This article is written by Sachi Ashok Bhiwgade, B.A.LLB (Hons.) student of Hidayatullah National Law University, Raipur. This article gives an overview of the Limitation Act, 1963.

Introduction

The law of limitation finds its root in the maxims “Interest Reipublicae Ut Sit Finis Litium” which means that in the interest of the state as a whole there should be a limit to litigation and “vigilantibus non dormientibus Jura subveniunt” which means the law will assist only those who are vigilant with their rights and not those who sleep upon it. The law of limitation specifies the statutory time frame within which a person may initiate a legal proceeding or a legal action can be brought. If a suit is filed after the expiry of the time prescribed it will be barred by the Limitation. It means that a suit brought before the Court after the expiry of the time within which a legal proceeding should’ve been initiated will be restricted.

History of the Act

The law of limitation developed in stages and finally took the shape of the Limitation Act of 1963. Prior to 1859, there was no law of limitation applicable to the whole of India. It was only in 1859 that a law relating to limitation (Act XIV of 1859) was enacted that was applicable to all the Courts. The Limitation Act was subsequently repealed in the years 1871, 1877, 1908. The Limitation Act, 1908 was repealed by the Third Law Commission and the Limitation Act of 1963 came into force. The 1908 Act referred only to foreign contracts whereas the 1963 Act talked about contracts entered into the territory of Jammu and Kashmir or in a foreign country.

Object of the Act

The Law of limitation prescribes a time period within which a right can be enforced in a Court of Law. The time period for various suits has been provided in the schedule of the Act. The main purpose of this Act is to prevent litigation from being dragged for a long time and quick disposal of cases which leads to effective litigation. As per the Jammu and Kashmir Reorganisation Act, 2019, provisions of the Limitation Act will now apply to the whole of India. The Limitation Act, 1963 contains provisions relating to the computation of time for the period of limitation, condonation of delay, etc. The Limitation Act contains 32 sections and 137 articles and the articles are divided into 10 parts.

Whether the Act is exhaustive?

The Limitation Act is exhaustive with respect to all matters expressly dealt in it. It cannot be extended by analogy. Ordinarily, the Act applies only to civil cases except in the matter expressly and specifically provided for that purpose.

Retrospective Operation

In BK Education Services Private Limited v. Parag Gupta and Associates, the Supreme Court clarified that since the law of limitation is procedural in nature, it will be applied retrospectively. The Supreme Court in Thirumalai Chemicals Ltd v. Union of India observed that statutes of limitation are retrospective so far as they apply to all legal proceedings brought after their operations for enforcing causes of action accrued earlier. In Excise and Taxation v. M/S Frigoglass India Private Ltd, the Punjab and Haryana High Court ruled that It is well-settled that the law of limitation is a procedural law and operates retrospectively unless it has been provided differently in the amending statute. In other words, unless there is a contrary intention manifested by express or necessary implication of the legislation itself, procedural law is generally retrospective law.

Limitation Bars Remedy

Section 3 lays down the general rule that if any suit, appeal or application is brought before the Court after the expiry of the prescribed time then the court shall dismiss such suit, appeal or application as time-barred. The law of limitation only bars the judicial remedy and does not extinguish the right. In other words, It means that the statute of limitation prescribes only the period within which legal proceedings have to be initiated. It does not restrict any period for setting up a defence to such actions. Hence, the original right to suit is not barred. However, Section 27 is an exception to this rule.

The Supreme Court in Punjab National Bank and Ors v. Surendra Prasad Sinha held that the rules of limitation are not meant to destroy the rights of the parties. Section 3 only bars the remedy but does not destroy the right which the remedy relates to.

In case of Against the Judgement in As 15/1996 v. K.J Anthony, the Court held that a defendant in a suit can put forward any defence though such defence may not be enforceable in the court, for being barred by limitation.

It was held in Bombay Dyeing and Manufacturing v. State of Bombay that the statute of limitations only bars the remedy but does not extinguish the debt.  

Limitation Does Not Bar Defence

The law of limitation does not restrict the defendant if he raises a legitimate plea in his defence even though the suit is time-barred. It was held in Rullia Ram Hakim Rai v. Fateh Singh, the bar of limitation does not stand in the way of defence. It only bars action and it is only its recovery that is time-barred. There is no provision that prohibits or prevents a debtor from clearing his time-barred outstandings.

The Supreme Court observed in Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi, the Limitation Act takes away the plaintiff’s remedy to enforce his rights by bringing an action in a court of law, but it does not place any restriction on the defendant to put forward his defence though such defence is barred by limitation and is unenforceable in the Court. 

Application to courts

Under Section 3(c), an application by a notice of motion in a High Court can be made when the application is presented to the proper officer of that court. If the period prescribed for any application expires on the day on which the court is closed, the application shall be made on the day on which the court reopens as per Section 4. 

