Order XIV Rule 2 CPC - Issue Of Limitation Cannot Be Decided As Preliminary Issue If It Is Not A Pure Question Of Law: Supreme Court

The Supreme Court observed that the issue of limitation cannot be decided as preliminary issue under Order XIV Rule 2 of the Code of Civil Procedure if it is not a pure question of law.

Order XIV Rule 2(2) provides that if issues both of law and of fact arise in the same suit, and the Court is of opinion that the case or any part thereof may be disposed of on an issue of law only, it may try that issue first if that issue relates to- (a) the jurisdiction of the Court, or (b) a bar to the suit created by any law for the time being in-force.

In this case, the trial Court dismissed a suit on the ground of limitation which was taken as a preliminary issue. The Suit was filed by the plaintiff seeking recovery of an amount of Rs 1,11,63,633 together with interest at the rate of 18% per annum from the date of the institution of the suit till the realization of the full amount, from the defendant. The trial Judge held that the admission in paragraph 10 of the plaint is that the last payment was made on 20 June 2013 by the plaintiff and since the suit was instituted on 1 April 2017, three years nine months and ten days thereafter, it is barred by limitation. The High Court upheld this order.

Before the Apex court, the appellant contended that the suit which was instituted on 31 March 2017 is within limitation and that in any event, this is a matter which has to be tried on the basis of evidence and could not have been disposed of purely on the basis of oral arguments ; That there was an open and running current account between the parties.

Perusing the plaint, the Apex Court bench noted that the issue as to whether the claim of the plaintiff is barred by limitation cannot be isolated from the nature of the transactions between the parties.

"In any event, whether the plea of the appellant as set up in paragraph of the plaint is proved would depend upon evidence adduced at the trial. The course of action which was followed by the learned trial Judge of directing the parties to address arguments on the issue of limitation was irregular. The issue of limitation in the present case would require evidence to be adduced.", the court noted.

The court noted that Order XIV Rule 2 of the CPC specifies two questions of law, which are (i) jurisdiction of the Court; and (ii) a bar to the suit created by any law for the time being in force. Referring to observations made in Nusli Neville Wadia v. Ivory Properties (2020) 6 SCC 557, the court allowed the appeal by observing thus:

Since the determination of the issue of limitation in this case is not a pure question of law, it cannot be decided as preliminary issue under Order XIV Rule 2 of the CPC.

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