Facts checked on 27 October 2026. Published by MDG Services on 4 November 2026.
The two clocks
This page is for a petrol pump that sells diesel on credit to regular customers such as transporters, not for money lent to a friend or relative.
The time limit is the last day to file a suit for the price of diesel sold on credit.
| Your case | The 3 years start | Source |
|---|---|---|
| No credit period was agreed | On the day the diesel was delivered (filled) | Limitation Act 1963, Art. 14 |
| A credit period was agreed, say 30 days | On the day that period ends | Limitation Act 1963, Art. 15 |
What starts the 3 years afresh
- A signed acknowledgment. The transporter writes that the money is owed and signs it before the 3 years end. A fresh 3 years run from the day of signing Limitation Act 1963, s.18.
- A part payment, with a note. A fresh 3 years run from the payment only if the payer also writes or signs an acknowledgment of that payment Limitation Act 1963, s.19. A payment on its own does not do it.
A made-up timeline
Made-up dates and figures. Diesel worth Rs 1,04,000 is filled in Gupta Transport's trucks at Sharma Fuels on 10 January 2026 with 30 days' credit.
| Date | What happens | Last day to file, about |
|---|---|---|
| 10 Jan 2026 | Diesel filled, 30 days' credit agreed | Not counting yet |
| 9 Feb 2026 | Credit period ends, nothing paid | 9 Feb 2029 Limitation Act 1963, Art. 15 |
| 1 Jun 2027 | The transporter pays Rs 20,000 by UPI and writes nothing about it | Still 9 Feb 2029 Limitation Act 1963, s.19 |
| 15 Mar 2028 | The transporter signs a note confirming Rs 84,000 is owed (Rs 1,04,000 less Rs 20,000) | 15 Mar 2031 Limitation Act 1963, s.18 |
What is not settled
- Many fills on one account. Courts differ on when the clock starts: at each delivery, at the last delivery, or when payment fell due. Count from your oldest unpaid fill to be careful; an advocate can count the exact last day.
- A confirmation in an app or chat. Whether it counts as a signed written acknowledgment is not settled. It may help as evidence. For the time limit, get a signature on paper.
What to do
Do not let dues age. Check how old your udhar is every month, and ask transporters with an old balance to sign a confirmation. Keep the evidence. Legal steps take time, so start well before the date: see the steps.
Khata Kavach shows how old each transporter's balance is (0 to 15, 16 to 30, 31 to 60, over 60 days) and dates every fill, bill and payment. It does not collect dues.
General information, not legal advice. For your own case, speak to an advocate or a chartered accountant.
Questions people ask
01Is the time limit counted from the bill date?
No. The law names the date of delivery, or the end of the agreed credit period Limitation Act 1963, Art. 14 Limitation Act 1963, Art. 15. Count from those dates, not from the bill date, and ask an advocate if they differ in your case.
02Who should sign for a firm or company?
Who may sign for a firm or company is a question for an advocate. For a firm, ask the owner or a partner to sign and note their role.
03Is the time limit different if a cheque bounced?
A bounced cheque brings its own short deadlines NI Act 1881, s.138. They are on the cheque bounce page. An advocate can tell you which route suits your case.
04Udhar kitne saal tak vasool ho sakta hai?
It depends on the dates in the table above and on any signed acknowledgment. What happens once the time limit has ended depends on the case: ask an advocate before you rely on an old balance in a notice or a suit.
Related pages
About Khata Kavach (advertisement)
Khata Kavach is a shared credit book for petrol pumps, from MDG Services. The transporter asks before each truck fills, your nozzle man sees the limit before he fills, and both of you see every fill, payment and bill. It never lends or holds money.