Law of Limitation- Period of Limitation for Suit

Law of Limitation- Period of Limitation for Suit

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Law of Limitation- Period of Limitation for Suit

The law of limitation prescribes the period within which existing rights can be enforced in a court of law.

The object of the limitation act is to prescribe the period within which the existing right can be enforced in the court of law.

 Period of Limitation for Suit:

(a)        The period of limitation for filing suit for recovery of money lent under a Demand Promissory Note is three years from the date of execution of documentation.

  • The DP Note may not be accompanied by the security way of pledge or at date of disbursement or balance confirmation.
  • If the amount is recoverable on the basis of bill of exchange or promissory note payable at a fixed time after date the period of limitation is from the date of when the bill / promissory note falls
  • If investment is on a bond where no date is specified for payment, a suit has to be filed with in three years from the date of execution of the bond.
  • If a bill of exchange is payable at sight or after sight but no fixed time, the limitation is three years from the date when the bill is presented.
  • If an investment is made on a mortgage of immovable property or other wise secured by a charge upon immovable property & money is payable by the mortgager on demand or no installment are agreed to , the banker must file suit with in twelve years from the date of the mortgages deed.
  • If the mortgage money is payable by installments and the mortgage deed provided that if default is made in payment of one or more installment the whole amount shall be fall overdue. The period of limitation is twelve years from the date when default is made in respect of which there is no such waiver.
  • If the Banker wants a decree against mortgager, the banker will have to file suit with in three years of the execution of the mortgage deed or the date of default, as the case may be.

Article wise period of limitation:

 

No of

Articles

Description of Suit Period of limitation Time from which period begins to run & remarks
57 For money payable for money lent 3- years When the investment is made

 

 

 

57 Like suit when the lender has given a cheque for the money

 

3- years When the cheque is paid

 

 

59 For money lent under an agreement that is shall be payable on demand

 

3- years When the investment is made

 

 

60 For money deposited under an agreement that is shall be payable on demand, including money of the customers to payable in the hands of his banker 3- years When the demand is made
66 On a single bond, where a day is specified for payment 3- years The day is specified

 

 

67 On a single bond, where no such day is specified.

 

3- years The date of execution of the bond

 

69 On a bill of exchange or promissory note payable at a fixed time after date 3- years When the bill or bond falls due.
70 On a bill of exchange at sight or after sight, but not at a fixed time. 3- years When the bill is presented.

 

 

71 On a bill of exchange accepted payable at a particular place. 3- years When the bill is presented at that place

 

72 On a bill of exchange or promissory note payable at a fixed time after sight or after demand. 3- years When the fixed time expired.
74 On a promissory or bond, payable by installment. 3- years The expiration of the first term of payment, as to the part then payable: & for the other parts the expiration of the respective terms of payment
75 On a single bond , where a day is specified for payment On a single bond where a day is specified for payment 3- years When the default is made unless where the payee or oblige waives the benefit of the provision & when fresh default is made in respect of which there is no such waiver.
78 Which the payee against the drawer of a bill of exchange has dishonored by non-acceptance.

 

3- years The date of the refusal to accept.
81 By surety against the principal debtor.

 

3- years When the surety pay the creditor
85 For the balance due on a mutual, open a current account, where there have been reciprocal demands between the parties. 3- years The close of the year in the last item admitted or is entered in the account, year to be computed as in the account.
132 To enforce payment of money secured by a mortgaged or otherwise charged upon immovable property 12- years When the money sued for becomes due, a suit on a simple mortgage deed to enforce payment of money due of the bond, by the sale of mortgaged property is governed by this article to attract the application of this article, the money must be effectively charged on the immovable property.
144 For possession of immovable property or any interest there in based on title 12- years When the possession of the defendant becomes adverse to the plaintiff.
145 To recover movable property deposited or pawned from a deposited or pawned from a depository or Pawnee. 30- years The date of the demand.
148 Against a mortgage to redeem or to recover possession of immovable property mortgaged 60- years When the right to redeem or to recover possession accrues due.

 

Extension of period of limitation – General:

The limitation can be extended / saved by the acts of the client in any of the following three ways:

 

(a) Fresh documentation If the   client executes a fresh promissory note or new bond etc for the old debt the limit is automatically extended from the date of fresh documentation. The documents may even be executed after the period of limitation has expired.

 

(b) Acknowledgement The limitation for filing a suit or an application in respect of any property or right can also be executed by an acknowledgement. The acknowledgement has to be in writing, signed by the party against whom the liability is sought to be enforced or by his duly authorized agent across the requisite revenue stamp, before the expiry of the prescribed period of limitation.
(c) Part- Payment Part payment of a debt or interest can also extend the period of limitation, provided the borrower or his duly authorized agent under his signature has authenticated such payment. The part payment should also have been made before the expiry of the prescribed period of limitation.

 

The period of limitation in any account must therefore, be watched from time to time. Every Bank should have on limitation register. Whenever any documents are executed by the investment client, they are entering into it, besides security register. It serves the purpose of dairy. The limitation register or the limitation dairy is maintained according to the date of limitation.

 

While obtaining fresh documents from the client in renewal of the original , the banker should obtain a ‘Link Letter’ or a ‘connecting Letter’ from the client.

