A suit on an unpaid invoice must be filed within three years from when the payment fell due (Articles 14 to 15 and 55, Schedule to the Limitation Act). A written acknowledgement signed by the buyer before expiry (Section 18) or a part-payment (Section 19) restarts the three years from that date. Use the limitation calculator.
Starting points
| Claim | Limitation starts | Period |
|---|---|---|
| Price of goods sold and delivered | Date of delivery (or the agreed credit date) | 3 years |
| Price of work done or services | When the work is done (or the agreed date) | 3 years |
| Money lent | When the loan is made (or demand, if payable on demand) | 3 years |
| Balance on a mutual, open and current account | Close of the year in which the last item was entered | 3 years |
| Enforcing an arbitral award / decree | Date of award / decree | 12 years for a decree; 3 years to apply for enforcement of an award (as a decree) |
| Cheque bounce complaint | See Section 138 timeline | 30 + 15 days + 1 month |
What restarts the clock
- Acknowledgement (Section 18): a letter, email, ledger confirmation or balance confirmation signed (including electronically) by the buyer admitting the liability, made before the period expires.
- Part-payment (Section 19): a payment of principal or interest by the buyer, recorded in the buyer’s handwriting or signed by them (bank transfers with a narration count in practice).
- Not enough: your own reminders, an unsigned statement, or a WhatsApp “ok” that does not admit the amount. Get the admission in writing.
MSME Samadhaan and limitation
The Limitation Act applies to arbitration, and Facilitation Councils generally apply it to references too. File promptly. If your claim is near the three-year mark, a Samadhaan reference or a suit filed before the date preserves it; a legal notice alone does not stop the clock. FundRaksha checks limitation in the free consultation before anything else.
Last reviewed: 2026-10-08. Information for Indian businesses; not legal advice.