Limitation Act:- SECTION 12-18

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12. EXCLUSION OF TIME IN LEGAL PROCEEDINGS

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

i. for an appeal or an application for leave to appeal or

1. for revision or

2. for review of a judgement the day on which judgement 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 judgement 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.

EXPLANATION:

In 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.

IN COMPUTING THE PERIOD FOR

12(1) any suit, appeal or application

12(2) an appeal or an application for leave to appeal, revision, review

12(3) Where a decree or order is appealed, revised or reviewed, an application is made for leave to appeal

12(4) an application to set aside an award

TIME TO BE EXCLUDED

the day from which such period is to be reckoned

day on which judgement complained of was pronounced,

time requisite for obtaining a copy of the decree, sentence or order

the time requisite for obtaining a copy of the judgment

the time requisite for obtaining a copy of the award

In computing the period of limitation prescribed for any suit, the date shown in the column III of the Schedule as the day from which the period of limitation begins to run shall be excluded.

Thus, if a pronote is executed on 5th June, 1945, the last day for filing the suit will be 5th June, 1948 and not 4th June, 1948, because the 1st day, - i.e., 5th June, 1945 will not be taken into account in computing the period of limitation which is three years in the case of a pronote.

In M/S. Saketb India Ltd v M/s. India Securities Ltd. (AIR 1999 SC 1090), held that ordinarily in computing the time, the rule observed is to exclude the first day and to include the last day.

In computing the period of limitation prescribed for an appeal, an application for revision or for review, an application for leave to appeal the following periods shall be excluded: —

i. the day on which the period begins to run;

ii. the day on which the judgment was pronounced;

iii. the time requisite for obtaining a copy of the decree, sentence or order;

iv. the time requisite for obtaining a copy of the judgment.

IN COMPUTING THE PERIOD OF LIMITATION PRESCRIBED FOR AN APPLICATION TO SET ASIDE AN AWARD, THE FOLLOWING PERIODS SHALL BE EXCLUDED: —

a. the day on which time begins to rune

b. the time requisite for obtaining a copy of the award.

In computing the period of limitation prescribed for any other application, only the day on which the time begins to run shall be excluded.

TIME REQUISITE FOR COPY

The words "time requisite" used in Section 12(3) have not been defined. The question what is the time requisite for obtaining copies in a particular case is one of fact and must be determined with reference to the facts and circumstances of that case and in the light of the rules, if any, and also of the practice of the Court.

The time requisite for obtaining copies is the time which an applicant takes to obtain the copies using all diligence possible on the part.

PARBATI V. BHOLA, I.L.R. 12 ALL. 79

Any "delay caused by the carelessness or negligence of a party applying for a copy cannot be taken into consideration or allowed for in computing the time requisite, for obtaining the copy. The requisite does not mean requisite by reason of the carelessness or negligence of the applicant; it means the time which is occupied by the officer who has got to provide that copy, in making the copy."

The provisions of Section 12(2) would apply even though the copy mentioned in that sub- section is not required to be filed along with the memorandum of appeal.

PRAMATHA NATH ROY V. LEE, A.I.R. 1922 P.C. 352

The word ‘requisite’ means something more than the word ‘required’. It must be construed to mean ‘properly required.’ The burden is on the appellant to show that no part of the delay beyond the prescribed period is due to his fault.

SYED QAMARUDDIN AHMED V. THE SPECIAL DEPUTY COLLECTOR, LAND ACQUISITION (DEFENCE) HYDERABAD, A.I.R. 1981 ANDHRA PRADESH 371

In the case of Jaimullabdin, in re, A.I.R. 1920 Mad. 1025, the judgment was pronounced at an early hour on the last day preceding certain holidays and an application for a copy was made on the day when the court reopened after the holidays. It was held that the appellant was not entitled to the deduction of the holidays. It is clear from this judgment ^- that where there is time for applying for a copy on the day when the judgment was delivered, it is not open to the appellant to contend that the time during which the Court was closed thereafter should be excluded.

