Article-Wise Analysis — Suits Relating to Contract (Articles 1–55) →

The Schedule to the Limitation Act, 1963 is the working heart of the statute: it is the table that tells a litigant how long a claim survives and, more subtly, when the clock began. The largest single group of entries — Articles 1 to 55, covering suits relating to accounts and to contracts — is also the most heavily examined, because almost every entry shares the same length but parts company on the one question that decides cases: from what date does the period run? This article walks through the contract block Article by Article, anchors each entry to the controlling case-law, and isolates the distinctions that recur in judiciary and CLAT-PG papers.

Where the contract block sits in the Schedule

The Schedule divides suits into ten classes. Suits relating to accounts occupy Articles 1 to 5; suits relating to contracts occupy Articles 6 to 55. Together these two parts span the entries this article addresses. They are followed by declarations (Articles 56–58), decrees and instruments (Articles 59–60), immovable property (Articles 61 onward), movable property, torts, trusts, and finally the residuary Article 113 for suits with no period prescribed elsewhere. Appeals run from Articles 114 to 117 and applications from Articles 118 to 137.

The architecture matters because the Schedule is read together with the operative sections. Section 3 commands the court to dismiss any suit filed after the prescribed period even if limitation is not pleaded; the period it refers to is the one in the third column of the relevant Article. Sections 12 to 24 then tell you how to compute that period — excluding the day from which it runs, excluding time spent bona fide in a wrong court, and so on. The Schedule supplies the raw period; the sections refine it. For an overview of how the sections interlock, see our note on the computation of the period of limitation and the foundational bar of limitation under Section 3.

Three years — and why the start date is everything

The defining feature of the contract block is uniformity of length. With negligible exception, every Article from 1 to 55 prescribes three years. The 1963 Act consciously rationalised the older, scattered periods of the 1908 Act into this single span for contractual and account claims, reserving the longer twelve-year periods for immovable property and trusts. As a result, the period column rarely decides a problem — the third column, the description of "time from which period begins to run," almost always does.

That column is the terminus a quo: the moment the cause of action is treated as complete and the clock starts. The same three years attaches to the price of goods, to money lent, to money deposited and to specific performance; yet the starting point is the date of delivery in one, the date the loan is made in another, the date a demand is made in a third, and the date fixed for performance in the fourth. A candidate who memorises "three years" learns almost nothing useful; a candidate who memorises the trigger dates can place any fact pattern. The sections on computation then operate on that start date — for instance, Section 12(1) excludes the very day from which the period is reckoned, so a promissory note executed on 12 April 2000 yields a suit that is in time if filed on 12 April 2003.

Suits relating to accounts (Articles 1–5)

Article 1 governs the balance due on a mutual, open and current account where there have been reciprocal demands between the parties; the three years run from the close of the year in which the last item admitted or proved is entered in the account. The requirement of mutuality — independent obligations flowing both ways, not merely a running shop ledger — is what distinguishes a true mutual account from an ordinary debtor-creditor account, and it is frequently tested by contrasting a customer's running tab (not mutual) with genuine cross-dealings (mutual).

Article 2 covers a suit against a factor for an account, running from when the account is, during the continuance of the agency, demanded and refused, or, where no such demand is made, when the agency terminates. Article 3 mirrors this for a suit by a principal against an agent for movable property received and not accounted for. The common thread is that an account claim crystallises either on a refused demand during the relationship or on the termination of the relationship itself.

Carriers and bailees (Articles 10–13)

The carrier Articles repay close reading because they pair a single subject with two different triggers. Under Article 10, a suit against a carrier for compensation for losing or injuring goods runs from when the loss or injury occurs; under Article 11, a suit against a carrier for compensation for non-delivery or delay in delivering goods runs from when the goods ought to be delivered. The contrast — actual loss versus failure to deliver on time — fixes the start date and is a staple distractor in objective papers.

These entries also illustrate the relationship between the Schedule and special statutes. Where a special law such as the Carriage by Road Act or the Railways Act prescribes its own period or notice requirement, Section 29(2) of the Limitation Act governs the interaction, and the Schedule yields to the special period to the extent the special law occupies the field.

Price of goods and work done (Articles 14–18)

Article 14 is the everyday commercial Article: the price of goods sold and delivered where no fixed period of credit is agreed runs three years from the date of delivery of the goods. Where a fixed period of credit is agreed, Article 15 runs time from the expiry of that period, and where the goods are to be paid for by a bill of exchange, Article 16 runs from when the period of the bill elapses. The progression — delivery, expiry of credit, maturity of the bill — shows how the same sale generates different start dates depending on the payment terms the parties chose.

