Successive breach limitation in works contracts runs from each distinct delay; final bill payment does not revive an unadjudicated damages claim.

A damages claim arising from repeated delay in handing over a works contract site was treated as a claim for breach of contractual obligations under Article 55 of the Limitation Act, 1963. The Court held that each distinct delay constituted a separate breach, so limitation ran from each breach rather than from final payment or termination, and Article 113 did not apply. It further held that final bill payment and refund of security deposit did not amount to acknowledgment of liability for unadjudicated damages, section 18 was unavailable because the claim had been repudiated, and section 15(2) did not save the suit. The claim was therefore time-barred.

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Issues: (i) Whether a claim for damages arising from repeated delays in handing over site in a works contract is governed by Article 55 of the Limitation Act, 1963 and accrues on each successive breach; (ii) Whether the suit was saved by acknowledgment, payment, or exclusion of time under the Limitation Act, 1963.

Issue (i): Whether a claim for damages arising from repeated delays in handing over site in a works contract is governed by Article 55 of the Limitation Act, 1963 and accrues on each successive breach.

Analysis: The claim was for damages for additional costs occasioned by delayed handing over of the work site and materials under an existing contract. The Court held that the dispute did not concern enhanced rates outside the contract, but compensation for breach of contractual obligations. It further held that the delays were not a continuous breach but distinct successive breaches, each giving rise to a separate cause of action. In such a situation, limitation begins to run from the date of each breach, and the residuary Article 113 could not be invoked.

Conclusion: The suit fell within Article 55 of the Limitation Act, 1963, and limitation ran separately from each breach, not from the final payment or termination of the contract.

Issue (ii): Whether the suit was saved by acknowledgment, payment, or exclusion of time under the Limitation Act, 1963.

Analysis: The Court held that payment of the final bill and refund of security deposit did not amount to acknowledgment of a liability for damages. A claim for damages does not ripen into a debt until adjudicated, and therefore Section 19 did not apply. Section 18 was also inapplicable because the claim for damages had been repeatedly repudiated. The notice under Section 80 of the Code of Civil Procedure, 1908 was issued after the claim had already become time-barred for the last breach, so Section 15(2) did not assist the respondent.

Conclusion: The claim was not saved by acknowledgment, payment, or exclusion of time, and the suit was barred by limitation.

Final Conclusion: The decree of the courts below was set aside and the suit was dismissed as time-barred, leaving the appellant State successful in appeal.

Ratio Decidendi: In a contract claim founded on successive breaches, limitation under Article 55 of the Limitation Act, 1963 runs from each distinct breach, and payment of the final bill or refund of security deposit does not extend limitation for an unadjudicated damages claim absent a valid acknowledgment of that liability.

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