Limitation Act 1963, denotation, Laws and Important Case Laws by CS Shweta Dubey


Limitation Act: denotation

The 'Law of Limitation' prescribes the time-limit for different suits within, which an aggrieved person can approach the court for redress or justice.

They are imposed by law, primarily the Limitation Act. The concept of limitation is related with the fixing or prescribing of period for barring legal actions. Limitation means a prescribed time limit according to statute. Under Black’s Law Dictionary Limitation means settling an estate or property; a certain time allowed by a statute for litigation.

The Code of Civil Procedure Act enforces the right to appeal but the limitation Act gives the period within which the appeal can be made to the Court. In general terms, the law prescribes different periods within which a person who has a grievance should go to court. For example, if somebody has borrowed your money and not returned it, you should approach the court within three years from the date you lent the money. If you don't go to the court within that time, the courts will not be of help to recover your money. This is called the limitation period. After the limitation period, you cannot enforce your rights in a court. The Limitation Act 1963 prescribes different limitation periods for different kinds of claims. Some other Acts such as the Consumer Protection Act also prescribe limitation periods.

Different time periods have been prescribed for different limitation periods for different claims. Although there is a bar of limitation still in some cases the limitation period gets extended if the court is satisfied with the bonafied reason of the plaintiff. This Act is applicable to all civil proceedings which can be taken to the Court of Law unless it is excluded by any enactment.

Enactment of the Law:

The statutory law was established in stages. The very first Limitation Act was enacted for all courts in India in 1859. And finally took the form of Limitation Act in 1963. Passed on 5th October,1963 and Came into force on 1January1964 The Limitation Act, 1963, however, provides the period of filing up appeals. It states that the appeals against a decree or order can be filed in a high court within ninety days and in any other court in thirty days from the date of the decree or order appealed against.

The Limitation Act consists of 32 sections, 5 parts, 137 articles which is much broader than the limitation act 1908."suit" does not include an appeal or an application.

What is period of limitation:

Theconcept of limitation is related with the fixing or prescribing of period for barring legal actions. According to Section 2(j) of the Limitation Act, 1963, ‘period of limitation’ means the period of limitation prescribed for any suit, appeal or application by the Schedule, and ‘prescribed period’ means the period of limitation computed in accordance with the provisions of this Act.

Extension of Period of Limitation:

Section 3 of the Act deals with the provisions where a suit cannot be instituted after the expiry of the Limitation Period but still some exceptions are provided under the Act and if all the conditions are satisfied then it can be granted. An appeal may be admitted after the expiry of the period if applicant satisfies the court that he had sufficient reason for not filing the application withinthe time limit. Even though explanation for day- to-day delay is not being insisted by the Courts, the litigant has to nevertheless furnish the satisfactory explanation for filing the application beyond the prescribed period of limitation.

Moreover, if the Court remains closed on the expiry date or last date for any suit, appeal or application then the suit, appeal or application may be instituted, preferred or made on the date when the court reopens.

The provisions under section 6 and 7 deals with the cases Where if the person entitled to institute a suit or make an application for the execution of a decree suffers from legal disability then the time period shall be reckoned once the disability ceases to exist.But this is not applicable for the suits to enforce rights of pre-emtion and thus they must be proceeded with and no extension of time will be given on account of the disability of the plaintiff.

Right of pre-emtion means a right/ advantage given out to the present stock holders, allowing them to gain the first option in case a house or property is being sold. It can also mean a right set in contracts, allowing a party go gain the first opportunity for purchasing a property or article, before it is put up for sale

When the Sections 6,7 and 8 are given a combined reading, it can be interpreted that one cannot take advantage of two disabilities as because as soon as the time begins to run and subsequent inability or disability is powerless to stop its running. It means that both the disabilities should overlap each other and if one ceases to be under a disability even for a day, time begins to run against him and subsequent disability of himself or after his death that of his legal representative, will not avail to save limitation.

