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LIMITATION ACT, 1963

G. M. WAGH

TABLE OF CASES

• INTRODUCTION....................................................................................................................
  • Object of Law of Limitation........................................................................................................
  • Effect of the Bar of Limitation....................................................................................................
    • Exception..............................................................................................................................
  • Constitutional Aspects of the Limitation Act...............................................................................
    • 1. Legislative Competence......................................................................................................
    • 2. Applicability of A. 14.........................................................................................................
    • 3. Applicability to A. 32.........................................................................................................
  • Salient Features of the Limitation Act, 1963...............................................................................
  • Applicability of Limitation Act, 1963..........................................................................................
  • Limitation, Laches, Acquiescence and Prescription.....................................................................
    • Laches and Acquiescence......................................................................................................
    • Prescription.........................................................................................................................
  • Starting Point of Period of Limitation........................................................................................
  • Institution of Suit Beyond the Period of Limitation...................................................................
• EXPIRY OF THE PERIODS OF LIMITATION ON A DAY WHEN THE COURT IS CLOSED (S. 4).
• EXTENSION OF PERIOD OF LIMITATION BY COURTS (CONDONATION OF DELAY)..............
  • Admission of Appeal or Application After Limitation.................................................................
  • ‘Sufficient Cause’.....................................................................................................................
• PERSONS UNDER LEGAL DISABILITY (SECS. 6-9)................................................................
  • Continuation of Disability Till the Death..................................................................................
• INSTANCES IN WHICH A SUIT IS NOT BARRED BY ANY LENGTH OF TIME (SEC. 10)...........
• COMPUTATION OF LIMITATION (SS. 12-24).........................................................................
  • Exclusion of Time (Ss. 12-15)...................................................................................................
    • Time in Legal Proceedings (S. 12).........................................................................................
    • Time in Applying for Leave to Sue as Pauper (s. 13).............................................................
    • Time Spent in Wrong Court (S. 14)......................................................................................
    • Exclusion of Certain Other Times (S. 15).............................................................................
• POSTPONEMENT OF LIMITATION (SS. 16-23)......................................................................
  • Death On or Before the Accrual of Right to Sue (S. 16).............................................................
  • Fraud or Mistake (S. 17)..........................................................................................................
  • Acknowledgement (S. 18).........................................................................................................
  • Payment on Account of Debt (S. 19).........................................................................................
  • Effect of Substituting or Adding New Plaintiff or Defendant (S. 21)...........................................
    • Effect of Adding Necessary Parties After Limitation..............................................................
    • Application to Pro Forma Parties.........................................................................................
    • Application to Proper Parties...............................................................................................
    • Misnomer or Misdescription of Party....................................................................................
    • Transposition of Parties.......................................................................................................
    • Parties Already Sufficiently Represented..............................................................................
  • Continuing Breaches and Torts (S. 22).....................................................................................
• PRESCRIPTION (SS. 25-27)..................................................................................................
• Athmaramayya vs. Seshappa
• Banwari vs. Sakhraj
• Bibi Asma vs. Suresh Prasad
• Chun Choudhary vs. State of Bihar
• Gurucharan vs. Surendra
• Jainarain vs. Governor-General of India
• K. Ammal vs. Chemgaran
• K. M. Mohammed Sultan vs. K. S. Muhammed Nurdin
• Karuppaswamy vs. C. Ramamurthy
• Keshbinder vs. Bindu Basini
• Mahadeva Rao vs. S. G. Chikanageshwaraiah
• Mahcidulci vs. Chirangilal
• Maniruddin vs. Sarat Chandra
• Navrattammal vs. State
• Raghunath vs. Madan Mohan
• Ramprosad vs. Vijayakrishnan
• S. F. Mazda vs. Durga Prasad Chamaria
• T. Motichand vs. Munshi
• Uppi vs. Mammavan
• Venkataramayyar vs. Kothandaramayyar
• Venkatasubbamma vs. Veeravadra

INTRODUCTION

The Law of Limitation prescribes the time-limit within which an aggrieved person can approach the court for redressal or justice. The suit or proceeding, if brought after the expiration of that time-limit, is said to be barred by limitation. This rule is basically meant to protect the long and established user and to indirectly punish persons who go into a long slumber over their rights.