Article 18 deals with the price of work done by the plaintiff at the defendant's request where no time has been fixed for payment, running from when the work is done. Together with Article 14, it captures the bulk of small-cause commercial litigation, and both turn on identifying the date of performance — delivery of goods or completion of work — as the trigger rather than the date of the unpaid invoice.

Money lent, deposited and received (Articles 19–24)

This cluster contains the single most tested distinction in the whole contract block. Article 19 governs money payable for money lent, running from when the loan is made. Article 21 governs money lent under an agreement that it shall be payable on demand, and — counter-intuitively — it also runs from when the loan is made, not from the demand. So a lender cannot keep a loan alive indefinitely by simply not demanding it; the clock starts at disbursement.

Article 22, by contrast, governs money deposited under an agreement that it shall be payable on demand, including money of a customer in the hands of a banker so payable, and it runs time only from when the demand is made. The deposit therefore stays alive until called for. The doctrinal reason is that a depositor's money is held for the depositor's benefit and is not "due" until demanded, whereas a loan is due the moment it is advanced. The crisp examination point is: loan payable on demand → time from the making of the loan (Article 21); deposit payable on demand → time from the demand (Article 22). Article 23 picks up money payable for money lent on a mortgage where a contemporaneous covenant exists, and Article 24 covers money received by the defendant for the plaintiff's use, running from when the money is received.

Negotiable instruments (Articles 31–37)

The negotiable-instrument Articles translate the mechanics of bills and notes into start dates. Article 34 governs a suit on a bill of exchange or promissory note payable at a fixed time after date, running from when the fixed time expires. Article 35 governs a bill or note payable on demand and not accompanied by a writing restraining or postponing the right to sue, and runs from the date of the bill or note — so a demand note is treated as immediately enforceable for limitation purposes. Article 36 deals with money payable by instalments under a promissory note or bond, running from the expiry of the first instalment in default in respect of which the suit is brought, and Article 37 handles an instalment note containing an acceleration clause — where default in one instalment makes the whole sum payable — running from when the default occurs, unless the payee waives the benefit, in which case time runs from the next default.

For computation, the day of the instrument is excluded under Section 12(1): a promissory note dated 5 September 1991 supports a suit filed on 5 September 1994, because the date of execution is left out of the count. These entries reward precise matching of the instrument's payment structure — fixed time, on demand, instalments, acceleration — to the correct Article.

Rent and miscellaneous money claims (Articles 47–52)

Article 47 covers money paid upon an existing consideration which afterwards fails, running three years from the date of the failure — the classic restitutionary claim for a total failure of consideration. Article 52 governs arrears of rent, running from when the arrears become due. The rent Article is a frequent companion to property questions because it sits at the boundary between a contractual money claim (the rent) and a possessory claim (the tenancy), and the candidate must keep the two limitation tracks separate: the rent claim is a three-year contractual claim under Article 52, while recovery of possession runs on the twelve-year property Articles.

Specific performance — Article 54

Article 54 is the most litigated entry in the contract block. It prescribes three years for a suit for specific performance of a contract, running from "the date fixed for the performance, or, if no such date is fixed, when the plaintiff has notice that performance is refused." The Article therefore contains two limbs, and only one can apply to any given contract.

The first limb applies where the contract names a date for performance; the second is a residual trigger for contracts that fix no date, where time begins only when the plaintiff has notice that the other side refuses to perform. The practical stakes are large: in the first-limb case the clock may have started years before the plaintiff thought to sue, whereas in the second-limb case the plaintiff controls the start indirectly through the moment of refusal. Distinguishing the two limbs correctly is the recurring task, and it depends entirely on whether a "date fixed for performance" exists.

The Ahmmadsahab and Madina Begum line

What counts as a "date fixed for performance" was settled by a three-Judge Bench in Ahmmadsahab Abdul Mulla v. Bibijan, (2009) 5 SCC 462. The Court held that the expression is a crystallised notion: "fixed" connotes something having a final, settled character, not subject to change or fluctuation, so the "date" referred to must be a specific, ascertainable date in the calendar. A contract that merely contemplates performance "after" some uncertain future event, or "within a reasonable time," does not fix a date within the first limb; in such a case the second limb — notice of refusal — supplies the start date.