Again Section 8 also prescribes that a person under disability may sue after the cessation of the disability within the same period as he would otherwise have been allowed under the schedule but in no case can the period be extended to anything beyond 3 years from the cessation of the disability. Disability or inability to sue includes disability to make an application for execution as well.

Section 9 says that once time has begun to run, no subsequent disability or inability to sue can stop its running; this applies to a person himself as well as to his representatives in interest after his death.

Suits on foreign Contracts:  

Section 11 provides that where cause of action for a suit based on contract arose in any foreign country or in jammu&kashmir where the limitation act, 1963 does not apply, the action started in indian court on such contract will be governed as per the indian limitation statutes. Only exception is where the parties were domiciled in jammu&kashmir or in the foreign country during the period prescribed by such rule of limitation.

Although, this section is applicable only to suits.However the principle on which it is built has universal application and applies to all suits and proceedings.

The rules which apply to the case of contract made in one country and put in suit in the court of another country are the following:-

1. The interpretation of the contract is governed by the law of the country where the contract was made.

2. The mode of suing and the time within which the action must be brought is governed by the law of the country where the action is brought.


The Law Commission came out with some important amendments to the Limitation Act, 1963, taking due consideration of expansion of India's international trade.

As per Section 30 Provision for suits, etc., for which the prescribed period is shorter than the period prescribed by the Indian Limitation Act, 1908 –

  • any suit for which the period of limitation is shorter than the period of limitation prescribed by the Indian Limitation Act,1908, may be instituted within a period of substituted for Seven years next after the commencement of this Act or within the period prescribed for such suit by the Indian Limitation Act,1908, whichever period expires earlier; and
  • any appeal or application for which the period of limitation is shorter than the period of limitation prescribed by the Indian Limitation Act, 1908 may be preferred or made within a period of ninety days next after the commencement of this Act or within the period prescribed for such appeal or application by the Indian Limitation Act,1908, whichever period expires earlier.

Part-III consists of Section 12 to24 which basically deals with the computation of the Period of Limitation:

Section 12 prescribes the time which shall be excluded in computing the time of limitation in legal proceedings. These exclusions of time are inevitable because it is not possible to prefer an application for leave to appeal, unless the appellant or the applicant has a copy of the judgement on which the decree is based as he will have to justify his application.

Section 12 of the Limitation Act, 1963 provides that:

  1. In computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned, shall be excluded.
  2. In computing the period of limitation for an appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded.
  3. Where a decree or order is appealed from or sought to be revised or reviewed, or where an application is made for leave to appeal from a decree or order, the time requisite for obtaining a copy of the judgment on which the decree or order is founded shall also be excluded.
  4. In computing the period of limitation for an application to set aside an award, the time requisite for obtaining a copy of the award shall be excluded.

As per explanation given for computing under this section the time requisite for obtaining a copy of a decree or an order, any time taken by the Court to prepare the decree or order before an application for a copy thereof is made shall not be excluded.

The Limitation Act, 1963 prescribes periods of limitation for suits, appeals or applications. The rules as to computation of period of limitation (Sections 12 to 24) not intended to apply only to periods of limitation prescribed by the Schedule but apply also to periods of limitation provided for by other enactments.

Section 12 of the Limitation Act is first of the sections providing for exclusion of time in computing the period of limitation. The Section 12 of the Act excludes from reckoning the day from which the period is to be reckoned and time requisite for obtaining copies of documents referred to in sub-sections (2) to (4). The true effect of Section 12 is that the periods referred to in the various sub-sections have to be added to the period of limitation.

There need not be any prayer or application by a party for the time to be excluded under Section 12 of the Limitation Act. This Section 12 confers a substantive right upon a party and it is the duty of the Court to exclude the time when the case comes under the purview of any of the sub-sections of Section 12.

According to sub-section (1) of Section 12 of the Limitation Act, the first day i.e. the day from which a period of limitation is to be computed, must be excluded. And the last day i.e. the day on which the suit is instituted must be included in the calculation. This rule is applicable whenever time has to be computed from a day specified whenever such time is fixed performance of contract or is prescribed by law for the doing of an act or for the institution of the proceedings in a Court of Law.

