[Article 113 Limitation Act] Limitation Period Begins To Run When The Right To Sue Accrues And Not When It 'First' Accrues: SC

In cases governed by Article 113 of the Limitation Act, the period of limitation begins to run "when the right to sue accrues" and not when the right to sue "first" accrues, the Supreme Court has observed

The suit was filed by the plaintiff against his bank praying for a decree for rendition of true and correct accounts in respect of the interest/commission charged and deducted by the defendant ­Bank relating to his current account for the period between 1.4.1997 and 31.12.2000 and also for recovery of the excess amount charged by the Bank consequent to rendition of accounts with interest at the rate of 18% per annum from the date of deduction including interest pendente lite realization of the amount and future interest. The plaint was rejected by the Trial Court under Order VII Rule 11(d) of the CPC on the ground that it was barred by law of limitation, as it was filed beyond the period of three years prescribed in Article 113 of the Limitation Act, from the date when the right to sue accrued to the appellant in October, 2000. This order of the Trial Court was upheld by the First Appellate Court and the High Court.

The issue before the Apex Court was whether the plaint could have been rejected by invoking Order VII Rule 11(d) of the CPC?

Referring to the averments in the plaint, the bench comprising of Justices AM Khanwilkar, Indira Banerjee and Dinesh Maheshwari noted many correspondences the plaintiff had made with the bank on many dates. The court, therefore, proceeded to discuss the scope of Article 113 of the Limitation Act. It said:

"Concededly, the expression used in Article 113 is distinct from the expressions used in other Articles in the First Division dealing with suits such as Article 58 (when the right to sue "first" accrues), Article 59 (when the facts entitling the plaintiff to have the instrument or decree cancelled or set aside or the contract rescinded "first" become known to him) and Article 104 (when the plaintiff is "first" refused the enjoyment of the right). The view taken by the trial Court, which commended to the first appellate Court and the High Court in second appeal, would inevitably entail in reading the expression in Article 113 as – when the right to sue (first) accrues. This would be re­writing of that provision and doing violence to the legislative intent. We must assume that the Parliament was conscious of the distinction between the provisions referred to above and had advisedly used generic expression "when the right to sue accrues" in Article 113 of the 1963 Act. Inasmuch as, it would also cover cases falling under Section 22 of the 1963 Act, to wit, continuing breaches and torts."

The bench referred to two earlier decisions: Union of India & Ors. vs. West Coast Paper Mills Ltd. & Anr (2004) 2 SCC 747 and Khatri Hotels Private Limited & Anr. Vs. Union of India (2011) 9 SCC 126.

Examining the plaint, the bench said that the fact that the plaintiff had eventually sent a legal notice on 28.11.2003 and again on 7.1.2005 and then filed the suit on 23.2.2005, is also invoked as giving rise to cause of action.  The appeal was therefore allowed by setting aside the judgments of the High Court, First Appellate Court and the Trial Court.

Case no.: CIVIL APPEAL NO. 2514 OF 2020 
Case name: Shakti Bhog Food Industries Ltd. Vs. The Central Bank of India
Coram: Justices AM Khanwilkar, Indira Banerjee and Dinesh Maheshwari 
Counsel: Advocates Nischal Kumar Neeraj and Anuj Jain

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