Whether a suit for cancellation of any registered instrument is barred by law of limitation?

As a lawyer, it becomes routine to come across the issue pertaining to a fact that a  suit is  'barred by law'.  An issue involved in this article is whether a suit for cancellation of any instrument is barred by law. Let me discuss it in detail.

Normally, it is general practice of an advocate of defendant to submit an application under Order 7 Rule 11 of Code of Civil Procedure,1908 (hereinafter referred as CPC) in a Court stating that a Court wherein a suit is intituted, has no jurisdiction to entertain and adjudicate the suit as it is barred by law.  This application is filed with the intention to get the suit rejected at the very first instance. Sometimes such intention is not found but to drag the matter, there are many agendas behind filing the application under Order 7 Rule 11 of CPC. Sometimes it is genuine, sometimes it is not. Such application becomes a tool of Advocate of the defendant since ages. However, apart from ground reality, let me discuss here only the legal position in terms of 'whether a suit is barred by law or not' qua law of limitations. 

First of all, it is required to note that there is no particular definition of " barred by law" in definition clause, however, "barred by law" is described in Order 7 Rule 11 (d) of CPC which says, "The plaint shall be rejected where the suit appears from the statement in the plaint to be barred by any law."

As this article is limited to the law of limitation in respect of 'barred by law'; I will restrain myself to discuss any law apart from the law of limitation. Let me discuss it as under.

Order 7 Rule 11(d) of CPC is crystal clear that if the suit appears from the statement in the plaint to be barred by any law, the plaint shall be rejected. Any law includes law of limitation. The plain reading of it inspires to come to the conclusion that suit is barred by law only if the statement made in the suit leads it towards the action of 'barred by law' and not otherwise. In other words if the statement or averment made in the plaint indicates that the suit is barred by law in context of the facts of the case directly, without reading between the lines, then it may be said that particular suit is barred by law as the issue of limitation is mingled with facts and law and therefore, it is necessary to handle the issue of limitation with care while adjudicating an application under Order 7 Rule 11(d) of CPC. The 'right to sue' is survived even if there is law of limitation. Generally, Law of limitation can restrain the remedy, however, it can not extinguish the civil right of a litigant. This provision has its own pros and cons.   It should not be a weapon for dragging the case from defendant side.  

Now let me discuss something about law of limitation qua the present issue. The Limitation Act, 1963 is the governing law for deciding limitation period. In the Act, Schedule is given for periods of limitation wherein period of limitation and time from which period begins to run is mentioned. That time is very crucial and important when the issue of limitation arises in the suit. The law of limitation is applied to the suits relating to accounts, contracts, decrees and instruments, immovable and movable properties, trusts and Trust property and miscellaneous matters.

Now let me discuss when a suit relating to cancellation of any instrument is instituted in a competent Civil Court, the period of limitation begins from the day when the facts entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract rescinded first become known to him as per the provision mentioned in Article 59 of the Schedule-1 of the Limitation Act, 1963. 

The scope of applicability of Article 59 is discussed by Hon'ble Supreme Court in the case of Prem Singh & Ors vs. Birbal & Ors in Appeal (Civil) 2412 of 2006 wherein SC established that "Article 59 would be attracted when coercion, undue influence, misappropriation or fraud which the plaintiff asserts is required to be proved. Article 59 would apply to the case of such instruments. It would, therefore, apply where a document is prima facie valid. It would not apply only to instruments which are presumptively invalid."

From which time the period of limitation is commenced is observed by Hon'ble Supreme in the case of Ningawwa vs Byrappa & 3 Ors reported in 1968 AIR 956, 1968 SCR (2) 797,  "It was contended on behalf of the respondents that the terminus a quo for the limitation was the date of the execution of the gift deed and claim of the appellant was therefore barred a,, the suit was filed more than three years after that, date. We are unable to accept this argument as correct. Article 95 prescribes., a period of limitation of three years from the time when the fraud becomes known to the party wronged."

Period of limitation starts from the date of the knowledge of the fact by the plaintiff as established by Rajasthan High Court in a case of Virendra Singh & Ors. vs. Kashiram ( Deceased by Lrs. ) reported in 2004 (0) AIJ-RJ 1804965 in paragraph no. 23.

A civil Court is required to decide an issue for adjudication of an application under O.7 Rule 11 (d) of CPC . The issue is whether a period of limitation starts from the date of the knowledge of the fact OR whether a period of limitation starts from the date of registration of an instrument. 

A suit can not be rejected on the ground of barred by law of limitation. I rely upon the following authorities for that.

1) 2017 (0) AIJEL-HC (GUJ) 237201 in case of Mahipatbhai Ramabhai Thakor vs.Deceased Vinubhai Shamalbhai Thakarda (para.no. 6 to 10.)

2) 2016 (0)AIJEL- HC (GUJ)236560 in case of Sankarbhai  Ramabhai Desai vs. Rathod Ujamba Alias Kantaben (para. No. 6 & 7.)

3) 2007 (0) AIJEL-SC in case of Ram Prakash Gupta vs. Rajiv Kumar Gupta (para nos. 17 & 18).

The established principle is that only averments made in the plaint as a whole are required to be considered by a court adjudicating an application under Order 7 Rule 11 of CPC. I rely upon the following authorities for it.

1) 2006 (0) GLHEL- SC in case of Mayar (H.K.) Ltd. vs. Owners and Parties, Vessel M.V. Fortunate Express (para nos. 10 &11).

2) 2017 (0) AIJEL-SC 59645 in case of Kuldeep Singh Pathania vs. Bikram Singh Jaryal (para nos. 10 & 11).

3) 2005 (0) GLHEL-SC 35507 in case of Popat and Kotecha Property vs. State Bank of India Staff Association (para nos. 25 & 26).

It is pertinent to note that there are cases where the Hon'ble Courts consider that period of limitation starts from the date of registration of the instruments. It is based on the facts of the cases and it differs from case to case. In the case of Hemendra Ishwarbhai Patel through Poa Piyush B. Trivedi vs. Gokulbhai Shanabhai- Decd. through Legal Heirs reported in 2017 (0) AIJ- GJ 237338, Hon'ble Gujarat High Court was of the view in paragraph no. 18 the Court is of the opinion that suit being ex facie barred by limitation and the plaint is also liable to be rejected under clause (d) of Rule 11, Order 7 of CPC. as the sale deeds being registered documents in favour of the plaintiff were in knowledge of the plaintiff and therefore, deemed knowledge would be attributed to the plaintiff in this case.  

Hon'ble Supreme Court in a case of Diboo (Smt.) (dead) by Lrs and Ors vs. Dhanraji (Smt.) (Dead) and Ors. reported in (2000) 7 SCC 702, it was held that "whenever a document is registered, the date of registration becomes the date of deemed knowledge. In other cases, where a fact could be discovered by due diligence, then deemed knowledge would be attributed to the plaintiff because a party cannot be allowed to extend period of limitation by merely claiming that he had no knowledge."

In my opinion when limitation is a mixed question of law and fact, it requires Trail of the case and therefore, suit is not required to be rejected,  however, when it is prima facie established that there is knowledge of the fact of the registration of an instrument by the plaintiff and he has not taken steps for cancellation of registration of that instrument in the limitation period, subsequently, he is not entitled to be protected in the name of 'no knowledge' of that fact once he has crossed the limit of period of limitation. 

 

Chirag Bhatt 
on 29 January 2018
Published in Civil Law
Views : 2405
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