Report No. 3
106. Article s 116 & 131.-
Article 116 provides for compensation for breach of a contract in writing and registered and a period of six years is provided; time starts when the period of limitation would begin to run in a suit brought on a similar contract not registered. It has been held by the Privy Council in Tricomdas Cooverji v. Shri Gopi Nath, ILR 44 Cal 759 (PC) that the word "compensation" is not used in this Article in the sense of unliquidated damages and that it also applies to recovery of a liquidated amount, as for example, rent under a lease. If the contract happens to be a registered contract, the period of limitation is extended to six years, and time runs from the event mentioned in column 3 of the Schedule to the Act. This Article has been applied to very cases covered by other specific Articles where the contract is registered which is an indication that all those suits are founded on contract. Article 131 also relates to suits on contract.
107. If simplification is desirable, as undoubtedly it is, all the above-mentioned Articles may be omitted and a provision may be made as in the English Act, that in case of suits founded on contract, time runs from the date on which the cause of action accrues and a uniform period of three years may be prescribed. It is not necessary to retain the period of six years in case of registered contracts on the analogy of specialty debts under English law.