Monday, 9 April 2012

Limitation for filing of Suits and other Applications and condonation of delay

The Limitation Act, 1963


The right of a person, if he has any, must be exercised within reasonable time, or else his said right will be forfeited as a penalty for his neglect. Laws come to the assist of the vigilant and not to the sleepy, so said by Salmond in his Jurisprudence.

A period of three years has been prescribed for suits relating to accounts, contracts, and declarations; suits relating to decree and instruments; and suits relating to movable properties. A period varying from 1 to 3 years has been prescribed for suits relating to torts and miscellaneous maters.

The doctrine of limitation is based on broad consideration, in the words of Abbott, CJ, in the case of Battley versus Faulkner, “the Statutes of limitation was intended for relief and quiet of the defendant and to prevent persons from being harassed at a distant point of time, after the committing of the injury complained of.” Also when the evidence are lost by defendant with the passage of time, at the benefit of the Plaintiff.

The condonation of delay is the discretion of the court and such discretion is to be exercised if the delay is within certain limits. But the length of delay is not a matter because acceptability of the explanation is the only criterion. If the explanation does not smack of malafides, or it is not put forth for dilatory strategy, the court must show utmost consideration to the Suitor. N Balakrishnan versus M Krishnamurthy – (1998) 7 SCC 123.

The discretion given in section 5 has to be exercised to advance substantial justice.

Speaking order for dismissal of Application for condonation of delay.
SBI versus Vendanathangal Dairy farm – (2000) 10 SCC 538.

Hearing of the other side must: Saraswathiamma versus Asst Commissioner – (2004) 4 Raj LW 555 (SC).

Delay can be condoned even when no written application is made:
Mahabir Singh versis Chief of Army Staff – (1990) Supp SCC 89.

The word “Sufficient cause” should receive liberal construction. The delay should be condoned when no negligence, inaction, or want of bonafides is imputable to the Appellant. Sandhya Rani versus Sudha Rani – AIR 1978 SC 537.

S.22 Continuous cause of action: disturbance of right of worship is a continuous wrong; A notice to quit India is a continuous wrong; An infringement of Trade mark is a continuous wrong.

Law of limitation only bars the remedy but does not extinguish the right. See contract Act 1872 section 26.

Section 27 Adverse possession: 12 years. Adverse possession of land by a wrong doer not only bars the remedy of the original owner to recover possession but also extinguish his title and confers a good title upon the wrong doer.
Mohammed versus Sarju – AIR 1942 All 42;
Fakirappa versus Ningappa – AIR 1949 Bom 266.

A person who claim adverse possession has to prove that he has remained in uninterrupted possession of the property to the knowledge of the true owner and has denied the title of the true owner and asserted his own right of ownership in the property to the exclusion of the true owner.

Broadly Suits can be divided into 9 classes:

Suits relating to Accounts (1 to 5)
Suits relating to Contracts (6 to 55)
Suits relating to Declarations (56 to 58)
Suits relating to Decree and Instruments (59 to 60)
Suits relating to Immovable property (61 to 67)
Suits relating to Movable property (68 to 71)
Suits relating to Tort (72 to 91)
Suits relating to Trusts and Trusts property (92 to 96)

S,3 Limitation Act – dismissal of Suit - (2005) 4 SCC 613

S.5 of the Limitation Act – Delay in condonation (2001) 9 SCC 106

Retrospective and prospective operation – (2011) 6 SCC 739 – Paras 45, 46.

Procedural law – (2011) 6 SCC 321 – Paras 16, 29, 31 to 37.

Section 5: Sufficient cause – (2010) 14 SCC 343; (2011) 3 SCC 545

Right to sue – when first accrues – (2011) 9 SCC 126

A fresh period of limitation: Section 18: An acknowledgement of liability extends the period of limitation. This section covers case where the original debt remains intact and a promise or an acknowledgement is made in respect of it and given a new starting point of limitation.

