of account or other reliable evidence establishing the precise outstanding liability.

The arbitral award fixed 15 April 1999 as the final date for payment; consequently, under Article 53, the limitation period expired on 14 April 2002.

Although the defendant allegedly paid ₹3,60,000 on 30 October 2002, that payment was made after expiry of the prescribed three-year period and therefore could not revive or extend limitation under Section 19.

The Court also found that the plaintiff failed to establish the exact outstanding amount.

The Official Liquidator had no personal knowledge of the relevant transactions, while the accountant’s evidence was based on society accounts whose underlying books were not properly proved or exhibited.

The statements of account relied upon by the plaintiff therefore did not satisfactorily prove that ₹19,74,653 remained due as on 30 October 2002.

In these circumstances, the claim failed both on limitation and on proof of liability, irrespective of the plaintiff’s arguments concerning the defendant’s assignment transactions and non-joinder.

It also held that the plaintiff failed to prove the alleged outstanding consideration and interest.

The Trial Court’s dismissal of Special Civil Suit No. 111 of 2005 was therefore upheld.

The First Appeal was dismissed, the record and proceedings were directed to be returned to the concerned court, and there was no order as to costs.