INDIAN LIMITATION ACT, 1963 ( W.E.F. 01-01- 1964)

Updated: May 20, 2020

LAW OF LIMITATION- The Law of Limitation limits or prescribes a time after the lapse of which suit other proceedings cannot be maintained in a court of law or the persons liable to sue shall become exempt from answering therein. It does not postpone or suspend the right of claimants, it merely prescribes a period for the institution of the suit and forbids them from being brought after periods, each of which starts from some definite event. It only restrains the holder of a right from enforcing his right by recourse to law after prescribed period of limitation.

NATURE OF ACT- The rule of limitation is the role of the procedure, a branch of adjective law. The intention of the law limitation is not to create a right where there is none, nor to extinguish a right where there is one, but to interpose a bar after a certain period to enforce an existing right. The plea of limitation can be raised only as against the plaintiff and not against the defendant. LAW IS “LEX FERI”: it means whether an obligation is to enforced or not depends exclusively upon the law of limitations of the country in which the suit is brought (lex feri)

LIMITATION BARS THE REMEDY BUT DOES NOT DESTROY THE RIGHT- Section- 3 of Indian limitation lays down the general rule of Limitation Act and reads as under: Subject to the provision contained in Section 4 to 24 ( inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence. The Limitation Act thus prescribes a period within which various suits, appeals, or applications for respective claims can be instituted in courts of law. If a party or claimant fails to do so. It cannot claim any further remedy at law.

The rule of limitation is a rule of procedure. It does not either create or extinguish a right. In the words of Sir Richard Couch in Harrynath V/S Mather, 20 LA. The intention of the law of limitation is not to give right where there is none nor to extinguish a right where there is one but to interpose a bar after a certain period to a suit to enforce an existing right. Limitation thus simply bars the judicial remedy, without extinguishing the right. For example, where the recovery of a debt has become time-barred without by the lapse of the prescribed time, the right to the debt is not extinguished and the same question and the same applies to the debtor without being aware of the money due to him on the ground that his claim for recovery of the debt had become time-barred. In Punjab National bank and others v/s Surendra Prasad Sinha, AIR 1992 SC 1815 Section 3 of Limitation Act bars the remedy but does not destroy the right to which the remedy relates. Right to debt continues to exist notwithstanding remedy is barred. Right can be exercised in any other manner than using a suit. It is settled law that the creditor would be entitled to adjust, from payment of a sum by debtor towards time-barred debt. It is also equally settled law that creditor when he is possession of adequate security debt due could be adjusted from security in his possession. Law of limitation is an absolute law and the parties cannot evade it by way of private agreement. Thus under section 28 of the contract act, an agreement that limits the time within which any party thereto may enforce his rights by the usual legal proceedings in ordinary tribunals is void. Similarly, an agreement between the parties that the defendant will not plead the law of limitation in a suit brought against him by the other is void. Exception: However, there is one exception to rule that law of limitation bars the remedy but not the right. This has been incorporated in section 27 of the Act. The Section provides: At the determination of the period hereby limited to any person for instituting a suit for possession of any property his right to such property shall be extinguished.

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