An acknowledgement within the meaning of this section must have the following essential attributes –

  1. The acknowledgement must be an affirmative admission of an existing liability; AIR 1963 MP 181
  2. It must be made by the person under the liability or by a person authorized to acknowledge;
  3. The liability must be subsisting on the date of the acknowledgement;
  4. The acknowledgement must be in writing and signed;
  5. The acknowledgement must be signed either by the debtor himself or by the agent duly authorized in that behalf;
  6. The acknowledgement need not be made to the creditor; AIR 1954 Pat 575.
  7. The acknowledgement may not indicate the precise amount of debt / liability; it is sufficient if the debtor acknowledges that something is due or may be due. AIR 1965 J & K 51.
  8. There may not be a promise to pay and mere acknowledgement of debt is sufficient to constitute “acknowledgement” within the meaning of this section, thereby giving the fresh period of limitation to the creditor. AIR 1938 Pat 139; AIR 1950 Bom 94; AIR 1961 SC 1236; AIR 1996 HP 14 (DB); AIR 1971 SC 2551; AIR 1925 Mad 261.
  9. An acknowledgement accompanied by refusal to pay is a valid acknowledgement within the meaning of this section. AIR 1963 Mad 403.
  10. An acknowledgement of liability whether express or implied, is good evidence of the existence of the liability. AIR 1935 All 129; AIR 1941 Nag 294.
  11. The acknowledgement need not directly refer to the liability sought to be enforced in the suit. AIR 1985 Ker 307, 308.
  12. An acknowledgement of liability need not be in respect of debt only; it may be in respect of any property or right which is the subject matter of the suit. 78 IC 617; AIR 1928 All 310.
  13. An absence of denial to a demand made does not operate as an acknowledgement. 33 Cal 1047 (PC); AIR 1917 All 304; AIR 1928 Sind 45; AIR 1935 All 129; AIR 1935 Rang 152; AIR 1936 All 522; AIR 1939 Cal 488; AIR 1939 All 483; AIR 1951 Bom 255.
  14. An acknowledgement by a legal practitioner is a valid acknowledgement to bind his clients. 18 All 384.
  15. A claim to set off is an valid acknowledgement;
  16. Oral evidence, subject to the provisions of Indian Evidence Act, 1872

The inclusion of a debt in a Balance Sheet of a company registered under the Companies Act 1956, which is duly prepared and authenticated would amount to an admission of liability and therefore satisfies the requirement of law for a valid acknowledgement under section 18 of the limitation Act. Premier Rubber Co. versus KSSI Corporation 1980 Ker LT 504; Rampur Engg Co Ltd versus Raza Ali 1966 ALJ 385; J A Dixit versus Official Liquidator, AIR 1963 All 284; (1968) 2 Andh WR 567, AIR 1968 Raj 214; Raja of Vizianagaram versus Official Liquidator AIR 1952 Mad 136, 145, Col 1; (1987) 62 Com Cases 239 (Kar); (1967) 37 Com Cases 796 (Ker); (1998) 4 Comp LJ 519 (Delhi);

Statutes of limitation, since they restrain a man from enforcing his rights must receive a strict construction. A document alleged to contain an acknowledgement of liability must be liberally construed. AIR 1919 Mad 941, 942; 1991 JLJ 263 (MP).

An application for winding up is not a suit or proceeding to enforce a mortgage or charge on immovable property. Therefore, the period of limitation under Article 62 of the Limitations Act, 1963 for presenting a winding up petition is 12 years from the date on which the mortgage debt becomes due. Pandam Tea Co Ltd, (1975) 45 Com Cases 67 (Cal)

Section 5 of the Limitation Act 1963, again gives the discretion to the Presiding Judicial Authority to condone the delay if the Applicant shows sufficient cause for delay in filing.

Some of the High Courts and Supreme Court observations on the exercise of judicial discretion, on condonation of delay.

The Hon'ble BOMBAY HIGH COURT, thru Hon'ble Judges:B.B.Vagyani, J. In Sonerao Sadashivrao Patil Versus Godawaribai W/o Laxmansingh Gahirewar, Stated-

This Civil Revision Application, Latur raises a question as to how the concept of sufficient cause in the matter of condonation of delay is to be interpreted and what should be the approach of the Court in exercising the discretionary power in this behalf.

