Limitation of Artha Rin (Money Loan) Suits

There is a fixed time limit for filing an Artha Rin suit. According to S.46 (1) of Artha Rin Adalat Ain (“ARAA”) 2003, “Notwithstanding anything contrary in the Limitation Act, 1908 (Act No. IX of 1908), any financial institution subsequent to the start of repayment of loan from the loane according to the agreement executed or its terms and conditions as per repayment schedule. During 1st year minimum 10% of the demand money, during 1st two years minimum 15% of the demand money, during 1st three years minimum 25% of the demand money is not recovered then subject to the provisions of sub-section (2), a suit can be filed within one year subsequent to it.”

That in addition, S.46 (2) of ARAA 2003 provides “If the financial institution has re-scheduled within aforesaid time limit of the repayment schedule of loan mentioned in sub-section (1) will according by mutatis mutandis be effective a new.”

Usually the time limit for filing a suit according to the schedule of Limitation Act (“LA”) 1908 begins: a) For money payable for money lent-when the loan is made, b) For money lent under an agreement that it shall be payable on demand- when the loan is made and the period of limitation is 3 years, c)For money payable to the plaintiff for money found to be due from the defendant to the plaintiff on accounts stated between them- when the accounts are stated in writing signed by the defendant or by an agreement to pay in the future and when that time arrives- the period of limitation in this case is three years.