Plea of limitation: Duty of Court

The Court is under an obligation to dismiss a suit if it is filed beyond the time prescribed by the Limitation Act. The provisions of Section 3 are mandatory and the Court will not proceed with the suit if it is barred by time. Under Section 3 of the Act, it is clearly mentioned that every suit instituted, appeal preferred and the application made after the prescribed period shall be dismissed. Even though limitation has not been set up as a defence.

It was held in Craft Centre v. Koncherry Coir Factories, it is the duty of the plaintiff to convince the Court that his suit is within time. If it is out of time and the plaintiff relies on any acknowledgments in order to save the limitations then he has to plead them or prove, if denied. The Court further held that, provision of Section 3 is absolute and mandatory and if a suit is barred by the time the court is under a duty to dismiss the suit even at the appellate stage though the issue of limitation may not have been raised. It was held in ICICI Bank Ltd v. Trishla Apparels Pvt Ltd that there is no doubt that the court is duty-bound to dismiss the suit in a case if it is barred by time even though no such plea has been taken by the opposite party.

In Mukund Ltd v. Mumbai International Airport, it was ruled that it is explicitly clear that when a suit is barred by limitation, the Court is precluded from proceeding on the merits of the contentions and in fact is obliged to dismiss the suit.   

Starting point of Limitation

The time from which period of limitation begins to run depends upon the subject matter of the case and a specific starting point of such period is provided extensively by the Schedule in the Act. It generally starts from the date when the summons or notice is served, or the date on which the decree or judgment is passed, or the date on which the event that forms the basis of the suit takes place. The Supreme Court in Trustee’s Port Bombay v. The Premier Automobile held that the starting point of limitation is the accrual of the cause of action.

Expiry Period of Limitation When Court is Closed

When a court is closed on a certain day and the period of limitation expires on that day, then any suit, appeal or application shall be taken up to the Court on the day on which it reopens. This means that a party is prevented not by his own fault but because of the Court being closed on that day. Section 4 of the Limitation Act provides that when the period of limitation is prescribed for any suit, appeal or application and such period expires on a day when the Court is closed, such suit, appeal or application shall be instituted, preferred or made on the day on which the Court reopens. The explanation to this section mentions that within the meaning of this Section a Court shall be deemed to be closed on any day if during any part of the normal working of the Court it remains closed on that day.

For instance, if a Court reopens on 1st January and the time for filing the appeal expires on 30th December (the day on which the Court remains closed) then the appeal can be preferred on the 1st of January when the Court reopens.

Condonation of Delay

Condonation of delay means that extension of time given in certain cases provided there is sufficient cause for such delay. Section 5 talks about the extension of the prescribed period in certain cases. It provides that if the appellant or the applicant satisfies the court that he had sufficient cause to not prefer the appeal or application within that period, such appeal or application can be admitted after the prescribed time. This Section further mentions that an application made under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908). The explanation states that in ascertaining or computing the period prescribed when the applicant or appellant has been misled by any order, practice or judgment of the High Court. It will be a sufficient cause within the meaning of this section.  

However, If a party does not show any cogent ground for delay then the application, suit or appeal will be rejected by the court.

In the case of State of Kerala v. K. T. Shaduli Yussuff, the court held, whether or not there is sufficient cause for condonation of delay is a question of fact dependant upon the circumstances of a particular case.

Sufficient Cause

Sufficient cause means that there should be adequate reasons or reasonable ground for the court to believe that the applicant was prevented from being proceeding with the application in a Court of Law.

In State (NCT of Delhi) v. Ahmed Jaan, it was said that the expression “sufficient cause” should receive a liberal construction. In Balwant Singh (Dead) v. Jagdish Singh & Ors, the Supreme Court held that it is obligatory upon the applicant to show sufficient cause because of which he was prevented from continuing to prosecute the proceeding in the suit. In this case, there was a delay of 778 days in filing the application for bringing the legal representatives on record. 

In Ornate Traders Private Limited v. Mumbai, the Bombay High Court ruled that where there is sufficient cause shown and the application for condonation of delay has moved bonafidely, the court would usually condone the delay but where the delay has not been explained at all and there is an inordinate delay in addition to negligence and carelessness, the discretion of the court would normally be against the applicant. 

The Bombay High Court in Brij Indar Singh v. Kansi Ram observed that the true guide for the Court while exercising jurisdiction under Section 5 is whether the litigant acted with sensible and reasonable diligence in prosecuting the appeal.

Whether an applicant has given a sufficient cause or not depends upon the discretion of the court and the circumstances of each case. For instance, a Court can condone the delay on medical grounds.