Continuing breaches and torts (section 22):

In the case of a continuing breach of contract or in the case of a continuing tort, a fresh period of limitation begins to run at every moment of the time during which the breach or the tort, as the case may be, continues.

As per Section 2(m) of the Limitation Act 1963, "tort" means a civil wrong which is not exclusively the breach of a contract or the breach of a trust;

According to section 22 of the limitation act, 1963, in the case of a continuing breach of contract or in the case of a continuing tort, a fresh period of limitation begin to run at every moment of time during which the breach or the tort, as the case may be, continues. However, the section does not prescribe any particular point of time during the course of the continuance of the injury from which limitation is to be computed.

Salient Features of Limitation Law:

Time Bound: It suggests that a time limit is necessary for instituting a suit or appeal or applications as because with the lapse of time, proof of a claim becomes more difficult.

Enforcement of rights:  The law relates to the conduct of the plaintiff, it being thought right that a person who does not promptly act to enforce his rights should lose them.

Different limitation periods for different claims: The law prescribed different time frames for different claims and set offs. 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 upto a certain period and not subsequently.

Scope and applicability of Limitation Act 1963 with regard to the appeals filed before High court under the special Acts:

According to Section 29(2) of Limitation Act 1963:

“The provisions contained in sections 4 to 24 (inclusive) shall apply only insofar as, and to the extent to which, they are not expressly excluded by such special or local law”. The scope and applicability of Limitation Act 1963 was interpreted by Larger Bench of High Court, Mumbai, in the case of Commissioner of Central Excise Vs M/s Shree Rubber Plast Co Pvt Ltd wherein it was held that the applicability of Section 4 to 24 of Limitation Act, the following three conditions must be satisfied:-

(i) There must be prescribed period of limitation under any special or local law;

(ii) The said prescription of period of limitation should be different from that of the period prescribed by the Schedule of the Limitation Act.

(iii) Application should be before a Civil Court. Hence section 4 to 24 of Limitation Act 1963 will apply to appeal filed under section 35G of Central Excise Act 1944.


Section 25 and 26 deals with the mode or method of acquisition right on the land or property and the procedure of calculating the period prescribed. The law is in the opinion that if the possession is acquired for an uninterrupted period of 20 years as prescribed on any land owned by any person and in case the property is owned by government then the period is 30 years, then the right of easement shall be absolute and indefeasible.

However, the explanation makes it clear that —nothing is an interruption within the meaning of this section, unless where there is an actual discontinuance of the possession or enjoyment by reason of an obstruction by the act of some person other than the claimant, and unless such obstruction is submitted to or acquiesced in for one year after the claimant has notice thereof and of the person making or authorizing the same to be made.

As per Section 2(f) of the limitation act, 1963 "easement" includes a right not arising from contract, by which one person is entitled to remove and appropriate for his own profit any part of the soil belonging to another or anything grown in, or attached to, or subsisting upon, the land of another. In general language it is the right to cross or otherwise use someone else's land for a specified purpose.

Although Limitation Act deals with the limitation period within which the appellant shall institute a suit but the right does not gets extinguished even after the expiry of the limitation period. However Section 27 is an exception to this. As per this Section after the term expires the right on the property gets ceased off. the law declares not simply that the remedy is barred but that the tile is extinct in favour of the possessor. But if we study the Section we can easily find that it is only applicable in case of instuting a suit against the possession and does not apply as suit by a mortgagee for recovery of the money due to him by sale of the mortgaged property.

