Report No. 89
The Limitation Act, 1963
1.1. Revision of the Limitation Act.- Revision of the Limitation Act, 1963 has been taken up by the Law Commission of India sou motu, in view of the importance of the subject as a branch of adjective law. The Act is an enactment of general application and importance; its provisions come up before the courts daily for interpretation.
An unjust or unsatisfactory rule of limitation that bars the institution of legal proceedings means that the remedy contemplated by the law for the enforcement of a legal right becomes futile,.-if the injustice or unsatisfactory character of the rule consists in its allowing an unduly long time for the pursuit of a legal reme.-then the interests of justice are defeated, because stale demands would thereby be encouraged. It is therefore proper that such an important enactment is reviewed from time to time.
The present Act was enacted about twenty years ago. During this period, extensive developments have taken place, both in law and in society. It is proper that those developments should be taken note of in a comprehensive manner. The present Act was passed after the Law Commission reported on the earlier Act of 1908 and largely implements the recommendations made by the Commission.1 It is therefore particularly appropriate that a review of the law may be undertaken by the Commission again.
1. Law Commission of India, 3rd Report (Limitation Act , 1908) (July, 1956).
1.2. History.- The statutory law of limitation has a long and interesting history in India, which takes us at least to 1859. Before that year, there was no uniform Iaw of limitation. Various Regulations, applicable to the Company's Courts dealing with certain topics falling within the law of limitation, were in force in the Mofussil of the three Presidencies. For the Courts established by the Royal Charter in the Presidency towns, the English law was taken as applicable. To introduce uniformity in law, the limitation Act (14 of 1859) was passed.
The Act came into force in 1862, but covered only suits, and, moreover, did not contain any provision relating to prescription. The Limitation Act, 1871 (9 of 1871), which replaced the Act of 1859, added certain provisions in the nature of law of prescription also, and introduced, for the first time, the arrangement which one finds in the present A.-namely, the general principles relating to computation and exclusion of time find a place in the body of the Act, while the actual ti.-limits for various kinds of proceedings are placed in a tabular statement, forming a Schedule to the Act.
It may also be mentioned that the Act of 1871 introduced a period of sixty years applicable to a suit of any kind brought by the Government. This Act was replaced by the Limitation Act, 1877 (15 of 1877). Besides making certain minor changes in regard to the classes of suits expressly covered and the time limit or the starting point of limitation for various suits, the Act of 1877 extended the operation of the law of prescription, by making two additions to it.
In the first place, while the Act of 1871 had provided that the right to land or to a hereditary office could be extinguished by lapse of time, the Act of 1877 extended this principle to any property, whether movable or immovable. Secondly, while the Act of 1871 provided for the acquisition of easements absolutely by open and uninterrupted enjoyment for twenty years, the Act of 1877 extended this provision to what are known as profits a prendre.
The Limitation Act 1908 (9 of 1908) made certain changes in matters of detail, without radically altering the substance or the arrangement of the provisions. In the meantime, the Indian Easements Act dealing with easements, had been passed, which too provided for the acquisition and extinction of easements by prescription. The Limitation Act of 1908 therefore expressly provided that its provisions concerning easements shall not apply to cases arising in the territories to which the Indian Easements Act, 1882 may, for the time being, extend.
The Limitation Act of 1963 (the present Act) has made a few changes of substance in the A.-particularly, in certain time limits and also in regard to the scheme relating to applications for execution. At the same time, it has not disturbed the basic structure of the Act of 1908. As already mentioned,1 the present Act largely implemented the recommendations made by the Law Commission in its Report on that Act.
1. Para. 1.1, supra.
2. Mr. Justice Kerr Law Reform in Changing times, 96 LQR 515.
1.3. Principles for revision.- It would be convenient to mention at this stage some of the general principles adopted by us in revising the Act. In the first place, we have examined the case law on the Act in some detail, addressing ourselves especially to conflict of decisions on important points. In a law of day-to-day use, this aspect is of practical importance. Secondly, some of the provisions of the Act appeared to require review in the light of a few juristic trends that have emerged in recent times.
