In Bombay Dyeing and Manufacturing Company vs. the State of Bombay (1957), the Supreme Court established a crucial legal principle that the statute of limitations acts as a bar to legal remedies rather than extinguishing underlying rights. This means that while the passage of time may prevent someone from seeking a remedy through legal action, it does not nullify or erase their fundamental legal entitlements or claims.
The limitation period starts from the date the "cause of action" arises, which is the date when the right to sue accrues. The Supreme Court in Trustee’s Port Bombay vs. The Premier Automobile (1971) held that the starting point of limitation is the accrual of the cause of action.
In certain situations, the court may condone a delay in filing an appeal or application, if there are sufficient cause. Section 31 of the ‘Limitation Act’ provides for the retrospective and prospective effect of the act.
The Supreme Court in Thirumalai Chemicals Ltd vs. Union of India (2011) observed that statutes of limitation are retrospective so far as they apply to all legal proceedings brought after their operations for enforcing causes of action accrued earlier.
The limitation on suits, appeal suits, and petitions is governed by the Limitation Act, 1963, which specifies different time frames depending on the type of claim, with common periods including 3 years for most contract-related claims, 12 years for suits related to immovable property possession, and a 90-day window for most appeals to the High Court from a lower court decision. Most laws either specifically mention that the provisions of the Limitation Act willy apply or they specify the limitation period. Foe example, Section 24 of the Recovery of Debts and Bankruptcy Act, 1993 states that the "provisions of the Limitation Act shall, as far as may be, apply to an application made to a Tribunal."
The law of limitation only bars the judicial remedy and does not extinguish the right. In other words, the statute of limitation prescribesonly the period within which legal proceedings must be initiated. In the case of Punjab National Bank and Ors vs. Surendra Prasad Sinha (1992), the Supreme Court held that the rules of limitation are not meant to destroy the rights of the parties. Section 3 only bars the remedy but does not destroy the right which the remedy relates to. Section 3 of the Limitation Act bars remedies but preserves the enforceability of rights, emphasizing that while access to legal recourse may expire, the fundamental entitlements endure beyond the specified time frame.
The Limitation Act is divided into five parts. It has one Schedule. Originally, it had 32 Sections but later Sections 28 and 32 were repealed.
Part I has 2 Sections which deal with title, extent, commencement and definitions (Sections 1-2). Section 2 (j) of the Limitation Act, 1963, defines ‘period of limitation’. It means the period of limitation prescribed for any suit, appeal or application by the Schedule, and ‘prescribed period’ means the period of limitation computed in accordance with the provisions of the Act.
Part II has 9 Sections which deal with limitation on suits, appeals, and applications, bar of limitation, expiry of prescribed period when court is closed, extension of prescribed period in certain cases, legal disability, disability of one of several persons, special exceptions, continuous running of time, suits against trustees and their representatives and suits on contracts entered into outside the territories to which the Act extends (Sections 3-11).
Part III has 13 Sections which deal with computation of period of limitation, exclusion of time in legal proceedings, exclusion of time in cases where leave to sue or appeal as a pauper is applied for, exclusion of time of proceeding bona fide in court without jurisdiction, exclusion of time in certain other cases, effect of death on or before the accrual of the right to sue, effect of fraud or mistake, effect of acknowledgment in writing, effect of payment on account of debt or of interest on legacy, effect of acknowledgment or payment by another person, effect of substituting or adding new plaintiff or defendant, continuing breaches and torts, suits for compensation for acts not actionable without special damage and computation of time mentioned in instruments (Sections 12-24).
Part IV has 3 Sections which deal with acquisition of ownership by possession, acquisition of easements by prescription, exclusion in favour of reversioner of servient tenement and extinguishment of right to property (25-27).
Part V has 5 Sections but two of its Sections have been repealed. It deals with savings, provision for suits, etc., for which the prescribed period is shorter than the period prescribed by the Indian Limitation Act, 1908 and provisions as to barred or pending suits, etc.
Section 29 of the Limitation Act reads: ''Savings.—(1) Nothing in this Act shall affect section 25 of the Indian Contract Act, 1872 (9 of 1872). (2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law. (3) Save as otherwise provided in any law for the time being in force with respect to marriage and divorce, nothing in this Act shall apply to any suit or other proceeding under any such law. (4) Sections 25 and 26 and the definition of “easement” in section 2 shall not apply to cases arising in the territories to which the Indian Easements Act, 1882 (5 of 1882), may for the time being extend.''
The Schedule provides description of suit, period of limitation and time from which period begins to run. It contains 137 Articles in the act which provide for periods of limitation. These 137 Articles in total are contained in three divisions:
First Division - Suits (Article 1-113), Second Division - Appeals (Articles 114-117) and Third Division - Applications (Articles 118-137).
The law relating to Law of Limitation in India is the Limitation Act, 1859 and subsequently Limitation Act, 1963 which was enacted on October 5, 1963 came into force from January 1, 1964 for the purpose of consolidating and amending the legal principles relating to limitation of suits and other legal proceedings.
Examples of limitation periods
Suit for recovery of money due on a contract: 3 years
Suit for possession of immovable property: 12 years
Suit for compensation for tort (personal injury): 1 year
Appeal to High Court from a District Court: 90 days