GOBIND RAM V. HARNAMPASS, A.I.R. 1981 DELHI 1 4

When there has been no mistake, inaction or want of bona fides on the part of the applicant or his Counsel and there is a delay in giving copies due to the negligence or rules of the copying Department, the period spent by an applicant in obtaining the certified copy should be regarded as "time requisite'

G.E.C. INDIA LTD. V. CORPORATION OF CAL., A.I.R. 1956 CAL. 413

The words "the time requisite for obtaining a copy" are not inapplicable in those cases where the appellant is not required to obtain a copy at his own expense by applying for it but is entitled by statute to get a copy from the authority, or authorities concerned within a certain time. In a case of that type also, the time, taken by the authorities concerned to supply the copy would legitimately be "time required for obtaining the copy", so far as the appellant is concerned, and he will be entitled to its exclusion under Section 12(2) in the matter of computation of the period of limitation.

"Time requisite for obtaining a copy" means the time beyond the appellant’s control occupied by the copying department after an application for copy has been duly made and not an ideally shorter period within which it could be shown that the copying department could prepare a copy. The Court is not concerned with the ideally minimum time within which the copying department could most expeditiously produce a copy. The Court is concerned with the time actually occupied by the copying department.

IQBAL SINGH V. A.V. SUBBARAO, A.I.R. 1973 A.P. 193

Time requisite for obtaining a copy of judgment or decree starts from the date of application. Where the original application filed for copies of the judgment and decree was struck off by the trial Court, but it was restored by a subsequent applicant, the date for computing the period of limitation is not the date on which the second ap location is filed, but the date when the original application was filed. In other words, where dismissal of an application for copy of judgment and decree is cured by its restoration, the starting of "exclusion period" also is thereby restored.

COURT CLOSING AFTER DELIVERY OF JUDGMENT: -

Where the judgment was delivered on the last day before the close of the Court for Christmas vacation and the application for copy of the judgment was made on the next reopening day. Held that it being impossible for the appellant to make an app ication earlier, he was entitled to exclude under Section 12 not only the time actually taken in obtaining the copies, but also the whole of the time during which the Court was closed when he could not have possibly applied for copies. [l.L.R. 27 Mad. ZT], there is no dispute that on a literal construction of the section 12, the period for which the Court remains closed cannot be excluded as the time requisite for obtaining copy of the judgment or decree. But the matter should be considered from a bigger principle and it is this that no litigant can be deprived of a right conferred on him for no fault of his.

5. EXCLUSION OF TIME IN CASES WHERE LEAVE TO SUE OR APPEAL AS A PAUPER IS APPLIED FOR: —

In computing the period of limitation prescribed for any suit or appeal in any case where an application for leave to sue or appeal as a pauper has been made and rejected, the time during which the applicant has been prosecuting in good faith, his application for such leave shall be excluded, and the Court may, on payment of the Court-fees prescribed for such suit, or appeal, treat the suit or appeal as having the same force and effects if the Court-fees had been paid in the first instance.

NOTES

According to Section 3, a suit is instituted in the case of pauper, when his application for leave to sue as a pauper is made.

Section 13 of the new Act expressly provides that where leave to sue or appeal as a pauper is applied for but is not granted, the time during which the applicant has been prosecuting in good faith, his application for such leave shall be excluded in computing the period of limitation prescribed for such suit or appeal and the Court may, on payment of the Court-fee, treat the suit or appeal as having the same force and effect as if the Court-fees had been paid in the first instance.

6. EXCLUSION OF TIME OF PROCEEDING BONA FIDE IN COURT WITHOUT JURISDICTION

a. In computing the period of limitation for any sui the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

b. In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

c. Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature.

EXPLANATION:

For the purposes of this section-

a. in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;

b. a plaintiff or an applicant resisting an appeal shall be deemed to proceeding;

c. misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.

The principle of Section 14 is the protection against the bar of limitation of a person honestly doing his best to get his case tried on the merits but failing through the Court being unable to give him such a trial.

BASDEO PD. KHEMKA V. UNION OF INDIA, A.I.R. 1978 CAL. 100

The section does not give a discretion to the Court but, on the other hand, the litigant is entitled as a matter of right to exclude the period spent in infructuous proceedings provided the requisite conditions are satisfied by the plaintiff.

