Jain And Brors vs State Of Chhattisgarh

The Plaintiff in a suit claimed eligible to exclusion of time in terms of Section 14 of the Limitation Act, 1963; for short 'the Limitation Act'. The trial

Court took up the application specifically filed invoking the said provision and held that the prior proceedings on the basis of which benefit of exclusion

of time was claimed, was decided on merits and not for want of or defect in jurisdiction. The Court below proceeded to hold that the earlier

proceedings were decided on merits and therefore, the Plaintiff is not entitled to maintain the application under Section 14 of the Limitation Act.

Holding so, the said application was dismissed and consequentially, the plaint was rejected under Order VII Rule 11(d) of the Code of Civil Procedure,

1908; hereinafter called 'the CP Code'. That is under challenge.

Assailing the impugned order, the learned counsel for the Appellant argued that the question whether the prior proceedings in writ jurisdiction before

the Madhya Pradesh High Court and before the Hon'ble Supreme Court in Special Leave Petition arising therefrom, are civil proceedings in relation to

the same matter in issue, is by itself a question that ought to have been determined at trial of the suit and that the plea whether the prosecution of such

earlier proceedings were with due diligence and in good faith are also matters to be considered at trial and not in summary manner, as has been done

by the Court below. Elaborating on the various aspects of Section 14 of the Limitation Act, learned counsel made reference to the judgments of the

Apex Court in C. Venkat Swamy v. H.N.Shivanna; AIR 2017 SC 5604, Suryachakra Power Corporation Ltd. v. Electricity Department; (2016) 16

SCC 152, M.P.Housing Board v. Mohanlal & Company; (2016) 14 SCC 199, Alka Gupta v. Narender Kumar Gupta; (2010) 10 SCC 141, Union of

India v. West Coast Paper Mills Ltd.; (2004) 2 SCC 747, and that of the Calcutta High Court in Basdeo Prasad Khemka v. Union of India; AIR 1978

Cal 100.

Learned counsel appearing for the Respondents No. 1 and 2 supported the impugned order.

Section 14 of the Limitation Act deals with exclusion of time of proceeding bona fide in court without jurisdiction. Sub-section 1 of that Act reads as

follows:

 “(1) In computing the period of limitation for any suit 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.â€​

In Consolidated Engineering Enterprises v. Irrigation Department;

(2008) 7 SCC 169, the Hon'ble Supreme Court delineated the conditions in which Section 14 of the Limitation Act will be application. The five

conditions enumerated therein, on the basis of clear terms of Section 14, are as follows:

“(1) Both the prior and subsequent proceedings are civil proceedings prosecuted by the same party;

(2) The prior proceedings had been prosecuted with due diligence and in good faith;

(3) The failure of the prior proceedings was due to defect of jurisdiction or other cause of like nature;

(4) The earlier proceedings and the latter proceeding must relate to the same matter in issue and;

(5) Both the proceedings are in a court.â€​

It was also held in that case as follows:

22....While considering the provisions of Section 14 of the Limitation Act, proper approach will have to be adopted and the provisions will have to be

interpreted so as to advance the cause of justice rather than abort the proceedings. It will be well to bear in mind that an element of mistake is

inherent in the invocation of Section 14. In fact, the section is intended to provide relief against the bar of limitation in cases of mistaken remedy or

selection of a wrong forum. On reading Section 14 of the Act it becomes clear that the legislature has enacted the said section to exempt a certain

period covered by a bonafide litigious activity.â€​

As succinctly laid down in Basdeo Prasad Khemka (supra); the provision in Section 14 of the Limitation Act for exclusion of time applies to cases

where the person brings the previous suit not only in the wrong court but also where he brings the case in the right court, but, is nevertheless

prevented from getting trial on merits by reason of not only any defect in jurisdiction, but also for causes of like nature. Section 14 of the Limitation

Act must be liberally construed. The said provision 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 conditions laid down in that Section are fulfilled. While the power given

under Section 5 of the Limitation Act is discretionary, the power under Section 14 is mandatory, if the requisite conditions are satisfied by the Plaintiff.

'Good faith' and 'due diligence' are twin conditions which have to be satisfied to secure the benefit of Section 14 of the Limitation Act in cases

which fall under that provision of the Limitation Act. 'Good faith' is defined in Section 2(h) of that Act. It reads as follows: “good faith†- nothing

shall be deemed to be done in good faith which is not done with due care and attention"". Thus, due care and attention are the yardsticks to determine

whether something is to be deemed to be done in good faith, to enable accrual of the benefit of Section 14 of the Limitation Act, insofar as it relates to

the term “good faith†in that Section. “Due diligence†depends on the relative facts of a particular case. It is a measure of prudence or

activity expected from and ordinarily exercised by a reasonable and prudent person under particular circumstances. The burden of proving that the

prior civil proceedings was prosecuted with due diligence is on the person claiming the benefit of that Section. The aforesaid are the clear indicators to

hold that due diligence and good faith are not pure questions of law; but, largely mixed questions of fact and law, in not questions of fact only. The

question whether the prior civil proceedings failed on account of defect of jurisdiction is not by itself conclusive and decisive because Section 14 would

apply also when the Court where that civil proceedings was prosecuted was unable to entertain it on account of “other cause of the like natureâ€.

