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COMPUTATION OF PERIOD OF LIMITATION

QUESTION BANK

1. Discuss the provisions relating to ‘computation of period of limitation’ under the Limitation Act., 1963.

2. Explain the effect of continuing breach of contract and continuing tort on the computation of period of limitation.

3. Explain “exclusion of time or proceeding ‘bonafide’ in court without jurisdiction as provided under the Limitation Act.

4. What is acknowledgment? State the essentials of valid acknowledgment under the Indian Limitation Act?

5. Explain the provision relating to extension and suspension of limitation.

SHORT NOTES

1. Effect of fraud or mistake.

2. Exclusion of time spent in legal proceedings.

3. Acknowledgment.

SYNOPSIS

Computation of the Period of Limitation

(Sections 12 to 24 of the Limitation Act, 1963)

1. Exclusion of Time in Legal Proceedings (Section 12)    

a. General Exclusion (S. 12(1)):

b. Appeals (S. 12(2)):

c. Revision, Review, or Leave to Appeal (S. 12(3)):

d. Setting Aside an Award (S. 12(4)):

Crucial Rule:

2. Exclusion of Time when Leave to Sue or Appeal as an Indigent Person is Applied For (Section 13)    

3. Exclusion of Time for Bona Fide Proceedings in a Court Without Jurisdiction (Section 14)    

a. Essential Ingredients of Section 14:

b. Explanations to Section 14:

c. Definition of Good Faith (Section 2(h)):

d. Practical Illustration:    

4. Exclusion of Time in Certain Other Cases (Section 15)

a. S. 15(1) - Stay or Injunction:

b. S. 15(2) - Statutory Notice or Sanction:

c. S. 15(3) - Receivers/Liquidators in Insolvency or Winding Up:

d. S. 15(4) - Setting Aside Execution Sales:

e. S. 15(5) - Defendant's Absence from India:

5. Effect of Death on or Before the Accrual of the Right to Sue (Section 16)    

a. S. 16(1) - Death of Potential Plaintiff:

b. S. 16(2) - Death of Potential Defendant:

c. Exceptions (S. 16(3)): The rules of Section 16 do not apply to:

6. Effect of Fraud or Mistake (Section 17)

a. Scope of Section 17(1):    

b. The Innocent Third-Party Purchaser Exception:    

Fraud by a Judgment-Debtor (S. 17(2)):

7. Effect of Acknowledgment and Payment in Writing (Sections 18, 19, and 20)

a. Effect of Acknowledgment in Writing (Section 18)    

b. Effect of Payment on Account of Debt (Section 19)    

c. Acknowledgment or Payment by Another Person (Section 20)    

8. Effect of Substituting or Adding a New Plaintiff or Defendant (Section 21)    

9. Continuing Breaches and Torts (Section 22)

10. Suits for Compensation for Acts Not Actionable Without Special Damage (Section 23)

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Computation of the Period of Limitation

(Sections 12 to 24 of the Limitation Act, 1963)

    Sections 12 to 24 of the Limitation Act, 1963, deal with the principles governing the computation of the period of limitation. These provisions dictate how the time frames specified in the Second Column of the Schedule to the Act are to be calculated in practice.

Essentially, these sections outline the specific days or periods that must be excluded or extended when calculating the limitation period. Importantly, there is no requirement for a party to formally pray or apply for the exclusion of these periods; it is the statutory duty of the court to exclude such time automatically while computing limitation.

Section 24: Use of the Gregorian CalendarFor the purpose of computing the period of limitation under this Act, the Gregorian Calendar (i.e., the Western/British Calendar) must be strictly utilized.

1. Exclusion of Time in Legal Proceedings (Section 12)

    Section 12 provides the foundational rules for excluding certain days from the computation of the limitation period:

a. General Exclusion (S. 12(1)): In computing the period of limitation prescribed for any suit, appeal, or application, the day from which such period is to be reckoned (the day on which time begins to run) shall be excluded.

b. Appeals (S. 12(2)): In computing the limitation period for an appeal, the following must be excluded:

i. The day from which the limitation period begins to run.

ii. The day on which the judgment complained of was pronounced.

iii. The time requisite for obtaining a copy of the decree, sentence, or order appealed from.

c. Revision, Review, or Leave to Appeal (S. 12(3)): In computing the limitation period for an application for leave to appeal, amendment, revision, or review, the following must be excluded:

i. The day on which the judgment was pronounced.

ii. The time requisite for obtaining a copy of the decree or order, as well as a copy of the judgment on which it is founded.

d. Setting Aside an Award (S. 12(4)): In computing the limitation period for an application to set aside an arbitral award, the time requisite for obtaining a copy of the award shall be excluded.

Crucial Rule: The phrase "time requisite" refers to the time reasonably required by the court to prepare and deliver the copies. Any delay caused by the negligence or inaction of the applicant—such as a delay between the date the copy is ready for collection and the date the party actually takes delivery—cannot be excluded.

2. Exclusion of Time when Leave to Sue or Appeal as an Indigent Person is Applied For (Section 13)

    Where an application for leave to sue or appeal as an indigent person (formerly referred to as a pauper) is made and rejected, the time during which the applicant has been prosecuting their application in good faith shall be excluded.

