Statute of Limitation Provisions Do Not Apply When a Statute Extinguishes the Right Itself: Supreme Court

The Supreme Court observed that the limitation law provisions will not apply where a law extinguishes the right itself.

The distinction between barring a remedy as an exception is well drawn, the bench observed in a judgment in which it dealt with Rule 30 of the Second Schedule of the Carriage by Air Act 1972.

Rule 30 provides that the right to damages will be off if the action is not brought within two years from the date of arrival at destination, or from the date on which the aircraft should have arrived, or from the date on which the carriage began stopped.

In this case, the court of first instance held that the action was not statute-barred because the time prescribed in Rule 30 of the Second Schedule to the Carriage by Air Act 1972 could be calculated from 28.10.2010 , that is to say the date on which the Respondent had recognized a proposal to settle the claim at 50% of the claim. For this purpose, Section 18 of the Limitation Act was invoked. Allowing the appeal, the Bombay High Court ruled that the suit was barred and dismissed it.

In considering the appeal against that judgment, the bench discussed the applicability of the Limitation Act where the right itself is extinguished, as opposed to a bar to remedy, as in the case of s. 3 of the Limitation Act.

“The procedural law governing the institution and settlement of civil suits in India comprises the Civil Procedure Code 1908 as well as the Limitation Act 1963. The Limitation Act is a branch of adjective law and applies to all proceedings which it has governed since the date of its promulgation. There is, however, a well-established principle, which states that when the right itself lapses, the provisions relating to limitation do not apply.”

As illustrations of provisions where the right itself is extinguished, the bench referred to section 11 as well as section 27 of the Limitation Act.

Section 11 deals with lawsuits in India relating to contracts made in foreign countries. In accordance with the principle of the lex fori, the section provides that the rules of limitation provided for in a foreign jurisdiction are not applicable. However, the exception to this rule is provided for in Article 11 (2) (a), when the contract, ie the right itself, expires. Similarly, Section 27 also recognizes the principle of extinguishment of right of ownership as an exception to the applicability of the Limitation Act, 1963

Noting this principle, the bench referred to Article 30 and observed:

Once the right to damages is extinguished at the expiration of two years from the three alternative dates mentioned in the rule itself, there would be nothing left for enforcement. Section 3 of the Limitation Act only prohibits the remedy, but where the right itself is extinguished, the provisions of the Limitation Act do not apply. For this reason, in The East and West Steamship Co., this Court held that once the right of liability is extinguished under the clause, there is no possibility of recognizing liability thereafter.

The head office then noted paragraph (2) of Article 30: – “(2) The method of calculating the limitation period is determined by the law of the court hearing the case. In its plain language, subrule (2) appears to adopt the applicability of the Limitation Act 1963 as Indian courts exercise jurisdiction, the bench observed. Thus, he considered another question raised, namely whether the provisions of the Carriage by Air Act 1972 expressly exclude the Limitation Act 1963, as provided for in section 29, and answered it in the affirmative. .

Also read: Carriage by Air Act ‘specifically excludes’ limitation law provisions: Supreme Court

Case details

Bhagwandas B. Ramchandani against British Airways | 2022 LiveLaw (SC) 645 | CA 4978 of 2022 | July 29, 2022 | Judges KM Joseph and PS Narasimha

Counsel: Lead Counsel Vinay Navare, assisted by Maître Pravartak Pathak, Maître Gwen Karthika, AOR Abha R. Sharma, for the Appellants and Maître Ritu Singh Mann for the Respondent assisted by Maître Dheeraj K. Garg and AOR Rajan K. Chourasia

Summaries

Air Transport Act 1972; Rule 30 – Limitation Act 1963; Section 29(2)- Rule 30 expressly excludes statute of limitations as provided in section 29 – rule 30(2) does not allow the applicability of the exclusion of periods for the purpose of calculating the two-year period (paragraph 43)

Limitation Act, 1963; Section 29(2) – The express authorization must be derived from the provisions of the law – Even in the event that the special law did not exclude the provisions of articles 4 to 24 of the law on limitation by an express reference, it would nevertheless be open to the Court to examine whether and to what extent the nature of these provisions or the nature of the object and scheme of the special law exclude their application – Referred to Hukumdev Narain Yadav c. Lalit Narain Mishra (1974) 2 SCC 133 (Paragraph 48)

Limitation Act, 1963 – Article 3 only prohibits recourse, but when the right itself is extinguished, the provisions of the statute of limitation do not apply. (Section 15.2)

Interpretation of the statutes – Municipal Laws Giving Effect to International Conventions – Courts should strive to maintain uniformity of interpretation with courts in other jurisdictions when interpreting international treaties and conventions. (Paragraph 29)

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