Limitation Act

July 9th, 2012

It is for general welfare that a period be put on litigation. Further, it is a general principle of law that law is made to protect only diligent and vigilant people. Equity aids the vigilant and not the indolent. Law will not protect people who are careless about their rights. (Vigilantibus non domientibus jur A subventiunt). Moreover, there should be certainty in law and matters cannot be kept in suspense indefinably. It is, therefore, provided that Courts of Law cannot be approached beyond fixed period. In civil matters, the limit is provided in Limitation Act, 1963.

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Bar of limitation – Subject to provisions of sections 4 to 24 of the Act (i.e. Limitation Act),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. [section 3(1)]. – – ‘Period of limitation’ means the period of limitation prescribed for any suit, appeal or application by the schedule to the Act and ‘prescribed period’ means the period of limitation computed as per provisions of the Act. [section 2(j)].

Period as  prescribed in Schedule to the Act – The period has been prescribed in Schedule to the Act. Generally, it is as follows – (a) 3 years for a suit relating to accounts, contracts, declarations, decrees, suits relating to movable property, recovery of law suit under a contract etc. (b) 12 years for suits relating to possession of immovable property and 30 years for mortgaged property (c) One year for suit relating to torts (3 years for compensation in certain cases (d) 30 to 90 days in case of appeals under Civil Procedure Code and Criminal Procedure Code. – – Period of filing appeal and application can be extended if proper cause is shown (but not the suit) [section 5].

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If court is closed on last day – If court is closed on last day of limitation, suit, appeal or application can be filed on next day when Court reopens. [section 4].

Continuous running of time – When once period of limitation starts running, it continues even if there is any subsequent disability or inability to institute a suit or make an application. [section 9]. – – However, if at the time when person is entitled to file a suit or make application, if a person was disabled (as he was minor or insane), the period of limitation will start after the disability is removed. [section 6(1)].

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In case of appeals against any judgment, if limitation is provided in any statute, that will prevail.

Computation of period of limitation – (a) First day or day of judgment is to be excluded. [section 12(1)]. (b) Time for getting copy of judgment or decree or order or award (against which appeal or application has to be filed is to be excluded. [section 12(3)]. (c) Time when leave to sue or appeal as pauper is applied for and is pending [section 13]. (d) Time spent (by mistake or misunderstanding) in proceeding bona fide in the Court without jurisdiction [section 14]. (e) If stay or injunction was granted, that period will be excluded. [section 15(1)]. (f) If consent/sanction of Government or some authority was required to be obtained for filing suit/application or notice was required to be given to Government in accordance with law, the period spent in obtaining the consent/sanction or time in giving notice is excluded. [section 15(2)].

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Effect of fraud or mistake – Period of limitation starts only after fraud or mistake is discovered by affected party. [section 17(1)]. In Vidarbha Veneer Industries Ltd. v. UOI – 1992 (58) ELT 435 (Bom HC) , it was held that limitation starts from the date of knowledge of mistake of law. It may be even 100 years from date of payment. – – – – The cardinal principal enshrined in section 17 of Limitation Act is that fraud nullifies everything. Thus, appeal against the party can be admitted beyond limitation, if party has committed fraud (in submitting non-genuine documents at adjudication in this case) – CC v. Candid Enterprises 2001(130) ELT 404 (SC 3 member bench).

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Effect of acknowledgment in writing – If acknowledgment of any property is right or liability is obtained in writing duly signed by the party against whom such property, right or liability is claimed, before the expiration of period of limitation, a fresh period of limitation is computed from date of acknowledgment. [section 18(1)], Acknowledgment can be signed either personally or by an agent duty authorised in this behalf. [section 18(2)]. [That is why Banks and Financial Institutions insist on confirmation of balance every year].

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Continuing breaches and torts – In case of continuous breaches and torts, a fresh period of limitation begins to run at every moment of time during which the breach or tort continues. [section 22].

Limitation is a question of law and can be raised at any stage i.e. even at the time of appeal.

Law of limitation only bars remedy, but does not extinguish the right – In Bombay Dyeing and Mfg Co. Ltd. v. State of Bombay AIR 1958 SC 328 = 1958 SCR 1122 (SC Constitution Bench), it was held that the law of limitation only bars the remedy of approaching the court of law. However, it does not extinguish the right as such.

Law of Limitation is applicable only to courts and not to tribunals. – Nityanand M Joshi v. LIC – AIR 1970 SC 209 = (1970) 1 SCR 396 = 36 FJR 324 (SC) * Sakura v. Tanaji – AIR 1985 SC 1279 * Birla Cement Works v. G M Western Railway (1995) 2 JT 59 (SC).

Limitation in criminal matters – As per section 468 of Cr PC, Court cannot take cognizance of offence after expiry of following limitation period – (a) Six months, if the offence is punishable only with fine (b) One year, if the offence is punishable with imprisonment for a term not exceeding one year (c) three years, if the offence is punishable with imprisonment for a term not exceeding three years. However, in case of economic offences, there is no time limit.

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