The essential requisites for the application of Section 14 of the Act are that the party seeking the benefit of Section 14 had to affirmatively show: that he had been prosecuting the previous suit with due diligence; that the matter in issue in the previous suit and the new suit are the same; that the previous suit was prosecuted in good faith; and that the Court was unable to entertain that suit on account of defect of jurisdiction or other cause of a like nature.

If all the aforesaid four elements are established, then only the period occupied in prosecuting the earlier suit will have to be excluded or added to the prescribed period. When the party seeking the benefit of Section 14 does not establish his case, the burden is not shifted on the other side to show the contrary.

GOOD FAITH

As per Section 14(1) in computing the period of limitation for any suit, the time taken to prosecute the same in a wrong Court shall be excluded if it was prosecuted in that court in good faith.

The definition of ‘good faith’ in the General Clauses Act, 1897 that ‘a thing shall Be deemed to be done in good faith where it is in fact done honestly, whether it is done negligently or not’ is not relevant to construing Section 14.

While considering Section 14, the definition of good faith given by the Limitation Act should be applied. Therefore, the rule as to what is a good faith is a matter to be decided on the facts and circumstance of each case.

According to section 2(h) of the Limitation Act, “nothing shall be deemed to be done in good faith which is not done with due care and attention”.

Therefore, if it is proved that the plaintiff prosecuted the case not due to want of due care and attention and he was careful enough, he can get the benefit of section 14.

On the other hand, if it was brought out that the suit happened to be filed and prosecuted in the wrong Court for want of due care and attention on the part of the plaintiff, then it cannot be said that the plaintiff was prosecuting the case in that court in good faith.

For proving absence of good faith, it is not necessary to establish that the plaintiff was dishonest in filing the suit before the wrong Court or that he did its mala fide.

VIJAY KUMAR RAMPAL AND OTHERS V. DIWAN DEVI AND OTHERS, A.I.R. 1985 S.C. 1669

Failure to pay the requisite Court-fee found short on a contention begin raised or the error of judgment in valuing a suit filed before a Court which was ultimately found to have no jurisdiction has absolutely nothing to do with the question of good faith in prosecuting the suits as provided in Section 14. Held, that the High Court was in error in holding that defective valuation and improper computation of Court-fees disclosed lack of good faith on the part of the plaintiff.

The section does not prescribe any period of limitation but provides only a method of calculation of that period when a suit has been instituted bona fide in a Court without jurisdiction.

The effect of this section is not to render the suit after refiling in the proper Court a continuation of the original suit, and consequently, the period of limitation has to be determined as if it was a new suit, and the period will be that which was prescribed for the original suit, but excluding the period during which the suit was being prosecuted bona fide in a wrong Court.

The same considerations apply to an application which has to be filed within a certain time.

COURT: —

The expression ‘Court’ contemplated under Section' 14 does not necessarily mean the Civil Court under the Code of Civil Procedure.

Shri Bansi Ram and Others v. Shri Khazana, A.I.R. 1993 H.P. 20 Any Tribunal or Authority deciding the civil rights of the parties will be deemed to be a Court for that purpose.

ORDER XXIII (23) OF CPC--- WITHDRAWAL AND ADJUSTMENT OF SUITS

Rule 1. Withdrawal of suit or abandonment of part of claim

Where the Court is satisfied, —

a. that a suit must fail by reason of some formal defect, or

b. that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim,

c. it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute fresh suit in respect of the subject- matter of such suit or such part of the claim.

Rule 2. Limitation law not affected by first suit—

In any fresh suit instituted on permission granted under the last preceding rule, the plaintiff shall be bound by the law of limitation in the same manner as if the first suit had not been instituted

EXPLANATION CLAUSE (A): —

Clause (a) of the Explanation to the section says that in excluding time under this section, the day on which the former suit or application was instituted or made and the day on which the proceedings therein ended shall both be excluded.

The period that can be deducted under this section is only the period from the date of the filing of the plaint to the date on which it was finally returned by the court for representation.

Thus, where A presented a plaint in the Court and the same was ordered to be returned on the 25th March for presentation to the proper Court, but the office returned it only on the 10th April, it was held that A was entitled to count in his favour the days up to 10th April when the plaint was finally returned.

