Acknowledgement of Debt

Limitation Act, 1963 — Section 18

A written or oral admission by the borrower that the debt exists. Under Section 18 of the Limitation Act, 1963, a fresh acknowledgement before a court or in writing signed by the debtor extends the limitation period for filing a recovery suit by 3 years from the date of acknowledgement.

A letter from a borrower acknowledging outstanding dues and requesting a repayment schedule constitutes an acknowledgement of debt.

In practice, an acknowledgement of debt is the single most common way a time-barred or near-expiry claim is rescued. Under Section 18 of the Limitation Act, 1963, a fresh acknowledgement in writing, signed by the debtor before the existing limitation period runs out, restarts the three-year clock from the date of acknowledgement. Creditors therefore treat borrower correspondence carefully: a letter admitting dues, a request for a repayment schedule, or a signed balance confirmation can each reset limitation and keep a recovery suit or DRT application alive. The timing is critical, the acknowledgement must precede expiry, not follow it; an admission made after limitation has already lapsed revives nothing. Borrowers and their counsel scrutinise dates and signatures for exactly this reason. Getting this wrong is fatal: a creditor who relies on a stale or post-expiry document may find the claim dismissed as barred. Well-advised creditors confirm the acknowledgement is dated, signed and in time before filing.