By way of example, we may mention the more liberal attitude of the law in regard to mistake of law as a basis for granting relief against strict application of rules of limitation. Thirdly, certain commercial and other transactions have gained popularity in recent times and it is proper that the law should take note of them. We may cite, by way of example, the practice of placing money in fixed deposits.
For the recovery of money so placed, the Act has no specific article at prese.-a matter certainly requiring attention. Fourthly, apart from conflict of views, judicial decisions have brought out a few lacunae in the A.-for example, the difficulty caused by the draftsmanship of section 29 in regard to stilts for dower. Fifthly, some of the provisions of the Act are unduly restricted in their scope, and it has been considered worth examination whether the principle on which they are based should not be given its full scope by making the provision more ample than at present. Section 11 furnishes one example.
That section (dealing with certain aspects of conflict of laws) is unnecessarily restricted to certain kinds of causes of action. These have been some of the important aspects that have been kept in view in reviewing the Act.
1.4. Need for having another look.- A query may perhaps be raised as to the need for having another look at the Act within twenty years or so. It is enough to answer it by quoting what the Chairman of the Law Commission for England and Wales said about the process of law reform:1
"In every society, law reform in changing times is a process which is as endlessly necessary as cleaning the streets, maintaining buildings, pruning trees and disposing of refuse. It has to be done; either systematically and continuously, or drastically from time to time."
1.5. Policies underlying the law of limitation.- The policies underlying the law of limitation are ultimately based on justice and convenience. An individual should not live under the threat of a possible action for an indeterminate period, since it would be unjust. Again, the defendant should be saved the task of defending stale causes of action, as it is often inconvenient. Further, vigilance in the pursuit of rightful claims should be encouraged so that these are the ethical or rational justifications for the law of limitation. All that has been said on the subject can be summarised by stating that the law of limitation rests upon three main foundatio.-justice, convenience and the need to encourage diligence.
1.6. Hardship occasionally caused.- However, it is obvious that while these considerations are laudable in themselves, their translation into practical legislation is not a matter of case. An over-emphasis on these propositions at the risk of disregarding some other weighty counter-balancing consideration might cause serious injustice. The law of limitation attracts adverse comments when a person is thrown out of court on the plea of limitation for no possible fault of his. A recent English case1 on the point is of one Mr. Liff.
He had suffered serious personal injuries in a car accident, but, on account of wrong advice given by his solicitors, the two insurance companies with whom the concerned car owners had insured themselves got away on the technical plea of limitation. An academic writer2 compares that luckless passenger to the plight of Winnie the Pooh,3 "Pathetic", he said, "that's what it is, Pathetic". Reference is made by the same writer in this context. Thus, the law of limitation has to strike a balance between the policy considerations mentioned above (on the one hand) and the risk of injustice (on the other hand).
1. Liff v. Peasley, (1980) 1 All ER 623.
2. Berelt Morgan Fault in the System, (30 Oct., 1980) 130 New U 1002.
3. A Milner Winnie The Pooh, Chapter 6.
1.7. Scheme of the Act: the sections.- So much as regards the importance of having a law of limitation that is reasonably fair in its substance and reasonably certain in its form. The scheme of the present Act may be briefly described at this stage. The Act (like its predecessors) is divided into sections and articles. The operative provisions and the principles as to computation of the period of limitation, as also provisions in the nature of prescription, are to be found in the sections of the Act.
The periods of limitation applicable to various classes of suits, appeals and applications, and the time from which the period begins to run in each case, are matters dealt with in a tabular form in the articles placed in the Schedule to the Act.
1.8. One of the principal objects of the law of limitation is the discouragement of stale demands1, particularly for the reason that where the raising of controversy is unduly delayed, evidence tends to disappear and opportunity may arise for the filling of claims which are either dishonest or mistaken in point of facts.
