9. PRESCRIPTION

SUMMARY

Terms of Prescription

For

10 Years

Prescriptive title by possession of lands and other immovable properties

10 Years

Actions on Mortgage or bond

6 Years

Action on a partnership deed, promissory note, bill of exchange, written promise, contract, bargain, agreement, or security (except Mortgage or bond).

3 Years

Action to recover movable property, rent, money lent without written security, without written security.

1Years

Action for goods sold, shop bill, book debt or work and labour.

2 Years

Action for any loss, injury or damage.

3 Years

Other cases


Explanatory Notes

Title to property

1. Proof of the undisturbed and uninterrupted possession by a defendant in any action, or by those under whom he claims, of lands or immovable property by a title adverse to or independent of that of claimant or plaintiff In such action for 10 years previous to the bringing of such action will entitle the defendant to a decree in his favour with costs. In like manner when any plaintiff brings his action or any third party intervenes in any action -

 
(a) for the purpose of being quieted in his possession of lands or other immovable property; or

(b) to prevent encroachment or usurpation thereof; or

(c) to establish his claim in any other manner to such land or other property. proof of such undisturbed and uninterrupted possession by such plaintiff or intervenient, or by those under whom he claims, will entitle such plaintiff or intervenient to a decree in his favour with costs.Period of 10 years will only begin to run against parties claiming estates in remainder or reversion from the time when the parties so claiming acquire 0 right of possession to the property in dispute. - Section 3.


2. Any person dispossessed of any immovable property otherwise than by process of law is entitled -

 
(a) to institute proceedings against the person dispossessing him within one year of such dispossession and

(b) on proof such dispossession within one year before action brought, to a decree for the restoration of such possession without proof of title. The provisions in the Prescription Ordinance are not to affect the other requirements of the low as respects possessory cases. Section 4.


Claims

3. No action is maintainable –

(a) for the recovery of any sum due upon any hypothecation or mortgage of any property or

(b) upon any bond conditioned for -
(I) the payment of money

(II) the performance of any agreement or trust or

(iii) the payment of penalty
unless the same is commenced -

(a) In the case of an instrument payable at or providing for the performance of its condition within a definite time, within ten years of the expiration of such time and

(b) In all other cases within ten years from the date -

(i) of such instrument of mortgage or hypothecation or

(ii) of last payment of interest thereon or

(iii) of the breach of the condition - Section 5


4. No action is maintainable –

(a) upon any deed for establishing a partnership, or

(b) upon any promissory note or bill of exchange, or

(c) (i) upon any written promise, contract, bargain or agreement, or
(ii) other written security not failing within the description of instruments set forth in Section unless such action is brought within six years



(a) from the date of the breach of such partnership deed or of such written promise, contract, bargain or agreement or other written security, or

(b) from the date when such note or bill shall have become due, or of the last payment of Interest thereon. -
Section 6.

5. No action is maintainable for the recovery of:-
(a) any movable property, rent, or mesne profit, or

(b) for any money lent without written security, or

(c) for any money paid or expended by the plaintiff on account of the defendant, or

(d) for money received by the defendant for the use of the plaintiff, or

(e) for money due upon an account stated, or

(f) for money due upon any unwritten promise, contract, bargain or agreement  unless such action is commenced within three years from the time after the cause of action shall have arisen - Section 7.


6 No action shall be maintainable for or in respect of -
(a) goods sold and delivered or

(b) any shop bill or book debt or

(c) work or labour done or

(d) the wages of artisans labourers or servants unless the same is brought within one year after the debt shall have become due. - Section 8


7. No action is maintainable for any loss Injury or damages unless the same is commenced within two years from the time when the cause of action shall have arisen. - Section 9.

8. No action is maintainable in respect of any cause of action -
(a) not hereinbefore expressly provided for or

(b) expressly exempted from the operation of this Ordinance unless the same is commenced within three years from the time when such cause of action shall have accrued. - Section 10.


9. No claim in reconvention or by way of set-off will be allowed or maintainable in respect of any claim or demand after the right to sue thereon is barred by the operation of any of the above provisions. – Section 11.

10. No acknowledgement or promise by words will be deemed evidence of a new or continuing contract -
(a) to take the case out of the operation of any of the Sections 5 to 11 or

(b) to deprive any party of the benefit of the said sections unless such acknowledgement or promise Is In writing signed by the party chargeable or by his agent duly authorised In that behalf. - Section 12.


PROVISOS

11. If at the time the right of any person to sue for the recovery of any immovable property first accrued such person is under any such disability as -
(a) Infancy

(b) Idiocy

(c) unsoundness of mind

(d) lunacy or

(e) absence beyond seas then and so long as such disability continues the possession of such immovable property by any other person shall not give such person any right or title to the some as against the person subject to such disability or those claiming under him. The period of ten years will commence to run from the removal of such disability or the death of such person whichever happens earlier.



Provided that the adverse and undisturbed possession for thirty years of any immovable property by any person or by those under whom he claims will be taken as conclusive proof of title as against the disability of any adverse claimant - Section 13.

12. If at the time when the right of action in respect of any of the causes referred to in Sections 5 to 11 accrues the person so entitled to sue is subject to any of the disabilities mentioned in Section 13 then the several periods of limitation provided above will not commence to run until the removal of such disability or the death of such person whichever happens earlier - Section14

13. Nothing contained In the Prescription Ordinance :-
(a) in anyway affects the rights of the State

(b) applies to actions for divorce or

(c) applies to any case in which special provision has been or may hereafter be made for regulating and determining the period within which actions may be commenced against any public officer or other person. - Section 15.


Note :

(1) There are various Statutes that sometimes contain the period of limitations in relation to the matters affected or       dealt with by those Statutes. In such cases the period of limitation contained in those Statutes will apply and not       what is stated in the Prescription Ordinance.

(2) In an arbitration commenced before the Arbitration Act No. 11 of 1995 coming into operation it was contended that       an Arbitrator was not bound to give effect to limitations, set out in the Prescription Ordinance. That position was       upheld by the Court of Appeal in PHIL-EAST ASIA CONSTRUCTION CORPORATION –V- GALADARI HOTELS LANKA       (LTD) AND ANOTHER (2001) BLR 78. Although the Respondent who was unsuccessful in this appeal applied to the       Supreme Court for Leave to Appeal its Senior Counsel conceded in the Supreme Court hearing that “action” in the       Prescription Ordinance does not include a reference to the Arbitration and the Supreme Court dismissed that       application (SC Spl. L.A.) No. 248/2001 on 11 th January 2002 .

(3) According to Sec. 39 of the Arbitration Act No. 11 of 1995 (brought into operation on 1 st August 1995 by an order      published in the Gazette Extraordinary No. 875/5 of 13 th July 1995), it is an implied term of the arbitration      agreement that in the event of a dispute arising to which the agreement applies. It shall be the duty of the      claimant to exercise due diligence in the prosecution of his claim. Where there has been undue delay by a      claimant in instituting or prosecuting a claim pursuant to an arbitration agreement, the arbitral tribunal may make      an order terminating the arbitration proceedings as provided for in the said section 39.

According to Section 44 of the said Act, in calculating the period of prescription for the purpose of any action, the period that elapsed between the commencement of an arbitration and its completion, or termination as the case may be, shall be excluded.