Once excluded, the court may permit the applicant to pay the requisite court fees, and the suit or appeal shall be treated as having the same force and effect as if the court fees had been paid in the first instance.

3. Exclusion of Time for Bona Fide Proceedings in a Court Without Jurisdiction (Section 14)

    Section 14 protects litigants who diligently pursue their remedies but inadvertently choose the wrong forum. Subsections (1) and (2) provide that the time spent prosecuting another civil proceeding—whether in a court of first instance, appeal, or revision—against the same defendant shall be excluded, provided the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, due to a defect of jurisdiction or other cause of a like nature, is unable to entertain it.

In Basdeo Khemka v. Union of India (AIR 1978 Cal 100), the court held that a litigant is entitled as a matter of right to exclude the period spent in infructuous proceedings, provided the essential statutory elements of Section 14 are fully satisfied.

a. Essential Ingredients of Section 14:

To claim exclusion under this section, the plaintiff/applicant must establish:

i. They were prosecuting the former civil proceeding with due diligence and in good faith.

ii. The former proceeding was between the same parties (or parties under whom they claim).

iii. The matter in issue in both proceedings is identical.

iv. The former court was unable to entertain it due to a defect of jurisdiction or another cause of a like nature.

b. Explanations to Section 14:

i. Explanation (a): The day on which the former suit or application was instituted and the day on which the proceedings closed shall both be excluded.

ii. Explanation (b): A plaintiff or an applicant resisting an appeal (i.e., acting as a respondent) is deemed to be prosecuting a proceeding.

iii. Explanation (c): A misjoinder of parties or causes of action is explicitly deemed to be a "cause of a like nature" to a defect of jurisdiction.

c. Definition of Good Faith (Section 2(h)):

    "Nothing shall be deemed to be done in good faith which is not done with due care and attention." Therefore, to claim the benefit of Section 14, the mistaken filing must not stem from gross negligence.

d. Practical Illustration:

    A primary teacher is dismissed by a private school administration. The teacher files an appeal before the School Tribunal (which has jurisdiction exclusively over specific private school matters). After one year, the Tribunal dismisses the case on a technical jurisdictional issue.

    The teacher then files a civil suit against the school management, where the limitation period is 3 years from the date of dismissal. If the suit is filed 4 years and 15 days after the dismissal, the 1 year spent in good faith before the School Tribunal will be excluded. Thus, the suit will be legally deemed within time (3 years and 15 days, minus 1 year = 2 years and 15 days).

4. Exclusion of Time in Certain Other Cases (Section 15)

Section 15 provides for the exclusion of time under several unique circumstances:

a. S. 15(1) - Stay or Injunction: Where the institution of a suit or the execution of a decree has been stayed by an injunction or order, the day on which such order was issued, the period during which it remained in force, and the day on which it was withdrawn shall be excluded.

b. S. 15(2) - Statutory Notice or Sanction: Where the law mandates that a prior notice be served (e.g., Section 80 of the CPC) or consent/sanction of the Government/authority be obtained before instituting a suit, the duration of the notice period or the time taken to obtain consent shall be excluded.

c. S. 15(3) - Receivers/Liquidators in Insolvency or Winding Up: In suits by or on behalf of an insolvent’s estate or a company in liquidation, the period between the filing of the petition and the appointment of the receiver/liquidator, plus an additional period of three months, shall be excluded.

d. S. 15(4) - Setting Aside Execution Sales: In a suit for possession of property by a purchaser at a court-enforced auction sale, the time during which a proceeding to set aside the sale has been prosecuted by the opposite party shall be excluded.

e. S. 15(5) - Defendant's Absence from India: The time during which the defendant has been absent from India (and from territories outside India under the administration of the Central Government) shall be excluded from the computation.

5. Effect of Death on or Before the Accrual of the Right to Sue (Section 16)

    Section 16 is built upon the foundational legal maxim that limitation cannot run unless there is a complete cause of action, which requires both a person capable of suing and a person capable of being sued.

a. S. 16(1) - Death of Potential Plaintiff: If a person who would have had a right to institute a suit or make an application dies before the right accrues, or if the right accrues only upon their death, the period of limitation is counted from the time there is a legal representative of the deceased capable of instituting such action.

b. S. 16(2) - Death of Potential Defendant: If a person against whom a right to sue or apply would have accrued dies before the right accrues, or if the right accrues upon their death, the limitation is calculated from the time there is a legal representative against whom the plaintiff can lawfully proceed.

c. Exceptions (S. 16(3)): The rules of Section 16 do not apply to:

1. Suits to enforce rights of pre-emption.

1. Suits for the possession of immovable property.

1. Suits for possession of hereditary offices.

6. Effect of Fraud or Mistake (Section 17)

    Where a suit or application is based on fraud or mistake, or where vital information is deliberately concealed, Section 17 shifts the starting point of the limitation period.

a. Scope of Section 17(1):

    Limitation does not begin to run until the plaintiff/applicant has discovered the fraud or mistake, or could with reasonable diligence have discovered it, in cases where:

i. The suit or application is based upon the fraud of the defendant.

ii. The knowledge of the right or title on which a right is founded has been fraudulently concealed from the plaintiff.

iii. The suit or application is for relief from the consequences of a mistake.

iv. Any document necessary to establish the plaintiff's right has been fraudulently concealed.

b. The Innocent Third-Party Purchaser Exception:

    The proviso to Section 17 dictates that nothing in this section enables a suit to be filed to recover, enforce a charge against, or set aside a transaction affecting any property which:

i. In the case of fraud/mistake, has been purchased for valuable consideration by a person who did not know or have reason to believe that any fraud/mistake had been committed.

ii. In the case of a concealed document, has been purchased for valuable consideration by a person who was unaware of the concealment.

iii. In short: A bona fide purchaser for value without notice is strictly protected.