EXPLANATION CLAUSE (B): —

Clause (b) of the Explanation says that the plaintiff or the applicant who, after having won the case in the Court of first instance strove as respondent to maintain the decree of the Court of first instance and ultimately lost the appeal by the appeal having been allowed against him, is entitled to have the period during which he has been fighting the appeal as respondent to be excluded from limitation should it become necessary to file a suit.

EXPLANATION CLAUSE (C): —

Clause (c) of the Explanation says that the misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.

SECTION 14, MEANING OF EXPRESSION "DEFECT OF JURISDICTION": —

The expression "defect of jurisdiction" on a plain reading means the Court must lackjurisdiction to entertain the suit or proceeding. The circumstances in which or the grounds on which, lack of jurisdiction of the Court may be found are not enumerated in the section.

The words "or other cause of a like nature" are to be construed ejusd m generis with the words ‘defect of jurisdiction’, that is to say, the defect must be of such a character as to make it impossible for the Court to entertain the suit or application and to decide it on merits.

DEENA V. BHARAT SINGH, A.I.R. 2002 S.C. 2768 AT 2772-2

It means Section 14 will have no application in a case where the suit is dismissed after adjudication on its merits and not because the Court was unable to entertain it.

SECTION 15- EXCLUSION OF TIME IN CERTAIN OTHER CASES

Section 15 provides for exclusion of time where there has been an injunction, or notice has to be given, or the previous sanction of the Government has to be obtained, or where a liquidator has been appointed. Five rules are laid down in this connection, as under: -

a. When a suit or execution proceedings are stayed by injunction or order: Sec. 15(1).

b. When notice to Government or any other authority is necessary, the period of notice: Sec. 15(2)

c. When receiver in insolvency or liquidator in winding up is appointed: Sec. 15(3).

d. When proceedings to set aside sale has been prosecuted: Sec. 15(4).

e. When the defendant has been absent from India: Sec. 15(5).

Section 15(1) In computing the period of limitation of any suit or application for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of the continuance of the injunction or order, the day on which it was issued or made, and the day on which it was withdrawn, shall be excluded.

The object of Sec. 15(1) is to safeguard the interest of the person who is precluded by an injunction or order of court from exercising a right of suit or execution of a decree passed. The words ‘stayed by injunction or order’ have reference to order of courts and not to a disability to sue or to apply arising from other circumstances such as declaration of war. The execution must have been stayed by an express injunction or order [Akkayya v Appayya, ILR (1947) Mad. 661], and not by an implied order or a collateral litigation. In order to attract Sec. 15(1), it is only the order of stay passed by the court that is necessary and not that the order is proper or valid.

Section 15(2) In computing the period of limitation for any suit of which notice has been given, or for which the previous consent or sanction of the government or any other authority is required, in accordance with the requirements of any law for the time being in force, the period of such notice or, as the case may be, the time required for obtaining such consent or sanction shall be excluded.

Explanation:

In excluding the time required for obtaining the consent or sanction of the government or any other authority, the date on which the application was made for obtaining the consent or sanction and the date of receipt of the order of the government or other authority shall both be counted.

Section 15(2) is intended for cases in which the plaintiff is under a statutory obligation to give a notice before he can institute a suit e.g. Sec. 80 of the C.P.C., 1908, which provides that no officer, etc., could be sued until the expiration of two months next after the notice in writing has been given.

Section 15(3) In computing the period of limitation for any suit or application for execution of a decree by any receiver or interim receiver appointed in proceedings for the adjudication of a person as an insolvent or by any liquidator or provisional liquidator appointed in proceedings for the winding up of a company, the period beginning with the date of institution of such proceeding and ending with the expiry of three months from the date of appointment of such receiver or liquidator, as the case may be, shall be excluded.

