Limitation - Study Material - Sem 3 PDF

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PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

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These notes are prepared by Radhika Seth,

Law Centre 2. This is meant only for
personal use of students. It is not meant
for public or wholesale distribution.
VOTE FOR MY PANEL ON 13TH SEPTEMBER-
ELECTION DAY.
RADHIKA SETH 2
FOR PRESIDENT
ANUBHAV SINGH
FOR SECRETARY 1
AMIT RANJAN
FOR CC 1
HARSH TOMAR
FOR CC 3

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chapter 1
limitation bars remedy but does not destroy/ extinguish the right
the law of limitation bars the remedy in a court of law only when the period of limitation has expired,
but it does not extinguish the right that cannot be enforced by judicial process. thus if a claim is
satisfied outside the court of law after the expiry of period of limitation, that is not illegal.
the intention of the law of limitation is, not to give a right where there is none, but to impose a bar after a
certain period to institute suit to enforce an existing right. the object is to compel litigants to be diligent in
seeking remedies in courts of law by prohibiting stale claims. it is to help the bona fide claimant and to
prevent fraud being practiced by people upon innocent persons by keeping actions hanging on them for a
long time.
the indian limitation act prescribes periods after the expiry of which a claim in the form of suit, appeal
or application cannot be maintained in a court of justice to enforce a right but it does not destroy the right
itself, example., a from time to time advances money to b and each time he advances money to b, he enters
the item advanced in his account book. let us suppose he has advanced six items of money on six different
dates, each succeeding item being separated from the previous one by a period of six months. four years
after the first advance was made, the period of three years fixed for the filing of the suit for the recovery of
the first item of advance has expired and the remedy of a for filing a suit is barred by limitation. here
although the remedy is barred, the right of a to recover the amount of the first advance is not
extinguished, but still survives although his right to file the suit for the recovery thereof is barred by limitation.
therefore, if b, the debtor, pays the amount of the first advance after it has become barred, or if he pays an
amount without specifying towards which of the six advances it might be credited and the creditor applies
it, in the payment of the first item of advance, the creditor will be fully justified in la\v in doing so and the
payment would not be allowed to be recalled on the ground of failure of consideration. a barred debt is a
good consideration for a written promise to pay it.
so, the law of limitation does not bar a defence, it only bars action.
section 27 of the limitation act is, however, an exception to the general rule that the act bars only the
remedy and does not extinguish the right. in a suit for possession of any property on the determination of
the period of limitation not only the remedy but the right also is extinguished under section 27 because it
cannot be recovered after the expiration of the period of limitation provided for instituting a suit for its
recovery. after a debt becomes barred a person is still deemed to owe and it does not cease to be due. [first
national bank ltd. verses seth sandal,].
salient features of the act
1. application of the act
the act applies to all civil proceedings and some special criminal proceedings which can be taken in a
court of law unless its application is excluded by any enactment. the act extends to whole of india except
the state of jammu & kashmir.
2. proceedings under special act
the provisions of the limitation act apply only to proceeding in "courts" and not to appeals or
applications before bodies other than courts such as quasi-judicial tribunals or executive authorities,

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notwithstanding the fact that such bodies or authorities may be vested with certain specified powers
conferred on courts under the code of civil or criminal procedure. but even in such a situation the relevant
special statute may contain an express provision conferring on the appellate authority the power to extend
the prescribed period of limitation on sufficient cause being shown by laying down that the provisions of
section 5 of the limitation act shall be applicable to such proceeding.
3. limitation only applies to institution of proceedings, not to their continuance
the bar of limitation arises only where a suit is instituted, an appeal is preferred or an application is made
after the prescribed period of limitation. thus, the bar only applies where a proceeding has been instituted
after the period of limitation. the bar does not apply to steps which constitute a mere continuation of
pending proceeding. thus, where an application for execution has been filed within the period of limitation,
but subsequently, an application is made to continue the execution proceeding, the latter application is
not subject to any period of limitation. similarly, where a suit is validly instituted, but the plaint is returned
for some purpose and represented, such representation is only a continuation of the suit and does not
affect the question of limitation.
4. limitation and writs under the constitution
the subject of limitation is dealt with in list iii i.e. concurrent list vide entry 13 of the constitution of india.
the legislature may, without violating the fundamental rights, enact statutes prescribing limitation within
which
actions may be brought by varying or changing the existing rules of limitation either by shortening or extending
time, provided a reasonable time is allowed for enforcement of the existing right of action which would
become barred under the amended statute.
constitutional validity of the limitation act, 1963
in tilokchand motichand verses. h.p. munshi, supreme court held that the statute of limitation is
not unconstitutional since it applies to right of action in future. it is a shield and not a weapon of offence.
court further held that the state cannot place any hindrance by prescribing a period of limitation in the way
of an aggrieved person seeking to approach the supreme court of india under article 32 of the constitution. to
put curbs in the way of enforcement of fundamental rights through legislative action might well be
questioned under article 13(2) of the constitution. court further held that a writ petition filed before the
supreme court is not a suit and is also not a petition or application to which the limitation act applies, so
limitation act is not applied to writs.
5. act not to apply to all applications
although the limitation act 1963 gives a wider definition to application yet it is clear that only certain and
not all applications are covered by the act despite the fact that the words "other proceedings were
added in the long title of the act in 1963. the following applications are not covered by the act:
(1) an application for a succession certificate to collect the debts due to the estate of a deceased
person. (janaki verses. kesavalu, 8 mad 207 (208)
(2) an application for probate or letters of administration (kalinath verses. nagendra nath,)
(3) an application for revocation of a probate. (ashwini kumar verses. sukhaharan).

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(4) an application under the religious endowments act or an application for the appointment of new
trustees. (janaki verses. kesavalu,)
(5) an application to a court to exercise the functions of a ministerial character example. an

application for the grant of sale certificate (kylasa verses. ramasami)
(6) an application for a final decree in a suit for partition (sudarsahn pande verses. lakshmidhar
pande,)
(7) an application for election dispute (venkateswar rao verses. narasimha reddy,)
(8) an application to invoke the jurisdiction of the courts under section 151 of the civil procedure code
(beeravu verses. kathiyamma, )
(9) an application to a court to do what the court is bound to do. (darbo verses. kesho,).
in bapu verses. bapu (ilr 39 mad 750) it has been held that the limitation act does not apply to criminal
proceedings unless it is made applicable to them by express provisions. periods of limitation have been
provided for appeals under the criminal procedure code in article 114 and 115. article 131 of the
limitation act applies to application of criminal revision.
in japani saho verses. chandrasekhar mahanty, the supreme court held that the reason why the
limitation act, 1963 did not provide for limitation for filing criminal cases in the court of law, is that it is
well-settled that a criminal offence is considered as a wrong to the state and the society, even though it has
been committed against an individual. court further observed that general rule of criminal justice is that a
crime never dies and this principle is reflected in well-known maxim "nullum tempus ant locus occurrit
regi" which means that lapse of time is no bar to crown in proceedings against the offenders.
further, limitation act is not applicable to a proceeding under section 33c (2) of the industrial disputes act,
1947. (town municipal council verses. presiding officer, labour court, )
6. prescribed period cannot be extended or curtailed by consent
parties cannot by consent or agreement, extend or curtail the period of limitation. similarly, the parties
cannot waive or contract themselves out of the law of limitation.
shorter term: any agreement which curtail the period of limitation provided by this act will be void
under section 28 of the indian contract act as it amounts to restraint of legal proceedings.
extended term: any agreement which extends the period of limitation will be void under section 23 of the
indian contract act as it is against the public policy and would defeat the provisions of law.
no one can contract himself out of the statute of limitation, and consequently where the result of a
compromise between the decree holder and the judgement-debtor was that the limitation provided by law is
extended, it was open to the judgement-debtor to plead that the decree-holder application for
exemption was barred by limitation [goobardhan verses. dan dayal].
7. religious endowments and government
the provision of the limitation act apply without distinction to suits concerning both sacred and
secular property and makes no difference if the plaintiffs in such suits are divine or human. even the
government is not entitled to an exemption from the provisions of the limitation act.

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8. arbitration proceedings
section 43 of the arbitration act, 1996 provides that the provisions of the limitation act 1963 shall
apply to any arbitration proceedings under the act. so, under the arbitration and conciliation act, 1996,
the arbitral tribunal has the duty to ascertain if the claim made by the claimant before the tribunal is
barred by limitation or not.
9. limitation bars suit, not defence
the limitation does not bar plea as a defence. a defendant in a suit can set up right in a defence though
he would not have enforced that right by a suit and the ground of defence cannot become stale or barred by
limitation. the statute of limitation prescribes only the periods within which legal actions have to be
commenced, and not any period for setting up claims by way of defence to such actions. thus, where by
the time the mortgagor initiated proceedings for redeeming the properties, the mortgagee as remedy to
enforce his claim by an action in a court of law has become time-barred, :he mortgagee can put forth his
possessory lien over the properties as i e fence against the claim for redemption and insist on payment
of debts egitimately due to him. such defences are not to be taken into consideration, it the instance of the
party prejudicially affected, at the time of hearing the ippeal. it is important to take note of the fact that
the court must be sure hat on the facts established on the evidence on record, the suit is not barred and
only thereafter it can exercise jurisdiction in a case even if plea of imitation has not been taken up as a
defence.
10. res judicata and limitation
the doctrine of res-judicata applies equally to the decision on a question of limitation as in the case of
decision on any other point. hence, the decision on a question of limitation may be concluded in
particular way by reason of the operation of the above doctrine. however, it depends on the acts and
circumstances of each case whether the question of limitation is res-judicata or not.
difference between limitation and prescription
1. a law of limitation prescribes the time after which a suit or other proceedings cannot be
instituted in a court of law. a law of prescription prescribes the time at the expiration of which some
substantive right may be acquired or may become extinguished. prescription has, therefore, a twofold
aspect: as creating a right and extinguishing a right.
2. a law of limitation merely affects the remedy, it does not touch the right of a person to the debt,
damage, goods, person, property, etc. but prescription extinguishes the right of action. limitation is
considered to be a species of prescription.
3. a law of limitation, as merely bars the remedy, is a part of the procedural or adjective law. a law of
prescription, as it affects the substantive right itself, is a part of the substantive law.
a law of prescription lays down the period at the expiry of which a substantive or primary right is,
under certain circumstances, acquired or extinguished. the term 'prescription' as used in the limitation act,
excludes, and is opposed to limitation. a person's right is extinguished by prescription when he cannot assert it
either judicially or extra-judicially. it perishes so far as he is concerned. but since a mode of losing rights
is also often a mode of acquiring them the right is virtually, though not expressly or directly, transferred to the
person who claims it by prescription. where prescription extinguishes the substantive right itself, the
remedy is necessarily lost or barred. a prescription such as that dealt with by section 27 is an distinctive
prescription. where prescription not only bars the remedy, and extinguishes the right of the original holder, but

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directly transfers his right to the opposing claimant, the latter acquires a title against all the world. such a
prescription is called acquisitive prescription. a prescription such as that referred to in section 25 belongs
to this class.
difference between limitation and estoppel
limitation and estoppel are different things, though the operation of each is to prevent a party from
asserting his right at law, in the one case by shutting out a suit, and in the other case by shutting out
evidence.
1. limitation is a rule of law. it comes into operation merely because of the passivity of the plaintiff in
not asserting his rights quickly enough. it is not necessary, in order to avail oneself of this defence, that
there should have been any acts or representations done or made by the other party. estoppel is a rule
of evidence; it arises by reason of some act, statement or omission intentionally made by a party,
2. again estoppel may apply to either party; a defendant may be estopped from raising a particular
defence, as much as a plaintiff may be estopped from setting up a particular case. limitation, however,
does not apply in a matter of defence.
difference between limitation and laches
laches means slackness or negligence, and hence, willful negligence in asserting one's right. the doctrine of
laches is based on the principle, delay defeats equity. these are following difference between limitation &
laches:
1. the basis of the doctrine of laches is the same as that of the law of limitation. in the latter case,
however, a suit is dismissed if not brought within the prescribed time and no other matters are taken into
consideration. in the case of laches, there is no fixed period of time; the court will look into facts of each
particular case to see (a) whether there was an unreasonable delay on the plaintiffs part; (b) whether the
plaintiffs delay has resulted in loss or destruction of evidence; and (c) whether the plaintiff has, by his delay
or omission, induced the defendant to incur an expense or to alter his position.
2. in the case of limitation, the ignorance or knowledge of the plaintiff with respect to his right is, in
most cases, immaterial. on the other hand, in order to defeat a claim on the ground of laches, it would
ordinarily be necessary to show that the plaintiff had a sufficient knowledge of the facts, constituting his
title to the relief, and that he knowingly abstained himself to assert his rights.
3. limitation is based on consideration of public policy whereas the doctrine of laches is based on
equitable consideration. limitation rests upon express law, laches depends upon general principles.
difference between laches and acquiescence
the doctrine of laches and doctrine of acquiescence have their origin in the english courts of equity
and applied to those cases which were not covered by the statutes. laches is just a type of acquiescence. in
kisandas premchand verses. jivatlal protapshi & co., court observed, laches mean doing nothing. lapse
of time or delay in suing, unaccounted for by disability or other circumstances constitutes laches. delay
in seeking equitable remedy is technically known as laches and will disentitle the claimant to establish his
claim even if the claim is not disputed. the domain of acquiescence is large while that of laches is very
small. laches is merely passive, while acquiescence implies almost active consent. where there is a statute of
limitation, the objection of laches does not apply until the expiration of time allowed by the statute. but
acquiescence is a different thing; it means more than laches. if a party who could object does not do so
and knowingly permits another to incur an expense in doing an act under a belief that it would not be

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objected to, a kind of permission may be said to have been given to another to alter his condition, and he
may be said to acquiesce.
acquiescence consist of tripartite factors which are, knowledge, capacity and freedom, i.e., a person
acquiescing must be fully cognizant of his right to dispute the claim, he must be under no disability and
lastly, must be free from all undue influence or pressure.
mere delay is not, by itself, fatal to a suit but delay which amounts to a waiver of the plaintiffs right by
acquiescence or conduct inducing a party to place himself in a position in which he would not otherwise
have placed himself, may be sufficient to disqualify a plaintiff from asserting rights which are not
actually barred by limitation.
note: in india, the statute of limitation being a complete code it has been said in many cases that
the equitable doctrine of laches and acquiescence does not apply to suits for which a period of
limitation is provided by the limitation act.

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chapter 2
limitation of suits, appeals and application

(sections 3 to 11)
since the statute of limitation is founded on public policy and expediency and the words of the statute being
definitive, even the court cannot override the words on any consideration of equity or justice. moreover the
supreme court time and again observed that since the plea of limitation is a jurisdictional fact, the court
will determine this question irrespective of the fact that whether a plea that the suit is barred by limitation
or not has been raised by the parties.
the question of limitation is ordinarily a mixed question of law and facts. when the question of
limitation is purely one of law capable of determination on the facts admitted or proved before the court,
the court is bound to raise the question sno motu and decide it. but where the question of limitation raises
issues of facts not arising from the plaint, the defendant is bound under order 8, rule 2 cpc to raise such
question in his written statement. but if he fails to do so, it is the discretion of the court whether to allow
such question at a later stage or not. thus, the plea of limitation should be raised at the earliest stage
otherwise it would be refused at the advanced stage like in appeal etc.
the limitation act is applicable to suits brought by the plaintiff; it does not apply to a right set up by
the defendant in defence. thus, the plea of limitation can be raised only as against the plaintiff, and not as
against the defendant.
bar of limitation (section 3)
the general rule of the limitation act, 1963 is stated in section 3(1) which provides that:
subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal
preferred, and application made after the prescribed period shall be dismissed, although limitation has not
been set up as a defence.
in rikhab das verses. smt chandro court held that true construction of section 3(1) of the limitation act is
that a suit, appeal or application, if time barred, shall be dismissed, if filed after the prescribed period even
though limitation has not been pleaded in defence except when such limitation is extended by the
provisions of section 4 to 24 (inclusive) applicable to them.
so, the provisions of section 3 of the limitation act, 1963 are controlled by the provisions of sections 4 to
24 of the same act, and have to be read, interpreted and considered as such. therefore, section 3 is not an
independent section in its operation and effect, but is controlled by those provisions of the sections 4 to
24 only.
scope of section 3(1)

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section 3(1) of the limitation act, 1963 limits time after which the suit of other proceedings would be
barred. section 3 further provides that any suit, appeal or application if made beyond the prescribed period
of limitation it is the duty of the court not to proceed with such suits irrespective of the fact whether the
plea of limitation has been set up in defence or not. court has no discretion or inherent powers to
condone the delay if the suit was filed beyond the prescribed period of limitation unless the matter was
covered by sections 4 to 24 of the limitation act. the provision in section 3 is absolute and mandatory.
section 3 is pre-emptory, and the duty of the court is to take note of the act and give effect to it. the
court can suo motu take note of question of limitation. the question whether a suit is barred by
limitation should be decided on the facts as they stood on the date of presentation of the plaint. it is a
vital section upon which the whole limitation act depends for its efficacy. the following points are
important in this regard:
1. the true construction of section 3(1) is that a suit, appeal or application which is time-barred
ought to be dismissed, even though limitation has not been contended in defence. except where such
limitation is extended by the provisions of sections 4 to 24 (inclusive) applicable to such suit, appeal or
application, as the case may be.
2. section 3(1) of the act only bars the remedy, but does not destroy the right. for example, even
when a creditor is unable to recover a barred debt because of bar of limitation, yet the right under the said
claims subsists and can be exercised in any other way, except where because of section 27 of the limitation
act, 1963, the right is also extinguished.
3. every suit, claim etc. must be filed within the time specified in the first schedule of the act, unless
there is something in the provisions of sections 4 to 24 of the act which absolved the plaintiff from that
necessity. the onus is on the plaintiff to prove these exceptional circumstances. it is for the plaintiff, when
the plea of limitation is raised, to show that his suit is in time. where the defendant alleges that a shorter
period of limitation is applicable to the suit, the onus is lies on him to prove facts that will shorten the
period.
4. section 3(1) apply only to proceeding in courts and not to other bodies such as quasi-judicial,
tribunals and executive authorities. section 3 operates equally to private individual and government.
5. special or local laws: by section 29(2) of the act section 3 has been made applicable to special or local
laws. therefore, every suit, appeal or application, for which a period of limitation is prescribed by special law
or local law, must be dismissed if it is made or filed after the prescribed period even though limitation is
not set up as a defence.
arbitration proceedings: section 43 of the arbitration act, 1996 provides that the provisions of the
limitation act, 1963 shall apply to any arbitration proceedings under the act. so, under the arbitration and
conciliation act, 1996, the arbitral tribunal has the duty to ascertain if the claim made by the claimant before
the tribunal is barred by limitation or not.
so. the effect of section 3 is not to deprive the court of its jurisdiction. therefore, decision of a court
allowing a suit which had been instituted after the period prescribed is not vitiated for want of jurisdiction.
a decree passed in a time barred suit is not a nullity.
suit when instituted [section 3(2) (a)]
section 3(2) (a) provides as to when a suit is to be deemed as instituted for the purpose of limitation.
according to section 3(2) (a) a suit is instituted:

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(1) in an ordinary case, when the plaint is presented to the proper officer;
(2) in the case of a pauper, when his application for leave to sue as a pauper is made; and
(3) in the case of a claim against a company which is being wound up by the court, when the claimant first
sends in his claim to the official liquidators.
1. suit in ordinary case (section 3(2) (a) (1)]
1. section 3(2) (a) (1) provides that a suit is instituted, in an ordinary case when the plaint is
presented to the proper officer and not when it is accepted. the plaint presented must be a valid plaint. the
expression." an ordinary case" in sub-section 2(a)(1) of section 3 of the limitation act means that the
plaintiff must present in court a duly-stamped plaint to the proper officer which as regards limitation will
be effective only from the date on which it is presented.
if the plaint is accompanied by insufficient court fees and time is given by the court to make good
the deficiency, the suit is still deemed to have been instituted on the date when the plaint was first
presented, and not on the date when the requisite court-fees were paid. [under section 149 and order vii,
rule 11 of the c.p.c., the court has power to allow the court fee to be paid at any time after the
presentation of the plaint and on such payment it will be validated retrospectively from its original
presentation.]
if a plaint has been insufficiently stamped at its presentation, and the deficiency is supplied after the
expiration of the period of limitation and after the expiry of the time fixed by the court for the supply of
the deficient stamps, it will be liable for rejection and the suit will be considered as barred.
[brahmomoyi verses. andi st]. wholly unstamped and insufficient documents are treated on the same
footing in view of the provisions of section 149 cpc which makes no distinction between wholly unstamped
and insufficiently stamped documents.
similarly when a plaint is returned and ordered to be amended within a time fixed by the court, it is
the date of the original presentation of the plaint and not the date of the subsequent presentation after
the amendment, which is taken to be the date of institution of the suit. but if the amended plaint is not
presented within the time fixed by the court, the date of subsequent presentation will be treated as the
date of presentation and if such date falls beyond the period of limitation the plaint will be deemed as filed
beyond time. it is a settled rule of law that the date of amendment is immaterial unless indeed the time
expressly allowed by the court has been exceeded.
the mere presentation of the plaint is sufficient to constitute the institution of a suit under the
section and registration of the plaint is not necessary for this purpose. but the presentation must be valid
according to law i.e. presentation must be made by a duly authorised person and in a manner and under
the conditions which make it valid under the law.
2. suit by indigent person [section 3(2) (a) (2)|
section 3(2) (a) (2) provides that for the purpose of the limitation act, a suit by pauper must be deemed
to be instituted on the date on which his application for leave to sue as a pauper is made.
in premier insurance verses. vidyawati court held that a suit by an indigent person i.e. by a pauper
commences for the purposes of limitation on the day the petition to sue as an indigent person is presented to
court under order 33, rule 3 of civil procedure code and not the day, when the application being granted is
numbered and registered as a suit under order 33, rule 8 of civil procedure code.