OBJECT OF LAW OF LIMITATION

The laws of limitation are founded on public policy signified by the Latin maxim Vigilantibus non dormentibus jura subvenient (Law aids only to those who are vigilant and not those who sleep over their rights). Limitation laws suggest that all disputes, claims and remedies should be kept alive only for a legislatively fixed period of time, for otherwise disputes would be immortal when man is mortal. Though arbitrarily fixed limits may seem unfair to some, however they are most pragmatic insofar as there is rarely any justice in stale claims – and evidence also gets destroyed, hence keeping remedy alive serves no useful purpose. The statutes of limitation are described as statutes of repose, to quiet title, to to suppress fraud and perjury, to quicken diligence and to prevent oppression, and also to supply the deficiency of proofs arising from the ambiguity, obscurity or the antiquity or transactions. They proceed upon the presumption that claims are extinguished or ought to be held extinguished whenever they are not litigated within the prescribed period. Courts have expressed at least three different reasons supporting the existence of statutes of limitation, namely,

1. That long dormant claims have more of cruelty than justice in them;
2. That a defendant might have lost the evidence to dispute the State claim;
3. That persons with good causes of actions should pursue them with.

2 Introduction The doctrine of limitation and prescription is based on two broad considerations, namely,

1. That the right not exercised for a long time is non-existence;
2. That the rights in property and rights in general should not be in a state of constant uncertainty, doubt and suspense. Limitation to litigation puts a statutory bar on enforce an existing right after a certain period.

EFFECT OF THE BAR OF LIMITATION

“Limitation bars the remedy, but does not extinguish the right.” Rules of limitation are prima facie rules of procedure and do not create any rights in favour of any person nor do they define or create cause of action but simply prescribe that the remedy could be exercised only up to a certain period and not subsequently. The purpose of the statute of limitation is not to destroy the rights but it is founded on public policy fixing a life span for the legal remedy for the general welfare. A right which is recognised by the law is protected by the law by providing some remedy for its violation, as expressed by the maxim Ubi jus ibi remedium. Where a right is both recognised and protected by the law, it is called a ‘perfect right’. However, the remedy should be sought for within the period of limitation provided for the same. If not, the law will recognise the right but will not enforce it. The right is then said to be an ‘imperfect right’. Under s. 3 of the Limitation Act, 1963, a suit instituted, an appeal preferred or an application made beyond the time prescribed is to be dismissed by the court even if limitation was not set up and pleaded by the opposite party. Thus, the remedy provided by law to enforce a right is lost once the period of limitation expires. Wording of sec. 3 shows that it is the right to institute the suit which is barred but the original right on which the suit was to be based is not barred. A statute of limitations which is a procedural law, as distinguished from a statute which prescribes conditions precedent to a right of action which is a substantive law, does not go to the substance of a right, but only to the remedy.

4 Introduction Further, what is prohibited by sec. 3 is a claim based on a time barred right and not a defence based on it. What it says is that the suit instituted after the period of limitation should be dismissed but does not say that a defence in the written statement should be struck down or ignored. Example A has taken a loan of Rs. 10,000 from B on 12.3.2016. He has not repaid that loan. In June 2020 A decided to baught a car and he wanted to sell his motorcycle for Rs. 25,000. B approached A to purchase the motorcycle. A agreed to sell the motorcycle to B and delivered it to B. B paid only Rs. 15,000 to A. When asked by A about the remaining amount ot Rs. 10,000, B told A that he had adjusted that amount towards the debt of Rs. 1,000 owed by A to B. B sued A for the remaining price of the motorcycle, Rs. 10,000. In his written statement B took defence that he has recovered the loan of Rs. 10,000 which was due from A to him. The Court will accept the defence and dismiss the suit. However, the above case must be distinguished from a case of set-off or counter- claim. In these cases the amount is not recovered by the defendant from the plaintiff. He claims that the amount which is due from plaintiff to defendant should be deducted from the amount due from defendant to the plaintiff. On the contrary, in the above example, defendant B had already recovered the amount from the plaintiff A. He only says that he has already recovered the amount from the plaintiff. Example A has taken a loan of Rs. 30,000 from B. A has sold this motorcycle to B for Rs. 25,000. B has not paid the price of motorcycle to A. So also A has not repaid the loan taken by him from B. B sues A for the loan of Rs. 30,000. A claims set-off of Rs. 25,000 and contends that he owes only Rs. 5,000 to B. Set-off must be within limitation as on the date of presenting the written statement in which it is claimed. Counter-claim must be within limitation as on the date of institution of the suit in which it is claimed. In the example previous to the last, B ’s contention was that he has already recovered the loan from the plaintiff A , while in the last example, A ’s contention was that he is entitled to recover the loan from the plaintiff B.

Effect of the Bar of Limitation 5 An indebtedness does not lose its character as such merely because it is barred, it still affords sufficient consideration to support a promise to pay, and gives a creditor an insurable interest. Under Sec. 25(3) of the Indian Contract Act, 1872, an agreement in writing undertaking to pay a time barred debt is valid and binding. It is well established proposition that payment of a time barred debt is a valid consideration for transfer of property. In suit for accounts the bar of limitation is not consequential, although the remedy is barred. A decree can be passed in favour of the defendant for the balance if found due to him.