That construction was applied and reaffirmed in Madina Begum v. Shiv Murti Prasad Pandey (Civil Appeal No. 6687 of 2016, decided 1 August 2016), where the Supreme Court treated the question whether a calendar date had been fixed as decisive of which limb of Article 54 governed, and held that the expression "date fixed for performance" points to a specified date in the calendar. The Court also clarified that whether a date was in fact fixed, and whether the plaintiff had notice of refusal, are matters to be established on the evidence rather than assumed, and that the High Court ought not to have disposed of the first appeal on the preliminary issue of limitation alone. The combined effect of Ahmmadsahab and Madina Begum is the working test for every Article 54 problem: look first for a calendar date; only if there is none do you ask when the plaintiff learned that performance was refused.

Breach of contract — the residuary Article 55

Article 55 is the residuary contract Article: compensation for the breach of any contract, express or implied, not specifically provided for elsewhere in the Schedule. It carries three years, and its third column is unusually rich because it accommodates three different breach patterns. Time runs (i) when the contract is broken, for a single completed breach; (ii) where there are successive breaches, when the breach in respect of which the suit is instituted occurs; and (iii) where the breach is continuing, when it ceases.

The relationship between Article 54 and Article 55 is a standard distinction. Article 54 is the special Article for the equitable remedy of specific performance; Article 55 catches the common-law claim for damages for breach where no more specific Article fits. A claimant who is out of time for specific performance under Article 54 may sometimes still be within time for a damages claim that crystallised on a later breach under Article 55, and the two must be pleaded and computed separately.

Continuing breach and Section 22

Article 55's third limb dovetails with Section 22, which provides that in the case of a continuing breach of contract, or a continuing tort, a fresh period of limitation begins to run at every moment of the time during which the breach or the tort continues. The doctrine must be kept distinct from a single completed breach — one cause of action, time runs once — and from successive breaches, where each separate breach gives a fresh cause of action but earlier, time-barred breaches are not revived.

The Calcutta High Court applied this machinery in Sunil Krishna Ghosh v. Calcutta Improvement Trust, AIR 2001 Cal 199. There the plaintiff had performed his part of the contract but the defendant had neither executed the conveyance nor refused in writing to do so, and had failed to hand over physical possession. The Court held that the defendant's failure to deliver possession was a continuing breach: a fresh cause of action arose on each day the breach persisted, so Article 55 read with Section 22 kept the suit alive. The case is the standard illustration that a continuing breach resets the clock daily, whereas a one-off breach does not. For the wider doctrinal frame, see our note on the introduction to the Limitation Act.

Bar of remedy, not extinction of right

A theme running through the whole contract block is that these Articles bar the remedy without extinguishing the right. The Limitation Act is, on the orthodox view, an adjective law — lex fori — that withdraws the remedy after the prescribed time but leaves the underlying obligation standing. The leading authority is Bombay Dyeing & Mfg. Co. Ltd. v. State of Bombay, AIR 1958 SC 328, where the Supreme Court held that when a debt becomes time-barred it does not become extinguished but only becomes unenforceable in a court of law; the debt subsists, and the bar of limitation is not one of the well-defined modes by which a contractual obligation is discharged.

Three practical consequences follow, and all are examinable. First, a debtor who voluntarily pays a time-barred debt cannot recover the money back on the plea that it was barred. Second, a time-barred debt is good consideration for a fresh promise to pay, which is why Section 25(3) of the Indian Contract Act validates a written promise to pay a debt barred by limitation — and Section 29(1) of the Limitation Act expressly preserves Section 25 of the Contract Act. Third, limitation ordinarily bars a suit but not a defence, so a defendant may rely on a contractual right by way of defence even where a suit to enforce it would be time-barred, as the Supreme Court accepted in the part-performance context in Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi, (2002) 3 SCC 676. Extinguishment of right, by contrast, is confined to suits for possession of property: only Section 27 extinguishes the right itself when the period for a possession suit expires.

Exam angle — the recurring distinctions

For revision, the contract block reduces to a small set of high-yield distinctions. The length is almost always three years, so points are scored on the start date and on inter-Article boundaries.

The four that examiners return to most often are: Article 21 versus Article 22 (loan on demand runs from the loan, deposit on demand runs from the demand); the two limbs of Article 54, controlled by the Ahmmadsahab requirement of a calendar date; Article 54 versus Article 55 (specific performance versus damages for breach); and Article 55 read with Section 22 for continuing breaches, illustrated by Sunil Krishna Ghosh. Layered on top is the bar-of-remedy principle from Bombay Dyeing, which explains why a time-barred contractual debt can still be paid, can still found a fresh promise, and can still be set up in defence. Master these and the rest of the block follows. For the broader scheme, return to the Limitation Act hub.