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3. claim against a companyclaim by liquidator [section 3(2) (a) (3)|
section 3(2)(a)(3) provides that for the purpose of the limitation act, a suit is instituted in the case of a
claim against a company which is being wound up by the court, when the claimant first sends in his claim
to the official liquidator.
in abdul muthalip verses. mohammed, court held that the provision in section 3(2)(a)(3) can apply only
in relation to a suit instituted in a regular civil court where previous to the institution of such suit the plaintiff
has put a claim to the official liquidator but not to a claim against the insolvent company in liquidation in
which case the time will run from the date of application for the winding up and not of adjudication.
set-off and counter claim [section 3(2) (b)]
the principles that limitation ordinarily does not bar the defence is not applicable in the case of set-off
and counter-claim. section 3(2) (b) of the limitation act 1963 clearly attract set off and counter-claim.
section 3(2)(b) specifically provides that a claim by way of set-off or a counter claim shall be treated as
a separate suit and shall be deemed to have been instituted
(1) in case of set-off on the same date as the suit in which set-off is pleaded has been filed and
(2) in the case of counter claim, on the date on which the counterclaim is made.
in the case of set-off the date with reference to which the test of limitation is to be applied is the
date of institution of the suit wherein the set-off is claimed. but, in the case of counter-claim it is the date
on which the written statement making the counter claim has been filed.
a counter claim can be preferred within a period of 3 years from the date the right to sue accrues in
cases where no such period of limitation is provided in schedule of the limitation act in terms of the
provisions of section 3(2)(b)(2) of the limitation act.
section 3(2) (c)
under section 3(2) (c) of the act an application by notice of motion in a high court is made when the
application is presented to the proper officer of that court.
in union of india verses. union of builders, court held that section 3(2) (c) of limitation act does not take
away the right of an applicant to present an application to the court directly if the rules of business so permit
and in that event for calculating the limitation, the applicant can well exclude the day when the courts are
closed in the sense that the judges do not sit to entertain though office remains open.
res judicata and section 3
the provisions of section 3 of the limitation act are subject to the principle that where a question of
limitation has been expressly adjudicated upon and there is no appeal against it, the decision is binding on
the parties and on the appellate court.
in deoki nandan verses. makan lal, court held that the provisions of section 3 are subject to the
principle that where a question of limitation has been expressly adjudicated upon and there was no
appeal against it, the decision is binding on the parties and on the appellate court, and the principle of
res-judicata will prevail and prevent the appellate court from reversing the decision of the trial court on

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the question of limitation when a question on limitation has been expressly adjudicated upon and
became final, the principle of res-judicata will prevail over this section.
execution proceedings
it is only when the point of limitation is concluded by proceedings in a previous execution that the
judgement-debtor is not allowed to raise the question of limitation in a subsequent execution of a decree.
so long as the application for execution is pending, the judgement-debtor can show at any stage that the
application is barred and the court will have to dismiss the application under .section 3 of the limitation
act. so, the principles of section 3 apply to execution proceedings. the court, therefore, is bound to take the
point of limitation itself and dismiss the execution application if it is not in time. where it fails to do so, it
cannot be said that the judgement-debtor is hit by res-judicata or any principles analogous thereto and,
therefore, is not precluded from raising the point of limitation in subsequent execution proceedings.
section 3(2)(c) of the act does not take away the right of an applicant to present an application to the
court directly if the rules of business so permit and in that event for calculating the limitation, the applicant
can well exclude the day when the courts are closed in the sense that the judges do not sit to entertain
such an application though office remains open. [uoi verses. union builders]
note: finally it can be noted that section 3 of the act bars only remedy and the right continues to
subsist. the exception to this general rule is mentioned in sections 25 to 27 of the act where even the
title of the property gets extinguished.
exception to bar of limitation le. exception to section 3
(1) expiry of prescribed period when court is closed (section 4)
where the prescribed period for any suit, appeal or application expires on a day when the court is
closed, the suit, appeal or application may be instituted, preferred or made on the day when the court
reopens.
explanationa court shall be deemed to be closed on any day within the meaning of this section if
during any part of its normal working hours it remains closed on that day.
the provisions of section 4 of the act is a privilege given to the plaintiff or appellant or the applicant
to institute suit or prefer appeal or make application on the reopening day of a court, if the prescribed
period of limitation expires on a day when the court is closed and he is prevented thereby from instituting
his suit, preferring his appeal or making his application on that day.
for the application of the provisions of section 4 following things are required:
(1) that there should be a prescribed period, and

(2) that period should expire on a holiday.
the explanation to section gives the benefit to the litigant in cases where the court remains closed
during part of a day or in the middle or towards the end of the day.
section 4 of the act is not controlled by section 3. section 4 is one of the exceptions to the general rule
of section 3. section 4 gives expression to the general principle of law enunciated by the maxims (1) lex
non-cogit ad impossibilia i.e. the law does not compel a man to do what he cannot possibly perform, and
(2) actus curiqe neminem gravabit i.e.an act of the court shall prejudice no man.

14
in angadi verses. hiranmayya, court observed that the language of section 4 indicates that it has nothing
to do with computing the prescribed period of limitation, nor it deals with extension of time but only extends
the concession. it says that when the prescribed period expires on a day on which the court is closed, the
application may be made or suit filed on the day the court reopens. the general principle of law is: when a,
party is prevented from doing a thing in court on a particular day, by the act of the court itself, as for
instance, on account of the closing of the court, and not by any act of his own, he is entitled to do it at
the first subsequent opportunity.
applicability
the section would apply to suits, appeals or applications, civil or criminal. the section does not apply
to applications before any authority other than courts. it has no application to an election petition
under the representation of the people act, 1951. section 4 is not attracted, when no period of limitation is
prescribed for filing of an application for certified copy of judgment and decree by a party and the party
can do it at any time.
application to special or local laws
this section applies to cases governed by special or local laws, vide section 29(2) by which the provisions
of section 4 have been made expressly applicable "for the purpose of determining any period of limitation
prescribed for any suit, appeal or application by any special or local law." thus, if the period of three months
limited for a suit under section 111, clause (b) of the up land revenue act expries on a holiday, a suit
instituted on the next court day is within time. [dhanpati verses. kandhaiya,]. if the special or local law is a
complete code in the matter of limitation then section 29(2) is not applicable
applicability to private agreements
the section does not apply to cases where a certain date has been fixed by a private agreement between
the parties. it applies only to cases where a certain period has been prescribed by a statute. in adya singh
verses. nasib singh, after a sale in execution of a decree, the decree holder agreed to have the sale set
aside on receipt of the decretal amount within two months from the date of sale. the last day of the
two months being a holiday, the judgment-debtor deposited the decretal amount in court on the re-
opening of the court. court held that the decretal amount not having been paid to the decree holder
within two months from the date of sale, the sale could not be set aside, and the fact that the court
was closed when the two months expired would not entitle the judgment-debtor to get the benefit
of section 4 and to deposit the money on the re-opening day.
effect of section 4 and section 12
in bhagwan swamp verses. municipal corporation, court held that when a party is entitled to get
the exclusion of time under section 12 of the act, the date of expiration of the prescribed period has to be
calculated by the days adding the days excluded under section 12 of the act and if on such date the
court is closed, the suit, appeal or application, as the case may be, preferred or made on the date
when the court reopens.
in jayaramma verses. raj gopalan, court held that sections 4 & 14 are mutually exclusive in their
effect and application. section 14 provides for exclusion of certain periods in computing limitation. section
4 has nothing to do with computing the period of limitation. the effect of section 4 is only to relieve a
party to the hardship arising out of the fact that the last day of limitation is a holiday.

15
in sanjeevi verses shanmugha (1965), court held that if the plaintiffs title to the property is to be
extinguished on the expiry of the period of 12 years and that period expires on a sunday the plaintiff
filing the suit on the following monday saves his right from being extinguish by adverse possession.
difference between section 4 and sections 12 and 18
the language of section 4 presupposes that the period of limitation has already expired but it has
expired on a day when the court was closed, and it provides that despite the fact that, limitation has
expired, the suit, appeal or application may be instituted, preferred or made on the day on which the court
re-opens. there is nothing in section 4 on the basis of which it could be said that it has the effect of extending
or enlarging the period of limitation. the language of sections 12 and 14, however, clearly provides for the
extension of the period of limitation prescribed by the act and if, after the addition, limitation expires on a
day when the court is closed, the suit, appeal or application may be filed on the re-opening day. thus, the
period of limitation should be computed first and, if section 12 or other similar sections permit the
exclusion of any period, that period should be added to the prescribed period of limitation and if the total
period thus arrived at expires on a day when the court is closed, section 4 of the act would come into play.
(2) extension of prescribed period in certain cases (section 5)
any appeal or application other than an application under any of the provisions of order xxi of the cpc,
1908 may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that
he had sufficient cause for not preferring the appeal or making the application within such period.
scope of the section
the section applies to appeals and certain applications mentioned in the sections. it should be noted
that it does not apply to suits i.e. to the original cause of action. the reason is that the period prescribed
for most of the suits extends from three to twelve years, while the periods prescribed for appeals and
applications do not exceed six months, some concession has, therefore, been allowed in respect of these
appeals and applications. for the applicability of section 5, the "prescribed period" should be over. (the
prescribed period means any period prescribed by any law for the time being in force). the section is
also not applicable to applications made under any of the provisions of order 21 of cpc and execution
petition.
as whole order 21 of the civil procedure code relating to execution has been specifically excluded from
the purview of the section 5 of the limitation act, 1963, none of the applications contemplated under
any rule of order 21 of the civil procedure code attracts section 5 of the limitation act, 1963. so, sections
of the limitation act does not apply to a petition for setting aside sale under order 21, rule 89 or rule 90
of the civil procedure code, or to an application filed by the auction purchaser to set aside auction sale
under order 21, rule 91 of the civil procedure code.
conditions/ principles for the condition of delay
(1) in order to bring a case under the purview of section 5, the application for the filing of which condonation
of delay is sought should not relate to the execution of decrees. if the application refers to execution of
decrees, the court will not grant the condonation even if the appellant had sufficient cause for not making
application within time.

16
(2) an application cannot be made under section 5 for the extention of the prescribed period unless the
prescribed period is over. the expression 'prescribed period' means any period prescribed by any law for
the time being in force.
(3) the party applying for condonation of delay under the section should satisfy the court that he had
sufficient cause for not preferring the appeal or making an application within the prescribed period.
'sufficient cause' has not been defined in the act.
(4) what constitutes sufficient cause cannot be laid down by hard and fast rules. the discretion given by
section 5 should not be defined and crystallized so as to convert a discretionary matter into a rigid rule of
law. anything which is done with due care and attention is said to have been done bonafidely and in good
faith.
(5) the following principles are required to be kept in mind while considering an application for
condonation of delay on sufficient cause:
(1) refusal to condone may result in throwing out a meritorious matter,
(2) substantial justice is to be preferred to technical laws.
(3) pedantic approach regarding every day's delay should be avoided in appropriate cases.
(4) injustice is to be removed by giving liberal interpretation to the words "sufficient cause".
(5) there should not be presumption that delay is always deliberate.
meaning of sufficient cause
the term "sufficient cause" has not been defined in the act, but it has been held that it must mean a
cause which is beyond the control of the party invoking the aid of the section. the extention of the time under
this section is at the discretion of the court. the discretion is judicial, and not arbitrary. no hard and fast rule
can be laid down to govern the matter or to control the exercise of such discretion. each case must depend
on its own facts, a cause for delay, which by due care and attention, the party could have avoided, cannot
be a sufficient cause. the test is to see whether it is a bona fide cause, and nothing is bona fide unless it is
done with due care and attention. the question of the existence of sufficient cause is one to be decided
from the facts and circumstances of the particular case. in exercising discretion under section 5 the court
should adopt a pragmatic approach. the court has to exercise the discretion on the facts of each case
keeping in mind that in construing the expression "sufficient cause" the principle of advancing substantial
justice is of prime importance. the proof of sufficient cause is the condition precedent for the court to
exercise its discretion.
what constitutes sufficient cause?
(a) illness: when illness is pleaded as a ground for delay, the illness must subsist for the whole period
and it must be proved that the person was not in a position to attend to any duty. the question whether
the effect of the particular illness is such that it afforded a sufficient cause for the delay in preferring the
appeal or the petition within time is one of fact and has to be decided on the basis of circumstances
disclosed in each case. where the claimant could not file claim petition due to mental shock because of
son's death and also his wife's illness and failure to procure sufficient fund, the delay in filing claim
petition was condoned (asha singh verses state of h.p.,). even when a party proved sufficient cause he
could not as a matter of right get the delay condoned and court may or may not exercise its discretion to
condone the delay regard being had to the facts of each particular case,

17
(b) imprisonment: imprisonment in a criminal case is a sufficient cause and the time spent in jail may
be deducted (maharaj narain verses. banoji).
(c) mistake of counsel: in certain circumstances, mistake of a counsel may be taken into consideration in
condoning delay under section 5 though there is no general proposition that mistake of a counsel by itself
is always a sufficient, cause. in order to constitute sufficient cause the mistake committed by the lawyer
"of his clerk must be bonafide.
(d) mistake or ignorance of law: mistake of law is a mistake committed by a party in establishing or
exercising the right conferred upon him by the law. the party knows his rights, he wants to assert them,
and establish them but through mistake in understanding the provisions of the law he goes to a wrong
forum instead of going to the forum which the law has set up for the determination of his rights. in cases
where there is mistake of law, the courts have almost uniformly taken the view that the time taken up
by asserting the rights in a wrong court or wrong forum should be excluded under section 5, (somnath
verses vivek,).
ignorance of law is ignorance of the right by a party which the law confers upon him. ignorance of
the right by a party conferred upon him by law is no excuse and thus cannot be a ground for condonation
of delay under section 5.
(e) wrong proceeding taken in good faith: where a person bona fide filed a suit instead of appealing
from a decree and soon after found out the error and preferred the appeal, it was held to be a 'sufficient
cause', (sitaram verses. nimba,). immediately after the termination of the wrong proceedings (whether in
review or revision) the appeal must be preferred with due diligence in order to get the benefit of the
section. when the same court is competent to entertain revision petition and appeal, conversion of revision
into appeal or vice versa is made by invoking inherent powers of the court.
(f) amendment of decree: time runs from the date of the originally drawn decree and not every
amendment in the decree entitles the party to claim an extension of time for filing an appeal. only when
the grounds on which the appeal is based are intimately connected with the amendment of the decree, the
court should consider it as a sufficient cause, but if the amendment has no relation to the grounds upon
which the vitality of the decree is sought to be challenged in appeal, such appeal should not be admitted
after time. (ram singh verses. rama bai,)
(g) proceeding in wrong court through bona fide mistake: where appellant preferred an appeal to a
wrong court, believing bona fide that the appeal lay there, the appellant is entitled to condonation (balbir
singh verses bhog singh, ). the pendency of the application to set aside the ex-parte decree cannot be
treated as sufficient cause for the delay in filing the second appeal as the causes of action are quite
different. (ujagar verses. duni chand,)
(h) ignorance of fact: whether the ignorance of death would constitute sufficient cause would depend on
the facts of each case. ignorance of death per se is not sufficient cause (firm dittu ram verses. ompress co.
ltd.
(1) other grounds which constitute sufficient cause
(a) inability to get stamps (kesho prasad verses. harbans,)
(b) application for copy of decree with insufficient folios. (dulali verses. saroda,)
(c) defective vakalatnama (lokenath verses. sheo saran,)

18
(d) fraud (allah wadhaya verses haji mohammad,)
illustrative cases: where delay condoned

(a) illness of a party where he was advised bed rest. (industrial minerals verses. k.m. chemicals) ;
applicant was suffering from fever (bhakhu bhai verses state )
(b) when an army officer was on duty and exigencies of service did not permit him to leave headquarters
(surajdil verses rani,
(c) where the applicants are parade nashin ladies and are ignorant of law delay in filing application for
setting aside abatement (radha verses. ramesh,)
(d) a revision petition filed after 90 days of the date of order can be allowed only if appealing party is
found to be diligent (parasuram singh verses. umesh sharma, )
(e) delay in filing the appeal was caused in obtaining the certified copy of the judgement [arjun prasad
verses. gorakh prasad, (gau)]
(f) delay was caused as the applicant believed that limitation would start from the date of knowledge of
the ex-parte decree and not from the date of judgment and decree (radhayshyam aggarwal
verses. m/s. rainwater deepak kumar property, gau)
(g) director-in-charge of the company served with summons. delay caused as he was advised bed-rest by
the doctors. the fact that there are other directors who could have applied for leave to defend
within time is not material as summons were sent to the defendant himself as director-in-charge.
[rajesh ahuja verses. manoj mittal,]
(h) delay in filing the appeal for the purpose of protecting the temple property from the hands of the
adversary deserves condonation as it serves a public purpose. (shree bharadaraja perumal temple
verses. k ramachandra,)
(i) delay on account of making enquiries and obtaining the particulars of the legal representatives,
(fialkrishna variar verses sheriffa,)
(j) delay caused due to absence of the knowledge of decree, held to be a sufficient cause. (a.e. co, ltd.
verses. e.m. shabha,)
illustrative cases where delay not condoned
(1) allegation of ignorance of law is not a sufficient cause,
(2) absence of counsel is not a sufficient cause.
(3) lack of reasonable skill of legal practioner is not a sufficient cause,
(4) illiteracy by itself is not a ground of delay.
(5) the mere fact of appellant being a pardanashin lady could not file the appeal in time is not sufficient cause.
(6) notice of delivery of judgement not given to parties.
(7) negligence of pleader or his clerk.

19
(8) delay on the part of state government due to lack of fund cannot be considered as sufficient cause,
(9) appellant failed to explain one year's delay in filing appeal,
(10) poverty of the appellant or applicant.
non-applicability of section 5 of the limitation act
section 5 of the limitation act, 1963 is not applicable to the following:
(1) the suits and proceedings under order xxi of the code of civil procedure.
(2) section 25 of the indian contract act, 1872 [section 29(1)].
(3) 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 (both
included) shall apply only in so far as, and to the extent which, they are not expressly excluded by such
special or local law [section 29(2)].
section 29(2) of limitation act makes sections 4 to 24 of the limitation act applicable when computing
limitation under a special or local law exactly in the same manner as they would be applicable when
computing limitation under the limitation act, 1963. in vidya charan shukla verses. khubchand, supreme
court held that unless the period of limitation prescribed by any special or local law is different from the
period prescribed in the schedule, sections 4 to 24 shall not apply to any proceeding under a special or
local law.
(4) 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. [section
29(3)]. so, section 5 of the limitation act is not applicable to a petition under section 12(l) (d) of the hindu
marriage act. however, section 5 of the limitation act would apply to any appeal presented to high court
under the hindu marriage act, 1955. (5) 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 easement act, 1882 may for the time
being extended [section 29(4)].
legal disability (section 6)
legal disability is inability to sue owing to minority, lunacy or idiocy. the law recognizes no other ground
as sufficient for extending the period of limitation. the effect of legal disability is that it extends the
period of limitation, but it does not prevent the period from running. the provisions as to disability apply
only when the plaintiff is under a disability and not when the defendant suffers there from. moreover,
these provisions apply only to suits and applications for execution of decrees. the main provisions regarding
legal disability are contained in sections 6, 7, 8 and 9 of the limitation act. sections 6, 7 and 8 together
constitute one unit and are supplementary to each other.
section 6 deals with initial disability and lays down general rule in case of person under initial disability.
section 7 provides special rule for some of these cases. section 8 serves as an exception to section 6 and
section 7 both.
essential ingredients of section 6

20
(1) legal disabilities under section 6 of the act, are minority, insanity and idiocy only.
(2) when any person is affected by any of these disabilities, he is entitled to institute the suit after
the cessation of his disability within the same period as provided for the institution of such suit.
(3) when any person is affected by more than one disability, he is entitled to institute the suit after the
cessation of those disabilities within the same period as provided for the institution of such suit.
(4) when any person is affected by more than one disability and before the cessation of that disability he is
affected by another disability, mentioned in the section, he is entitled to institute the suit after the cessation
of both the disabilities.
(5) when any person affected by any of the disabilities mentioned in the section, dies before the
cessation of such disability, his legal representative is entitled to institute the suit within the same period as
provided for the same.
(6) where any person dies during his disability, and his legal representative is also affected by any such
disability, in that case, he is entitled to institute such suit after the cessation of his disability.
(7) the provisions of this section apply also to the execution of decrees.
(8) 'minor' for the purposes of this section also includes a child in the womb.
object of section 6
generally, limitation begins to run from the date of accrual of the cause of action. this section is one of
the exceptions to the general rule. in this and similar cases, the period of limitation does not run from the
accrual of the cause of action, but runs from a subsequent date i.e. the date on which the disabilities
cease. the object of the section is not to place minors under special disability as compared to majors, but to
make a special concession in their favour. it is clear from the section that minority or lunacy should not
prevent limitation from running as against a minor or lunatic. it simply gives to the minor or lunatic an
extended period for filing a suit or application. the section is, however, subject to the other provisions of the
act (sections 7, 8 and 9).
scope and application of section 6
1. section 6 is an enabling section to enable persons under disability to exercise their rights within a
certain time. this section applies only to cases dealt within the act itself i.e. to those suits and
applications for execution of decree which are mentioned in first schedule. the provisions of this section
are not applicable to cases, to which a period of limitation is prescribed by special or local law. this
section refers to periods of limitation prescribed by the act itself.
2. this section is limited only to suits and applications for execution of decrees. it does not operate
in favour of an appellant under disability. this section does not apply to appeals and pre-emption suits.
3. the privilege which this section allows is entirely personal and can be claimed only by a person
under disability or his representative after his death. the privilege given by the act to a minor, insane or
idiot is personal to him alone (or in the event of his death while under the disability, his legal
representative can avail himself of those privileges). but neither purchasers nor the assignees can take
the benefit thereof.

