Limitation periods for legal documents in banking are governed by the Limitation Act, 1963, primarily under Articles 31-43 for negotiable instruments and related contracts. These periods start from specific events like due dates or demands, with extensions possible via acknowledgments or payments under Section 18-19. Banks must track these to enforce recovery suits timely.
Key Documents Table
| Document Type | Limitation Period | Starting Point |
| Demand Promissory Note | 3 years | Date of the note |
| Usance Promissory Note | 3 years | When the note falls due |
| Bill of Exchange (payable at sight or presentation) | 3 years | When the bill is presented |
| Usance Bill of Exchange | 3 years | Due date |
| Cheque (civil recovery suit) | 3 years | Date of the cheque (Article 35) |
| Money Lent (Loan Agreement) | 3 years | When the loan is made |
| Guarantee (Surety Bond) | 3 years | When surety pays creditor (vs principal); when pays excess (vs co-surety) |
| Single Bond (specified payment day) | 3 years | Day specified |
| Single Bond (no specified day) | 3 years | Date of execution |
Extensions and Exceptions
Acknowledgments in writing or part payments signed by the debtor reset the 3-year clock from that date. For bank guarantees, enforcement may align with contract terms but cannot shorten Limitation Act periods below statutory minima. Cheque bounce complaints under NI Act Section 138 have separate timelines: present cheque within 3-6 months validity, notice within 30 days of dishonor, complaint within 1 month of notice expiry.
Banking Recovery Notes
Loan recovery suits often use the last acknowledged payment or default date as the start, typically 3 years. Revival requires fresh documents for new limitation. Mortgages securing loans have 12-30 years for immovable property enforcement. Consult legal experts for case-specific application, as courts interpret based on facts.