EXCEPTION

The Limitation Act, 1963 lays down a rule of substantive law in Sec. 27, which is an exception to the general rule that law of limitation does not extinguish the remedy. Accordingly, if an owner, whose immovable property is encroached upon, suffers his right to be barred by the law of limitation, the practical effect is the extinction of his title in favour of the party in possession. It is of the utmost consequence in India that the security which long possession affords should not be weakened. As between private owners contesting inter so the title to lands, the law has established a limitation of twelve years: after that time it declares not simply that the remedy is barred, but that the title is extinct in favour of the possessor, and the possessor perfects his title to the land by adverse possession.

CONSTITUTIONAL ASPECTS OF THE LIMITATION ACT

The following three Constitutional aspects of Constitutionality of the Limitation Act, 1963 are determined by the Supreme Court:

1. Legislative Competence
2. Application of art. 14
3. Application to art. 32

Constitutional Aspects of the Limitation Act 7

3. APPLICABILITY TO ART. 32

T. Motichand vs. Munshi The Supreme Court held that no period of limitation can be prescribed for a person aggrieved by the State action challenging such action as violating fundamental rights and filing a petition under art. 32 of the Constitution before the Supreme Court. Such principle of limitation period would have the effect of putting curbs in the way of the enforcement of fundamental rights and might be challenged under art. 13(2) of the Constitution which states, “The State shall not make any law which takes away or abridges the rights conferred by this part and any law made in contravention of this clause shall, to the extent of the contravention, be void.” Law of limitation abridges a right, and hence cannot be applied to judicial remedies available for violation of fundamental rights.

SALIENT FEATURES OF THE LIMITATION ACT, 1963

The Salient Features of the Limitation Act, 1963 are as follows:

1. The Limitation Act, 1963 contains 32 Sections and a Schedule which is divided into three divisions contains 137 Articles. (a) First division deals with Suits (Arts. 1 to 113), (b) Second division deals with Appeals (Arts. 114-117), and (c) Third division deals with Applications (Arts. 118-137). The sections provide for rules of limitation and articles provide for periods of limitation in specific suits and proceedings.
2. No uniform of limitation for suits under the classifications has been attempted. (a) The longest limitation period of 30 years (under the Indian Limitation Act, 1908 it was 60 years) is in the suits of the following nature: (i) Suit by the mortgagor for the redemption or recovery of possession of the immovable property mortgaged; (ii) Suits by mortgagees for foreclosure; and (iii) Suits by or on behalf of the Central Government or any State Government including the State of Jammu and Kashmir.

8 Introduction (b) A longer period of 12 years has been prescribed for various kinds of suits relating to immovable property, trusts and endowments, and in case of execution applications. (c) A period of 3 years has been prescribed for suits relating to accounts, contracts, and declarations, suits relating to decrees and instruments and suits relating to movable property. (d) A period varying from 1 to 3 years has been prescribed for suits relating to torts and miscellaneous matters and for suits for which no period of limitation has been provided elsewhere in the Schedule to the Act. (e) The minimum period of 30 days for appeals.

3. The Limitation Act, 1963 has avoided illustrations on the suggestion of the Third Report of the Law Commission on the Limitation Act of 1908 as the illustrations are unnecessary and often are misleading.
4. The scope of the Limitation Act, 1963 has been considerably widened to include almost all Court proceedings. The extended definition of ‘application’ has been given so as to include any petition, original or otherwise. The change in the language of Sections 2 and 5 of the Limitation Act, 1963 includes all petitions and also applications under special laws.
5. The definitions of ‘application’, ‘plaintiff and ‘defendant’ have been enlarged in the new Act so as to include not only a person from whom the ‘applicant’, ‘plaintiff, or ‘defendant’ as the case may be, derives his title but also a person whose estate is represented by an executor, administrator or other representative.
6. Sec. 27 provides for law of prescription under which the expiry of period of limitation not only bars the remedy, but also extinguishes the right.
7. There are provisions in the Limitation Act, 1963 which modify the period of limitation under special circumstances: (a) Secs. 4 and 5 provide for extension of period of limitation in certain situations. (b) Secs. 6 and 7 deal with the cases where the person who has to institute a suit or proceeding is suffering from some disability such as minority or unsoundness of mind. (c) Secs. 12-15 provide for exclusion of certain periods of time while computing the period of limitation for filing suits and proceedings. (d) Secs. 16-23 provide for postponement of limitation in certain cases.

10 Introduction The chief points to be considered in connection with laches are:

1. Acquiescence on the plaintiff’s part;
2. Any change of position on the defendant’s part. If a party having a right stands by and allows another person to violate it, he cannot afterwards complain. This is the proper sense of the word ‘acquiescence’. The whole fault of the plaintiff lies in this that he remains silent while the violation of the right is in progress. In some cases this may be construed to mean the giving implied assent to the violation of his right. Therefore, it is unjust to give the plaintiff a remedy where he has by his conduct waived the remedy. In other cases, the plaintiff whose rights are violated, by his silence, allows the defendant to be mislead about his own rights.