21
4. section applies to every minor whether he has guardian or not. the benefit of this section is not
limited to the period after the cessation of disability, but applies also to the period during which
disability exists.
5. disability must be continuous. the section applies only where the person is already under a
disability when the right to sue accrues. if a disability supervenes subsequently, then the benefit of this
section cannot be taken. this is made clear by section 9 which says that where once time has begun to run
no subsequent disability or inability to sue stops it.
6. a person who was not entitled to sue or apply at the start of the commencement of the limitation
but becomes entitled to do so later cannot get benefit of section 6.
7. section 6 applies only to cases where a person entitled in his own right to institute a suit or make
an application is labouring under disability.
this section does not apply to a case where a person is not under any disability even though the suit or
the application is for the benefit of another person who is under disability.
8. this section requires that the plaintiff must have been a minor when the cause of action first accrued,
and the cause of action must have accrued to the a minor himself otherwise he cannot claim any exemption
under the section, example., if the cause of action accrued to the minor's father, the minor son cannot,
after his father's death, wait till he attains majority. similarly, if the cause of action had accrued before his
birth, the minor cannot, on coming of age, avail himself of the benefit of this section. the minor must have
been in existence at the time when the cause of action accrued.
9. in computing the period of limitation for a minor, the date on which he attains majority must be
excluded from calculation. in batuk verses. rudra, it has been held that the three-year period must be
counted, not from the date of attainment of majority, but from the date of cessation of minority.
10. a minor is a person who has not attained the age of majority under the indian majority act, 1875
and the hindu minority and guardianship act, 1956. in both the statutes in general cases, a minor is a
person who has not completed the age of 18 years. under section 3 of the indian majority act (under
two special cases) the age of majority will be attained on completion of 21 years by a person. the age of
a person must be calculated from the date of his birth and not from the date of his conception.
11. section 6 applies to the case of a child in the womb. a child in the mother's womb is deemed to be
in existence at least for purposes of inheritance and has a right to challenge any transaction which
affects its interest at that time.
12. section 6 (3) read with section 8, provides that in a suit for possession, where a minor dies
before attaining majority, his representatives would have either total period of 12 years from the date of
accrual of the cause of action, or 3 years from the date of the minor's death, whichever is longer.
disability of one of several persons (section 7)
where one of several persons jointly entitled to institute a suit or make an application for the
execution of a decree is under any such disability, and a discharge can be given without the concurrence of
such person, time will run against them all; but, where no such discharge can be given, time will not run as
against any of them until one of them becomes capable of giving such discharge without the concurrence
of the others or until the disability has ceased.

22
explanation 1this section applies to a discharge from every kind of liability, including a liability in
respect of any immovable property.
explanation 2for the purposes of this section, the manager of a hindu undivided family
governed by the mitakshara law shall be deemed to be capable of giving a discharge without the
concurrence of the other members of the family only if he is in management of the joint family
property.
analysis of section 7
according to section 7, where two or more persons are entitled to file a suit, and anyone of them is
under legal disability, then suit can be filed without concurrence of such disabled person. if all of them
are disabled then limitation period does not start till the cessation of disability of at least one of them and
is capable of discharging such duty. in other words, if one among them is free from legal disability limitation
period starts even though the others are legally disabled. the time will start running against all
including the disabled.
section 7 is really an appendix to section 6. in both sections the period of limitation is only
extended. section 7 is only an application of the principle embodied in section 6 to a joint right
inherited by a group of persons wherein some or all of whom are under the disability. it is the existence
of a person in the group with the capacity to give a discharge without the concurrence of others, which
makes time run as against all in the group. the disability of the other persons in the group does not
prevent the running of time, and it is not the cessation of the disability of one of the group, but the
attainment by him of the capacity to give a discharge without the concurrence of the others that
makes time run as against all.
section 7 applies only to cases of persons whose substantive right is joint. it does not deal with
persons whose rights are several though they may come together under rule 1 of order 1 of cpc, 1908,
for the purpose of instituting a suit; thus, where no discharge can be given without the concurrence of
one of the joint debtors under disability time will not run against any of them until all have ceased to be
under disability.
scope of section 7
1. this section deals with cases where there are several persons jointly entitled to institute a suit or
make an application for the execution of a decree, and some only or such one of them is under a legal
disability, while the rest are not. for such a case provision has been made under section 7.
illustrations
(a) a incurs a debt to a firm of which b, c and d are partners. b is insane, and c is a minor. d can give
a discharge of the debt without the concurrence of b and c. time runs against b, c and d.
(b) a incurs a debt to a firm of which e, f and g are partners. e and f are insane, and g is a minor. time
will not run against any of them until either e or f becomes sane or g attains majority.
2. section 7 contemplates a legal capacity to give discharge without concurrence of the person under
disability. this section can be broken into two parts:
(1) where a valid discharge can be given by the persons not under disability without the concurrence
of other person, time will commence to run against them all.

23
under this head, we can consider the position of karta in a joint hindu family where other members of
coparcenary are suffering from disability contemplated in section 6(1). it is common rule in joint family
property that karta can sue in representative capacity on behalf of the joint family and its member and he
can give a valid discharge of the whole debts taken for joint family purposes even without the consent or
concurrence of the other members of family. now according to section 7 in such situation, time will start
running against all the members including karta and other coparcener and therefore karta must contest
the case on behalf of rest of the family members otherwise karta cannot be allowed to take the plea of
minority etc. of the other coparcener.
(2) where no valid discharge can be given without the concurrence of others, time will not commence
to run against any of them until the disability ceases or until the person under disability loses
his interest in the subject matter of the suit or in the decree.
in case of mortgage, right to redeem is an indivisible right and one mortgagor cannot give a valid
discharge without the concurrence of other mortgagor. similarly, one mortgagee cannot give a valid
discharge without the concurrence of other co-mortgagees. section 66 of t.p.a. provides that partial
redemption is not allowed.
3. this section like the preceding section 6 is confined to suits and applications for execution of
decrees by persons under disability. it does not apply to appeals. this section also does not apply to
enforce rights of pre-emption as pre-emption suits also have been specifically exempted from the purview of
section 6 and 7.
relationship between section 6 and section 7
sections 6 and 7 are not mutually exclusive; the latter section supplements the former. this section
is a disabling section and in so far as it takes away the right conferred by section 6 has to be strictly
construed. sections 6 and 7 do not give a fresh period of limitation. the words 4any such disability' include
only minority, idiocy or insanity but do not include the disability of the group to give a discharge. moreover,
section 7 applies only if the disability exists at the time when the limitation is to be reckoned.
meaning of some expression used in section 7
(1) jointly entitled: this expression as contemplated in the section refers to cases in which the
cause of action is common to a number of persons. it applies when the procedural right to sue is joint
irrespective of whether the substantive right is joint or not [a.c. fields verses. chhotibai,]. this section
deals with cases where more than one individual possesses the same identical substantive right.
there may be three kinds of cases:
(a) where there is a joint substantive right, but the right to sue is not joint;
(b) where the substantive right is joint and the right to sue is also joint;
(c) where the substantive right is not joint, but the right to sue is joint.
in the case (a) section 7 will have no application because of its opening words. in the case (b) the first
part of section 7 may apply. in the case (c) it is the second part of section 7 which will apply.
(2) discharge: discharge, referred to in section 7 is one which can be given by a joint claimant in his
own right as a joint claimant. it includes release of rights in immovable property.

24
the word "discharge" is not limited to discharge of monetary claim alone but also to discharge or
satisfaction of all other liabilities as well. the word 'discharge' has reference to transaction which is
required to be avoided and has no application to void transactions (sri narayan verses. balesvvar,). it
does not include a mere non-filing of a suit (nidhi pradhan verses. bhawna,).
(3) "time will not run": the words "time will not run" in the second part of section 7 would merely
refer to the additional period conferred by this section. the explanation 2 makes it clear that for the
purposes of this section, the manager of a hindu undivided family governed by mitakshara law shall be
deemed to be capable of giving a discharge without the concurrence of the other members of the family
only if he is in management of the joint family property. the managing member of the joint hindu
mitakshara family has an implied authority to bind all the members by a discharge given by him without
their concurrence, even though they may be minors, and, time will run against them all.
however, where the minor is represented by a guardian appointed under the guardian and wards act, the
adult member cannot give a valid discharge under this section (gaurhasi verses. smt anardia,)
special exceptions (section 8)
nothing in section 6 or in section 7 applies to suits to enforce rights of pre-emptions, or shall be

deemed to extend, for more than three years from the cessation of the disability or the death of the
person affected thereby, the period of limitation for any suit or application.
the first part of section 8 provides that no exemption will be given under sections 6 and 7 on grounds
of legal disability etc., so far as the pre-emptory suits are concerned. in suits relating to pre-emption no
extension shall be given. the ordinary period of limitation for pre-emptory suit is one year under article 97,
schedule 1 of the act and no extension beyond this period shall be given in any case. the policy of law is that
the suits of preemption shall be brought as quickly as possible.
the second part of section 8 is also an exception of the rules contained in sections 6 and 7. according to
which maximum extension of period of limitation shall be not more than 3 years in any case. this rule can be
subdivided in following heads:
1. if after the cessation of disability the ordinary prescribed period of limitation is still existing and if it
is more than 3 years then no extension shall be given in any case.
2. if after the cessation of disability, only 3 years of the ordinary prescribed period of limitation are
still existing and remaining, then also no extension shall be given.
3. if the ordinary prescribed period is expiring before the cessation of disability then extension will have
to be given. now in this situation, if the ordinary prescribed period is of more than 3 years then the
maximum extension will be given of 3 years but if the ordinary prescribed period is of less than 3 years
then only so much of extension will be given as is ordinarily available.
4. if after the cessation of disability only little period of limitation is still remaining which is less than
the ordinary prescribed period available, then also the extension will have to be given according to the
rule number 3 discussed above.
scope of section 8
this section is ancillary to and restrictive of the concession granted in section 6 and 7. the effect of
section 8 is that a person under disability may sue after the cessation of the disability within the same

25
period as he would otherwise have been allowed under the schedule; and the present section adds a
proviso that in no case the period can be extended to anything beyond three years from the cessation of the
disability. the section must be read together with each article in schedule 1 and when the period
prescribed by the latter is three years or more, and expires within three years from the date of
attainment of majority, the intention is that the minor should have the full term of three years; but when
the prescribed period is less than three years and the minor gets the period (according to section 6) from
the date of the majority, the prescribed period is not to be enlarged to three years. (subramanya verses.
shiva subramanya,).
relationship between sections 6, 7 and 8
section 8 is in nature of a proviso to section 6 and section 7. it does not confer any substantial
privilege rather it restricts the exemptions granted in section 6 and 7. special limitation as an exception
has been provided in section 8 of the act laying down that extended period after cessation of the disability
would not be beyond three years from the date of cessation of the disability or death of the disabled
person (darshan singh verses gurdev singh, ).
under this section, the limitation period can be extended to an extent of three years, if the
ordinary prescribed period of limitation remains a period of less than three years after the cessation
of disability for bringing the suit. but if the period remaining is more than three years, no extension can
be granted. (bibhuti verses. girish).
combined effect of section 6 and 8
the combined effect of sections 6 and 8 may be stated as follows:
(1) if the period of limitation prescribed for the suit or application is three years or less, and it expires
before the minor attains majority, the minor will get the same period from the date of attaining
majority. in such a case there is no occasion for section 8 to apply.
(2) if the period of limitation is more than three years, (example., if the suit is one for possession, for
which the prescribed period is 12 years), and it expires before the minor attains majority, the minor
will get only three years from the date of attaining majority, under section 8.
(3) if the period of limitation is three years or less, and it expires at some date after the minor attains
majority (example., if the suit is one for which the period prescribed is two years and the minor attains
majority one and half years after the accrual of the cause of action), the minor will get the full period
prescribed for the suit (i.e., 2 years) from the date of attaining majority.
(4) if the period of limitation prescribed for the suit is more than three years, and it ordinarily expires
within three years (or less) after the minor attains majority, he will get 3 years from the date of
majority.
(5) if the period of limitation prescribed for the suit is more than three years (example., 12 years), and
the period ordinarily expires on the date which is more than three years from the date of attainment of
majority (example., if the right to sue accrues in 1900, and the minor attains majority in 1907, so that
ordinarily the period will expire 5 years after the attainment of majority by the minor), the minor will get
the remaining period (i.e., 5 years) from the date of majority, but no further extension of time (viz. 12
years from the date of majority) will be allowed under section 6 because in the ordinary course he is
getting more than three years.

26
under this section, the period can be extended upto the extent of three years if under the
ordinary law out of the period of limitation prescribed, there remains a period of less than three years
for bringing the suit but if the period remaining is more than three years, no extension can be granted and
there is no occasion for section 8 to apply.
where the period prescribed for a suit expires three years after the majority of the minor, he is not
entitled to any extension of time under the combined effect of section 6 and 8. but where the period
prescribed by schedule 1 expires more than three years after the termination of the disability, then
upon the date on which the limitation prescribed by that schedule expires, there is no question of any
extension of time. section 8 has no application to such a case as this section is not intended to curtail
the period of limitation.
continuous running of time (section 9)
where once time has begun to run, no subsequent disability or inability to institute a suit or make an
application stops it:
provided that, where letters of administration to the estate of a creditor have been granted to his
debtor, the running of the period of limitation for a suit to recover the debt shall be suspended while the
administration continues.
principle: the principle underlying section 9 is the same as that under the english law, i.e. "time when
once it has commenced to run in any case will not cease to do so by reason of any subsequent event."
generally, when any of the statutes of limitation have begun to run, no subsequent disability will stop
this running". the principle of section 9 is therefore to be strictly applied and no exceptions (other than
those recognised in the act) should be allowed to be made by any court.
the principle laid down in this section is subject to certain exceptions. even where time has begun to
run, it can be stopped provided the cause of action which has given the right to sue is discharged or in any way
disappears. the period of limitation can be extended in three classes of cases:
(1) where injustice has been caused by an act of court;
(2) where the cause of action was satisfied; and
(3) where the cause of action was cancelled.
scope of section 9
the section applies to suits as well as applications. the section contemplates a case of
subsequent and not of initial disability, i.e.,- i t contemplates those cases where the disability occurred
after the accrual of the cause of action. cases of initial disability have been provided for by section 6. this
section applies when the cause of action continues to exist.
object of section 9
the law of limitation aims at promoting diligence and discouraging, laches or delay or indolence of
any sort. therefore limitation requires that a person should be diligent to file a suit in respect of his right
as quickly as possible, and not allow the matters to slide until a dangerously late hour when the
prescribed period is on the point of running out. if he does so, he runs the risk of something or other

27
happenings at the last moment which may prevent him from filing a suit because period has actually run
out.
meaning of disability or inability
disability or inability to sue includes disability to make an application for execution as well. disability is
want of legal qualification to act, inability is want of physical power to act. this disability is the state of
being a minor, insane or an idiot as have been mentioned in section 6, whereas illness, poverty etc. are
instances of inability. when the time starts running any subsequent disability or inability to institute the suit or
make application cannot stop it from running out its full prescribed period. the disability or inability
contemplated by section 9 is confined to such cases as are mentioned in the act itself, and new exemptions
cannot be recognised. there is no distinction between voluntary and involuntary (example., caused by
minority) disabilities. as the rule stands, it appears to apply strictly to every case of subsequent disability or
inability excepting those cases that may be specially exempted from the operation of this rule.
the inability must be a personal inability affecting the plaintiff himself. the fact that the plaintiff was
unable to sue the defendant owing to the latter's absence from india would not constitute an "inability"
under this section so as to make the period of limitation run continuously. in such a case the rule of
section 15(5) will apply and the period of the defendant's absence from india will be excluded from
computation. this section does not in any way qualify section 15(5).
lack of or absence of cause of action is neither disability nor inability. it is personal disability or inability
to sue due to some personal fact which is covered under this section and not absence of cause of action.
illustrations
joint effect of sections 6, 7, 8 and 9
the joint effect of these sections is that if advantage is taken of two disabilities, they must so
overlap each other as to leave no gap of normal period between them, i.e., period which is free from all
disabilities because as soon as such an interval occurs, the time begins to run and subsequent inability or
disability is powerless to stop its running. if it is not a continuing disability from- the beginning (when the
cause of action arose), or if one ceases to be under a disability even for a day, time begins to run against
him and subsequent disability of himself or after his death that of his legal representative, will not avail to
save limitation. for instance, a, a hindu minor, is under the guardianship of his own mother z he is
deprived of the possession of his family estate by a trespasser y, while he is yet a minor and under the
guardianship of his own mother z while yet a minor, a dies and is succeeded to his estate by the mother, the
erstwhile (former) guardian. here, time begins to run against the mother as soon as she succeeds to the
property. if the widow of a subsequently adopts a son who is a minor and who in consequence of the
adoption becomes the heir of a, the adopted son cannot claim extension of time.
exceptions to section 9 (i.e. section 12 to 15)
the rule laid down in section 9 is however a general rule and running of time will be suspended in
the: following seven cases:
(1) where letters of administration to the estate of a creditor have been granted to his debtor, the
running of time in favour of such debtor is suspended for so long as the administration continues. this is
in order to prevent an administrator from taking advantage of his office in delaying the payment of a debt he
himself owes to the estate, till the prescribed period has expired.

28
(2) in computing the period of limitation prescribed for an appeal, an application for leave to appeal
and an application for a review of judgment, the time requisite for obtaining a copy of the decree,
sentence or order appealed from or- sought to be reviewed, (and when a decree is appealed from or
sought to be reviewed the time required for obtaining a copy of the judgment also), is to be excluded.
likewise, in the case of an application to set aside an award, the time required for obtaining the copy of the
award is also to be excluded. (section 12)
(3) in computing the period of limitation for a suit or appeal as a pauper, the time taken for
prosecuting an application for leave is to be excluded, if such leave is necessary. (section 13)
(4) when the plaintiff has been prosecuting another civil proceeding bona fide in a court without
jurisdiction. (section 14)
(5) when notice has been given before the institution of a suit in accordance with law, the limitation
will be suspended during the period of notice. [section 15(2)]
(6) in a suit for possession by a purchaser at a sale in execution of a decree, limitation will be
suspended during the time for which the proceeding to set aside the sale has been prosecuted. [section
15(4)]
(7) when the defendant is absent from india and the territories beyond india under the administration of
the central government. (section 15(5)]
suits against trustees and their representatives
(section 10)
notwithstanding anything contained in the foregoing provisions of this act, no suit against a person in
whom property has become vested in trust for any specific purpose, or against his legal representatives or
assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such
property, or the proceeds thereof, or for an account of such property or proceeds, shall be barred by any
length of time.
explanationfor the purposes of this section any property comprised in a hindu, muslim or buddhist
religious or charitable endowment shall be deemed to be property vested in trust far a specific purpose and
the manager of the property shall be deemed to be the trustee thereof.
section 10 of the limitation act, 1963 can be invoked against any person in whom the property
has become vested for a specific purpose or his legal representative or assigns not being assigns for
valuable consideration. it applies to three categories of relief, namely, to follow the trust property or its
proceeds or for account of the trust property or its proceeds. such suits shall not be barred by any
length of time.
explanation to section 10 further signifies that though under the general law there may be no trust for a
specific purpose, yet in the case of religious and charitable endowment of the hindus and muslims the
endowed property should be treated as property vested in trust for a specific purpose and the manager
thereof as trustee for the purpose of section 10.
scope of the section 10
(1) the words of section 10 means that when a trust has been created expressly for some specific
purposes or object, and if such property become vested in a trustee, then the person who is beneficiary

29
can bring a suit against that trustee to enforce that trust, such suit shall not be barred by any limitation.
the effect of this section is that an apparently fraudulent trustee cannot escape by reason of lapse of time
and he cannot run away by putting the trust money into his own pocket.
(2) section 10 applies to express trusts only and does not apply to implied, resulting or
constructive trusts as enumerated in chapter 4 of the indian trusts act, 1882.
requirements of section 10
(1) there must be property which has become vested in a person in trust for a specific purpose.
(2) the suit must be against such person or his legal representative or assign (not being an assign for
valuable consideration).
(3) the suit must be for the purpose of following in the hands of such person the trust property or its
proceeds or for an account of such property or proceeds.
meaning of certain expressions used in section 10 (1) specific purpose
the expression "specific purpose" means a purpose that is either actually or specifically defined in the
terms of the will or the settlement itself, or a purpose which can be certainly affirmed.
following are the instances of trust for specific purpose: (a) the husband is in a position of a
trustee so far as the ornaments and utensils entrusted to him by the wife are concerned and there
shall not be any limitation for a suit by the wife against the husband. (swapna verses. thankavely,).
(b) where a hindu widow who was the natural guardian of her minor sons handed over a sum of money
to her brother for the benefit and education of her son, it was held that she constituted the brother
a trustee for a specific purpose. (chintaman verses. chanderao),
(c) where a father executed a settlement-deed by which he gave certain properties to his son and
directed him to pay a certain amount to the settler's daughters, it was held that there was a
specific trust in favour of the daughter. (nachimuthu verses. mithuswamy, ).
(d) in the case of payment by a father of a girl to the prospective father-in-law or the prospective
husband, it is simple trust. the only duty of the husband is to convey the legal estate of the property
to the girl. though, it is a simple trust, yet it is an express trust for a specific purpose as denoted in
section 10 of the limitation act. (t.c. chacako verses. annamma,).
(2) vested
the word implies that a person must have an estate in the subject-matter of the alleged trust and not
the mere power of controlling or directing it. the mere fact that a person has got with him the control or
management of the property will not vest the property in him. "vesting" implies property or ownership in the
subject-matter. therefore, the directors of a company are not trustees because they are not persons in
whom the property of the company may be said to have been vested under this section.
(3) assigns for valuable consideration
the exemption contained in this section in favour of assigns for valuable consideration does not extend to
an assign who is a mere volunteer (example., a donee or legatee from the trustee), even if he takes
without notice. all assigns for value are excluded from the operation of this section and consequently

30
suits against them would be liable to be barred by one of the articles in the schedule. article 134 would
apparently cover all such cases. when the property is movable, article 48a would apply.
(4) representative
representative in section 10 means the person who, as heir or executor or administrator, represents the
estate of the deceased trustee and who has received as representative, the specific trust property which is
the subject of trust, which has, after the trustee's death, passed into the hands of the representative, as
part of his estate, the beneficiary of trust can, without bar of limitation, recover from his hands the
specific property.
(5) religious and charitable endowments
for the protection of charity, it is now specially provided that a hindu, muslim or buddhist religious or
charitable endowment is to be deemed to be the trust for a specific purpose, its manager 'an express
trustee', and its property 'express trust property'.
suits not falling under section 10
suits seeking to make the trustee liable for what, but for his willful default or negligence, he might
have received are quite different from suits for an account of what he, in fact, received, or what actually
became vested in him. such a suit will not, therefore, fall under section 10. a suit for the enforcement of
plaintiffs personal right to manage trust properties is not a suit to recover property for the purposes of
the trust, and does not fall under section 10. where there is an invalid trust, a suit to recover the
property from the trustees in the enforcement of a resulting trust is also not governed by section 10.
suit on contracts entered into outside the territories to which the act extends (section 11)
(1) suits instituted in the territories to which this act extends on contracts entered into in the
state of jammu and kashmir or in a foreign country shall be subject to the rules of limitation contained
in this act.
(2) no rule of limitation in force in the state of jammu and kashmir or in a foreign country shall be a
defence to a suit instituted in the said territories on a contract entered into in that state or in a
foreign country unless
(a) the rule has extinguished the contract; and
(b) the parties were domiciled in that state or in the foreign country during the period prescribed by
such rule.
suits on foreign contracts
section 11 provides that where cause of action for a suit based on contract arose in any foreign
country or in jammu & kashmir where the limitation act, 1963 does not apply, the action started in
indian court on such contract will be governed by lex fori i.e., the indian limitation statutes. only
exception is where the parties were domiciled in jammu & kashmir or in the foreign country during the
period prescribed by such rule of limitation.
this section is applicable only to suits. however the principle on which it is built has universal application
and applies to all suits and proceedings.