Case law: Collector (LA) v. Katiji (1987)

Facts

In this case, an appeal was preferred by the State of Jammu and Kashmir against the decision of enhancing the compensation in the matter of acquisition of land for a public purpose, raising important questions with regard to principles of valuation. An appeal for condonation of delay was filed but was dismissed by the High Court as time-barred because it was four days late. The State later appealed to the Supreme Court by special leave.

Held

The Supreme Court allowed the appeal and ruled that the expression ‘sufficient cause’ under Section 5 is adequately elastic to enable the Court to do substantial justice to parties. The order of the High Court dismissing the appeal as time-barred was set aside and the matter was remitted back to the High Court to dispose of the appeal on merit after affording a reasonable opportunity of hearing to both sides.

The Supreme Court also laid down certain principles to be followed by the Court while interpreting the matter relating to condonation of delay:

• Normally a litigant does not get the benefit by lodging a late appeal;
• Refusal to condone delay might result in a meritorious matter being thrown out; 
• Delay must be explained in a pragmatic matter;
• A litigant does not stand to benefit by resorting to delay but in fact, he is at serious risk;
• It must be understood that the judiciary is resected not because of its power to legalize injustice on technical grounds but because it is capable of removing injustice.

Delay by Government

Under Section 25, where a property belonging to the Government over which access and use of light or any way or watercourse or the use of any water, have been peaceably and openly enjoyed as an easement and as of a right by any person claiming title thereto, without any interruption for thirty years, the right to such access and use of light or air, or way or waterway, or use of their easement shall be absolute and indefeasible, In case of a private property it is twenty years.   

Exclusion of Time

Section 12 to Section 15 deals with the exclusion of time under the Limitation Act. Section 12 talks about the time that has to be excluded for computing time of limitation in legal proceedings. Sub-section (1) says that the day on which the cause of action arises that day shall be excluded while computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned.

The following time has to be excluded from computing the period of limitation:

• The day on which the period of limitation for any suit, appeal or application has been reckoned.
• In case of an appeal or an application for leave to appeal/revision/review of a judgment:                                                    

i) The day on which the judgment complained of was pronounced.

ii) Necessary time taken for obtaining a copy of the decree, sentence, order appealed from or sought to be revised or reviewed.

• In case of decree or order is appealed from or sought to be revised or reviewed or an application for leave to appeal from a decree: 

i) Time requisite for obtaining a copy of the judgment

• In case of application to set aside an award: 

i) Time requisite for obtaining a copy of the award  

Explanation to this Section states that in computing the time necessary for obtaining a copy of the decree or order the time taken by the court to prepare the decree or order before an application for a copy of the decree or order is made shall not be excluded. 

Under Section 13, where an application for leave to sue or appeal as a pauper (indigent) has been made and rejected, the time spent by the applicant in prosecuting in good faith shall be excluded.

Under Section 14, if a party is proceeding in good faith in a court without jurisdiction any suit or application the time spent by the party should be prosecuting another civil proceeding with due diligence and that prosecution shall be in good faith shall be excluded.

Under Section 15, the following time shall be excluded:

• The day of the issuance and withdrawal of the stay order or injunction.
• In case where a previous consent or sanction of the government is required – the time spent on obtaining the consent or sanction.
• In case of proceedings for winding up of a company- the time during which the receiver or liquidator was appointed.
• In case of a suit for possession by a purchaser at a sale in execution of decree- the time during which proceeding to set aside sale has been prosecuted.
• The time during which the defendant is absent from India and under territory outside India under the administration of the Central Government.

Postponement of Limitation

Postponement of limitation means extending the period of limitation. Section 16 to 23 of the Act deals with the postponement of limitation.

In the following cases the period of limitation will not begin to run:

• Under Section 16: Firstly, where a person having the right to sue or make an application has died before the right accrues or right accrues only on the death of that person- the period of limitation will be computed from the time when there is a legal representative who is capable of instituting. Secondly, where a person against whom the right to sue or make an application would have accrued dies or would have accrued on his death, limitation will start when there will be a legal representative of the deceased.
• Under Section 17: Where the suit or application is based upon fraud, mistake or concealment by fraud- the period of limitation will not start unless the plaintiff or applicant has discovered the fraud, concealment or mistake.
• Under Section 18: In case of an acknowledgment of liability in respect of any property or right-a-fresh period of limitation will be computed from the time acknowledgment was signed.
• Under Section 19: where payment on account of a debt or of interest on legacy- a fresh period of limitation will be computed when payment was made.
• Section 20: Section 20 is only a further explanation of section 18 and section 19. It says that under a disability the expression ‘agent duly authorised’ will include the lawful guardian, committee, manager or agent duly authorised by such guardian, committee or manager. 
• Section 21: Where a new plaintiff or defendant is added or substituted after the institution of suit- the suit will be deemed to be instituted when he was so made the party. However, if the new plaintiff or defendant was added due to a mistake in good faith and the Court is satisfied, the suit shall be deemed to have been instituted on an earlier date.
• Under Section 22: Where there is a continuing breach of contract or tort – a fresh period of limitation will start at the moment when the breach or tort continues.
• Under Section 23: In case of suits for compensation for acts not actionable without special damage- limitation period will start from the time when the injury occurs.      

