Time-Barred Suit Must Be Dismissed Even If Plea Of Limitation Isn't Raised As Defence : Supreme Court

The Supreme Court held that even if the plea of limitation is not set up as a defence, the Court has to dismiss the suit if it is barred by limitation.

Reversing the findings of the High Court's Division Bench, the bench comprising Justices BR Gavai and Sandeep Mehta upon placing reliance on the case of V.M. Salgaocar and Bros. v. Board of Trustees of Port of Mormugao and Another, (2005) 4 SCC 613 observed that as per the mandate of Section 3 of the Limitation Act, the court has to dismiss any suit instituted after the prescribed period of limitation irrespective of the fact that limitation has not been set up as a defence.

The aforesaid observation of the Court came while deciding a case where a plea for a rendition of accounts of the partnership firm was filed by the partner beyond the period of limitation.

As per the mandate of Section 42(c) of the Partnership Act, 1932 the partnership firm automatically dissolves upon the death of a partner.

The court noted that the filing of a suit for the rendition of an account of the partnership firm by another partner ought to be filed within the prescribed limitation period of three years being calculated from the date of the partner's death. Any suit filed beyond the limitation period would not be maintainable due to the enforcement of a specific bar to entertain the time-barred suit under the Limitation Act.

“The period of limitation for filing a suit for rendition of account is three years from the date of dissolution. In the present case, the firm dissolved in year 1984 by virtue of death of Shri M. Balraj Reddy (deceased partner) and thus, the suit could only have been instituted within a period of three years from that event. Indisputably, the suit came to be filed in the year 1996 and was clearly time-barred…”, the judgment authored by Justice Sandeep Mehta said.

Accordingly, the court allowed the appeal and restored the judgment of the Single Judge of the High Court.

Counsels For Petitioner(s) Mr. Sridhar Potaraju, Sr. Adv. Mr. Gaichangpou Gangmei, AOR

Counsels For Respondent(s) Mr. T. V. Ratnam, AOR Mr. Vadlamani Seshagiri, Adv. Mrs. Bela Maheshwari, AOR

Case Title: S. SHIVRAJ REDDY(DIED) THR HIS LRS. AND ANOTHER VERSUS S. RAGHURAJ REDDY AND OTHERS

Citation : 2024 LiveLaw (SC) 411

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