It should be noted that by the time a receiver or liquidator is appointed in insolvency or liquidation proceedings, and the receiver or liquidator after getting information about the assets and liabilities of the estate gets down to the task of realizing the assets of the estate, claims in favour of such estate or company get barred to the detriment of the persons entitled to the benefits of the assets. To avoid this hardship, it is provided that the period between the filing of the petition for winding up or adjudication and the appointment of the receiver (including interim receiver) or liquidator (including provisional liquidator) and a period of three months thereafter (to enable him to acquaint himself with the affairs of the estate) should be excluded.

In Sec. 15(5), the defendant is one who was at one time present in India and later has been absent from India. A person who has never been in India cannot be considered as having been ‘absent from India.’

P.J. JOHNSON V ASTROFIED ARMADOM AIR 1999 KER. 53 F.B.

it was held that in a suit for recovery of money for goods and services supplied to the ship of a foreign corporation, the foreign corporation was never present in India and necessarily, therefore, was never absent from India and Sec. 15(5) cannot, therefore, be attracted while computing the period of limitation for a suit filed in India against such corporation.

Sec. 15(5) has reference only to the absence of the defendant from the India, not to that of the plaintiff. A plaintiff out of the India may prosecute a suit by his attorney. Further, the plaintiff’s voluntary or involuntary absence in a foreign country cannot bar the operation of limitation. The onus is upon the plaintiff to prove that the defendant has been absent from India.

MUTHUKANNI V ANDAPPA AIR 1955 MAD. 96 F.B.

In a suit against partners, where one of the partners is absent from India, it has been held that the fact of his absence entitles the plaintiff to deduct the time not against all the defendants, but against the absentee defendant only.

ATUL KRISTO BOSE V LYON 5- CO. (1887) 14 CAL. 457

The words “absent from India” do not necessarily imply that the defendant was present in India at the time the cause of action accrued or the period of limitation commenced to run. The sub-section will apply equally to cases where the defendant was absent altogether from India at the time of the accrual of cause of action, as to cases where he leaves India after the period of limitation.

IN COMPUTING THE PERIOD OF LIMITATION

1. any suit or application for the execution of a decree the institution or execution of which has been stayed by injunction or order

2. for any suit of which notice has been given, or for which the previous consent or sanction of the government or any other authority is required,

In excluding the time required for obtaining the consent or sanction of the government or any other authority, the date on which the application was made for obtaining the consent or sanction and the date of receipt of the order of the government or other authority shall both be counted

3. for any suit or application for execution of a decree by any receiver or interim receiver appointed in proceedings for the adjudication of a person as an insolvent or by any liquidator or provisional liquidator appointed in proceedings for the winding up of a company,

4. for suit for possession a by a purchaser at a sale in execution of a decree

5. for any suit

THE TIME OF…. SHALL BE EXCLUDED.

1. the time of the continuance of the injunction or order

2. the day on which it was issued or made, and

3. the day on which it was withdrawn,

the period of such notice or the time required for obtaining such consent or sanction

the period beginning with the date of institution of such proceeding and ending with the expiry of three months from the date of appointment of such receiver or liquidator

the time during which a proceeding toset aside the sale has been prosecuted

the time during which the defendant has been absent from India and from the territories outside India under the administration of the Central Government,

16. EFFECT OF DEATH ON OR BEFORE THE ACCRUAL OF THE RIGHT TO SUE

1. Where a person who would, if he were living, have a right to institute a suit or make an application dies before the right accrues, or where a right to institute a suit or make an application accrues only on the death of a person, the period of limitation shall be computed from the time when there is a legal representative of the deceased capable of instituting such suit or making such application.

2. Where a person against whom, if he were living, a right to institute a suit or make an application would have accrued dies before the right accrues, or where a right to institute a suit or make an application against any person accrues on the death of such person, the period of limitation shall be computed from the time when there is a legal representative of the deceased against whom the plaintiff may institute such suit or making such application.

Section 16(3) Nothing in sub-section (1) or sub-section (2) applies to suits to enforce rights of pre-emption or to suits for the possession of immovable property or of a hereditary office.