Extinguishment of Right

General Rule that the law of limitation only bars the remedy but does not bar the right itself. Section 27 is an exception to this rule. It talks about adverse possession. Adverse possession means someone who is in the possession of another’s land for an extended period of time can claim a legal title over it. In other words, the title of the property will vest with the person who resides in or is in possession of the land or property for a long period. If the rightful owner sleeps over his right, then the right of the owner will be extinguished and the possessor of the property will confer a good title over it. Section 27 is not limited to physical possession but also includes de jure possession. As per the wordings of this Section, it applies and is limited only to suits for possession of the property.

Void Order: Limitation

An order that exceeds the jurisdiction of the court is void or voidable and can be taken up in any proceeding in any court where the validity of the order comes into question.

In Sukhdev Raj v. State of Punjab, the court held that even for void orders if the suit is filed then the period of limitation prescribed by the schedule appended to the Limitation Act is applicable.

The Court in Devi Swarup v. Smt Veena Nirwani ruled that it is a well-settled proposition that even void orders have to be challenged so that the same can be declared as void. Even a void order continues to have effect till the same is declared non-est.

In State of Punjab and Ors v. Gurdev Singh, where the question arose whether for avoiding an ultra vires order of dismissal, an employee is required to approach a court within the prescribed time by the law of limitation. The argument was based upon the proposition that to challenge a void order, there is no limitation period prescribed and the aggrieved person can approach the Court at any time. The Apex Court held that to say that a suit is not governed by the law of limitation runs afoul to the Limitation Act. The statute of limitations was intended to provide a time limit for all suits conceivable.   

Case Law: Exception: Union Carbide Corporation. v. Union of India (1991)

• This case involved Union Carbide (India) Ltd (UCIL) which was a subsidiary of the Union Carbide Corporation (UCC), New York. One of the world’s largest disaster occurred on the fateful night of 2nd and 3rd December 1984. Methyl Isocyanide Gas (MIC) considered the most toxic chemical in industrial use leaked from the tanks used for its storage in the Union Carbide Company at Bhopal causing the death of thousands of people. 
• An Act was passed by the Central Government on 23 March 1985 named the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 to authorise the Central Government to ensure that the claims arising out of or in connection to Bhopal Gas Tragedy are dealt with effectively, swiftly and to the best advantage of the claimant and for matters related to it. 
• The Union of India in the exercise of its power conferred by the Act instituted an action on behalf of the victims for the award of compensation before the US District Court, Southern District of New York.
• Justice Keenan of the Federal District Court dismissed the case as forum non conveniens with the condition that Union Carbide shall consent to the jurisdiction of the Indian court and shall waive the defence based upon the statute of limitations.
• The Bhopal District Court made an order for payment of compensation of rupees 350 crores as interim compensation. This award was challenged in the High Court and the compensation amount reduced to rupees 250 crores. Later, both the UCC and the Union of India appealed by special leave against the order of the High Court. The Supreme Court recorded settlement of claims in the suit for U.S. Dollar 470 million and for the termination of the civil and criminal proceeding. Soon petitions were filed in the Supreme Court challenging the constitutional validity of the Act. The judgment, in this case, was pronounced on 22 December 1989 upholding the validity of the Act.             
• The Bhopal Act under Section 8 provides that if a claim is registered under the provisions of this Act then the provisions of the Limitation Act shall be excluded. Section 8 states that in computing, under the Limitation Act,1963 or any other law for the time being in force, the period of limitation for the purpose of instituting a suit or other proceeding for the enforcement of the claim, any period after the date on which such claim is registered under, and in accordance with, the provisions of the Scheme shall be excluded. 
• Further, by virtue of Section 11, the Bhopal Act has an overriding effect over any other law inconsistent with this Act. Section 11 states that the provisions of this Act and of any Scheme framed thereunder shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act. 

Hence, the Union Carbide case serves as an exception to the Limitation Act for it excludes the Limitation Act,1963 from the purview of the Bhopal Act, 1985.     

Conclusion

The law of limitation prescribes the time within which a person can enforce his legal right. This Act keeps a check on the cases so that they are not dragged for over a long time. This Act also recognizes the fact that there are situations when persons instituting a suit or preferring an appeal for a genuine cause are unable to institute a suit within the time prescribed in the Act and the same criteria cannot be applied to every situation.

References

• Limitation Act,1963.
• http://lawcommissionofindia.nic.in/reports/Report193.pdf
  

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