Revival of Documents :

Banks are expected to hold valid legal documents as per the provisions of the Limitation Act, if the limitation period expires, then the bank should arrange to obtain fresh set of documents.However, under certain situations, the limitation period can be extended. A limitation period can be extended in the following manners:

1. Acknowledgement of debt: As per section 18 of the limitation Act, where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

2. Part payment: As per section 19, where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made. However, an acknowledgment of the payment shall be in the handwriting of, or in a writing signed by, the person making the payment.

3. Fresh set of documents: When the bank obtains a fresh set of documents before the expiry of the original documents, fresh period of limitation will start from the date of execution of the fresh documents. A time-barred debt can be revived under Section 25 (3) of the Indian Contract Act only by a fresh promise in writing, signed by the borrower or his authorized agent, generally or specially authorized in that behalf. A promissory note/ fresh documents executed for the old or a barred debt will give rise to a fresh cause of action and a fresh limitation period will be available from the date of execution of such documents.