Section 16(1) Where a person who would, if he were living, have a right to institute a suit or make an application dies before the right accrues, or where a right to institute a suit or make an application accrues only on the death of a person,

Section 16(2) Where a person against whom, if he were living, a right to institute a suit or make an application would have accrued dies before the right accrues, or where a right to institute a suit or make an application against any person accrues on the death of such person,

Section 16(3) Nothing in sub-section (1) or sub-section (2) applies to..

the period of limitation shall be computed from the time when there is a legal representative of the deceased capable of instituting such suit or making such application.

the period of limitation shall be computed from the time when there is a legal representative of the deceased against whom the plaintiff may institute such suit or making such application.

to suits to enforce rights of pre-emption or to suits for the possession of immovable property or of a hereditary office.

PRINCIPLE —

This section deals with the effect on death on running of limitation when the person, who would have a right to institute a suit or make an application, dies before or on accrual of such right.

The section adopts the general principle that unless there is a completed cause of action, limitation cannot run and that unless there is a person who can sue and a person who can be sued, there cannot be a complete cause of action. In other words, limitation cannot run unless there be a person who can sue or who can be sued.

CAPABLE OF INSTITUTING OR MAKING, ETC -- The words “a person capable of instituting such suit” in this section means a person not under such disabilities as are mentioned in Sec. 6. The expression “capable of suing” is the equivalent of “not under legal disability to sue.” Thus, the mere existence of a legal representative of the deceased is not sufficient for the purpose of Sec. 16.

SCOPE OF THE SECTION. –

The section applies to suits as well as applications. However, it does not apply to suits:

1. to enforce rights of pre-emption, or

2. for the possession of immovable property, or

3. for the possession of an hereditary office.

The section does not apply to appeals also.

BEFORE THE RIGHT ACCRUES. - To bring this section into operation, death must occur before the right to sue or make an application accrues. The effect of death before the right to sue accrues is to prevent the running of limitation until there is a legal representative of the deceased plaintiff or defendant capable of suing or being sued, or capable of making the application or against whom the application may be made. If the death happens after the right to sue has accrued, the running of time is not prevented because according to S. 9, when once time has begun to run, no subsequent disability or inability stops it.

In the case of a person other than a Hindu, Muhammedan, Buddhist, Jain, Sikh, or Indian Christian, dying intestate, only an administrator can sue or be sued on behalf of the estate. (Ss. 211 and 212 of the Indian Succession Act.) In such cases, limitation cannot begin to run under S. 16 before the grant of letters of administration. In the case of Hindus, Muhammedans, Jains, Buddhistis, Sikhs and Indian Christians, a suit can be brought on behalf of or against the estate of deceased person even before the grant of letters of administration. Therefore, there will be no postponement of limitation under S. 16 in such cases.In all cases where there is an executor he can, sue or be sued on behalf of the estate even before obtaining probate of the will. Consequently, in such cases, there will be no postponement of limitation under S. 16.

17. EFFECT OF FRAUD OR MISTAKE

1. Where, in the case of any suit or application for which a period of limitation is prescribed by this Act- the suit or application is based upon the fraud of the defendant or respondent or his agent; or the knowledge of the right or title on which suit or application is founded is concealed by the fraud of any such person as aforesaid; or the suit or application is for relief from the consequences of a mistake; or where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him; the period of limitation shall not begin to run

I. until the plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, have discovered it; or

II. in the case of a concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production:

PROVIDED that nothing in this section shall enable any suit to be instituted or application to be made to recover or enforce any charge against, or set aside any transaction affecting, any property which- in the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know, or have reason to believe, that any fraud had been committed, or in the case of mistake, has been purchased for valuable consideration subsequently to the transaction in which the mistake was made, by a person who did not know, or have reason to believe, that the mistake had been made, or in the case of concealed document, has been purchased for valuable consideration by a person who was not a party to the concealment and did not at the time of purchase know, or have reason to believe, that the document had been concealed.

3. Where a judgement-debtor has, by fraud or force, prevented the execution of a decree or order within the period of limitation, the court may, on the application of the judgement-creditor made after the expiry of the said period extend the period for execution of the decree or order:

PROVIDED that such application is made within one year from the date of the discovery of the fraud or the cessation of force, as the case may be.

