Introduction of Limitation Period in Agreements

Clients often walk into the office and ask the same question: “Sahab, I only found out about this property issue in August, so shouldn’t my limitation start from August?”

It’s one of the most common misunderstandings in civil litigation, and the answer usually surprises them. No limitation starts when you find out about something. It starts when your right to sue accrues, whether you know about it on that day or not.

This distinction matters far more than it sounds. Cases that are otherwise strong on merits get dismissed purely on this one technical point. This post walks through that principle using a fact pattern that comes up in court again and again.

A Common Fact Pattern: Agreement, Expiry, and Delayed Knowledge

Suppose two parties agree on a term of 6 years, starting in January 2019 and ending in January 2025. Under the terms of the agreement, as soon as these 6 years lapse, the other party’s right to possession, specific performance, or a declaration accrues on that date.

Here’s where it gets interesting: information about the property, such as a transfer or a third party taking possession, only comes to that party’s knowledge in August, not January.

So the question is: does the limitation start running from January, when the right accrued, or from August, when the knowledge arrived?

The answer: January.

The Legal Basis: Article 120, Limitation Act 1908

In Pakistan, when no specific limitation period is provided for a particular type of suit, Article 120 of the First Schedule, Limitation Act 1908 applies. It prescribes a residuary limitation period of 6 years, running from the date the “right to sue accrues.”

The word “accrues” carries real legal weight here. It refers to the date on which the cause of action legally came into existence, regardless of whether the party knew of it on that day. Superior courts have repeatedly clarified that this is an objective test, not a subjective one. The court does not look at when the party found out; it looks at when the legal right actually came into being.

Superior courts have consistently held that the six-year limitation period for a suit for declaration begins to run from the date the right to sue accrues. That principle applies directly to our fact pattern: the agreement expired in January 2025, so the right to sue accrued in January 2025. The information that surfaced in August has no bearing on that starting point.

Article 113 vs Article 120: An Important Clarification

Many advocates and students get confused here because a lot of material available online comes from India’s Limitation Act 1963, where this same residuary provision is called Article 113 (with 3 years). Pakistan still follows the Limitation Act 1908, where this residuary article is Article 120 (with 6 years). If you ever reference an Indian judgment or article on this point, always cross-check both the article number and the limitation period, as citing the wrong provision in a plaint can be an embarrassing and avoidable mistake in court.

What “Accrual of Right to Sue” Actually Means

The accrual of a right to sue simply means the moment the cause of action is legally complete, not the moment the party becomes aware of it. Superior courts have repeatedly drawn this line whenever a party argues, “I only found out later.”

In practical terms:

• The agreement’s term expires → the right accrues → the clock starts.
• Someone later learns of the breach → this does not affect the clock.
• If a party fails to file suit in time and relies solely on “I didn’t know,” the suit can be dismissed as time-barred under Order VII Rule 11 CPC.

This is exactly where newer advocates often go wrong, treating the client’s date of knowledge as the starting point for limitation, when the actual starting point is something else entirely.

When Exactly Does a Suit Become “Time-Barred”?

This is the part clients (and sometimes junior associates) find hardest to pin down. A suit doesn’t become time-barred on some vague “later date”; it becomes time-barred the moment the prescribed limitation period, counted from the date of accrual, runs out.

Here’s how the counting actually works, using our fact pattern:

• The agreement expired in January 2025; this is the date the right to sue accrued.
• Under Section 12(1) of the Limitation Act 1908, the day from which the limitation period is to be reckoned is itself excluded from the count. So the 6-year clock effectively starts counting from the next day.
• Six years are then counted forward from that point. Once those 6 years are complete, the suit becomes time-barred from the very next day onward.
• So, in this example, if the right accrued in January 2025, the suit had to be filed by January 2031 (six years later). Filing even a single day after that cut-off renders the suit time-barred.

One narrow exception: under Section 4 of the Limitation Act 1908, if the last day of the limitation period happens to fall on a day the court is closed, the suit can still be validly filed on the day the court reopens.

Once a suit is time-barred, Section 3 of the Limitation Act 1908 makes dismissal mandatory; the court must dismiss it as time-barred even if the defendant never specifically raises limitation as a defense. In practice, this usually happens at the very first stage, through rejection of the plaint under Order VII Rule 11(d) CPC, without the case ever being examined on merits.

This is precisely why calculating the exact cut-off date, not just the general “6 years” figure, is one of the first things to do before drafting any plaint. A miscalculation of even a few days can be fatal to an otherwise strong case.

The Exception: What Happens If There’s Fraud?

There is an important exception every advocate should keep in mind: if the other party has deliberately concealed facts, Section 18 of the Limitation Act 1908 comes into play. In such cases, the limitation starts running from the date the fraud is discovered, not from the date the original cause of action accrued.

But this exception only applies when:

1. The other party actually and deliberately concealed the facts (mere silence isn’t enough),
2. The lack of knowledge was directly caused by that concealment, and
3. The transferee is not a bona fide purchaser for value.

Superior courts have made it clear that if the act in question was “open,” meaning the other party asserted their claim openly rather than hiding it, this does not amount to fraudulent concealment, and the normal accrual rule continues to apply.

Superior courts have also clarified that where a declaration involved an open act, the six-year time limit cannot be waived, meaning simply saying “I didn’t know” is not enough; you must actually prove the other party deliberately concealed the facts.

A Lesson From the Courtroom

Practicing at the District Courts, I’ve seen this issue surface most often through a limitation objection raised by the defendant right at the start of proceedings. When the plaintiff argues “we only found out later,” the court’s first move is to examine the averments in the plaint itself: does the plaint state, in its own words, when the right actually accrued?

If the plaint itself mentions that the agreement expired in January 2025, and the suit was filed in, say, October 2025 or later beyond the permissible period, if there’s been additional delay, the defendant moves an application under Order VII Rule 11 CPC to have the plaint rejected. Unless the plaintiff can actually establish fraud or concealment, the suit can be dismissed at this stage, without ever being heard on the merits.

This is exactly why it matters at the drafting stage: if you’re representing the plaintiff and there’s a genuine reason for the delay (such as fraud or concealment), plead it in detail in the plaint itself; simply stating “we found out later” is not sufficient.

Related Reading: Does This Apply to Maintenance Claims Too?

This same accrual principle that the clock starts when the right arises, not when a party finds out, also governs a wife’s claim for recovery of past maintenance under family law. If you’re handling (or studying) a maintenance recovery matter, read our detailed breakdown here: Limitation Period for Past Maintenance Claims in Pakistan.

Practical Takeaways for Advocates and Law Students

• Always check first whether a specific article applies to your case; don’t default to the residuary Article 120 if a more specific provision governs your facts.
• When drafting a plaint, clearly state the date of accrual, not just the date of knowledge.
• If you’re relying on a delay caused by fraud or concealment, specifically plead the necessary ingredients under Section 18.
• Set realistic expectations with clients early. “I found out later” is rarely sufficient on its own.
• If you’re on the defense side, raise the limitation objection early, ideally under Order VII Rule 11 CPC.

Conclusion

Limitation law can feel technical, but its practical impact is significant — a single date can determine whether a case is even heard. The agreement’s expiry, the accrual of the cause of action, and the date of knowledge are three separate things, and keeping them separate is the foundation of both sound drafting and a strong case.

Frequently Asked Questions (FAQs)

Disclaimer:

This article is intended for general legal information and educational purposes only. It does not constitute legal advice for any specific case. The facts of every case differ, and the application of limitation law can vary accordingly. Always consult a qualified advocate regarding your specific matter.