Schedules:

  1. Further the schedules prescribes different limitation period,
  2. First Divison deals with suits i.e. from article 1-113
  3. Second Divisons deals with appeals 114-117
  4. Third Divison deals with applications in specified cases118-136


Some glimpses of limitation period:

  1. To enforce a right of preemption whether the right is founded on law or general usage or on special contract: the time limit is 1 year from the date the purchaser takes under the sale.
  2. Article 100 says that in case of alteration or setting aside any decision or order of a civil court in any proceeding other than a suit or any act or order of an officer of government in his official capacity- One year from the date of judgment or order.
  • For every appeal, there is a limited period, within which appeal should be filed.
  • For appeal, in case of a decree passed by lower court in civil suit, the limitation is :
  • Appeal to High Court - 90 days from the date of decree or order.
  • Appeal to any other court - 30 days from the date of Decree or order.


In case there are more than one plaintiff or defendants, then any one of them can file on appeal against all of them respectively.

Merely because an appeal is filed, does not mean that the order or decree of lower court is stayed. In case of temporary stay of decree or order, it has to be specifically asked, and stay will operate only if court grants it.

In case of execution of decree, the court, which passed the decree, can itself stay the execution for time being on sufficient reasons shown.

The appellate court may, on the day fixed for hearing the appellant dismiss the appeal, or issue notice to the opposite party to appear on next day.

In case of applications:

To the Supreme Court for Special leave to appeal: 60days from the date of judgment of order and in case of refusal of leave of sue from the date of     

Where no specific time period given

Any suit for which no period of limitation is provided elsewhere in this schedule :3 years from the right of sue accrues.

Case Study on Counter Claim

In the case of Voltasv/s. Rolta, where Voltas Ltd. (“Voltas”) and Rolta India Ltd. (“Rolta”) entered into a civil construction contract for construction and modification of certain buildings. Subsequently, as certain disputes arose between the parties, on December 3, 2004, Rolta terminated the contract. Thereafter, numerous letters were exchanged by the parties.

On March 29, 2006, Voltas invoked the arbitration clause. Rolta by a letter dated April 17, 2006 denied any amount being payable by them and called upon Voltas to pay Rolta INR 680 million approx (initial counter claim), for the losses suffered by Rolta. Voltas subsequently filed an application under section 11 of the Arbitration and Conciliation Act, 1996 (“Act”), before the High Court of Bombay (“High Court”), for appointment of the arbitrator (“Section 11 Application”). On November 19, 2010, the High Court appointed a sole arbitrator.

Voltas filed its statement of claim on April 13, 2011, claiming a sum of INR 230 million approximately. Subsequently, Rolta after August 24, 2011, filed a counter claim for a sum of INR 3337 million approx, as damages for breach of contract (subsequent enhanced counter claim).

Voltas objected to the counter claim contending that the limitation period for filling the claim had expired. The arbitrator accepted the objection of Voltas and dismissed the counter claim.

Rolta challenged the award of the arbitrator before the High Court. The single judge of the High Court ruled in favour of Voltas and upheld the award. Subsequently, in further appeal before the two - judge bench of the High Court, the earlier decision and the award was set-aside and it was held that the counter-claim was within the limitation period.

Aggrieved by the decision of the division bench, Voltas appealed before the Supreme Court.

Supreme Court Judgment:

Supreme Court allowed the appeal in part. The Supreme Court allowed the counter claim up to the amount of INR 680 million approximately i.e. the amount provided under the letter dated April 17, 2006 and not the amount of INR 3337 million approximately provided under the counter claim filed before the arbitrator.

Initial counter claim at the time of notice -within the limitation period

 

Conclusion:

On the whole it can be said that although this act limits time frame within which one needs to file a suit or appeal or application for redressal purposes but the same cannot limit the right to one’s property. The Limitation in one hand and compensation on Delay of the same are two effective implementations in the quick disposal of cases and effective litigation. The sole intention of the law of limitation is prescribing time period within which the suit can be filled and the time available within which the person can get the remedy conveniently. The law compensation of delay keeps the principle of natural justice alive and also states the fact that different people might have different problem and so if sufficient cause of the delay is given to the court then the same can be extended if the Court finds it a bonafide one. Thus it is essential to hear them and decide accordingly whether they fit in the criteria of the judgment or whether they deserve a second chance.

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