Basics of Limitation Law

Basics of Limitation Law. -Mahendar Ramdas Bangeja.

. Topics to be covered. Limitation Act and its Policy Analysis of Section 3 Condonation of delay Disability of the Plaintiff Exclusion of Lack of Jurisdiction Acknowledgment Concept of Adverse Possession.

. Policy and Purpose of Limitation Act. Preamble: “An act to consolidate and amend the law for the limitation of suits and other proceedings and for purposes connected therewith.” The policy is to: To prevent any unnecessary delay To put an end to the chance of litigation A legal dispute cannot be kept alive forever if a party is aggrieved and wants a redressal from the court then he shall go to the court within reasonable time. He shall not keep the opposite party anxious and waiting that the proceeding will be filed against him. Legal rights shall be settled as soon as possible..

“ Viglantibus Non Domnitibus Jura Subenient ”- A person aggrieved by any wrong is expected to be vigilant upon his right and if he sleeps upon his rights then law will not come to his rescue..

Bars remedy and not right. The limitation act does not take away persons substantive legal right rather it away the procedural legal right i.e right to enforce the substantive legal right. It converts a perfect right into imperfect right. L.S Synthetics Limited vs Fairgrowth Financial Services Limited (2004) : A defence can be raised even though a remedy is barred. Exception: In the cases of Section 25, 26 and 27 it is not only the remedy that is barred rather the very substantive right of the property i.e ownership is extinguished..

Procedural or Substantive: Essentially procedural in nature as it only provides for the period within which a suit, application or appeal can be filed. It can be said that limitation is complementary to CPC. However, Section 25, 26 and 27 do create substantive legal right also and to that extent it is substantive law. Limitation by Agreement: Neither parties by mutual agreement nor the court in its inherent powers can alter the period of limitation. Can a party waive the right of limitation? A party cannot waive his right to object limitation. Limitation is a matter of public policy and an individual cannot intervene in the matter of public policy even if it is waived by him the court shall dismiss the suit..

Period of Limitation and Prescribed Period- Section 2(j) of the Limitation Act..

Exclusions and Exceptions. Limitation act does balancing of interest between parties and stipulates certain circumstances wherein despite the expiry of period of limitation the plaintiff, applicant or appellant may be allowed to file his proceeding by way of an exception (Section 4 to 11). Certain period spent in earlier proceeding may get excluded shifting ahead the prescribed period (Section 12 to 24)..

Analysis of Section 3. Questionnaire.

3. Bar of limitation.—. (1) Subject to the provisions contained in sections 4 to 24 (inclusive) , every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed , although limitation has not been set up as a defence ..

Features of Section 3. Declaratory Provision Restrictive Provision The word “shall” makes the provision mandatory unless the exception apply- Subject to 4 to 24 Prescribed period The suit shall be dismissed even if bar of limitation is not raised.

Burden of Proof. The burden of proving the bar of limitation will lie upon the defendant or the respondent. Once he has proved the period of limitation. The burden shifts upon Plaintiff, Appellant and Applicant and thereupon the said plaintiff will prove the applicability of any exclusions or the exceptions..

Section 5- Condonation of Delay. Stopwatch.

Section 5- Extension of prescribed period in certain cases..

Applicability: Appeals and Application other than execution applications. Double Discretion: Firstly, the discretion to see whether there was satisfactory explanation or not. Secondly, the court will have a discretion that even if the satisfactory explanation has been proved it will allow the application or not. The burden of proof to prove sufficient cause lies strictly upon the applicant..

COA Arise Limitation Period Prescribed Period After the Prescribed Period Appeal Filed.

Ramlal vs Rewa Coalfields (1961) Justice P.B Gajendragadkar and Justice K.N Wanchoo.

Collector, Land Acquisition, Anantnag and Ors. vs. Katiji and Ors. (19.02.1987 - SC) Justice M.P Thakkar and Justice B.C Ray.

N.Balakrishnan vs M.Krishnamurthy (1998). Suit of Declaration of Title was filed by Plaintiff/Respondent(herein) which was decreed in his favour on 28.10.1991 On coming to know the Defendant/Appellant(herein) moved an application to set aside the decree but the said application was dismissed for default on 17.02.1993 Defendant/Appellant move an application on 17.08.1995 to set aside the order dated 17.02.1993- A delay of 883 days ..