31
section 11 lays down the following two rules:
(1) suits instituted in india on contracts entered in a foreign country are subject to the rules of limitation
contained in this act.
(2) no foreign rule of limitation can be a defence to a suit instituted in india on a contract entered
into a foreign country, unless the rule has extinguished the contract and the parties were domiciled in
such country during the period prescribed by such rules. the foreign law of limitation will be applied
where it extinguishes the right or created the title so that it ceases to be a matter of mere procedure.
the general principle of international law is that contract regarding its form, validity, interpretation and
the rights and liabilities of the parties to it, is governed by lex loci contracts, meaning thereby the law of
the place where the contract is made or the law which the parties have agreed or intended shall govern
the contract or which they may be presumed to have so intended while all matters of procedure are
governed only by lexfori or the law of forum in which the action is brought. it is well-settled that so much
of the law as affects the remedy and the procedure only is governed by the law of the country in which the
action is brought and not by foreign law.
the rules which apply to the case of contract made in one country and put in suit in the court of
another country are the following:-
1. the interpretation of the contract is governed by the law of the country where the contract was
made.
2. the mode of suing and the time within which the action must be brought is governed by the law
of the country where the action is brought.
chapter 3
computation of limitation(section 12 to 24)
part 3 of the act containing sections 12 to 24 deals with computation of period of limitation. section
12 prescribes the time which shall be excluded in computing the time of limitation in legal proceedings.
these exclusions of time are inevitable because it is not possible to prefer an application for leave to
appeal, unless the appellant or the applicant has a copy of the judgement on which the decree is
based as he will have to justify his application by traversing the findings of said judgement.
exclusion of time in legal proceedings' (section 12) section 12 reads as under:
(1) in computing the period of limitation for any suit, appeal or application, the day from
which such period is to be reckoned, shall be excluded.
(2) in computing the period of limitation for an appeal or an application for leave to appeal or
for revision or for review of a judgment, the day on which the judgment complained of was

32
pronounced and the time requisite for obtaining a copy of the decree, sentence or order appealed
from or sought to be revised or reviewed shall be excluded.
(3) where a decree or order is appealed from or sought to be revised or reviewed, or where an
application is made for leave to appeal from a decree or order, the time requisite for obtaining a
copy of the judgment on which the decree or order is founded shall also be excluded.
(4) in computing the period of limitation for an application to set aside an award, the time
requisite for obtaining a copy of the award shall be excluded.
explanationin computing under this section the time requisite for obtaining a copy of a decree
or an order, any time taken by the court to prepare the decree or order, before an application for a
copy thereof is made, shall not be excluded.
analysis of the section
section 12 is first of the sections providing for the exclusion of time in computing the period of
limitation. the true effect of section 12 is that the periods referred to in the various sub-sections have to
be added to the period of limitation for ascertaining the last date for filing the appeal.
the section excludes from reckoning:
(a) the day from which the period is to be reckoned, and
(b) time requisite for obtaining copies of documents referred to in subsection (2) to (4).
scope of section 12
sub-sections (1) to (4) of the section 12 speak about the exclusion of time for the purpose of
computing the period of limitation while the explanation speak about the exclusion or non-exclusion
of time for the purpose of computing the time requisite for obtaining the copy. true effect of section 12 is
that the period that come within reach of sub-section in the section have to be added to the period of
limitation. effect of the explanation is that the period that comes within it has to be added also when
period under sub-section (2) is being added. the plain reading of section 12 shows that only for
computing the period of limitation for:
(1) an appeal;
(2) an application for leave to appeal;
(3) for revision, or;
(4) for review of the judgement, the day on which the judgement complained and the time
requisite for obtaining a copy of the decree shall be excluded.
rules of exclusion of time
section 12 of the act provides for exclusion of time in computing the period of limitation. there need
not be any prayer or application by a party for doing so as section 12 confers a substantive right upon a
party. it is the duty of the court to exclude the time when the case comes under the purview of any of
the sub-section of section 12. it lays down the following rules:

33
(1) in computing the period of limitation prescribed for any suit, the date shown in the 3rd column of
the schedule i.e., the day from which the period of limitation begins to run, shall be excluded.
(2) in computing the period of limitation prescribed for an appeal the following periods shall be
excluded:(a) the day on which the period begins to run; (b) the day on which the judgment was
pronounced: (c) the time requisite for obtaining a copy of the decree, sentence or order; (d) the time
requisite for obtaining a copy of the judgment.
(3) in computing the period of limitation prescribed for an application for revision or for review, the
following periods shall be excluded:(a) the day on which the time begins to run; (b) the day on which
the judgment was pronounced; (c) the time requisite for obtaining a copy of the decree; (d) the time
(4) in computing the period of limitation prescribed for an application for leave to appeal, the following
periods shall be excluded:(a) the day on which the time begins to run; (b) the day on which the
judgment was pronounced; (c) the time requisite for obtaining a copy of the decree; (d) the time
(5) in computing the period of limitation prescribed for an application to set aside an award, the
following periods shall be excluded:(a) the day on which time begins to run; (b) the time requisite for
obtaining a copy of the award.
(6) in computing the period of limitation prescribed for any other application, only the day on which
the time begins to run shall be excluded.
(7) section 12 of the limitation act does not deal with the starting point of limitation for filing a suit,
appeal or application. it deals only with the exclusion of certain period of limitation inter- alia for appeal.
subsection (1) applies to all applications and sub-section (2) applies only to application of three kinds
mentioned therein. this section has no application to proceedings in foreign courts.
benefit of section 12when could not be given
where an application for the certified copy of order or decree to be appealed against is not made
before the expiry of the period of limitation prescribed for preferring the appeal from the order or
decree then, the proposed appellant is not entitled to the benefit of deducting the time requisite for
obtaining the certified copy of the order or the decree in the matter of computation of period of
limitation for preferring the appeal against the order or decree. if the proposed appellant was allowed
the period for preferring the appeal against the order or decree to run out, he is not entitled to the
benefit of section 12 of the limitation act.
meaning of some expressions used in section 12
(1) time requisite: the words "time requisite" have not been defined, but the word ''requisite" is a strong
word and it may be regarded as meaning something more than the word "required". it means, properly
required, and it throws upon the appellant the necessity of showing that no part of the delay beyond the
prescribed period is due to his default. the expression "time requisite" cannot be understood as the time
absolutely necessary for obtaining the copy of the order. what is deductible under section 12(2) is not
the minimum time within which a copy of the order appealed against could have been obtained. this
section permits the appellant to deduct from the time taken for filing the appeal, the time required for
obtaining the copy of the order appealed from.

34
the time requisite for obtaining certified copies undoubtedly means "the time properly required" and an
appellant cannot in the computation of period of limitation for filing the appeal ask for exclusion of time
which was spent negligently. in determining what the time requisite is, the conduct of the appellant
must be considered, and no period can be regarded as requisite which need not have elapsed if the
appellant had taken reasonable and proper steps in making a requisition to obtain the order. the time requisite
is question of fact to be determined on the basis of the facts of each particular case. the rules and practice of
the courts are also required to be considered.
the term "time requisite" for obtaining a certified copy of the decree is a much stronger term than the term
'period required'. therefore, a party would be entitled to be benefit of the period that is lost on account of the
laches of the court. the period could only be computed against a party if the party himself is in default.
when a judgement is pronounced on such a date that the day or days following it are holiday, during
which the appellant cannot apply for a copy of the judgement then, in computing the period of limitation
prescribed for appeals, such holidays should be excluded.
where the judgement is delivered on the last working day and is followed by a vacation during which the
period of limitation would expire, then an application should be made for copies on the reopening day and
the period of vacation should be included as "time requisite" for the obtaining of the copies and excluded under
section 12. the time during which decree is not drawn up is excluded even though application for copy is not
made before drawing up of decree.
(2) certified copy: certified copy of public document is defined in section 76 of the indian evidence act,
1872. every public officer having the custody of a public document which any person has a right to inspect
shall give that person on demand and payment of prescribed fees thereof a copy of that document with a
certificate written at the foot of such copy that it is true copy of such document or part thereof, as the case
may be.
no time limit is fixed for making an application for a certified copy of the order or decree to be appealed
against. but it must be noted that time taken for obtaining a certified copy of the order or decree cannot be
excluded when the application for the certified copy is made after the expiration of the period of limitation.
under section 12(2) read with the explanation, a person cannot get extension of the period that elapsed
between pronouncement of the judgement and the signing of the decree if he made the application for a
copy only after preparation of the decree.
(3) decree: according to section 2(2) of the code of civil procedure, 1908, it means a formal expression
of adjudication which conclusively determines the rights of the parties with regard to all or any of the
matters in controversy in the suit and may be either preliminary or final. it shall include the rejection of a plaint
and the determination of any question within section 144 of the code of civil procedure.
it has been held by a full bench of the allahabad high court that section 5 of the act cannot be
applied in making the computation of time provided for under section 12 and does not become
applicable until such computation has been made. in computing the time requisite for obtaining copies,
no allowance can be made for delay caused by inability, by reason of poverty, to pay the estimated cost
of copies. but if the stamps are not procurable, or the office is not open to receive payment of the
estimated cost, allowance may be for the delay so caused. these and similar cases of delay may be
considered under section 5 after computation has been made under the other sections.
exclusion 01 i i m e in case where leave to sue or appeal as a pauper applied for (section 13)

35
in computing the period of limitation prescribed for any suit or appeal in any case where an
application for leave to sue or appeal as a pauper has been made and rejected, the time during which the
applicant has been prosecuting in good faith his application for such leave shall be excluded, and the court
may, on payment of the court-fees prescribed for such suit or appeal, treat the suit or appeal as having the
same force and effect as if the court fees had been paid in the first instance.
leave to sue as an indigent person
section 13 provides that if the application for leave to sue or leave to appeal as pauper is rejected,
then the time during which the applicant has been prosecuting in good faith for this application should be
excluded. in such cases, if the application is rejected the court may on the payment of the required court
fees, treat the suit or appeal as having the same force and effect as if the court fee have been paid in the first
instance. for exclusion of time under section 13, it is necessary that the applicant should be prosecuting in
good faith, it means the applicant should not have any mala fide intention i.e. there was no false or
vexatious claim. the burden of proof lies upon the person who claims the benefit.
this section is to be read with order 33 and order 44 of c.p.c.
in p. sreedevi verses. p. appu , court held that no-time limit has been set out in section 13 and the
court can extend time at its discretion to whatever extent it thinks fit. but it must be proved that the
applicant acted in good faith when he presented the application as pauper.
exclusion of time of proceeding bona fide in court without jurisdiction (section 14)
(1) in computing the period of limitation for any suit the time during which the plaintiff has been
prosecuting with due diligence another civil proceeding, whether in a court of first instance or of
appeal oil revision, against the defendant shall be excluded, where the proceeding relates to the same
matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other
cause of a like nature, is unable to entertain it.
(2) in computing the period of limitation for any application, the time during which the applicant has
been prosecuting with due diligence another civil proceedings, whether in a court of first instance or of
appeal or revision, against the same party for the same relief shall be excluded where such proceeding is
prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is
unable to entertain it.
(3) notwithstanding anything contained in rule 2 of order 23 of the code of civil procedure, 1908, the
provision of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the
court under rule 1 of that order, where such permission is granted on the ground that the first suit must
fail by reason of a defect in the jurisdiction of the court or other cause of a like nature.
explanation: for the purposes of this section:
(a) in excluding the time during which a former civil proceeding was pending, the day on which
that proceeding was instituted and the day on which it ended shall both be counted;
(b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;
(c) mis-joinder of parties or of causes of action shall be deemed to be a cause of a like nature with
defect of jurisdiction.
requisites of section 14

36
section 14 of the limitation act contains general principle based on justice, equity and good
conscience and the principle may applied liberally but not in disregard of the express words of the
section.
section 14 of the limitation act provides for exclusion of time or proceeding bonaflde in court
without jurisdiction.
a person who claims exclusion of time under this section must prove the following:
(a) that he had prosecuted the former proceeding in good faith and. with due diligence.
(b) that the former proceeding was between the same parties.
(c) that the matter in issue was the same.
(d) that the former court had been unable to entertain it from the defect of jurisdiction or other
cause of a like nature.
section 14 of the limitation act applies to suits and application only, and not to appeals. the reason
why this section is limited to courts of original jurisdiction is merely because section 5 gives a large and
more unfettered power in the same behalf to appellate courts. though section 14 does not in terms apply
to an appeal, the principle underlying the section can be invoked in aid of sufficient cause contemplated by
section 5.
further benefit of the provision of section 14 is not available to criminal proceedings. section 14 applies
only to proceedings before court.
further,-section 14 of the limitation act is in terms restricted to civil proceedings. in naryana rao verses
kshwarlal the supreme court observed that a civil proceeding is one in which a person seeks to enforce by
appropriate relief the alleged infringement of his civil rights against another person or the state, and
which if claim is proved would result in the declaration of the right claimed and also specific relief such as
payment of debt, delivery of specific property, damages, compensation, enforcement of personal rights,
determination of status etc. civil proceedings would include not only appeal but also civil revision. some
examples of civil proceedings are: (1) a proceeding which seeks relief against the enforcement of a taxation
statute; (2) execution proceedings; (3) proceedings before revenue courts; (4) an insolvency proceeding before
an official assignee; (5) a suit to recover on a pronote in a panchayati adalat.
some examples of non-civil proceedings are: (1) the proceedings before authority appointed under
section 15(1) of the payment of wages act; (2) the proceedings before railway authority; (3) the proceedings
under the child marriage restraint act; (4) the proceedings under the cattle trespass act etc.
execution proceedings
section 14 applies also to proceedings in execution. time taken up in a prior execution proceedings
instituted in a wrong court can be excluded believing bonafide that court had jurisdiction.
arbitration proceedings

37
section 14 of the limitation act when read with section 43 of the arbitration and conciliation act, 1996
clearly indicate that the period during which arbitration proceedings remained pending in wrong court would
be excluded while presenting arbitration proceedings before proper court.
in gulbarga university verses mallikarjun s. kodagali supreme court observed that the provision of
section 14 of the act would be applicable to arbitration proceeding.
in coal india ltd. verses. ujjal transport agency, supreme court held that where application for setting
aside arbitration award was filed within 3 months, excluding the period spent before the wrong forum it
was not barred by limitation.
conditions of section 14
1. due diligence and good faith
the first condition to be fulfilled for the application of the section is that the plaintiff should
prosecute previous proceedings with due diligence and in good faith. due diligence means such care and
prudence as is usually exercised by persons of common or average prudence. in order to invoke the
provision of this section, the whole of the previous proceedings must have been prosecuted by the
plaintiff with due care.
prosecution includes prosecution in the initial stage, namely, in the filing of the plaint itself and if it
can be said that the plaintiff deliberately undervalued the suit, it will be a case of prosecution without
due diligence and there will be want of good faith. there may be cases where the initial filing may not be
due to want of good faith and yet subsequent prosecution of the case may be without due diligence, and
in that case section 14 will not be attracted.
the plaintiff or the applicant must have prosecuted previous proceeding in "good faith". "good faith" as
used in this section means exercise of due care and attention. "good faith" as used in this section is different
from the good faith as defined in general clauses act. according to general clauses act a thing shall be
deemed to be done in good faith if it is done honestly whether it is done negligently or not. but according
to section 2(h) of the limitation act, 1963, nothing shall be deemed to be done in good faith which is not
done with due care and attention. the general clauses act emphasizes honesty and ignores the factor of
negligence but the limitation act emphasizes not only honesty but that a party has acted with due care
and attention. thus, if the proceedings in another court were instituted honestly but without exercising
due care and attention, it would be deemed that the appellant did not acted in good faith.
whether a person acted in good faith or not depends upon the circumstances of each" case. a wrong
advice of lawyer may in certain circumstances of a particular case amounts to good faith within the
meaning of section 14. if the mistake of the lawyer is a bonafide mistake, such a case will come within
the protection of section 14.
this section has no application when the first suit has failed owing to the laches and negligence of
the plaintiff or his lawyer. thus, where the plaintiff brought a suit without asking for leave to sue giving
jurisdiction to the court to hear the suit, it cannot be said that he was prosecuting the suit in good faith.
in t. raja rao verses. state of a.p., (1965), the full bench of andhra pradesh high court has observed
that where the plaintiff has proved good faith, the time which he has been taking as indispensable and
necessary steps preparatory to initiating the suit in a court should also be regarded as time during which he
was prosecuting the proceeding.
2. proceeding (between the same parties

38
(a) same plaintiff in both the suits: a plaintiff can claim the benefit of this section only where the
previous proceeding has been brought by him or by some person through whom he derives title to sue.
where the plaintiff and another person had brought the suit in one capacity, and the plaintiff alone
brought the other suit in another capacity, no deduction of the time spent in the previous suit could be
made. (hossen verses. asha bibi,)
(b) same defendant in both the suits: this section excludes time taken in proceedings in a court
without jurisdiction against the particular defendant only. the defendant, therefore, must be the same
in both the proceedings. in nilmadhab verses. krishtodoss, where there were several defendants in the
second suit, and the former suit was instituted against only one of them, no exclusion of time was
granted under this section.
(c) prosecuting a proceeding: it is not necessary that plaintiff must have been prosecuting the
previous proceeding as a plaintiff. he is entitled to deduction of the period of pendency of a former suit
in which he as defendant was urging the same claim as he afterwards prefers as plaintiff. this section
nowhere lays down that before a plaintiff or applicant may claim exemption under this section he
should have been described as plaintiff or applicant in the previous proceeding. all that is required of
him to prove is that he prosecuted the previous civil proceeding in good faith, and if he proves that he
may avail himself of this section, even though he was not described as a plaintiff or as an applicant in
the previous proceedings. (alidas verses sobhomal).
similarly, the plaintiff is entitled to deduct the period during which he, as respondent, has been opposing
a previous appeal brought against him by the present defendant (lakhanchandre verses. madhusudan,)
3. same matter in issue
the previous suit or application must relate to the same matter in issue. the words "same matter in
issue" have been substituted in this section for the words "the same cause of action' occurring in section
14 of limitation act, 1908. the words "matter in issue" are wider in scope and have wider significance
than the words "the same cause of action." thus, the previous suit must relate to the same matter in
issue and must found upon the same cause of action which is the foundation of the subsequent suit.
where the first suit and the second suit were not substantially based on the same cause of action, this
section has no application.
4. defect of jurisdiction
one of the essential conditions is that there should be an initial want of jurisdiction. the court must
be unable to entertain the previous suit or application on account of defect of jurisdiction or other
cause of a same nature. the words "defect of jurisdiction" do not cover such mistakes as the presentation
and prosecution of an appeal which did not lie in any court.
this section does not require any order of the court which had no jurisdiction recognizing the
fact. all it requires is that the court which has to decide the question of limitation must find that the
other court was unable to entertain the proceeding because it had no jurisdiction. this section does
not apply when there is no want of jurisdiction and when the competent tribunal refuses to interfere
with the order of a lower court, or when the court has got to go into the merits before a case can be
dismissed, the defect cannot be said to be defect of jurisdiction.
where the court in which the wrong proceeding was instituted had jurisdiction, but erroneously
held that it had no jurisdiction to grant the relief claimed, the time spent in the court may be deducted

39
under this section. failure of a suit on the ground that it is misconceived or premature will not afford any
ground for application to section 14 to the subsequent suit.
the words "or other cause of a like nature" should be liberally construed. they must be construed
ejusdem generis with defect of jurisdiction; that is to say, the defect must be of such a character as to
make it impossible for the court to entertain the suit or application and to decide it on merits. in braja
gopal verses tara chand, pat, the patna high court held that the words "other cause of a like nature"
must be liberally construed but it has to be kept in mind that they have to be given a meaning ejusdem
generis with any analogous to the words preceding them. they connote that the suit must be one which
the court could not entertain because of those defects. there must be a defect which affects the
inherent capacity of the court to entertain the suit and prevent it from trying the same.
where good faith and due diligence are there, a cause is not prevented from being of a like nature to
defect of jurisdiction, merely because it was in the plaintiffs own power to avoid, or it resulted from his own
act or from a bona fide mistake of law or procedure, which prevented the court in limine from
entertaining the suit [lal bihari verses. rant,].
section 14 (2)
there are three pre-conditions required for application of this section:
(1) parties in the earlier civil suit and in the subsequent proceeding should be the same.
(2) the earlier suit and the later proceeding must seek the same relief and
(3) the court where the earlier suit has filed was unable to entertain it from "defect of jurisdiction' or
other cause of a like nature.
the benefit of this sub-section can be availed of only where there is initial want of jurisdiction. if the
court in fact has no jurisdiction but assumes jurisdiction, then section 14 applies.
dismissal of an application under order 21, rule 89 of c.p.c. for failure to deposit the necessary
amounts in time is one on merits and not due to defect in jurisdiction. therefore for filing an application
under order 21, rule 90 of c.p.c. for setting aside sale, the time spend in prosecuting the previous
proceeding under order 21, rule 89 cannot be excluded.
section (14)3
it is in the nature of a proviso to order 23, rule 2, and c.p.c. the expression 'other cause of the like nature'
has to be read ejusdem generis; it does not include res judicata. for applicability of the provision in
section 14(3) following conditions are to be satisfied:
1. both the prior and subsequent proceedings are civil proceedings prosecuted by the same party;
2. the prior proceeding had been prosecuted with due diligence and good faith;
3. the failure of the prior proceeding was due to defect of jurisdiction or other cause of like nature;
4. the earlier proceeding and later proceeding must relate to the same matter in issue.
5. both proceedings are in a court.