PRESCRIPTION

The Indian Limitation Act deals with the Law of Prescription as well as the Law Limitation. Prescription is the acquisition of title by possession of property for the prescribed period provided that possession was neither forcible nor clandestine. Such possession acquires its title chiefly on account of the fact that those who had interest in the property have allowed their rights to get barred by not caring to pursue their remedies within the time allowed by law to enforce those remedies. Limitation simply bars the judicial remedy but it neither affects the extra judicial remedies nor the substantive right itself. Prescription bars not only the judicial remedy but a extinguishes a substantive right. Limitation as affecting the remedy is an adjective law. Prescription on the other hand as affecting the right itself is a substantive law. Limitation is negative in its operation depriving a person of a power which he possessed before. Prescription, on the other hand, is affirmative conferring on a person right to that which he hitherto enjoyed in fact but not in law.

Starting Point of Period of Limitation 11

STARTING POINT OF PERIOD OF LIMITATION

The basis of law of limitation is that the person whose rights are violated has to act quickly and seek the remedy to which he is entitled without unnecessary delay. Therefore, the period of limitation begins on the day on which the cause of action arose, or the day on which the aggrieved person got the knowledge of the violation of his right, whichever is later.

INSTITUTION OF SUIT BEYOND THE PERIOD OF LIMITATION

Sec. 3 lays down that a suit instituted, an appeal preferred, or an application made beyond the prescribed period of limitation shall be dismissed, although limitation has not been pleaded as a defence. This means that where the court finds that a suit or other proceeding has been instituted after the prescribed period of limitation, is must be dismissed. Same rule is applicable to appeals and applications, but that rule has to be read with sec. 5 of the Limitation Act, 1963.

EXTENSION OF PERIOD OF LIMITATION BY COURTS

(CONDONATION OF DELAY)

A Court may grant extension of period of limitation in appeals and applications other than applications for execution, and no others (Sec. 5).

ADMISSION OF APPEAL OR APPLICATION AFTER LIMITATION

The general rule is that every suit instituted, appeal preferred or application made after the period prescribed there for by the first schedule shall be dismissed. Sec. 5 is an exception to this general rule and provides that an appeal or any other than an execution application may be admitted after period of limitation prescribed therefor. When the appellant or applicant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application within such period. But mere proof of existence of sufficient cause for not filing the proceeding within the prescribed period does not ipso facto compel the court to extend the time. The court has a discretion which is of course a judicial and not an arbitrary discretion, to admit or refuse to admit the proceeding even if sufficient cause is shown. The existence of sufficient cause for not filing the proceeding in time is thus merely a condition that must be satisfied before the court can exercise its power of granting or refusing to grant the extension of time. If the condition is not satisfied, there is no room for the applicability of the discretion. Where no cause has been given for filing the proceeding out of time, there arises no opportunity of considering the sufficiency or otherwise of the reason for that fact, and there cannot be any room for the exercise of the discretion given by the section. If the condition is satisfied, then the court gets a discretionary power to grant or refuse the prayer for extension of time. But it may in its discretion refuse to extend the time even though there may be sufficient cause for the delay. The extension of time is thus a matter of concession or indulgence to the applicant and cannot be claimed by him as a matter of absolute right.

14 Extension of Period of Limitation by Courts(Condonation of Delay)

‘SUFFICIENT CAUSE’

For obtaining an extension under sec. 5 the appellant or the applicant must satisfy the court that he had sufficient cause for not preferring the appeal or making the application within the prescribed period. What is a ‘sufficient cause’ has nowhere been defined in the Limitation Act except that the Explanation indicates what shall be the sufficient cause in the case of an appellant, or who was misled by any order, practice or judgement of the High Court in ascertaining or computing the prescribed period. But it has been held that sufficient cause must mean a cause which was beyond the control of the party invoking sec. 5. A cause for delay which by due care and attention a party could have avoided cannot be a sufficient cause. However, the expression ‘sufficient’ cause’ should receive a liberal construction. The extension of time cannot be obtained for instituting a suit as sec. 5 does not apply to suits. The reason is that the period of limitation allowed in most of the suits extends from three to twelve years, whereas in appeal and applications, it does not exceed six months. Therefore it is necessary that some concession should be made in respect of these appeals and applications, to provide for circumstances which hinder a person from filing his appeal or application within the short period of time allowed. If an appellant or applicant is misled by any order, practice or judgement of the High Court in ascertaining or computing the prescribed period of limitation, he must be regarded as having shown sufficient cause for not preferring the appeal or making the application within the period allowed by law, and he is entitled to extension of time under sec. 5. But even in such a case if he is guilty of undue delay, the delay may not be condoned.