We concur with the view in this regard, stated in Basdeo Prasad Khemka (supra). This is also an issue which cannot be treated as a question of law

only.

Order VII Rule 6 of the CP Code as it stood before the 1976 Amendment, reads as follows:

“6. Grounds of exemption from limitation law. - Where the suit is instituted after the expiration of the period prescribed by the law of limitation, the

plaint shall show the ground upon which exemption from such law is claimed:â€​

By the amendment to the CP Code as per the Act 104 of 1976, a proviso was added to that Rule. It is to the following effect:

“Provided that the Court may permit the plaintiff to claim exemption from the law of limitation on any ground not set out in the plaint, if such ground

is not inconsistent with the grounds set out in the plaint.†Order VII Rule 6 alongwith its proviso as noted above, requires that the plaint shall show

the ground upon which exemption from the law of limitation is claimed and the Court is within its power to permit the Plaintiff to claim exemption from

law of limitation on any ground not set out in the plaint, if such ground is not inconsistent with the grounds set out in the plaint. This is noticed here to

state that the question of eligibility for exemption from limitation is a matter that may arise for decision during the course of the suit. This is the scheme

of the CP Code as well.

Rule 1(4) of Order XIV of the CP Code states that issues are of two kinds, namely, issues of fact and issues of law. Sub-rule (2) of Rule 2 of

Order XIV provides that where issues, both of law and of fact arise in the same suit, if the Court is of the opinion that the case or any part thereof

may be disposed on an issue of law only, the Court may try that issue first. Clause (a) and (b) of Rule 2(2) of Order XIV confines such authority to

try such an issue of law only, if it relates to (a) jurisdiction of the Court; or, (b) a bar to the suit created by any law for the time being in force. That

does not include the authority to consider any plea of the Plaintiff as regards the grounds on which exclusion is claimed under Section 14 of the

Limitation Act because the consideration of the grounds of claim for exclusion calls for decision on different points or issues, which are not issues of

law only and also for the reason that if such consideration is done summarily, it will be in conflict with the power of the Court in terms of the proviso to

Rule 6 of Order VII of the CP Code as explained in paragraph No. 8 above.

When the predominant questions that would arise for adjudication of a claim for exclusion under Section 14 of the Limitation Act are not questions

or issues of law only, they require to be dealt with only by affording opportunity to the Plaintiff to establish such eligibility in consonance with the

prescriptions of Section 14 of the Limitation Act. This is done at the trial of the suit by framing an issue or such issue, as to question of limitation, as

may arise for decision; and, not otherwise, through a summary disposal of the Plaintiff's claim of exclusion on the strength of Section 14 of the

Limitation Act.

In the light of the provisions in Order VII Rule 6 of the CP Code requiring the Plaintiff to show in the plaint, the ground upon which exemption

from limitation is claimed, there is no requirement to institute a separate application claiming the benefit of Section 14 of the Limitation Act. In the light

of the provision to Order VII Rule 6 of the CP Code, the Plaintiff could be permitted to claim exemption on any ground not set out in the plaint,

provided such ground is not inconsistent with the grounds set out in the plaint. Therefore, even if a separate application is filed by the Plaintiff pleading

eligibility for exclusion of time in terms of Section 14 of the Limitation Act, that ought to be treated as part of the pleadings for the purpose of

adjudication and not to be decided summarily. Once the plaint, taken alongwith any such application, contains the claim of exclusion of time in terms of

Section 14 of the Limitation Act, the plaint cannot be rejected under Order VII Rule 11(d), because the suit cannot then, ""appear from the statement in

the plaint"" to be barred by limitation.

For the aforesaid reasons, the impugned order of the Court below dismissing the application under Section 14 of the Limitation Act by merely

making reference to the earlier proceedings and the contents of those orders, is an exercise without jurisdiction and is illegal and materially irregular

even on counts of jurisdiction and procedure of the trial Court in terms of the CP Code and the Limitation Act. The consequential rejection of the

plaint as if is to be treated as barred by limitation, is also therefore unsustainable.

In the result, this appeal is allowed setting aside the impugned order including the consequential rejection of the plaint and directing that the suit and

IA No. 1 shall stand restored to the file of the Court below, which shall decide on the plea of the Appellants as to the eligibility for exclusion of time in

terms of Section 14 of the Limitation Act. That shall be done only by framing requisite issue or issues as to the bar of limitation, among the issues in

the suit, and such issue shall not be tried as a preliminary issue.

The parties are directed to mark appearance before the Court below on

19 th June, 2018. Registry to inform the Court below.