Section 3. Bar of limitation

(1) Subject to the provisions contained in sections 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.

(2) For the purposes of this Act-

(a) a suit is instituted-

(i) in an ordinary case, when the plaint is presented to the proper officer;

(ii) in the case of a pauper, when his application for leave to sue as a pauper is made; and

(iii) in the case of a claim against a company which is being wound up by the court, when the claimant first sends in his claim to the official liquidator;

(b) any claim by way of a set off or a counter claim, shall be treated as a separate suit and shall be deemed to have been instituted-

(i) in the case of a set off, on the same date as the suit in which the set off is pleaded;

(ii) in the case of a counter claim, on the date on which the counter claim is made in court;

(c) an application by notice of motion in a High Court is made when the application is presented to the proper officer of that court.

The section places a statutory obligation on the courts to examine whether the suit is filed within limitation or not, and if the suit is filed beyond limitation, what must follow is that it must be dismissed. To put in other words, Section 3 is peremptory. It is the duty of the court to take notice of this provision and give effect to it even though the point of limitation is not referred to in the pleadings.

What if the Court fails to take note of this? – Whether a decree passed in a suit barred by limitation a nullity & therefore can be ignored in subsequent litigation? ——–NO

Ittyavira Mathai v. Varkey Varkey AIR 1964 SC 407 – An exactly same contention was made before Supreme Court. It is simply a case where court fails to perform its duty. It makes an error of law. The error can be corrected in the manner laid down in CPC. If the aggrieved party does not take appropriate steps to have the error corrected, the erroneous decree will hold good and will not be open to challenge on the basis of being a nullity.

Order 7 Rule 1 CPC– Plaint to contain, amongst other particular facts contributing the cause of action.

Order 7 Rule 6 CPC– Where the suit is instituted after the expiration of period prescribed by law of limitation the plaint must show the ground on which exemption from such law is claimed.

F.N. Ray v. Collector of Customs AIR 1957 SC 648 — Where law permits the transmission of memorandum of appeal by post, the appeal will be deemed to be preferred on the date when it is received by the authorised officer of the Tribunal & not on the date when it is transmitted through the agency of post office.

Note—Whether a suit is barred by limitation should be decided on the foots as they stood on the date of presentation of plaint. There is no provision in the limitation Act under which a suit, which was in time on the date of institution of suit can subsequently became barred by time.

Note—Where two articles of law of limitation cover a given right of a suit, & one does not apply more specifically than the other, then the court should lean in favour of application of “that” provision, which keeps the right of suit alive in preference to that which would destroy it.

Limitation on admitted facts—When the question of limitation is capable of determination on the facts admitted or proved before the court, it is duty of court to decide the question suo motu; however; if the question of limitation is a mixed question of law & facts, and the suit does not appear to be barred by limitation on the face of it, then the facts necessary to prove limitation must be pleaded, an issue raised & then proved.

Plea of limitation can be raised at any stage—The plea of limitation can be raised at any stage of the case. A defendant can raise the plea of limitation, at the hearing of the suit, even though he has not pleaded the limitation in his written statement.

Similarly, he can take the plea of limitation for the 1st time in appeal or even in Second appeal. But where it has been raised at a later stage, the court will not allow if it require further inquiry into questions of facts & requires taking of evidence for its decision. Though there is no absolute bar and the court of 2nd appeal may allow the plea to be raised in its discretion.

Question of limitation “once decided”—The question of limitation “once decided” cannot be reopened at a later stage of the same proceeding nor can it be reagitated in any subsequent proceedings.

Que.- A question of limitation is decided by the trial court. Plaintiff being dissatisfied by a part of decree appeals against it. Can the appellate Court go behind the decision & reverse the decision of trial court on the question of limitation, even if the defendant has filed no appeal on the ground that the suit is time barred?

Withdrawal of suit & Limitation—The withdrawal of a suit with or without permission of the court will not stop the running time & the later or fresh suit (on the same cause of action) after such withdrawal has to be filed within the period of limitation prescribed for that suit.

Pendency of appeal but operation not suspended by appellate court—Once the limitation starts running, it runs its full course until the running of limitation is interdicted by an order of court. The pendency of appeal, unless the operation of judgment is suspended by superior court, does not amount to suspend the operation of running of limitation.

Any appeal or any application (other than an application under any of the provisions of Order 21 CPC 1908), may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within (Ram Lal v. Rawa Coalifidds AIR 1962 SC 361) such period.

4. Expiry of prescribed period when court is closed

Where the prescribed period for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the date when the court reopens. Explanation: A court shall be deemed to be closed on any day within the meaning of this section if during any part of its normal working hours it remains closed on that day.