The principle behind Sec. 17 is that the right of a party defrauded cannot be affected by lapse of time so long as he remains in ignorance of the fraud which has been committed. But as soon as the circumstances constituting the fraud become known to him, subsequent lapse of time will operate as a bar. Those who fraudulently appropriate the property of others should be assured that no time will secure to them the fruits of their dishonesty, but that their children’s children will be compelled to restore the property.

Sec. 17 is limited to suits and applications including execution petition) only.

It does not apply to appeals. It also does not apply to criminal cases {Emperor v Nageshappa, 20 Bom. 543). In cases where an appellant has been kept out of the knowledge of his right to appeal by the fraud of the opposite party, he may not be able to rely on this section but, he may seek the indulgence of the Court under Sec. 5 of the Act for excusing the delay.

Sec.17 is an enabling section which postpones the starting point of limitation for suits and applications. Once limitation started running subsequent acts of fraud would not prevent running of time. Thus, there must be fraud at the time when the cause of action arises {Babulal v Chandabai AIR 1989 Karnt. 221).

The fraud mentioned in this section must be committed by the party against whom a right is sought to be enforced i.e. the defendant or his agent. If the fraud has been committed by a third person, this section will not apply.

Baikunth v Kesor AIR 1969 Pat. 160

The date of knowledge of fraud or mistake is to be excluded from computation of limitation period.

Kalyan Mal v Ahmadudin AIR. 1934 PC 208

Burden of proof - If the plaintiff claims exemption on the ground of fraud on the part of the defendant, he must prove the fraud The court will not presume it from the mere existence of suspicious circumstances. When the plaintiff proves it then the burden shifts upon the defendant/respondent to show that the plaintiff had clear knowledge of the facts constituting the fraud at a time which is too remote to allow him to bring the suit.

18. EFFECT OF ACKNOWLEDGEMENT IN WRITING

1. Were, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgement of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgement was so signed.

2. Where the writing containing the acknowledgement is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.

Explanation:

For the purposes of this section-

a. an acknowledgement may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or right;

b. the word signed means signed either personally or by an agent duly authorised in this behalf; and

c. an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.

WHAT IS ACKNOWLEDGMENT?

Acknowledgement means a definite, clear admission of existing liability by the defendant. It is a statement in writing that a debt is due and unpaid.

An acknowledgment is an admission by the writer that there is a debt owing by him, either to the receiver of the letter or to some other person on whose behalf the letter is received, but it is not enough that he refers to a debt being due from somebody.

Sec. 18 do not enlarge the period of limitation but a fresh period begins to run from the date of acknowledgment. Acknowledgement of liability by the defendant interrupt limitation i.e. cancels the already elapsed portion of the period of limitation and allows a fresh period of limitation from the date of such interruption.

Such an acknowledgment, however, does not extinguish the original cause of action nor create a new one. The basis of the claim is the original cause of action and the acknowledgment only shows that it still subsists and remains unsatisfied. An acknowledgment merely recovers the debt.

Example - A period of three years is prescribed by the Indian Limitation Act for an ordinary oral debt. After expiry of 2 years, the debtor gives written acknowledgement in the form of a letter signed by him to the creditor saying that he is sorry for the debt not being paid yet. A fresh period of 3 years will start from the date of the letter.

It is important to note that the day on which the acknowledgment is made will have to be excluded in computation (Sec. 12, Limitation Act).

VENKATARAMAYYAR V KOTHANDARAMAYYAR, 13 MAD. 135

If an acknowledgement is made in favour of a minor, the new period of limitation is to be computed from the date when the plaintiff attains majority.

Under this section, an acknowledgement is not limited in respect of a debt only; it may be in respect of “any property or right” which is the subject-matter of the suit e.g. the taking of account of a dissolved partnership.

The distinction between an “acknowledgement” under Sec. 18 of the Limitation Act and a “promise” under Sec. 25 of the Contract Act. It is of great importance. Both must be in writing signed by the party or his agent authorized in that behalf, and both create a fresh starting point of limitation. But while an acknowledgement under the Limitation Act is required to be made before the expiration of the period of limitation, a promise under Sec. 25(3) of the Contract Act may be made after the limitation period. If a debt is time-barred, there can be no acknowledgement of the debt; there can only be a promise to pay that sum. Such a promise would amount to a new contract.

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