Explanation by the Appellant/Defendant/N. Balakrishnan.

Held:. “Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncontainable due to want of acceptable explanation whereas in certain other cases delay of very long range can be condoned as the explanation thereof is satisfactory” “In this case explanation for the delay set up by the appellant was found satisfactory to the trial court in the exercise of its discretion and the High Court went wrong in upsetting the finding, more so when the High Court was exercising revisional jurisdiction. Nonetheless, the respondent must be compensated particularly because the appellant has secured a sum of Rs. Fifty thousand from the delinquent advocate through the Consumer Disputes Redressal Forum.”.

Section 6 to 9- Disability of Plaintiff.

Section 6. (1) Where a person entitled to institute a suit or make an application for the execution of a decree is, at the time from which the prescribed period is to be reckoned, a minor or insane , or an idiot , he may institute the suit or make the application within the same period after the disability has ceased , as would otherwise have been allowed from the time specified therefor in the third column of the Schedule. (2) Where such person is, at the time from which the prescribed period is to be reckoned, affected by two such disabilitie s, or where, before his disability has ceased, he is affected by another disability, he may institute the suit or make the application within the same period after both disabilities have ceased , as would otherwise have been allowed from the time so specified. (3) Where the disability continues up to the death of that person, his legal representative may institute the suit or make the application within the same period after the death, as would otherwise have been allowed from the time so specified. (4) Where the legal representative referred to in sub-section (3) is, at the date of the death of the person whom he represents, affected by any such disability, the rules contained in sub-sections (1) and (2) shall apply. (5) Where a person under disability dies after the disability ceases but within the period allowed to him under this section, his legal representative may institute the suit or make the application within the same period after the death, as would otherwise have been available to that person had he not died. Explanation.—For the purposes of this section, ‘minor’ includes a child in the womb.

Section 9. Where once time has begun to run, no subsequent disability or inability to institute a suit or make an application stops it: Provided that where letters of administration to the estate of a creditor have been granted to his debtor, the running of the period of limitation for a suit to recover the debt shall be suspended while the administration continues..

Once the time has started to run it will not stop and it will continue to run until the last of prescribed period. Section 6 provides any disability on the date of reckoning will prevent the time from running. However, in the case of inability Section 6 does not apply. Proviso- Debtor of the deceased gets into dual capacity ( i ) as debtor (ii) administrator. He can always avoid his own liability towards the Legal Representatives of the deceased and let the prescribed period get expired. In order to avoid this situation, the proviso declares that the time during which he carried on the administration the running of period remains suspended..

Section 8. Nothing in section 6 or in section 7 applies to suits to enforce rights of pre-emption , or shall be deemed to extend, for more than three years from the cessation of the disability or the death of the person affected thereby, the period of limitation for any suit or application. Principle: Maximum of three years of extension can be granted and not the entire period of limitation. However, if some period is remaining out of the prescribed period of the party, then you get only so much extension as in total makes it 3 years..

Total Period: 12 years. COA. Disability Ceases. Prescribed Period.

Total Period: 12 years. COA. Disability Ceases. Prescribed Period.

Total Period: 3 years. Disability Ceases after a period of 2 years.

Section 14. (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding , whether in a court of first instance or of appeal or revision, against the defendant shall be excluded , where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature , is unable to entertain it. (2) In computing the period of limitation for any application , the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it..

(3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature. Explanation.— For the purposes of this section,— (a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted ; (b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding; (c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction..

Consolidated Engg. Enterprises and Ors. Vs. Principal Secy. Irrigation Deptt. and Ors (2008) Justice K.G Balakrishnan, Then CJ J.M Panchal and R.V Raveedran.

“Formal defect”: Apart from lack of jurisdiction those grounds due to which suit cannot be entertained rather the plaint may be either returned or rejected. Examples: Misjoinder of Cause of Action Misjoinder of parties Non-Disclosure of COA Erroneous Valuation of Suit Deficit Court Fees Notice of Section 80 CPC not complied with Defect in the prayer clause Bars like Res Judicata, Order 2 Rule 2, Order 22 R 9, Order 23 Rule 3A etc will not fall under Secton 14(1) as in such cases a fresh cannot be filed. If the above elements are proved then BOP lies upon the Plaintiff to prove that he has acted in goodfaith and with due diligence in prosecuting the former..