The discretion is given to the Court to condone delay and admit the Appeal in order that judicial power and discretion in that behalf should be exercised to advance substantial justice. If the spirit behind the empowerment of discretionary power on the Court is taken into consideration, it is beyond doubt clear that the Court is required to adopt liberal approach in the matter of interpretation of the phrase "sufficient cause". This concept is adequately elastic to enable the Court to apply law in a meaningful manner.

The Hon'ble BOMBAY HIGH COURT thru Hon'ble Judges:B.B.Vagyani, J. In Lalchand Manakchand Mehta Versus Neelamchand Harakchand Mehta said-

Para 9. The law of limitation is made to advance justice and not to destroy the rights of parties. While considering the prayer for condonation of delay, the Court is required to take liberal and pragmatic approach. The Court cannot reject the prayer for condonation of delay on hyper technicalities. In the case of Surajmal (cited supra), this Court has observed that Sec. 14 of the Limitation Act must be liberally construed.

This Court relying on the observations made in the case of Balkrishna Rajaram V/s. Baijnath Girdharilal, AIR 1939 Nagpur 150, has held that the liberal approach must be adopted while construing the provisions of Sec. 14 of the Limitation Act, In the light of ratio of Surajmal (cited supra), legal position boils to this that while interpreting the provisions of Sec. 14 of the Limitation Act, proper approach is required to be taken so to save the remedy than bar the proceeding.

Para 11. Thus it becomes plain that the expression "sufficient cause" within the meaning of Section 5 of the Act or Order 22 Rule 9 of the Code or any other similar provision should receive a liberal construction so as to advance substantial justice when no negligence or inaction or want of bona fide is imputable to a party. In a particular case whether explanation furnished would constitute "sufficient cause" or not will be dependant upon facts of each case. There cannot be a straitjacket formula for accepting or rejecting explanation furnished for the delay caused in taking steps. But one thing is clear that the Courts should not proceed with the tendency of finding fault with the cause shown and reject the petition by a slipshod order in over jubilation of disposal drive. Acceptance of explanation furnished should be the rule and refusal an exception more so when no negligence or inaction or want of bona fide can be imputed to the defaulting party. On the other hand, while considering the matter the Courts should not lose sight of the fact that by not taking steps within the time prescribed a valuable right has accrued to the other party which should not be lightly defeated by condoning delay in a routine like manner.

However, by taking a pedantic and hyper technical view of the matter the explanation furnished should not be rejected when stakes are high and/or arguable points of facts and law are involved in the case, causing enormous loss and irreparable injury to the party against whom the lies terminates either by default or inaction and defeating valuable right of such a party to have the decision on merit. While considering the matter, Courts have to strike a balance between resultant effect of the order it is going to pass upon the parties either way.

In Anantnag V/s. Mst. Katiji and others, AIR 1987 SC 1353, the Hon'ble Supreme Court has observed that the message with regard to liberal approach does not appear to have percolated down to all the other courts in the hierarchy. The following guidelines should be born in mind while interpreting the concept of sufficient cause:
(1) Litigant does not stand benefited by lodging an Appeal late;
(2) Refusal to condone may result in meritorious matters being thrown out at the very threshold and the cause of justice being defeated;
(3) In the matter of explanation of every days delay, pedantic approach should be avoided. Rational common sense pragmatic approach should be invariably adopted;
(4) Substantial justice is to be preferred against technical flaws;
(5) There is no presumption that delay is always deliberate;
(6) Injustice is to be removed.

The primary function of a Court is to adjudicate the disputes between the contesting parties and to advance substantial justice. It is to be born in mind that the rules of limitation are not made to harm the valuable rights of the parties. Reference with profit can also be made to the case of N. Balkrishnan V/s. M. Krishna Murthy, 1998 7 SCC

The Supreme Court has observed that the rules of limitation are not meant to destroy the rights of the parties. They are meant to see that the parties do not resort to dilatory tactics. The Supreme Court has further observed that Sec.5 of the Limitation Act does not say that the discretion given to the Court can be exercised only if delay is within a certain limit. Length of delay is not the matter, acceptability of explanation is the only criterion.

