Question

As per S.19 of the Limitation Act, 1963 if any payment is made on account of a debt, before the expiration of the prescribed period by the person liable to pay the debt or by his agent duly authorized in that behalf a fresh period of limitation starts running from the

• A. Time when suit was filed
• B. When the payment was made
• C. When the creditor demands
• D. None of the above

Hint:

Remember the two key ways to reset the limitation period for debts: 1. Section 18: Acknowledgment of liability \textit{in writing} and signed by the party. A fresh period runs from the date of acknowledgment. 2. Section 19: Payment on account of the debt. A fresh period runs from the date of payment. Both must occur before the original limitation period expires.

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
The Limitation Act, 1963, not only prescribes the period for filing suits but also specifies certain actions that can extend or renew this period. Section 18 (acknowledgment in writing) and Section 19 (effect of payment on account of debt) are two such important provisions.
Step 2: Detailed Explanation:
Section 19 of the Limitation Act, 1963, is titled "Effect of payment on account of debt or of interest on legacy."
It states that where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent, a fresh period of limitation shall be computed from the time when the payment was made.
This means that a part-payment of a debt 'resets the clock' for the limitation period. For example, if the limitation period for recovering a loan is 3 years, and the debtor makes a small payment 2 years after the loan was due, the creditor gets a fresh period of 3 years from the date of that small payment to file a suit for recovery.
Therefore, the fresh period of limitation starts from the time when the payment was made.