If 14(1) conditions are fulfilled, then entire period spent in the wrong court will be excluded. Conflict between Order 23 Rule 2 and Section 14(3)- Section 14(3) will override Order 23 Rule 2. If the conditions are fulfilled the period of previous suit will be excluded..

Section 18 to 20 – Acknowledgement. Checkmark.

18. Effect of acknowledgment in writing.. (1) 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) Where the writing containing the acknowledgment is undated , oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.

Explanation. For the purposes of this section,— (a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right; (b) the word “signed” means signed either personally or by an agent duly authorized in this behalf; and (c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right..

Tilak Ram vs Nathu (1966). For a valid acknowledgement it is essential that it was in writing, signed and dated. Even if not dated oral evidence to prove the date can be given and the acknowledgment will be admissible. For acknowledgment it is not necessary to prove that a party intended to prove to fulfill the liability rather there has to be any communication which implied suggests that the party is admitting its liability. To infer acknowledgment entire liability has to be read together. Burden of proof lies upon the party who claims benefit of acknowledgement..

Lakshminathan Cotton Mills Co. Ltd vs Aluminum Corporation of India Ltd (1971).

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 the debt or legacy or by his agent duly Authorized in this behalf , a fresh period of limitation shall be computed from the time when payment was made: Provided that, save in the case of payment of interest made before the 1st day of January,1928, an acknowledgment of the payment appears in the hand-writing of, or in a writing signed by the person making the payment. Explanation - For the purposes of this section, - (a) Where mortgaged land is in the possession of the mortgage, the receipt of the rent of produce of such land be deemed to be a payment; (b) "Debt" does not include money payable under a decree or order of a court..

In Section 19, the acknowledgment has to be made by part-payment. The Payment itself will be deemed to be an acknowledgement provided person making the payment has Written and Signed any note while making payment..

Jiwanlal Acharya vs Rameshlal Agarwala (1967). In the case of payment by cheque date of payment will be date which is mentioned on the cheque..

Santlal Mahton vs Kamla Prasad (1951) 4 Judges Bench- Justice B.K Mukherjee.

Rajesh Kumari vs Prem Chandra Jain (1997) Delhi High Court R.C Lahoti.

In case of Dishonour. The advantage of limitation of the Plaintiff cannot be undone by the defendant by doing a tortious act of withholding the fund and making the cheque bounce. In such a case principle of Estoppel also applies against the defendant. Even if the cheque bounced, if the date mentioned in the cheque was a date within the prescribed period then the payment for the purpose of Section19 will be deemed to have been made..

Distinction between Section 18 and 19. In the case of Section 18 writing must contain within itself an admission of any exisiting liability. While in the case of Section 19 if the writing merely records the facts of payment. An endorsement of payment need not imply an acknowledge of liability.

Section 20. (1) The expression “agent duly authorised in this behalf” in sections 18 and 19 shall, in the case of a person under disability, include his lawful guardian, committee or manager or an agent duly authorised by such guardian, committee or manager to sign the acknowledgment or make the payment. (2) Nothing in the said sections renders one of several joint contractors, partners, executors or mortgagees chargeable by reason only of a written acknowledgment signed by, or of a payment made by, or by the agent, of, any other or others of them. (3) For the purposes of the said sections,— (a) an acknowledgment signed or a payment made in respect of any liability by or by the duly authorised agent of, any limited owner of property who is governed by Hindu law, shall be a valid acknowledgment or payment, as the case may be, against a reversioner succeeding to such liability; and (b) where a liability has been incurred by or on behalf of a Hindu undivided family as such, an acknowledgment or payment made by, or by the duly authorised agent of, the manager of the family for the time being shall be deemed to have been made on behalf of the whole family..

Section 27 and Concept of Adverse Possesion.

Section 27- Extinguishment of Right to Property. At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished..

Section 27 of the Limitation Act refers to a suit of poession. If a suit of possession is barred by limitation, the very susbstantive right in respect of the property is extinguished. However, if the suit is for specific performance of a contract then the position is different. Article 65 to Schedule I of the Limitation Act, 1963 prescribes a timeline of 12 years, within which an aggrieved person may file a suit for recovery of possession of immovable property or any interest therein based on proprietary title (i.e. title bases on documents).