40
explanation clause (a): clause (a) of the explanation to 14 section says that in excluding time under
this section, the day on which the former suit or application was instituted or made and the day on which
the proceedings therein ended shall both be excluded. the period that can be deducted under this
section is only the period from the date of the filing of the plaint to the date on which it was finally
returned by the court for representation. thus, where a presented a plaint in the court and the same was
ordered to be returned on the 25th march for presentation to the proper court, but the office returned it
only on the 10th april, it was held that a was entitled to count in his favour the days up to the 10th april
when the plaint was finally returned.
explanation clause (b): clause (b) of the explanation to section 14 says that the plaintiff or the
applicant who, after having won the case in the court of first instance strove as respondent to maintain
the decree of the court of first instance and ultimately lost the appeal by the appeal having been allowed
against him, is entitled to have the period during which he has been fighting the appeal as respondent to be
excluded from limitation should it become necessary to file a suit.
explanation clause (c): legislature in clause (c) of the explanation to section 14 has provided that
misjoinder of parties or of causes of action shall be deemed to be a cause of the like nature with defect of
jurisdiction. but, the plea of bar of res judicata is not such a question which can be said to relate to the
jurisdiction of the court or other cause of like nature within the meaning of section 14. [johari mal verses.
suraj singh, (1970) 72 punjab law reports 385].
distinction between section 5 and 14

in consolidated engineering enterprises verses. irrigation department
supreme court observed that there is a fundamental distinction between discretion to be used in section 5
of the limitation act and exclusion of time provided in section 14 of the said act. the power to excuse delay
and grant of extension of time is discretionary under section 5 whereas under section 14 of the act the
exclusion of time is mandatory, section 5 is broader in its sweep than section 14 of the act in the sense that a
number of different reasons can be advanced and established to show that there was sufficient cause in not
filing appeal or application within time. the ingredients of section 5 and section 14 of the limitation act
are different. the effect of section 14 of the act is that in order to ascertain what is the dates of expiration
of the period prescribed the day excluded from operating by way of limitation have to be added to what
is primarily the period of limitation prescribed under the limitation act.
in ramlal verses. rewa coal fields ltd., the supreme court had cautioned against ignoring the difference
between section 5 and 14 of the limitation act and held as follows:
"it is however, necessary to emphasize that even after sufficient cause has been shown a party is not
entitled to the condonation of delay in question as a matter of right. the proof of a sufficient cause is a condition
precedent for the exercise of the discretionary jurisdiction vested in the court by section 5. if sufficient cause is
not proved nothing further has to be done; the application for condoning delay has to be dismissed on that
ground alone. if sufficient cause is shown then the court has to enquire whether in its discretion it should
condone the delay. this aspect of the matter naturally introduces the consideration of all relevant facts and
it is at this stage that diligence of the party or its bona fides may fall for consideration; but the scope of the
enquiry while exercising the discretionary power after sufficient cause is shown would naturally be limited only
to such facts as the court may regard as relevant. it cannot justify an enquiry as to why the party was sitting
idle during all the time available to it. in this connection we may point out that considerations of bonafides or
due diligence are always material and relevant when the court is dealing with applications made under section 14
of the limitation act. in dealing with such applications, the court is called upon to consider the effect of the
combined provisions of sections 5 and 14. therefore, in our opinion, consideration which have been expressly
made material and relevant by the provisions of section 14 cannot to the same extent and in the same

41
manner be invoked in dealing with applications which fall to be decided only under section 5 without reference to
section 14."
exclusion of time in certain other cases (section 15)
(1) in computing the period of limitation of any suit or application for the execution of a decree, the
institution or execution of which has been stayed by injunction or order, the day on which it was issued
or made and the day on which it was withdrawn, shall be excluded.
(2) in computing the period of limitation for any suit of which notice has been given, or for which
the previous consent or sanction of the government or any other authority is required, in accordance with
the requirements of any law for the time being in force, the period of such notice or, as the case may be,
the time required for obtaining such consent or sanction shall be excluded.
explanationin excluding the time required for obtaining the consent or sanction of the
government or any other authority, the date on which the application w as made for obtaining the consent or
sanction and the date of receipt of the order of the government or other authority shall both be counted,
(3) in computing the period of limitation for any suit or application for execution of a decree by any
receiver or interim receiver appointed in proceedings for the adjudication of a person as an insolvent or
by any liquidator or provisional liquidator appointed in proceedings for the winding up of a company,
the period beginning with the date of institution of such proceeding and ending with the expiry of
three months from the date of appointment of such receiver or liquidator, as the case may be, shall be
excluded*
(4) in computing the period of limitation for a suit for possession by a purchaser at a sale in
execution of a decree, the time during which a proceeding to set aside the sale has been prosecuted shall be
excluded.
(5) in computing the period of limitation for any suit, the time during which the defendant has
been absent from india and from the territories outside india under the administration of the central
government, shall be excluded.
ingredients of section 15 (1)
in computing the period of limitation prescribed for
(a) any suit or
(b) any application for the execution of a decree the institution or execution of which has been
stayed by injunction, or order, the following is excluded:
(1) the time of the continuance of the injunction or order;
(2) the day on which it was issued or made; and
(3) the day on which it was withdrawn.
object and scope of section 15 (l)

42
in dhandhania verses. s.r. poddar court held that the object of section 15(1) is to safeguard the
interest of the person who is precluded by an injunction or order of court from exercising a right of suit or
execution of a decree passed in his favour against his being injured or damnified on that account.
section 15(1) does not apply to appeals or applications other than the application for execution.
section 15(1) is attracted for excluding the period of stay for any suit institution of which has been stayed
by an injunction or order issued by court. in order to invoke section 15(1) there must be a decree which
is operative. a party seeking to take advantage of section 15(1) must show that he was earlier restrained
by an order from making the prayer which he is not making. but if he could have done earlier what he is
trying to do now, section 15(1) will not be attracted to his case.
thus, section 15(1) provides certain condition under which a person is entitled in law to get exclusion of
time from the period of limitation. where a person is restrained from an injunction issued or an order
passed by the court of law staying the institution of suit or execution of decree, in those cases the person
concerned is entitled to the exclusion of that time which was arrested by the injunction or order issued
or passed by the court, and also the day on which such injunction was issued or order was passed
staying the institution of suit or proceedings in respect of the execution of the decree, as well as the day
on which such injunction is vacated or order is withdrawn.
when notice to government or any other authority is necessary [section 15(2)1
section 15(2) talks about cases in which the plaintiff is under a statutory obligation to give a notice before
he can institute a suit. when it is necessary under the law to give the person intended to be sued a notice
of such intention, the period between the service of the notice and the expiry of the time prescribed for the
notice is excluded in computing the period of limitation.
example: section 80, civil procedure code, requires a notice to be given before the institution of suit.
in such a case, the period of notice shall be excluded. similarly, sections 86 and 87 of the civil procedure
code require that in respect of suits against foreign rulers, ambassadors and envoys, the consent of the
central government should be obtained before filing the suit. in such cases, the time taken for obtaining
such consent should be excluded.
explanation to section 15(2) further lays down that in excluding time required for obtaining the
consent or sanction of the government or any other authority, the date on which the application was
made for obtaining the consent or sanction and the date of receipt of the order of the government or other
authority shall both be counted.
when receiver in insolvency or liquidator in winding up is appointed [section 15(3)1
section 15(3) provides that, a receiver including an interim receiver or a liquidator including a provisional
liquidator appointed in a proceeding for adjudication of a person as an insolvent or in a proceeding for the
winding up of a company as the case may be, is entitled for the exclusion of the period between the date
of application and the date of appointment and also additional period of three months thereafter in
computing the period of limitation for filing suit or execution as such receiver or liquidator.
the law commission in its third report has stated that:
"it is common knowledge that by the time a receiver or liquidator is appointed in insolvency or
liquidation proceedings and the receiver or liquidator after getting information about the assets and
liabilities of the estate sits down to the task of realizing the assets of the estates, claims in favour of such
estate or company get barred to the detriment of the person entitled to the benefit of assets. to avoid this
hardship this sub-clause provides that the period between the filing of the petition for winding up or

43
adjudication and appointment of the receiver (including interim receiver) 'or liquidator (including a provisional
liquidator and a period of three months thereafter) to enable him to against himself with the affairs of the
estate should be excluded.'"
so, section 15(3) has specifically provided for giving receiver (including interim receiver) or liquidator
(including provisional liquidator) a period of three months after his appointment to file a suit or a petition
for execution.
suit for possession by a purchaser at a sale in execution of a decree (section 15(4)]
section 15(4) provides that in computing the period of limitation for a suit for possession by a purchase
at a sale in execution of a decree, the time during which a proceeding to set aside a sale has been
prosecuted shall be excluded.
to obtain the benefit of section 15(4) the following conditions have to be fulfilled:
(1) the suit should be one for possession by the purchaser at a sale in execution of the decree, and
(2) it should be a suit and not an application.
if these two conditions are fulfilled then the time during which a proceeding for setting aside the sale had
been prosecuted shall be excluded.
the word "proceedings" in section 15(4) is comprehensive enough to include a suit and an
application. so the period, during which the validity of the sale is in controversy, whether the sale is
impeached by a suit or by an application it is to be excluded,
defendant is absent from india [section 15(5)1
section 15(5) provides that the period of limitation for any suit, the time during which the defendant
has been absent from india and territories outside india under the administration of the central
government, shall be excluded from the prescribed period of limitation for the suit.
section 15(5) refers only to the absence of the defendant and not that of the plaintiff. if the
defendant has gone out of india, the time during which he remains outside will be excluded from
computation. the onus is upon the plaintiff to prove that the defendant has been absent from india or
from the territories under the administration of government of india.
the provisions of section 15(5) apply only to suits and not to the applications for the execution of
decrees.
section 15(5) pre-supposes that the defendant is one who was at one time present in india and later
he has been absent from india. a person who has never been in india cannot be considered as having been
"absent from india". factually a company cannot either be present in india or absent from india. but it
may have the domicile or residence in india. section 15(5) can be viewed in one of the two ways, i.e.,
that provision does not apply to incorporated companies at all or alternatively that the incorporated
companies must be held to reside in places where they carry on their activities and thus being present in all
those places.
in turner morrison & co. ltd. verses. hungerford investment trust ltd., the plaintiff company filed a suit
on 15-11-1965 for recovery of a sum of money from the defendant company on account of the tax liability
of the latter discharged by the plaintiff before 15-11-1962. the defendant, a foreign company, had invested

44
large sums of money in the plaintiff-company and its board of directors used to meet in india now and then.
the defendant company was attending the general meetings of the shareholders of the plaintiff company
through its representatives. held, that in the circumstances the defendant company must be held to be
residing in india and was not absent from india within the meaning of section 15(5). consequently,
section 15(5) had no application to save the suit from the bar of limitation and the suit brought by the
plaintiff company was barred by limitation of three years under article 23 of the limitation act.
problem of section 15(5)
q. a lent some money to the, a resident of allahabad, on 5th january, 1940 on the foot of a promissory note.
b went to korea on 1st january, 1942 and returned to india on 1st may, 1946. what would be the last day of
limitation for filing a suit against b for the recovery of this debt? b took another loan from a on the foot of
another promissory note on 15th may, 1946. after that b went away to bangalore and returned to allahabad
on first february, 1950. what would be the last day of limitation for filing a suit of recovering the loan
taken by b in 1946? give reasons.
ans. the period of limitation prescribed for a loan on the basis of a promissory note is 3 years from the
date loan was advanced. the period from 1st january 1942 to 29 april, 1946 during which b remained in korea,
i.e., outside the territory of india, shall be excluded in view of section 15(5). on excluding this period, the last day
of limitation will be 5th may, 1947.
as for the loan taken on 15th may, 1946 the last day of limitation will be 15th may, 1949, i.e., 3 years after
the date of loan. the time upto 1 2-1950 spent in bangalore will not be excluded as bangalore is in india and
section 15(5) speaks of exclusion of time of defendant's absence from india and certain other territories, and
not from the city or province where the loan was taken.
grounds of exemption from limitation in suits, appeals and applications (section 12-15)
1. suits (sections 12-15): in computing the period of limitation prescribed for any suit:
(1) the day from which such period is to be reckoned is to be excluded: section 12(1).
(2) time taken in prosecuting in good faith an application for leave to sue or appeal as a pauper, when
such application has been made and rejected is to be excluded (section 13).
(3) the time during which the plaintiff has been prosecuting in good faith another civil proceeding in a
court without jurisdiction against the same defendant founded on the same cause of action is to be
excluded [section 14(1)].
(4) if the institution of the suit has been stayed by injunction or order, the time of continuance of the
injunction or order, the day on which it was issued or made and the day on which it was withdrawn is to be
excluded [section 15(1)].
(5) if notice has been given in accordance with the requirements of any enactment for the time being in
force, the period of such notice is excluded [section 15(2)].
(6) if it is a suit for possession by a purchaser at a sale in execution of a decree, the time during which a
proceeding to set aside the sale has been prosecuted is to be excluded [section 15(3)].

45
(7) in a suit or application against insolvency receiver or liquidator in winding up, the time from
commencement of such proceedings to the date of appointment of such receiver or liquidator and three
months thereafter is to be excluded [section 15(4)].
(8) the time during which the defendant has been absent from india and from the territories beyond india
under the administration of the central government is to be excluded [section 15(5)].
2. appeals (section 12 & 13): in computing the period of limitation prescribed for any appeal:
(1) the day from which such period is to be reckoned is to be excluded [section 12(1)].
(2) the day on which the judgment complained of was pronounced, and the time requisite for obtaining a
copy of the decree, sentence or order appealed from is to be excluded [section 12(2)].
(3) if it is an appeal from a decree, the time requisite for obtaining a copy of the judgment on which it is
founded is to be excluded [section 12(3)].
(4) time taken in prosecuting in good faith an application for leave to sue or appeal as pauper, when such
application has been made and rejected is to be excluded [section 13].
3. applications (sections 12-15): in computing the period of limitation prescribed for any application:
(1) the day from which such period is to be reckoned is to be excluded [section 12(1)].
(2) if it is an application for leave to appeal or an application for review of judgment, the day on which the
judgment complained of was pronounced, and the time requisite for obtaining a copy of the decree,
sentence or order appealed from or sought to be reviewed is to be excluded [section 12(2)].
(3) if a decree is sought to be reviewed, the time requisite for obtaining a copy of the judgment on which it
is founded is to be excluded [section 12(3)].
(4) if it is an application to set aside an award, the time requisite for obtaining a copy of the award is to
be excluded [section 12(4)].
(5) the time during which the applicant has been prosecuting in good faith another civil proceeding in a
court without jurisdiction, against the same party for the same relief, is to be excluded [section 14(2)]. if it is
an application for execution of a decree the execution of which has been stayed by injunction or order,
the time of the continuance of such injunction or order, the day on which it was issued or made, and
the day on which it was withdrawn is to be excluded [section 15(1)].
effect of death on or before the accrual of the right to sue (section 16)
(1) where a person who would, if he were living, have a right to institute a suit or make an application
dies before the right accrues, or where a right to institute a suit or make an application accrues only on the
death of a person, the period of limitation shall be computed from the time when there is a legal
representative of the deceased capable of instituting such suit or making such application.
(2) where a person against whom, if he were living, a right to institute a suit or make an application
would have accrued dies before the right accrues, or where a right to institute a suit or make an application
against any person accrues on the death of such person, the period of limitation shall be computed from
the time when there is a legal representative of the deceased against whom the plaintiff may institute such
suit or make such application.

46
(3) nothing in sub-section (1) or sub-section (2) applies to suits to enforce rights of pre-emption or to
suits for the possession of immovable property or of a hereditary office.
principle of section 16
this section is based upon the general principle that where there is no person who could sue, or be
sued, the statute of limitation would not run. in other words, a complete cause of action cannot exist
unless there is somebody who could sue and who may be sued. until both these persons exist there
cannot be a perfect cause of action. but if the cause of action has already accured and time has once
begun to run, no subsequent disability or inability to sue stops the running of time (section 9). in a suit by a
legal representative of the principal against the agent, time would not run until there was a legal
representative of the principal to institute the suit. "if the statute has not begun to run during the lifetime
of an intestate, then it does not begin to run until letters of administration to his estate have been
granted because an administrator derives his title solely under his grant."
for application of section 16(1), cause of action must not arise before the person dies. when a legal
representative comes into existence or is appointed, he can take advantage of the section only if the
cause of action has not arisen during the life-time of the person whose legal representative he is
appointed. the intention of the legislature in section 16 is to limit the time, during which an action may
be brought and not to take away the rights of a person, who is a possible defendant to an action and
it is not intended to accelerate any right of action against such a person.
the section applies to suits as well as applications. however, section 16(3) prohibits the operation of
section 16(1) in case of certain suits to ensure security of title like suits:
(a) to enforce rights of pre-emption, or
(b) for the possession of immovable property, or
(c) for the possession of a hereditary office. the section does not apply to appeals also.
before the right accrues: to bring this section into operation, death must occur before the right to
sue or make an application accrues. the effect of death before the right to sue accrues is to prevent
the running of limitation until there is a legal representative of the deceased plaintiff or defendant
capable of suing or being sued, or capable of making the application or against whom the application
may be made. if the death happens after the right to sue has accrued, the running of time is not
prevented because according to section 9, when once time has begun to run, no subsequent disability or
inability stops it.
in the case of a person other than a hindu, muslim, buddhist, jain, sikh, or indian christian, dying
intestate, only an administrator can sue or be sued on behalf of the estate. (sections 211 and 212 of the
indian succession act). in such cases, limitation cannot begin to run under section 16 before the grant of
letters of administration. in the case of hindus, muslims, jains, buddhist, sikhs and indian christians, a suit
can be brought on behalf of or against the estate of deceased person even before the grant of letters of
administration. therefore, there will be no postponement of limitation under section 16 in such cases.

47
in all cases when there is an executor he can sue or be sued, on behalf1 of the estate even before
obtaining probate of the will. consequently, in such cases, there will be no postponement of limitation
under section 16.
capable of instituting or making etc.: section 6 must be read along with this section. thus, the words "a
person capable of instituting or making etc." in this section means a person not under such disabilities as
are mentioned in section 6. the expression "capable of suing" is1 the equivalent of "not under legal disability to
sue". it cannot refer to incapacity arising from want of means or other physical causes.
effect of fraud or mistake (section 17)
(1) where, in the case of any suit or application for which a period of limitation is prescribed by this
act,
(a) the suit or application is based upon the fraud of the defendant or respondent or his agent; or
(b) the knowledge of the right or title on which a suit or application is founded is concealed by the
fraud of any such person as aforesaid; or
(c) the suit or application is for relief from the consequences of a mistake; or
(d) where any document necessary to establish the right of the plaintiff or applicant has
been fraudulently concealed from him; the period of limitation shall not begin to run
until the plaintiff or applicant has discovered the fraud or the mistake or could, with
reasonable diligence, have discovered it; or in the case of a concealed document, until the
plaintiff or the applicant first had the means of producing the concealed document or
compelling its production:
provided that nothing in this section shall enable any suit to be instituted or application to be
made to recover or enforce any charge against, or set aside any transaction affecting, any
property which
(1) in the case of fraud, has been purchased for valuable consideration by a person who was
not a party to the fraud and did not at the time of the purchase know, or have reason to
believe, that any fraud had been committed, or
(2) in the case of mistake, has been purchased for valuable consideration subsequently to
the transaction in which the mistake was made, by a person who did not know, or have
reason to believe, that the mistake had been made, or
(3) in the case of a concealed document, has been purchased for valuable consideration by a
person who was not a party to the concealment and, did not at the time of purchase
know, or have reason to believe, that the document had been concealed.
(2) where a judgment-debtor has, by fraud or force, prevented the execution of a decree or
order within the period of limitation, the court may, on the application of the judgment-creditor
made after the expiry of the said period extend the period for execution of the decree or order.
provided that such application is made within one year from the date of the discovery of the
fraud or the cessation of force, as the case may be.