Section 9: speaks about the commencement and termination of time: ordinarily in computing time, the rule observed is to exclude the first day and to include the last day.
Rajubhai T Choithani versus State of Gujrat – (1989) 1 Guj LR 309 at p.311.

Section 14 and 21: Sampat Prakash versus State of J & K – AIR 1970 SC 1118. 

J Kumaradasan Nair & Anr Vs IRTC Sohan & Ors 2009 3 MLJ 522 SC
Sankar Dastidar v Shrimati Banjula Dastidar & Anr AIR 2007 SC 514
Seth Ramdayal Jat v Laxmi Prasad 2009 5 MLJ 992 SC
The State of West Bengal Vs The Administrator Howrah Municipality and Ors AIR1972SC749

Limitation bars only the remedy, but does not extinguish the rights, save as provided u/s 27 of the Act of 1963 – AIR 1957 Travco 174 – Mariyakutty versus Chaldean Syrian Bank Ltd;

Law of Limitation – Section 5 – Sufficient cause – (2012) 5 MhLJ 584; AIR 1962 SC 361

Limitation Act – Section 5 – AIR 2012 SC 1629(A) – Para 12

Law of limitations –
The idea is that every legal remedy must be kept alive for legislatively fixed period of time.
Popat and Kotecha Property versus State Bank of India Staff Asso – (2005) 7 SCC 510, Para 9.

The law of limitation has been enacted extending a valuable right in favour of a party against whom within a period of limitation no action is brought before the Court, save in exceptional cases, where a case for condonation of delay is made out.
Krishi Utpadan Mandi Samiti Amroha versus Ganga Ram – AIR 1992 All 275 at 279.

Just impediment – laws of limitation –
AIR 1979 SC 1352;

Law of Limitation in Criminal Complaints – “Interests of Justice” –
S K Bajaj versus D K Bhattacharia – 1982 CrLJ 210 (Section 473 of CrPC, 1973)

Limitation Act –
Principles and objects restated (2005) 7 SCC 510, Paras 7, 8, 9 (The period of limitation…..);

Suit barred by law of limitation – averments in the Plaint can only be looked into to decide Application under O.7 R.11, Paras 10, 25
Section 5 – Sufficient cause – (2001) 9 SCC 105, Para 5 (In exercising jurisdiction under section 5 …)
Speaking Order in Application for condonation of delay – must – (2000) 10 SCC 538, Para 5;
Appeal delay – cannot be extended where……… AIR 1992 All 275, Para 32 (As observed above discussing………)
Section 5 – Sufficient cause – AIR 1972 SC 749, Paras 27, 30, 37, 37A

Article 14 of limitation Act 1908 does not apply to void and ultra vires Orders – it does not applies where jurisdiction has been usurped and the Order is ultra vires, an Order made without jurisdiction is a nullity and need not be set aside – AIR 1924 Cal 913

Sufficient cause under section 5 of Limitation Act –
AIR 1972 SC 749;
AIR 1972 SC 1973;
AIR 1992 SC 1540;
AIR 1934 All 163 and 43;

Section 40, 44 of Evidence Act r/w Article 95 of Limitation Act 1908
AIR 1955 Pat 66, Paras 13, 31, 21, 22, 25, 29, 30
AIR 1955 All 569, Paras 11, 12, 14, 16, 18
Article 14 of limitation Act 1908 does not apply to void and ultra vires Orders – it does not applies where jurisdiction has been usurped and the Order is ultra vires, an Order made without jurisdiction is a nullity and need not be set aside – AIR 1924 Cal 913

Condonation of delay – Revision, Appeal – (2012) 10 SCC 488
Condonation of delay – 2013 (1) All MR 163

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