Since this difficulty would not survive where the party against whom the claim is made has himself furnished reliable evidence of the debt or liability, the Act in sections 18 to 20, provides for counting a fresh starting point of limitation where the person sought to be charged in respect of any property or right has made a written acknowledgment of liability, as also where payment on account of a debt or an interest on a legacy has been made by such person (coupled with a written record). Of course, such acknowledgments or payment must have been made before the claim has already become time-barred.
1. cf. para. 1.5, supra.
1.9. The case of substitution or addition of parties during the course of litigation is dealt with in section 21. Continuing breaches of contracts and torts are taken care of by section 22, while, in respect of suits for compensation for acts which are not actionable without special damage, section 23 makes a suitable provision. Section 24 provides that for the purposes of the Act all instruments shall be deemed to be made with reference to the Gregorian calendar.
1.10. Next follow provisions in the nature of prescription concerned with the acquisition of easements by prescription (sections 25 and 26) and the extinguishments of right to property at the determination of the period of limitation for instituting a suit for possession of any property (section 27). The body of the Act ends with miscellaneous provisions concerned with the amendment of certain other Acts, savings, transitional provisions and repeal (sections 28 to 32).
Coming to the body of the Act, sections 1 and 2 deal with preliminary matters, including definitions. The most important provisions of the Act relating to the bar of limitation occurs immediately thereafter, in section 3. Dismissal of a suit, appeal or application filed after the prescribed period is mandatory. Section 4 deals with the situation of expiry of the prescribed period at a time when the court is closed. Under section 5, in the case of appeals and certain applications, the court has power, for sufficient cause, to extend the prescribed period.
Here one has an example of legislative anxiety to maintain a balance between ensuring vigilance and avoiding hardship. As regards persons under legal disability, appropriate provisions are made in sections 6 to 8. Subject to these special provisions, the general principle laid down in section 9 is that once time has begun to run, no subsequent disability or inability to institute a suit or make an application stops it. By way of an exceptional provision, section 10 provides that certain suits against trustees and their representatives are not barred by "any length of time".
The section takes within its fold Hindu, Muslim and Buddhist religions and charitable endowments as we.-a provision which constitutes a first rate example of the legislature stepping in to correct an anomaly brought to light by judicial decisions. Section 11 deals with a topic belonging to conflict of laws, namely, suits on contracts entered into outside the territories to which the Act extends. Such suits are governed by the Indian law of limitation, whatever be the locus of the cause of action.
Elaborate provisions as to the computation of the period of limitation next follow. Thus, time taken in certain preliminaries that are requisite for pursuing legal proceedings of special categories (appeals and certain applications) is the subject-matter of section.-provision based on necessity. That section also enacts the general rule that the day from which the period of limitation for any suit, appeal or application is to be reckoned must be excluded in computing the period of limitation.
Sections 13 and 14 provide for the exclusion of time actually taken in certain infructuous legal proceedin.-in regard to the special case of an application for permission to sue as a pauper (if ultimately the application is not granted), and in regard to the more general case of legal proceedings which become infructuous because the court, from defect of jurisdiction or other cause of like nature, is unable to entertain them.
Certain cases where the institution of legal proceedings has to be postponed by reasons of necessity, judicial orders (such as, injunctions or stay orders) or statutory provisions as to the giving of a notice as a condition precedent to the institution of a legal proceeding, and the like, are dealt with in section 15. The absence of the defendant from India is, in computing the period of limitation for a suit, excluded under section 15(5).
A cause of action arising on death or a cause of action whose accrual does not take place until after the death of the person concerned needs special treatment, and section 16 attends to such causes of action in the context of limitation.
While these provisions of the Act are mostly concerned with difficulties arising from certain circumstances which are not dependent on the conduct of an individual, justice requires that provision should also be made to relax the law of limitation in case of fraud or mista.-these two being situations in which a person is prevented from instituting legal proceedings within time, either because of the misconduct of the opposite party or because of his own having laboured under a misconception. These two situations are taken care of by section 17.