48
section 17 of the act deals with the effect of 'fraud' or 'mistake' on period of limitation prescribed by
the act. as per this, the limitation shall be computed from the time when the fraud became known to
the person defrauded. therefore, if any person by the exercise of fraud has kept away other person from
the knowledge that he has a right to file a suit, limitation will be computed from the time when such fraud
became known to the person so defrauded. where any document necessary to establish such right has
been fraudulently concealed from him or where the suit or application is for the relief from the
consequences of a mistake, limitation shall be computed from the time when he first has the means of
producing the document or compelling its production and in latter case, when the plaintiff or the applicant
has discovered the mistake. the main object of this section is to keep the right of a person to sue suspended
so long as he is not made aware of the fraud committed against him. such a period is excluded from the
prescribed period of limitation. section 17 of the limitation act is an enabling section which postpones the
starting point of limitation for suit and application.
principle of section 17
this section is based on the principle that the right of a party defrauded cannot be affected by lapse of
time or by anything else done or omitted to be done by him so long as he remains without any fault of
his own, in ignorance of the fraud which has been committed. but as soon as the circumstances
constituting the fraud become known to him, subsequent lapse of time will operate as a bar.
in pallav seth verses. custodial and others, court observed that the provisions of section 17 embody
fundamental principles of justice and equity, viz., that a party" should not be penalized for failing to adopt
legal proceedings when the facts or material necessary for him to do so have been willfully concealed from
him and also that a party who has acted fraudulently should not gain the benefit of limitation running in his
favour by virtue of such fraud.
scope of section 17
this section applies to suits and applications but does not apply to appeals. it is an enabling section
as it postpones the starting point of limitation for suits and applications.
the section applies to the following classes of suits and applications:
(a) where they are based upon the fraud of the defendant or respondent or his agent.
(b) where the knowledge of the right or title is concealed.
(c) where they are for relief from consequences of mistake.
(d) where any document necessary to establish such right has been fraudulently concealed.
in the first three cases the period of limitation begins to run from the time the fraud or mistake is
discovered or could have been discovered with reasonable diligence, in the cases of fourth class i.e.,
concealment of documents, the time begins to run when the plaintiff or the applicant first had the
means of producing the concealed document or compelling its production. however, the rights, of a
bonafide purchaser for value without notice of fraud, mistake or concealment are protected.
essential features of the section
in re marappa goundar, court observed that a person desiring to invoke the aid of this section must
established three things:

49
(1) that there has been fraud;
(2) that by means of such fraud he was kept away from the knowledge of his right to sue or apply or
of the title on which such right is founded, and
(3) time will be extended under the section only as against the person guilty of fraud or who is
accessory thereto who claims through the person guilty of fraud otherwise than in good faith and
for valuable consideration.
so, this section will be attracted only if it is proved that the plaintiff by means of fraud has been kept
away from the knowledge of his right to sue, and if there is no fraud on the part of the defendant, the
plaintiff can't get benefit of the section,
in swarnamoyee dasi verses prabodh chandra sarkar, it was observed by the court that to
constitute a fraud there should be an abuse of confidential position, some intentional imposition, some
deliberate concealment of facts, a designed fraud by which a party knowing to whom the right belongs
conceals the facts and circumstances giving that right.
in order to plead the fraud there must be existence of the following ingredients:
(1) a promise made without any intention of performing it;

(2) any such act or omission as the law specifically declares to be fraudulent;
(3) the suggestion, as a fact, of that which is not true, by one who does not believe it to be
true,
(4) any other act fitted to deceive, and
(5) the active concealment of a fact by one having knowledge or belief of the fact.
so, according to this section, the fraud must have been committed by the defendant or respondent or
his agent. the section does not apply unless there has been fraudulent concealment by the defendant of the
plaintiffs right to sue.
section 17(2) of limitation act provides that where the execution of a decree or order within the period of
limitation has been prevented by fraud or force of the judgement-debtor, the court may, on the application of
the judgment-creditor made after the expiry of the period of limitation, extend the period for the execution of
the decree or order. but, such an application must be made by the judgement-creditor within one year from the
date of the discovery of the fraud or the cessation of force, as the case may be.
effect of acknowledgement in writing (section 18)
(1) where, before the expiration of prescribed period for a suit or application in respect of any property or
right, an acknowledgement of liability in respect of such property or right has been made in writing signed
by the party against whom such property or right is claimed, or by any person through whom he derives
his title or liability, a fresh period of limitation shall be computed from the time when the
acknowledgement was so signed.
(2) where the writing containing the acknowledgement is undated, oral evidence may be given of the time
when it was signed; but subject to the provisions of the indian evidence act, 1872, oral evidence of its
contents shall not be received.

50
explanationfor the purposes of this section
(a) an acknowledgement may be sufficient though it omits to specify the exact nature of the property or
right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is
accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off,
or is addressed to a person other than a person entitled to the property or right,
(b) the word "signed" means signed either personally or by an agent duly authorized in this behalf
and
(c) an application for the execution of a decree or order shall not be deemed to be an application in
respect of any property or right.
acknowledgement
acknowledgement means a definite, clear admission of existing liability. it is not necessary that there should
be a promise to pay; the simple admission of a debt is sufficient. an acknowledgement does not create any
new right of action, but only enlarges the time and has the effect of making a new-period run from the date
of the acknowledgement. an acknowledgement of a barred debt cannot give fresh period of limitation in
favour of creditors. under this section, an acknowledgement is not limited in respect of a debt only, it may
be in respect of "any property or right" which is the subject-matter of the suit, example., the taking of
account of a dissolved partnership. an acknowledgement of a conditioned liability will not give a fresh start
so long as the condition remains unfulfilled. there must be an unqualified admission, or an admission
qualified by a condition which is fulfilled. an unqualified admission and an admission qualified by a
condition which is fulfilled stand precisely upon the same footing, and both are within section 18.
what constitutes acknowledgement
an acknowledgement is not limited in respect of a debt only; it may be in respect of "any property or
right" which is subject-matter of the suit.
in prabhakaran verses. m. azhagiri filial, supreme court pointed out that it would be erroneous to
proceed on the assumption that an acknowledgement that would fall within the ambit of section 18 of the
act can be made only by a debtor and there is no question of a "creditor" making an acknowledgement. to say
so would be to ignore the purport and scope of section 18. this is because section 18 deals with not only
with the acknowledgement with reference to all suits involving properties or rights for which a limitation
is prescribed under the act and that is sets out the circumstances, in which fresh period of limitation can be
computed for a suit. it is made clear in regard to mortgages, the transfer of property act has created and
recognized rights as well as obligations both in mortgagor and mortgagee and that an acknowledgement
under section 18 can be only by a mortgagee and such acknowledgement will extend the limitation for a
suit against the mortgagee by the mortgagor in respect of the property or right claimed against him.
ingredients of section 1.8 and essentials of a valid acknowledgement to constitute a valid

acknowledgement and thus to give a fresh period of limitation under this section, the following
conditions must be satisfied:
(1) the acknowledgement must have been made before the expiration of the period prescribed. in
order to fall within the provisions of section 18 the acknowledgement, if any, has to be made prior to the
expiration of the prescribed period for filing the suit. once limitation period prescribed has expired, it
cannot revive under this section. it is only during subsistence of a period of limitation, if any, such document

51
is executed, that the limitation would be revived afresh from the -date of acknowledgment. (sampuran
singh verses. niranjan kaur).
(2) the acknowledgement must have been made by the party against whom the right is then claimed
or by any person through whom he derives his title or liability. an acknowledgement by a person not liable
at the time of acknowledgement does not amount to acknowledgement in law.
(3) the acknowledgement must be in writing; however, if the acknowledgement is undated, oral
evidence may be given of the time when it was signed. but section 18(2) clearly prohibits, subject to the
provisions of the evidence act, receiving of oral evidence of contents of the acknowledgement.
(4) such acknowledgement must have been signed by the party, his agent or the party against whom
the right is then claimed or by any person through whom he derives his title or liability.
(5) the acknowledgement must be an acknowledgement of liability. it is not necessary that the
acknowledgement must also contain or import a promise to pay; a simple admission that debt is due, is
quite sufficient under the indian law. it is otherwise under the english law, under which an acknowledgement
to be effective must also contain or import a promise to pay. under the indian law, it is not necessary that the
writing containing the acknowledgement of same right or property should specify exactly what the right is or
the exact nature of the property (example., exact sum due). again and this is really extraordinary-an
acknowledgement will be sufficient for the purposes of the section, even though it is coupled with a refusal to
pay, or with a claim to set-off, or with a statement that time for payment has not yet arrived. but all the
same it must be an admission of liability; a statement by the debtor implying that there is no liability does
not amount to an acknowledgement. an acknowledgement or liability need not be express; it may be by
implication. (bhagwan verses. madhav,). the acknowledgement must distinctly and definitely relate to the
liability in respect of the right claimed. (gopal rao verses harilal,).
(6) the acknowledgement is not required to be made to the creditor or the person entitled to the
right or the property. it may be made to any person, even to one who has no connection with
the creditor.
illustrations of sufficient acknowledgement of liability
(1) "i am ashamed that the account has stood so long."
(2) "please send in the account made up to christmas last".
(3) "the promissory note which i gave is unstamped and 1 will not pay
(4) "i cannot afford to pay my new debts much less the old debt 1 owe you."
(5) "i admit the existence of a running account....my representatives will compare accounts and pay what
may he found to be due....."
(6) "i am willing to pay you the sum due by instalments."
(7) "as we have informed your client, we are quite willing to pay him the rent due if he can show a title to give us
a good receipt for it that will satisfy our lawyers. if he is unable to produce a perfect title, we are still willing to
pay him the rent on his giving substantial indemnity."
illustration of insufficient acknowledgements

52
(1) a letter "enclosing a remittance of rupees. 100 to old account" does not show that a further sum is
due.
(2) "i wish to look to your accounts; in my own account 1 do not see any amount due to you. please,
therefore, send the account."
(3) "i admit the loan, but i have since repaid the amount."
(4) a letter written by a railway company to the plaintiff informing the latter that the goods have been
delivered to a third party under an indemnity bond, and that the plaintiff cannot be entertained is not an
acknowledgement of liability.
(5) the plaintiff consigned some bags to be delivered to the consignee but they were not delivered, and
the railway company wrote a letter to the plaintiff informing that the bags were lying at a certain place
and that the plaintiff might take delivery if he liked. the letter did not amount to an acknowledgement.
duly authorised agent [explanation (b) to section 18]
according to section 18, acknowledgement can be with respect to property or right or the liability.
further an acknowledgement of liability has to be made in writing signed by the party against whom such
property right is claimed or by any person through whom he derives title or liability. in explanation (b) to
section 18 of the act, it is further said that the word "signed" means signed either personally or by an
agent duly authorised in this behalf. an acknowledgement by the guardian, committee or manager of a
person under disability, by an agent duly authorised by such guardian, etc., is within this section. the
manager of a joint hindu family has the same authority to make an acknowledgement as he has to
create debts on behalf of the joint hindu family.
an acknowledgement by a legal practitioner will be valid acknowledgement to bind his clients. an
attorney is a duly authorised agent and an admission made by him in a letter to the attorney of the
opposite party is a sufficient acknowledgement.
the official assignee is not the agent of the insolvent. therefore, an acknowledgement made by him
does not save limitation under this section. an official receiver is an officer appointed to administer the
estate of an insolvent, under the provincial insolvency act. he is not technically, an agent of the insolvent.
difference between section 18 limitation act and section 25(3) indian contract act
the distinction between an "acknowledgement" under section 18 of the limitation act and a "promise"
under section 25 of the contract act is of great importance. both must be in writing signed by the party or
his agent duly authorised in that behalf and both create a fresh starting point of limitation. but while an
acknowledgement under the limitation act is required to be made before the expiration of the period of
limitation, a promise under section 25 of the contract act may be made after the limitation period. if a
debt is time-barred, there can be no acknowledgement of the debt; there can only be a promise to pay that
sum. such a promise would amount to a new contract. it is open to the borrower to make a promise in
writing, signed by himself, to pay a debt of which his creditor might have enforced payment but for the law
of limitation of the suit. this is recognized by section 25(3) of the contract act.
new period of limitation
a new period of limitation is to be computed from the time of the acknowledgement, i.e., from the
time when it was signed. it is the true date of acknowledgement from which a new period starts. oral
evidence is permissible to show that the writing bears a wrong date by mistake. the date of delivery- of

53
the acknowledgement is not the starting point. the date of acknowledgement is to be excluded in computing
the new period (vide section 12 and general clauses act).
comparison between section 6, 12, 14, 18 and 19
the plaintiffs disability or the defendant's fraud (sections 6 and 12) prevents the operation of the
limitation. abortive proceedings by the plaintiff or the defendant's absence from india (section 14) suspend
the running of time. acknowledgements of liability or payments by the defendant (sections 18 and 19)
interrupt limitation, i.e., cancel the already elapsed portion of the period of limitation and allow a fresh
period of limitation from the date of such interruption.
effect of payment on account of debt or of interest on legacy (section 19)
where payment on account of a debt or of interest on a legacy is made before the expiration of the
prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this
behalf, a fresh period of limitation shall be computed from the time when the payment was made:
provided that, save in the case of payment of interest made before the 1st day of january, 1928, an
acknowledgement of the payment appears in the hand-writing of, or in a writing signed by, the person
making the payment.
explanationfor the purposes of this section,
(a) where mortgaged land is in the possession of the mortgagee, the receipt of the rent or produce of
such land shall be deemed to be a payment;
(b) "debt" does not include money payable under a decree or order of a court.
ingredients of the section 19
this section provides that fresh period of limitation will be computed when a payment is made on
account of a debt or of interest on a legacy provided that
(a) it is paid before the expiry of the prescribed period of limitation.
(b) it is paid by the person liable to pay the debt or interest on legacy, or by his agent duly authorized
in this behalf.
(c) an acknowledgement of the payment appears in the handwriting of, or in a writing signed by, the
person making the same.
the section does not require that the acknowledgement should also be made within the period of
limitation but it is essential that such acknowledgement whether made before or after the period of
limitation must be in existence prior to the institution of the suit.
just as where an acknowledgement of liability is made under section 18 of the act, all the period that
has run up to then is cancelled and a fresh period commences so also, where payment is made on account of
a debt or legacy on interest under section 19 of the act, a fresh starting point of limitation is afforded to
the creditor.

54
section 19 is a special provision which enables a creditor to get a fresh period of limitation when there is
an acknowledgement in writing by the debtor or his authorised agent. further under this section, a
payment may be made not only in cash but in any other medium that the creditor may choose to accept.
(a) prescribed period: the word "prescribed'' means the period prescribed in the first schedule, and
not the period within which the plaintiff may bring his suit. schedule 1 has to be read with section 12 of the
act and the day from which such period is to be reckoned has to be excluded. a payment made after the
expiry of the prescribed period will not be applicable to same limitation.
(b) payment: to constitute payment it is not necessary that it should be in cash or currency. payment
may be made in any form. it is necessary that there must be something which is tantamount to payment.
section 19 saves limitation from the date of payment and if the payment is made by a post dated cheque,
unless the cheque is accepted as payment it could not be regarded as a payment before due date.
a payment is not a good payment unless it is made to the person entitled. mere payment by the
debtor would not attract section 19 unless this shows that there was an acknowledgement of the
payment in the handwriting of the debtor or under a 'writing signed by him.
(c) computation of fresh period: where a payment saves limitation, the fresh period is to be computed
from the date of payment. in computing the period of limitation, the date on which the payment was
made must be excluded.
in order to be covered by the limitation under this section payment should be made by a person
liable to pay it. the expression "person liable to pay" is of wide connotation. it is not restricted to personal
liability only. it will cover the property liability also.
distinction between sections 18 and 19
1. sections 18 and 19 are not mutually exclusive. a payment which, owing to some defect, does not
fulfil the requirements of section 19 may nevertheless operate as acknowledgement of liability and as
such save limitation under section 18, if the conditions of that section are fulfilled.
2. section 18 applies to suits and applications in respect of any property or right, while section 19
applies only to suits on debts and legacies.
3. an acknowledgement of liability under section 18 operates only against the person against whom
such property or right, in respect of which the acknowledgment is made, is claimed. a payment of interest
as such or a part payment of principal, on the other hand, operates against all persons liable to pay of the
debt in respect of which the payment made and not merely against the person making the payment or
those deriving title under him subsequent to such payment.
4. an acknowledgement, under section 18 need not be addressed to the person entitled to the
property or right, but a payment under section 19 must be made two the person entitled to payment.
5. under section 18, a mere writing containing an admission of liability in respect of the property or right
claimed is enough. but under section 19, two things are necessary, viz., (a) a payment, and (b) a writing
recording such payment.
the difference between sections 18 and 19 has been succinctly set out in parasuraman verses.
purushottaman and co. in the following words

55
"there is certainly a difference between section 18 and section 19, as in the case of an acknowledgement
under section 18, a payment under section 19 is also required to be recorded in writing. but, under section
18, the writing must contain within itself an admission of existing liability, while under section 19, it is
sufficient if the writing merely records the fact of payment. an endorsement of payment need not imply an
acknowledgement of liability. whereas an acknowledgement for the purpose of section 18 must be by
the person against whom the property or right in question is claimed by some person through whom he
derives the title or liability, a payment for the purpose of section 19 need only be by the person liable to
pay the debt. an acknowledgement under section 18 only operates against the person who makes the
acknowledgement and those claiming under him, but subject to the provision of sub-section (2) of section
20. a payment under section 19 saves limitation against all the persons who are liable for the debt."
in l.m.l.l. lakshmanari chettiar verses. v.a.r. alagappa chettiar,
the difference between the two sections has been stated in the following words: ''section 18 deals with the
making of an acknowledgement of liability before the expiration of the period prescribed for a suit or
application in respect of a property or right. section 19 deals with payment on account of a debt or of
interest on a legacy being made before the expiration of the prescribed period by the person liable to pay
the debt or legacy or by his agent duly authorised in that behalf, and a fresh period of limitation being
computed from the time when the payment was made.
effect of acknowledgeivient or payment by another person (section 20)
(1) the expression "agent duly authorised in this behalf in sections 18 and 19 shall, in the case of a
person under disability, include his lawful guardian, committee or manager or an agent duly authorised by
such guardian, committee or manager to sign the acknowledgement or make the payment.
(2) nothing in the said sections renders one of several joint contractors, partners, executors or
mortgagees chargeable by reason only of a written acknowledgement signed by, or of a payment made by,
or by the agent of, any other or others of them.
(3) for the purposes of the said sections;
(a) an acknowledgement signed or a payment made in respect of any liability by, or by the duly
authorized agent of, any limited owner of property who is governed by hindu law, shall be a valid
acknowledgement or payment, as the case may be, against a reversioner succeeding to such
liability; and
(b) where a liability has been incurred by, or on behalf of a hindu undivided family as such, an
acknowledgement or payment made by, or by the duly authorized agent of, the manager of the
family for the time being, shall be deemed to have been made on behalf of the whole family.
section 20 is an explanatory as well as supplementary of sections 18 and 19 dealing with

acknowledgement and payment respectively. it is not an exception to any one of these sections.
a mere acknowledgement by one joint-debtor cannot bind the other debtor merely because he is a
partner of the former. the provisions in this section are in the nature of the explanation to sections 18
and 19. this section explains the meaning of the words "agent duly authorised" as used in sections 18 and
19.

56
section 20(1) provides that the expression "agent duly authorised in this behalf in section 18 and 19,
in respect of a person under disability includes the following:
(a) his lawful guardian, committee or manager, or
(b) an agent duly authorised by such guardian, committee or a manager, to sign the acknowledgement
or make the payment.
the expression "lawful guardian" is not limited to a guardian appointed by the court. it means any
person who is entitled to act as guardian under the personal law of the minor. (bechu verses. baldeo).
so, section 20(1) is meant to protect those creditors who accept an acknowledgement from a
guardian and refrain from a suit; it would be unfair for the minor afterwards to turn round and say that
the creditor's remedy is barred.
partners and co-partner [section 20(2)1
section 20(2) provides the effect of acknowledgement or payment by person under joint liability
(example., joint contractor, joint partner, joint mortgagees, co-contractors, co-debtors). section 20(2)
provides that mere writing or signing of an acknowledgement by one partner does not necessarily of itself bind
his copartners, but it must also be shown that he had authority, express or implied to make the
acknowledgement on behalf of himself and his partners.
limited owner [section 20(3)(a)]
it says that acknowledgement or payment made by the widow or limited owner is a valid
acknowledgement or payment as against a reversioner.
manager of a joint family [section 20(3)(b)]
this sub-section lays down two conditions in order that the act of a member of a joint hindu family
specified in section 18 & 19 may extend the period of limitation against all the members. these conditions
are:
(1) that the loan must have been incurred by or on behalf of the joint family and
(2) that specified acts must be the acts not of any member of the family but must be the act of the
karta.
it is not, however, necessary that the document evidencing the loan must on the face of it show that
the loan has been incurred on behalf of the joint family.
effect of substituting or adding new plaintiff or defendant (section 21)
(1) where after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit
shall, as regards him, be deemed to have been instituted when he was so made a party:
provided that where the court is satisfied that the omission to include a new plaintiff or defendant
was due to a mistake made in good faith, it may direct that the suit as regards such plaintiff or defendant
shall be deemed to have been instituted on any earlier date.