 

Waiver of limitation:

The parties cannot, by agreement, expressed or by implied, extend or alter the period of limitations laid down by law.  It is also not possible for them to waive limitation by agreement. An agreement not to raise the plea of limitation in cases a suit/ application / appeal is inoperative & ineffective.

STAMP ACT:

Stamp Act was implemented first 1899 for the provisional collection of taxes and lastly amendment in the year 1998 with effect from July-01,1998.  Stamp needs to be executed for creation of charge in several documents. There are 4- categories of Stamps:

  1. Judicial Stamp- Used for court
  2. Non-Judicial Stamp – It is printed in a specialized paper having of several value, used for contract, mortgage, sale contract, etc.
  • Adhesive stamp- Having adhesive on the back side. Revenue stamp, postal stamp are of that category
  1. Impressed or Embossed Stamp – Used by Notary public, in collectorate office for pledge letter, Lien letter, letter of guarantee etc

As per the clause –12, adhesive stamp must be cancelled at the time of affixing the same and with out cancellation document will be treated as stampless. The vender / beneficiary of the stamp can cancel the stamp by affixing / writing ‘Cancelled’ along with date and signature.

But it is observed from the branch record that stamps are not executed in related documents as per Stamp Act mentioned above, which may hamper the Bank’s interest and as well as may cause for financial loss.

As per schedule –1 stamp duty on instruments, the type of stamp is to be affixed in instruments are given below:

Schedule of Stamp Duty  on instruments with ref. to amendment- 1998 w.e.f. 01.07.98

 

Sl. Description

 

Stamp Act Reference Stamp Duty
01. Demand Promissory Notes

(i) Up to Tk. 1,000/-

(ii) AboveTk.1,000/- but not exceeding Tk. 5000/-

(iii) Above Tk 5000/-

 

Article 49

Schedule –1

Section-2(22)

 

Tk. 5/-

Tk.10/-

Tk.20/-

02. Letter of Credit Application & Agreement

Memorandum of an Agreement

Article 5(c)

Schedule -1

Tk.150/-
03. Letter of Hypothecation

 

Article 5(c)

Schedule -1

Tk.150/-
04. Cancellation of any instrument

 

Article -17 Tk.150/-
04. Letter of Pledges

 

As a matter of Practice Tk150/-
06. Letter of Undertaking not to create any further charge over property etc. Article 5(c) Schedule-1-A Tk.150/-
07. Agreement for Bill Purchase Article 5(c)

Schedule -1-A

Tk.150/-
07. Letter of Guarantee Article 5(c)

Schedule -1-A

Tk.150/-
09.a Power of Attorney for procuring Registration of one or more documents in relation  to a single transaction or for admitting execution of one or more such documents (48.a) Article-48

Sec-2(21)

Tk.50/-
09.b Power of attorney authorizing to act in a single transaction other than mentioned above(48.b) Article-48

Sec-2(21)

Tk.100/-
09.c Power of attorney authorizing to act in a single transaction other than mentioned above(48.c) Article-48

Sec-2(21)

Tk.200/-
09.d Power of attorney authorizing to act in a single transaction other than mentioned above(48.b) Article-48

Sec-2(21)

Tk.400/-

10.  Bill of Lading – Article 14, of schedule -1 of stamp act,1998

 

10.a When the value drawn but not exceed Tk.5,000/-  

 

Tk.20/-
10.b When exceeds Tk. 5000/- but not exceeding Tk.50,000/- Tk.50/-
10.c When exceeds Tk.50,000/-  

 

Tk.200/-

 

If a bill of lading is drawn in parts, the proper stamp there for must be must be borne by each of the set

 

  1. Bill of Exchange
  1. Where payable otherwise than on demand but not more than one Year after date or sight (Article 13. Section 2(2) of schedule -1 of stamp act,1998)
Amount of Bill  

Proper  Stamp Duty

If drawn Singly If drawn in set of two, for each part of the set

 

If drawn in set of three, for each part of the set
Irrespective of consideration value

 

0.2% 0.1% 0.07%

 

  1. Where payable at more than one year after date of sight

(Article 13. Section 2(2) of schedule -1 of stamp act, 1998)

Amount of Bill  

Proper  Stamp Duty

If drawn singly If drawn in set of two, for each part of the set

 

If drawn in set of three, for each part of the set
Irrespective of consideration value

 

1% 1%

 

1%

 

  1. Article 6(2) of schedule- 1. Stamp Act-1998, Description of Instrument
  1. If loan or debt is repayable on demand or more than three months from the date of such instrument evidencing the agreement
Amount of Loan or Debt  

Proper  Stamp Duty

If drawn singly If drawn in set of two, for each part of the set

 

If drawn in set of three, for each part of the set
Irrespective of consideration value

 

0.5% 0.25%

 

0.12%

 

  1. If loan or debt is repayable not more than three months from the date of such instrument evidencing the agreement
Amount of Loan or Debt  

Proper  Stamp Duty

If drawn singly If drawn in set of two, for each part of the set

 

If drawn in set of three, for each part of the set
Irrespective of consideration value

 

0.3% 0.15% 0.08%

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