Fraud by a Judgment-Debtor (S. 17(2)):

    If a judgment-debtor uses fraud or force to prevent the execution of a decree or order within the limitation period, the court may extend the execution period upon an application by the judgment-creditor. However, such an application must be made within one year from the date of the discovery of the fraud/force.

7. Effect of Acknowledgment and Payment in Writing (Sections 18, 19, and 20)

a. Effect of Acknowledgment in Writing (Section 18)

    If, before the expiration of the prescribed period of limitation for a suit or application, an acknowledgment of liability in respect of such property or right is made in writing and signed by the party against whom the claim is made, a fresh period of limitation begins to run from the time the acknowledgment was signed.

Important Principles of Section 18:

i. Timing: The acknowledgment must be made before the expiry of the original limitation period. An acknowledgment made after the debt is time-barred cannot revive the limitation under this section.

ii. Undated Documents: Under S. 18(2), if the acknowledgment is undated, oral evidence may be given to prove the date it was signed, but oral evidence of its contents is inadmissible unless the document is lost.

iii. Implication Suffices: In Sarangdhar Singh v. Lakshmi Narayan (AIR 1956 Pat 320), the court ruled that an acknowledgment of liability need not be explicit; it can be derived by necessary implication.

iv. Explanation (a): An acknowledgment is valid even if it omits the exact nature of the right, claims a set-off, is accompanied by a refusal to pay, or is addressed to a third party.

b. Effect of Payment on Account of Debt (Section 19)

    Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay (or by their authorized agent), a fresh period of limitation is computed from the date the payment was made.

i. The Proviso: The payment must be acknowledged in the handwriting of, or in a writing signed by, the person making the payment.

ii. Mortgaged Land: If a mortgagee is in possession of mortgaged land, the receipt of rent or produce from the land is deemed to be a payment for the purpose of this section.

iii. Exclusion: The term "debt" under Section 19 explicitly excludes money payable under a court decree or order.

c. Acknowledgment or Payment by Another Person (Section 20)

    Section 20 clarifies who constitutes an "agent duly authorized on this behalf" for Sections 18 and 19:

i. For persons under a legal disability, it includes their lawful guardian, committee, manager, or an agent authorized by them.

ii. Joint Liabilities (S. 20(2)): An acknowledgment or payment made by one joint contractor, partner, executor, or mortgagee does not automatically make the others liable.

iii. Hindu Undivided Family (HUF): An acknowledgment or payment made by the Karta (manager) of an HUF, or their authorized agent, is deemed to have been made on behalf of the entire family.

8. Effect of Substituting or Adding a New Plaintiff or Defendant (Section 21)

    When a new plaintiff or defendant is substituted or added after the institution of a suit, the suit is deemed to have been instituted as regards them on the date they were actually made a party.

    The Proviso (Good Faith Mistake): If the court is satisfied that the omission to include the new party earlier was due to a mistake made in good faith, it may direct that the suit be deemed instituted against them on an earlier date.

If a party is added after the limitation period for the suit has expired, the suit will be dismissed as time-barred strictly regarding that newly added party, unless the benefit of the proviso is granted.

9. Continuing Breaches and Torts (Section 22)

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

The core objective of Section 22 is to prevent a multiplicity of legal actions, allowing a single comprehensive suit to encompass all damages sustained over the span of the ongoing wrong.

i. Continuing Breach of Contract: For example, a breach of a covenant for quiet enjoyment or a tenant’s ongoing failure to keep premises in a contractually required state of repair constitutes a continuing breach.

ii. Continuing Tort: In Municipal Board v. Sukhdev Prasad (1980), the defendant constructed shops in front of the plaintiff’s house, permanently obstructing their right to frontage and passage. The court held that the obstruction constituted a continuing wrong, meaning a suit filed even after 20 years was not barred by limitation.

10. Suits for Compensation for Acts Not Actionable Without Special Damage (Section 23)

    In the case of a suit for compensation for an act which does not give rise to a cause of action unless a specific injury/special damage actually results, the period of limitation is computed from the exact moment when the injury results.

    Unlike standard torts where the cause of action arises at the moment the wrong is committed, under Section 23, the clock starts only when actual tangible damage surfaces. For instance, if a neighbor excavates their own land (a lawful act) but later causes your adjoining house to collapse due to a loss of lateral support, the limitation begins on the day the house sustains injury, not the day the excavation took place.

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