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(2) nothing in sub-section (1) shall apply to a case where a party is added or substituted owing to
assignment or devolution of any interest during the pendency of a suit or where a plaintiff is made a
defendant or a defendant is made a plaintiff.
section 21 deals with the effect of substituting or adding new plaintiff or defendant in a. suit. section 21
applies only to suits. the word 'suit' in this section includes only the stages of a suit down to its termination
by the decree of the trial court, and does not include an appellate stage or proceedings in execution of
the decree made in the suit. section 21 applies to the case of all persons brought on record after the
expiry of limitation. section 21 refers only to parties subsequently.
transposition of parties
section 21 of the limitation act does not govern the transposition of parties and is confined only to
cases of addition of parties. order 1, rule 10 of cpc bestows ample power to court to order transposition
of parties.
object of section 21
in chokalingam chetty verses. seethai achi, court held that the object of the section is to safeguard
rights which a person have acquired against another by lapse of time in the matter of making persons
parties.
section 21(1)
section 21(1) lays down a general rule regarding the effect of substitution or addition of new parties to a
suit. it provides that where after the institution of the suit a new plaintiff or defendant is substituted or
added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party.
sub-section (1) does not apply to cases in which the plaintiff is added in the course of the suit in
consequence of assignment of interest from the original plaintiff, it is confined to cases where the new
plaintiff is added or substituted in his own right, so that he may himself be considered to be instituting a
suit independently of the right of the original plaintiff. if the plaintiff is added in consequence of
assignment of right from the original plaintiff, the case will fall under section 21(2) and not under section
21(1). this section is confined to suits only, and does not apply to proceedings in execution.
proviso to section 21(1)
the proviso to section 21(1) of the limitation act, 1963 provides that where the court is satisfied that
the omission to include a new plaintiff or defendant was due to a mistake made in good faith it may
direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on the
earlier date.
in chun choudhary verses. state of bihar, it was held by the court that the proviso to section 21(1)
clothes the court with the discretion to condone the delay in filling the application for addition of parties
after the period of limitation provided the same is made bona fide and good cause is shown therefore.
in ram prasad dagaduram verses. vijay kumar, supreme court held that the proviso to section 21 of
the limitation act, 1963, which enables the court on being satisfied that the omission to include a new

58
plaintiff or a new defendant was due to a mistake made in good faith to direct that the suit as regards such
plaintiff or defendant shall be deemed to have been instituted on any earlier day.
so, from the above decision of court it emerges that in order to get benefit of the proviso to section
21(1) of the limitation act, 1963 it is necessary to prove that the non-impleadment of the necessary
plaintiff or defendant was due to a mistake made in good faith otherwise the court may refuse to allow its
discretion to order the impleadment of the party from any fearlier date.
exceptions to section 21(1)
section 21(2): assignment or devolution
section 21(2) lays down certain exceptions to section 21(1). thus, section 21(1) has no application
where a party is added or substituted owing to:
(a) an assignment, or
(b) devolution of an interest during the pendency of the suit, or
(c) where a plaintiff is made a defendant, or
(d) where a defendant is made a plaintiff.
the reason is that in such cases the newly added person steps into the shoes of the deceased or the
assignor, as the case may be, and no new considerations arise in the matters of limitation.
so, section 21(2) makes it very clear that the provisions of the section would not apply to a case where
a party is added or substituted owing to assignment or devolution of any interest during the pendency of
the suit or where plaintiff is made a defendant.
purchaser pendentelite
in k.s. lokaiah verses m.b. shivaraya, (kant.) it was held that in an execution of decree for possession, the
purchaser pendent lite is impleaded. he steps into the shoes of he decree holder and is entitled to come on
record within 12 years of the date of decree and not from the date of purchase. in such a case section 21(2)
and not section 21(1) is attracted.
continuing breaches and torts (section 22)
in the case of a continuing breach of contract or in the case of a continuing tort, a fresh period of
limitation begins to run at every moment of the time during which the breach or the tort, as the case may
be, continues.
according to section 22 of the limitation act, 1963, in the case of a continuing breach of contract or in
the case of a continuing tort, a fresh period of limitation begin to run at every moment of time during which
the breach or the tort, as the case may be, continues. however, the section does not prescribe any particular
point of time during the course of the continuance of the injury from which limitation is to be computed.

59
the object of this section is to prevent multiplicity of suits and to enable one to be brought for all
loss suffered during the whole period the breach continued.
scope of section 22
in balakrishna verses. shree dm. sansthan, the supreme court has observed that section 22 of the
limitation act, 1963 refers not to a continuing right but to a continuing wrong. it is the very essence of a
continuing wrong that it is an act which creates a continuing source of injury and renders the doer of the
act responsible and liable for the continuance of the said injury. if the wrongful act causes an injury
which is complete, there is no continuing wrong even though the damage resulting from the act may
continue. if, however, a-wrongful act is of such a character that the injury caused by itself continues, then the
act constitutes a continuing wrong. in this connection it is necessary to draw a distinction between the injury
caused by the wrongful act and what may be prescribed as the effect of the said injury. it is only in regard
to act which can be properly characterized as continuing wrongs that section 22 can be invoked.
continuing breach/continuing cause of action
a continuing cause of action is one arising from the repetition of acts or omissions similar to those in
respect of which an action is brought. a continuing breach must be distinguished from successive breaches,
as for instance, failure to pay rent, interest, or other sums payable periodically. here, each successive
breach constitutes an independent cause of action which is liable to become time-barred after the
prescribed period, reckoned from the date of such breaches; and although one suit may be brought in
respect of several bleaches, yet one cannot recover anything in respect of those breaches which
happened beyond the prescribed period reckoned back from the date of the suit. therefore, a suit for
arrears of interest or of rent which felt due more than three years before the institution of the suit
cannot be recovered.
continuing tort/continuing wrong
the continuing tort means continuing wrong. in the case of a continuing tort, the wrongful act
complained of creates a continuing source of injury and is of such a nature as to render the person doing
it responsible for the continuance. the wrongful act produces a state of affairs, every moment's
continuance of which a fresh action is maintainable. in cases of this class, damages is not of the essence of
action. the act complained of is wrongful in itself. the criterion of the applicability of this section, both in
cases of contracts as well as torts, is not whether the right or its corresponding obligation is a
continuing one, but whether the wrong is a continuing one.
what are continuing wrongs
the following are some instances of continuing wrongs giving rise to a fresh period of limitation:
(a) an infringement of a trade mark is a continuing wrong (bengal waterproof ltd. verses bombay
waterproof mfg. co.)
(b) similarly a trespass upon immovable property is a continuing wrong, and the owner may sue the
trespasser for compensation, within three years of the termination of the trespass; narsimma verses.
raghavpathi, 6 mad. 176).
(c) the interference with the right of irrigation of a person is a continuing wrong. (kania verses narain, 50
1c 299).

60
(d) any obstruction to the water course and to the flow of water flowing naturally to the plaintiffs land is
a continuing wrong. (masooma bibi verses said khan,).
(e) the disturbance of a right of ferry is in the nature of a continuing wrong. (nityahari verses. dunne).
(f) infringement of a right of way is a continuous wrong. (kaloi dist. municipality verses. bat champa,
(1976))
(g) an obstruction of light and air is analogous to the obstruction of a right of way or flow of water.
(h) wrongful attachment before judgment, if the attachment continues; for any length of time, will
be a continuous tort. (surajmal verses maneek chand,).
(1) the refusal of a wife to return to her husband and allow him the exercise of conjugal rights
constitutes a continuing wrong. (basawanewa verses. shivappa ).
suits for compensation for acts not actionable without special damage (section 23)
in the case of a suit for compensation for an act which does not give rise to a cause of action unless
some specific injury actually results there from, the period of limitation shall be computed from the time
when the injury results.
section 23 of the limitation act, 1963, applies only where the act of the defendant does not of itself
constitutes an injury but an injury results there form subsequently.
the principle of this section is that where the cause of action lies, not in specific act or omission but in the
resulting damage, the statute runs from the time when the plaintiff sustains the loss. this section is
applicable to suits for compensation for acts not actionable without special damage. where an act is rightful in
itself i.e., unless and until damage results from it to another, the right of action is not complete and the
time therefore does not run until the damage is sustained. each separate specific injury caused by an act
constitutes fresh cause of action, and separate period of limitation will run for each.
this section applies only where the act of the defendant does not of itself constitutes a legal injury, but
an injury subsequently results there from. where the act of the defendant itself constitutes a legal injury, it
has no application, and the mere fact the plaintiff suffers damage subsequently will not enable him to
compute the period of limitation for a suit from the date of the damage.
where the wrongful act itself gives rise to a cause of action, this section does not apply. thus, where
the defendant threw sulphuric acid on the face of the plaintiff, which resulted in the loss of one of his
eyes, the act of the defendant was itself sufficient to give rise to a cause of action for damages for
personal injury. time would run from the date when the act of throwing sulphuric acid was committed and
not from the date when the specific injury (viz., loss of eye) resulted. (abdulla verses abdulla).
in tavoy municipality verses. khootun, it was laid down that time begins to run not from the date on
which the plaintiff becomes aware of the loss but the date on which the loss actually results. when once
the limitation begins from the date of incurring losses, it cannot be arrested by invoking the provisions of
section 23 by issuing one more notice.
thus, section 23 neither specifies nor alter the period of limitation but states the modes of computing
the period of limitation. the section deals with the time from which the period of limitation can be
computed i.e. from the date when the specific injury results due to that act of the defendant which itself
does not constitute a cause of action for a suit for compensation.

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computation of time mentioned in instruments (section 24)
ah instruments shall, for the purposes of this act, be deemed to be made with reference to the
gregorian calendar.
in india, there are in use several calendars, for example. samvat, bengali etc., but the period of
limitation must not be calculated according to the native date.
according to section 24 of the limitation act, 1963, if a question of limitation arises, the instrument
must be deemed to have been made with reference to the gregorian calendar, the intention of the
parties being immaterial.
the provision of section 24 is absolute and unconditional. therefore, if a question of limitation arises,
the concerned instrument must be deemed to have been made with reference to the gregorian calendar.
the instruction of the parties is irrelevant. question and
chapter 4
acquisition of ownership by possession
in this chapter following three topics are covered:
(1) acquisition of easement by prescription [section 25]

(2) exclusion in favour of reversioner of servient tenement [section 26]
(3) extinguishment of rights to property [section 27]
(i) acquisition of easement by prescription (section 25)
(1) where the access and use of light or air to and for any building have been peaceably enjoyed
therewith as an easement, and as of right, without interruption, and for twenty years, and where
any way or watercourse or the use of any water or any other easement (whether affirmative or
negative) has been peaceably and openly enjoyed by any person claiming title thereto as an
easement and as of right without interruption and for twenty years, the right to such access and
use of light or air, way, watercourse, use of water, or other easement shall be absolute and
indefeasible.
(2) each of the said periods of twenty years shall be taken to be a period ending within two
years next before the institution of the suit wherein the claim to which such period relates is
contested.
(3) where the property over which a right is claimed under subsection (1) belongs to the
government that sub-section shall be read as if for the words "twenty years" the words "thirty
years" were substituted.

62
explanationnothing is an interruption within the meaning of this section, unless where there is
an actual discontinuance of the possession or enjoyment by reason of an obstruction by the act of
some person other than the claimant, and unless such obstruction is submitted to or acquiesced in
for one year after the claimant has notice thereof and of the person making or authorizing the
same to be made.
in order to understand this section better we must know what easement means. according to
section 2(f) of the limitation act, 1963 "easement" includes a right not arising from contract, by which
one person is entitled to remove and appropriate for his own profit any part of the soil belonging to
another or anything grown in, or attached to, or subsisting upon, the land of another.
according to section 4 of the easement act, 1882 easement is a right which the owner or occupier of
certain land possesses, as such, for the beneficial enjoyment of that land, to do and continue to do
something, or to prevent and continue to prevent something being done, in or upon, or in respect of,
certain other land not his own."
easement is acquired by prescription. prescription is the acquisition of title to land or to an
easement or an interest in land, by long user or enjoyment against the will of the former owner, or in
disregard of any other claim of title. title by prescription arises from a long continued and
uninterrupted possession of property but, neither by violence, nor by stealth nor, by leave asked from time
to time.
scope of section 25
section 25 of the limitation act, 1963 deals with the law regarding mode of acquisition of
prescriptive right as well as the procedure of the computation of the period prescribed under which the
right could be matured. the period for acquisition of ownership under this mode has been prescribed 20 years
of uninterrupted possession over the land of any person but in the case of land belonging to government
the period is 30 years. this prescribed period shall be taken to be period ending within 2 years next
before the institution of suit in each cases, wherein the claim to which such period relates, is contested.
further, this section is concerned only with the acquisition of the easement and does not
purport to measure the extent of the right or to indicate the remedy by which a disturbance of the right
is to be vindicated; for that recourse must be had to the english law. so, section 25 is remedial. it is neither
prohibitory nor exhaustive. a person may acquire a title under this section when he had none at the
beginning. but it does not exclude or interfere with other titles and mode of acquiring easement.
when there is separate easement act, then what is the need of sections 25 and 26 of the limitation
act?
the answer to above question can be found in the statements of objects and reasons to the limitation
act, 1963 where it is provided that as the pith and substance of the law of easement is a law relating to
rights in or over land and land is entry is the state list. so, state government alone has power to make law
for land, so it is not possible for the indian parliament to extend the easements act by law to those parts
of india where easement act has not been extended. so, parliament decided not to extend the sections 25
and 26 of the limitation act to those territories where easement act is extended. however, parliament
retained section 25 and 26 of the limitation act, 1963 by giving a reason that when the easement act,
1882 is made applicable to any state by state legislation then sections 25 and 26 of the limitation act
would automatically become inapplicable. under section 29(4) of the limitation act, 1963 parliament has

63
specifically made it clear that the provisions of sections 25 and 26 of the limitation act, 1963 will not
apply to the areas to which the easement act, 1882 had been made applicable to.
further, limitation act, 1963 under section 25 and 26 "only prescribe the acquisition of easement by
prescription whereas the easement act, 1882 prescribes all the modes of acquisition of easement.
ingredients of section 25
section 25(1) provides that where the access and use of light or air to and for any building have
been
(1) peaceably enjoyed.
(2) as an easement,
(3) and as of right,
(4) without interruption, and
(5) for 20 years (30 years in the case of property belonging to the government), then such right to
such access and use of light or air becomes absolute and indefeasible.
section 25(1) further provides that where any way or watercourse or the use of any water or any
other easement (whether affirmative or negative), has been
(1) peaceably and openly enjoyed,

(2) by any person claiming title thereto
(3) as an easement,
(4) and as of right.
(5) without interruption, and
(6) for 20 years (30 years in the case of property belonging to the government), then the right to
use such way, water-course, use of water or other easement becomes absolute and indefeasible.
section 25(2) further clarifies that the period of 20 (or 30, according to section 25(3)) years is to be
taken to be a period ending within two years before the institution of the suit wherein the claim to which
such period relates is contested.
meaning of certain expressions used in section 25
"peaceably": in order to establish a right of easement, it is enough for the plaintiff to prove that he has
been exercising the right peaceably and without any interruption, without express or implied permission of
the owner of the servient tenement and without secrecy or stealth. the word "peaceably" means that the
dominant owner has neither been obliged to resort to physical force himself at any time during the period of
enjoyment nor had he been prevented by the use of physical force by the defendant in his enjoyment of
such right.
"openly": except in the case of light or air, the enjoyment must be open and manifest and not
clandestine. the reason of the requirement that the user must be open lies in the fact that acquiescence

64
lies at the root of all prescription, and where the enjoyment is not open, it cannot be said that the owner of
the servient tenement actually or constructively acquiesced in or consented to the easement.
without interruption: an "interruption"' within the meaning of the act is an actual discontinuance or
cessation of enjoyment of user by reason of an obstruction submitted to or acquiesced in for a year, not by
the mere voluntary act of the claimant of the right but in consequence of an obstructive act done by a person
other than the claimant. but if a cessation of user takes place due to an accident or a voluntary act or
omission of the claimant himself, then it does not amount to an interruption.
as an easement: the claimant must have enjoyed the right as an easement, where there is unit of
possession or ownership in the same person of both the tenements, there cannot be any enjoyment as an
easement during the period of unity.
as of right: section 25 provides that where the access and use of light or air to and for any building have
been peaceably enjoyed therewith as an easement and as of right without interruption and for 20 years, the
right of such access and use light or air shall be absolute and indefeasible. in order to make such a right
absolute and indefeasible, it is necessary to establish that the access and use of light had been enjoyed
also as of right.
exclusion in favour of reversioner of servient tenement (section 26)
where any land or water upon, over or from, which any easement has been enjoyed or derived has
been held under or by virtue of any interest for life or in terms of years exceeding three years from the
granting thereof the time of the enjoyment of such easement during the continuance of such interest or
term shall be excluded in the computation of the period to twenty years in case the claim is, within three
years next after the determination of such interests or term resisted by the person entitled on such
determination to the said land or water.
section 26 provides that where any land or water upon, over or from, which any easement has been
enjoyed or derived has been held under or by virtue of any interest for life or in terms of years exceeding
three years from the granting thereof, the time of the enjoyment of such easement during the continuance
of such interest or term shall be excluded in the computation of the period of twenty years in case the
claim is, within three years next after the determination of such interest or terms, resisted by the
person entitled to such determination to the said land or water.
object and scope of section 26
this section is to be read with section 25. this section is entirely for the benefit of reversioners. the
object of the section is the prevention of easement being acquired under the act against interested
person who are incapable of resistance. the section does not apply to a donee or transferee from a hindu
widow by virtue of her powers as presenting the estate, since in such a case, the transferee succeeds the
widow in her capacity as full owner and not as upon the determination of her life interest.
so, according to section 26 of the limitation act, 1963, the time during which an infant, an insane
person or a married woman is the owner of the servient tenement is excluded from the period during
which a prescriptive right is in course of acquisition.
this section can be better understood if we read this section with the illustration provided under
section 27 of the previous limitation act i.e. limitation act, 1908.
essentials of section 26

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(1) this section is an exception to section 25 of the limitation act.
(2) the benefit of the section can only be claimed in the case where suit has been filed within 3 years
next after the determination of the interest or term, as the case may be.
(3) where the easement has been enjoyed or derived by virtue of any interest for life or under any
grant, the period of such enjoyment of the easement will be excluded in computing the period
of limitation and the suit must be brought within 3 years after the determination of the same.
extinguishment of right to property (section 27)
at the determination of the period hereby limited to any person for instituting a suit for possession of
any property, his right to such property shall be extinguished.
the general principle is that limitation act in personal actions bars only the remedy and does not
extinguish the right itself. section 27 is an exception to this general principle so far as suits for possession of
property are concerned and lays down that after the expiry of the period thus prescribed for instituting
a suit for possession of any property the person o should have instituted such suit, but has failed to do so,
shall cease to have any right to the property. after the expiry of its period, the law declares not simply
that the remedy is barred but that the tile is extinct in favour of the possessor. but this section is confined
to suits for possession only and does not apply as suit by a mortgagee for recovery of the money
due to him by sale of the mortgaged property. the mortgagee's remedy may be barred if he omits to sue
within the statutory period but his right is not extinguished.
sections 25 and 26 deal with the direct acquisition of rights to easement by adverse possession. section
27 deals with the indirect acquisition of the ownership of corporeal property by possession or rather with
the extinction of the right to property by prescription. the right that is extinguished by the operation of this
section is the right of a particular person, whose suit for possession of the property has been barred. if
the right of a hindu widow is extinguished by limitation. it does not follow that the right of the
reversioner shall also be extinguished. similarly, if after the grant of a simple mortgage, the mortgagor is
dispossessed of the mortgaged property, the mortgagor is the person entitled to institute a suit for
possession of the property and consequently, if he does not sue within 12 years, his right is extinguished.
but the simple mortgagee's right to bring the property to sale is not affected.
section 27 of the limitation act only provides for extinction of right to property where suit for
recovery of possession of that property is not filed within the period mentioned in the act.
applicability of section: section 27 is not merely procedural but substantial. the section applies only
where suits for possession of property become barred by limitation. it does not apply to applications for
possession. possession in section 27 is not confined to physical possession. it embraces both actual
possession and possession in law.
section 27 only applies to persons who are out of possession and seeks to recover possession, but not to
the case of a person who is still in possession of the property. where no period of limitation is provided, then
section 27 does not apply. the principle of section also applies in areas where the limitation act does not
apply.
extinction of right of government: where the government has a right to the possession of land or
other property and no suit is brought within 30 years to enforce such right, the right of the government
is extinguished under section 27, but, in case of private owners contesting rule to land between

66
themselves, the law as prescribed a limitation of 12 years. after the expiry of the period of 12 years the
law declares that not only the remedy is barred but the title also is extinguished.
adverse possession: the concept of adverse possession contemplates a hostile possession, i.e., a
possession which is expressly or impliedly in denial of the title of the true owner. it implies that it
commenced in wrong and is maintained against right. possession to be adverse must be possession by a
person who does not acknowledge the others' rights, but denies them. the principle of law is to firmly
establish the person who basis his title on adverse possession must show by clear and unequivocal
evidence that his possession was hostile to the real owner and amounted to a denial of his title to the
property claimed. for deciding whether the alleged acts of a person constituted adverse possession the
animus of the person doing those acts is the most crucial factor.
illustration
when a person goes out of india voluntarily or under compulsion, it is his duty to make some
arrangement to look after his property left in india. when he does not do that and a person enters the land
openly and continues to possess in assertion of his right and completes the requisite number of years, he
acquires title by adverse possession under section 27 of the / limitation act.
further, a person who claims adverse possession has to prove that he has remained in uninterrupted
possession of the property to the knowledge of the true owner and has defied the title of the true owner
and asserted his own rights of ownership in the property to the exclusion of the true owner. otherwise
mere possession for any number of years cannot constitute adverse possession.
in zile singh verses. mushi, it has been held that when after the order of eviction was passed the
tenant was continuing in possession for more than 12 years and the landlord did not file any execution for
possession within the above period, the right to recover possession has been lost by lapse of time.
however, in ajit chopra verses sadhuram, the supreme court has made it clear that even if the execution
of the decree for execution is barred by limitation that does not be bar the landlord filing a suit for
recovery of possession based on title.
essentials of adverse possession
the following are the essentials of adverse possession:
1. the defendant must be in actual possession, mere entries in the record of the defendant's
name are not sufficient. the possession necessary to find a title by adverse possession under this section
is not different in character (though it may be in duration) from the possession required to prevent
limitation under article 64 or article 65. so, it is not necessary for the plaintiff to prove affirmatively physical
possession of every part of land. the only thing to be considered in such a case is whether the acts of
possession which have been proved will legitimately show that the plaintiff had enjoyed such domination
over the property in the manner in which such domination is normally exercised so as to acquire title under
this section.
2. the possession must be adequate, in continuity, in publicity and in extent to show that it is adverse
on the owner. it is not sufficient that some act of ownership have been done. the possession must be
open, notorious, actual, exclusive and adverse.

