The general principle is that limitation, in personal actions, bars only the remedy and does not extinguish the right itself. Section 27 of the Limitation Act is an exception to this general principle so far as suits for possession of property are concerned and lays down that after the expiry of the period prescribed for instituting a suit for possession of any property, the person who should have instituted such suit, but has failed to do so, shall cases to have any right to the property.
After the expiry of the period, the law declares not simply that the remedy is barred but that the title is extinct in favour of the possessor. But section 28 is confined to suit for possession only and does not apply to a suit by mortgagee for recovery of the money due to him by sale of the mortgaged property.” The mortgagee’s remedy may be barred if he omits to sue within the statutory period, but his right is not extinguished.
It is only in cases to which section 28 applies that the Act bars the remedy and extinguishes the right. In all other cases only the remedy is barred but the right remains intact. Thus where A from time to time advances money to B and each time that he advances money to B he enters the item advanced in his account book.
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ADVERTISEMENTS:
Let us suppose he has advanced six items of money on six different dates each succeeding item being separated from the previous one by a period of six months. Four years after the first advance was made the period of three years fixed for the filing of suit for the recovery of the first item of advance has expired and the remedy of A for filing a suit is barred by limitation.
Hers although the remedy is barred, the right of A to recover the amount of the first advance is not extinguished but still survives although his right to file a suit for recovery thereof is barred by limitation.
Therefore if B, the debtor, pays the amount of the first advance after it has become barred or if he pays an amount without specifying towards which of the six advances it might be credited and the creditor applies it in the payment of the first item of advance, the creditor will be fully justified in law in doing so and the payment would not be allowed to be recalled on the ground of failure of consideration. A barred debt is a good consideration for a written promise to pay it.