67
3. there must be an intention to hold the property. if the defendant believes that he is entitled
only to a life estate, and remains in possession with that belief, his possession is not adverse to that of
the plaintiff who shared his belief.
4. possession cannot be adverse if its commencement can be referred to a lawful title. thus, the
possession of a manager of a family or a guardian does not become adverse until he has distinctly
repudiated his title.
5. the possession does not become adverse to the plaintiff when there was no notice or knowledge, or
circumstances that could have given notice or knowledge to the plaintiff that the defendant's
possession was in displacement of his right. but the knowledge may be presumed from an open and
notorious act of possession.
6. possession does not become adverse to the plaintiff until the plaintiff is entitled to immediate
possession.
7. possession of a portion of the land cannot be held to constitute constructive possession of the
whole, so as to enable the possessor to obtain thereby title to the whole by limitation. a wrongdoer gains title
only to that portion of land which is actually held by him.
distinction between adverse possession and permissive possession
permissive possession does not become hostile till there is an assertion of an adverse possession to the
knowledge of the owner. the permissive character of the possession can be inferred from the attending
circumstances even without direct evidence. if possession is found to be permissive at the inception, the
possession cannot prescribe or sustain title or any claim adversely to the grantor of the possession unless it
is proved that the person in possession asserted an adverse title to the property to the knowledge of true
owners for a period of twelve years or more, [v. muthiash pillai verses vedambal,].

68
law of arbitration
chapter 1 introduction
conflict of interests are part of human life. human conflicts are inexorable because society is a multifarious web of
social relations. in human affairs disputes are likely to arise. we cannot avoid disputes but an attempt must be made to
resolve them. in civil law they are resolved and settled through negotiations or through conciliation or through
arbitration and finally through court. thus, the dispute settlement mechanisms so far known and practiced all over the
world are:
( i ) negotiation
(2) settlement
(3) conciliation
(4) arbitration
(5) seeking verdict through court.
out of all these disputes settlement mechanisms, arbitration is a quicker, less expensive and less time consuming
remedy as it does not permit dilatory tactics of parties to prolong litigation and saves time from intricacies of
procedure. further it provides parties with flexibility of being able to choose their own "judge".
salient features of the arbitration and conciliation act 1996
the act contains the following salient features:
1. "the arbitration act of 1996 provides not only for domestic arbitration but spreads its sweep to international
commercial arbitration too. the indian law relating to enforcement of foreign arbitration awards provides for greater
autonomy in arbitral process and limits judicial intervention to a narrower circumference than under the previous law.
2. under the new law the grounds on which an award of an arbitrator could be challenged before the court have been
severely cut down and such challenge is now permitted on the basis of invalidity of the agreement, want of
jurisdiction on the part of the arbitrator or want of proper notice to a party of the appointment of the arbitrator or of
arbitral proceedings.
3. the power of the arbitrator have been amplified by insertion of specific provisions on several matters.
4. the role of institutions in promoting and organizing arbitration has been recognized.
5. the power to nominate arbitrators has been given to the chief justice or to an institution or person designated
by him.
6. the time limit for making awards has been deleted.

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7. the importance of transactional commercial arbitration has been recognized and it has been specifically provided
that even where the arbitration is held in india, the parties to the contract would be free to designate the law
applicable to the substance of the dispute.
8. under the new law unless the agreement provides otherwise, the arbitrators are required to give reasons for the
award.
9. the award itself has now been vested with status of a decree, in as much as the award itself is made executable
as a decree and it will no longer be necessary to apply to the court for a decree in terms of the award.
10. there is no provision in the new act for referring the matter to an arbitrator by intervention of the court. however,
if during the pendency of the proceedings in the court parties enter into an arbitration agreement then they have
to proceed in accordance with the provisions of the new act. when the award is made, it is a decree. it cannot be filed in
the high court. it has to be filed in the court as defined in clause (e) of section 2 of the new act for its enforcement as a
decree under section 36 of the new act. if there is a challenge to the award recourse has to be under section 34 of the
new act [paragraph 7].
11. a remarkable feature of the new 1996 act, following the uncitral model law and in step with other modern
arbitration laws, is that the concept of 'party autonomy' runs through the entire fabric of the act.
12. the new act provides, so to say, a 'two level system*. in two level system, the first part of the legislative provision
grants the parties general freedom in regulating an issue while the second part sets forth the default rules which apply
only when no such party stipulation is made. the first choice is given to the parties to agree on various details of arbitral
process like the number of arbitrators, procedure for appointing them, procedure for challenging them, for term i nat i ng
t he i r mandate, the place of arbitratio n, the commencement of arbitral proceedings, language to be used in
arbitral proceedings, whether there would be oral hearing or not and on diverse other details. if that level fails, the act
provides for a second level; namely, a default alternative procedure by enacting diverse legal provisions.
13. the 1996 act allows court's intervention in nine situations; power to refer the parties to arbitration where there is
an arbitration agreement (section 8); granting of interim measure (section 9); power to decide whether the arbitrator
who is challenged by the parties is entitled to have any fees (section 13); power to decide1 on the termination of the
mandate of an arbitrator (section 14); for assistance in taking evidence (section 27); setting aside of arbitral award
(section 34); enforcement of arbitral award (section 36): hearing appeals from original decrees of the court passing
the order (section 37); and cost of arbitration (section 39).

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Chapter-2 short title, extent and commencement
scope and applicability of part i of the arbitration and conciliation act, 1996 [section 2(2)]
section 2(2) of the act provides that. part i of arbitration and conciliation act, 1996 applies where the place of
arbitration is in india. in bharat aluminium company verses kaiser aluminium technical service, inc., (civil appeal no.
70190 of 2005 decided on september 6, 2012)
the apex court held that section 2(2) makes a declaration that part i of the arbitration act, 1996 shall apply to all
arbitrations which take place within india. so, part i of the arbitration act, 1996 would have no application to international
commercial arbitration held outside india. therefore, such awards would only be subject to the jurisdiction of the indian
courts when the same are sought to be enforced in india in accordance with the provisions contained in part ii of the
arbitration act, 1996.
court further held that the provisions contained in arbitration act, 1996 make it crystal clear that there can be no
overlapping or intermingling of the provisions contained in part i with the provisions contained in part ii of the arbitration
act, 1996. the provision contained in section 2(2) of the arbitration act, 1996 is not in conflict with any of the provisions
either in part i or in part ii of the arbitration act, 1996. in a foreign seated international commercial arbitration, no
application for interim relief would be maintainable under section 9 or any other provision, as applicability of part i of the
arbitration act, 1996 is limited to all arbitrations which take place in india. similarly, no suit for interim injunction
simplicitor would be maintainable in india, on the basis of an international commercial arbitration with a seat outside india.
court finally held that part i of the arbitration act, 1996 is applicable only to all the arbitrations which take place within
the territory of india.
exclusion of certain disputes by another law not affected [section 2(3)1
section 2(3) of the act provides that part 1 shall not affect any other law for the time being in force by virtue of which
certain disputes may not be submitted to arbitration.
so, section 2(3) provides that the provisions of this part 1 of the act, shall not be applicable to those disputes which
have been prohibited for disposal through arbitral proceedings by a special statute. example. matters of appointment of
guardians, matter of industrial disputes etc.. because it is governed by their separate arrangement of tribunals,
application of provisions of part 1 of the act, to arbitrations prescribed by special statutes [section 2(4)]
section 2(4) of the act provides that the part 1 except section 40(1), sections 41 & 43 shall apply to every arbitration
under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and
as if that other enactment were in arbitration agreement, except in so far as the provisions of this part are
inconsistent with that other enactment or with any rules made there under.
so, section 2(4) in a way provides that provisions of part 1 of the act shall be applicable even in special statute
arbitrations when no procedure has been prescribed for arbitration in the special statute. for example such provisions
have been enacted by the trusts act, 1882, the companies act, 1956, provincial insolvency act, etc.
applicability of part 1 of the act in other cases of arbitration [section 2(5)]
section 2(5) of the act states that subject to the provisions of subsection (4) and save in so far is otherwise provided by
any law for the time being in force or in any agreement in force between india and any other country or countries,
this part shall apply to all arbitrations and to all proceedings relating thereto.

71
so, section 2(5) is complementary to section 2(4) and is also regulated by section 2(4) and shall be applied where in the
agreement of arbitration of the statute no otherwise provision has been prescribed i.e. where the application of the
new act has not been barred.
construction of reference [section 2(6)]
section 2(6) of the act provides that the part i of the act leaves the parties free to determine certain issue, that
freedom shall include the right of the parties to authorize any person including an institution, to determine that issue
except section 28 which provides rule making power in case of dispute and the matter required to be referred to
arbitration shall be applied to arbitration in india and is effective to in matter of international commercial arbitration.
in sanshin chemical industry verses oriental carbons & chemicals
the supreme court held that a conjoint reading of section 2(6) and 20 leads to the conclusion that in the event parties
do not agree with regard to the place of arbitration, though the right to authorise any person including an institution for
deciding the venue of the arbitration and such decision would not partake the character of adjudication of a dispute
arising out of the agreement, so as to clothe it with the character of an award.
domestic award [section 2(7)]
section 2(7) of the act states that an arbitral award made under part 1 shall be considered as a domestic award.
in bharat aluminium company verses kaiser aluminium technical service, inc. (civil appeal number 7019 of 2005,
decided on september 6, 2012) the apex court held that the section 2(7) does not, in any manner, relax the territorial
principal adopted by arbitration act, 1996. it certainly does not introduce the concept of a delocalized arbitration into the
arbitration act, 1996. it further held that part 1 of the arbitration act, 1996 applies not only to purely domestic
arbitrations, i.e., where none of the parties are in any way "foreign" but also to "international commercial arbitrations"
covered within section 2(1 )(f) held in india. the term "domestic award" can be used in two senses: one to distinguish it
from "international award5', and the other to distinguish it from a "foreign award". it must also be remembered that
"foreign award" may well be a domestic award in the country in which it is rendered. as the whole of the arbitration act
1996 is designed to give different treatments to the awards made in india and those made outside india, the distinction
is necessarily to be made between the terms "domestic awards" and "foreign awards." the scheme of the arbitration act,
1996 provides that part i shall apply to both "international arbitrations" which take place in india as well as "domestic
arbitrations" which would normally take place in india. this is clear from a number of provisions contained in the
arbitration act, 1996 viz. the preamble of the said act; proviso and the explanation to section 1(2); section 2(1 )(f); 11(9),
11(12); 28(1 )(a) and 28(1 )(b). all the aforesaid provisions, which incorporate the term "international", deal with pre-
award situation. the term "international award" does not occur in part i at all. therefore, it would appear that the term
"domestic award" means an award made in india whether in a purely domestic context, i.e., domestically rendered in
a domestic arbitration or in the international context, i.e., domestically rendered award in an international
arbitration. both the types of awards are liable to be challenged under section 34 and are enforceable under
section 36 of the arbitration act, 1996. therefore, it seems clear that the object of section 2(7) is to distinguish the
domestic award covered under part 1 of the arbitration act 1996 from the "foreign award" covered under part ii
of the act; and not to d ist i n gu is h the "domestic award"' from an "international award" rendered in india.
reference to arbitration rules in agreement [section 2(8)]
according to section 2(8) of the act, where the part 1:
(a) refers to the fact that the parties have agreed or that they may agree or

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(b) in any other way refers to an agreement of the parties, that agreement shall include any arbitration rules
referred to in that agreement.
so, section 2(8) provides that where in any agreement between the parties a reference is made to arbitration rules of
any association or industry or institution those rules shall be deemed to be included in the agreement and the parties
shall be deemed to have agreed to the contents of those rules. in other words, such rules will be treated as an
arbitration agreement between the parties.
claim includes counter-claim [section 2(9)]
section 2(9) provides that wherever there is a reference in part 1 of the act to a claim it shall apply to a counter-claim.
similarly, a reference to a defence shall also apply to a defence to that counter-claim. however, this |s subject to the
two exceptions which are contained in section 25(a) and section 32(2)(a) where a reference to claim means only the
clam made by claimant and would not include the counter claim.
so, this section has clarified that claim includes counter claim i.e. for counter claim there need not be a separate
proceeding, it would be a 'set off in the claim itself.
receipt of written communications [section 3]
section 3 of the act is similar to article 3 of the model law of uncitral.
section 3(1) states that unless otherwise agreed by the parties:
(a) any written communication is deemed to have been received if it is delivered to the addressee personally or at his
place of business*, habitual residence or mailing address, and
(b) if none of the places referred to in clause (a) can be found after making a reasonable inquiry, a written
communication is deemed to have been received if it is sent to the addressee's last known place of business, habitual
residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it.
section 3(2) provides that communication is deemed to have been received on the day it is so delivered.
section 3(3) provides that section 3 does not apply to written communications in respect of proceedings of any judicial
authority. it is so because proceedings of judicial authority are regulated by order 5 of civil procedure code, 1908.
waiver of right to object [section 4]
according to section 4 of the act, a party who knows that:
(a) any provision of this part from which the parties may derogate, or
(b) any requirement under the arbitration agreement, has not been complied with and yet proceeds with the
arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for
stating that objection, within that period of time, shall be deemed to have waived his right to so object.
so, section 4 only narrates the circumstances in which a person is deemed to have waived his right to object, section
4 does not define the waiver, nor it is defined elsewhere in the act.

73
according to russell, "waiver is a term loosely used and difficult to define when applied to irregularities in proceedings
before an arbitrator, or in the conduct of the arbitrator during those proceedings."
in narayan prasad lohia verses nikunj kumar lohia, parties agreed to appoint even number of arbitrators as against the
provision of section 10 of the act which provides for odd numbers of arbitrators. the party which knew this defect did
not raise any objection before the arbitral tribunal within the time specified under 16(2) regarding the composition of the
tribunal. supreme court held that in this case parties waived their right under section 4 of the act and the award so
arrived at will not be challengeable and liable to be set aside under section 34(2)(a)(5) of the act.
extent of judicial intervention [section 5]
notwithstanding anything contained in any other law for the time being in force, in matters governed by this part, no
judicial authority shall intervene except where so provided in this part.
in p. anand gajapathi raju verses p.v.g. raju (dead) supreme court held that section 5 of the 1996 act clearly brings out
the object of the act. namely, that of encouraging resolution of disputes expeditiously and less expensively and
when there is an arbitration agreement the court's intervention should be minimal.
role of judiciary in arbitration
section 5 of the arbitration and conciliation act, 1996 provides for limited role of judicial authority in the matters of
arbitration. the court shall not, intervene in any matter relating to arbitration except those which are provided in part-i
of the said act. provisions of judicial intervention in part-i of the act are given below:
(1) power to refer parties to arbitration where there is an arbitration agreement (section 8).
(2) power to make interim order in respect of subject-matter of dispute (section 9).
(3) power to appoint arbitrators in the event of failure or disagreement by parties to arbitration agreement (section
11).
(4) power to decide on the termination of mandate of the arbitration [section 14(2)].
(5) power of assistance in taking evidence (section 27).
(6) power to set aside an award (section 34).
(7) power to give further opportunity to arbitral tribunal to resume arbitral proceedings for elimination of
grounds for setting aside [section 34(4)].
(8) power to enforce arbitral award (section 36).
(9) power to hear appeal (section 37).
(10) power to order delivery of award on payment of costs to the court [section 38(2)].
(11) power to make order on costs of arbitration in absence of sufficient provision made in award [section 39(4)].
(12) power of determination of question relating to insolvency proceedings [section 41(2)].
(13) power to extend time for reference to arbitration of time-barred future disputes [section 43(3)].

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the setting aside of an arbitral award may not be done by a judicial authority except where so provided in part-1.
there is one and only one provision in part-1 which provides for setting aside of an arbitral award and that is section 34.
section 34 provides the occasion for the court to exercise its jurisdiction to set aside an arbitral award. it can arise only
when an application is made to it under section 34( 1), which should be in accordance with section 34(2) and section 34(3).
section 34(2) specifies the grounds for setting aside an arbitral award. section 34(3) fixes the time-limit for an application
to set aside an arbitral award. section 34(2) is divided into two clausesclause (a) and clause (b). under clause (a), the
party making the application has to furnish proof of the ground or grounds on which he attacks the award. under clause
(b), the court itself may suo motu find if the ground exists. the fact remains that under both the clauses, it is necessary
that there should be an application. it is here that the mandate contained in section 5 becomes relevant, which says
that no judicial authority shall intervene except where so provided in part i. it is, therefore, clear that a court cannot
intervene, i.e., set aside an arbitral award, except where there is an application as provided in section 34(1). it would,
therefore, appear that the court has suo motu power to set aside an arbitral award.
section 5 of the 1996 act is based on article 5 of the uncitral model law.
administrative assistance [section 6]
in order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral tribunal with the consent of the
parties, may arrange for administrative assistance by a suitable institution or person.
this is one of the sections providing a basis for institutional arbitration for other provisions reference may be made to
section 11 contemplating that the chief justice may designate an institution, besides a person, to appoint an
arbitrator provision gives recognition to the role of arbitral institutions. yet another provision in section 19(2) of the act
which gives parties freedom to agree on the procedure to be followed by the arbitral tribunal. this freedom may
envisage agreement between the parties to follow the procedure under the rules of arbitration of an established arbitral
institution. sections 68 provides that the parties, or the conciliator with the consent of the parties, for facilitating the
conduct of conciliation proceedings, may arrange for administrative assistance by a suitable institution or person.

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chapters 3
arbitration agreement [sections 7 to 9]
arbitration agreements
the existence of arbitration agreement is a condition precedent for the exercise of power to appoint an
arbitrator/arbitral tribunal under section 11 of the act. it is not possible to appoint an arbitrator to adjudicate the
disputes between the parties in the absence of an arbitration agreement.
what constitutes an arbitration agreement?
section 2(1) (b) of the arbitration and conciliation act, 1996 defines arbitration agreement is an agreement referred
to in section 7 of the act.
section 7 of the act states that an "arbitration agreement" means an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not.
essential ingredients of arbitration agreement
the essential elements of an arbitration agreement are as follows:
(1) the parties must ad idem. (agreed to the same thing in the same sense)
(2) there must be animus arbitrandi i.e. an intention of the parties to settle such difference by a private tribunal.
(3) there must be a present or future difference in connection with some contemplated affairs.
(4) the parties must agree in writing to be bound by decision of tribunal.
(5) arbitration agreement to be definite & certain.
(1) parties must ad idem: for a valid and binding arbitration agreement there must be a valid contract and the parties should
be competent to contract and contract must be by free consent, for lawful consideration and lawful object.
as arbitration agreement is a contract, so there must be offer and acceptance. consideration for the contract
comprises in the promise by each party to the other that in case of any dispute or difference between them he would
abstain from any action in a court of law. mutual obligation of each to the other to abstain from legal action and to
perform the award of the arbitrator forms the consideration for the contract.
in u.p. rajkiya nigam ltd. verses indure pvt. ltd. 1996(1) arbitration u.p. rajkiya nirman nigam (hereinafter called
nigam), a state government undertaking was approached by indure pvt. ltd. a private limited company, (hereinafter
referred to as company) for joint participation is submitting tender to u.p. state electricity board. in furtherance thereof,
the nigam sent an unsigned draft agreement to the company. the company sent a counter-proposal deleting clause 10 in
the draft agreement, which sought to thrust responsibility on the company and materially altering clause 12 to convert joint
liability of the parties to individual liability of the nigam. clause 14 in the draft agreement was an arbitration clause,
which did not have an independent existence. the company after singing such revised agreement sent it to the nigam.

76
the nigam being a government undertaking, the contract has to be duly executed in accordance with the articles of
association. but such execution was not done. the nigam thereafter unilaterally submitted tender to u.p. state electricity
board, but later on, withdrew it. the question was whether there had emerged a concluded contract for joint participation
and arbitration agreement existed. the supreme court held that there was no consensus ad idem between the parties on
material terms of the contract. no concluded contract had, therefore, emerged and arbitration agreement being part of
such unconcluded contract did not exist.
(2) there must be animus arbitrandi: the parties to arbitration agreement must have animus (intention) to refer the
dispute to arbitration and should follow the decision of the arbitrator.
illustration
where an arbitration clause in a contract provided that all disputes between the parties arising out of the contact
shall be referred to the sole arbitration of a/b, it was held that since the words 'sole arbitration' were used, it must be
assumed that the sign of which occurred between the names of the two arbitrators meant or' and that one or the
other of them was to be appointed as arbitrator, but in the absence of any provision in the clause as to how the choice
was to be made between the two arbitrators, the clause was invalid as being vague and uncertain.
there would be no uncertainty if the clause provides for reference to arbitration of a or b at the option of one of the
parties.
form of arbitration agreement
the act does not prescribe any form of agreement. arbitration agreement may be:
(1) in the form of an arbitration clause in a contract; or
(2) in the form of a separate agreement; or
(3) by incorporation of an arbitration clause of an earlier contract into a later contract provided it is not inconsistent
with the terms of such later contract. an agreement may be in the following form also:
(1) a signed document by both parties containing all the terms;
(2) a signed document by one party containing the term and plain acceptance by other party; or
(3) an unsigned document containing the term of submission to arbitration agreed to orally by both the parties. it is
sufficient if one party signs and other accepts it.
further section 7(5) clearly provides that the reference in a contract to a document may also constitute an arbitration
agreement if:
(1) the contract containing the reference is in writing; and
(2) the reference in such as to make that arbitration clause part of the contract, and
(3) the document to which reference is made contains as arbitration clause.
section 2(8) further provides that where any "rules of an arbitral institution is referred to in an agreement, the agreement
shall be deemed to include the arbitration rules and such rules will be deemed to be a part of the agreement.

77
in rukmanibai gupta verses collector, jabalpur (1980), the supreme court laid down that an arbitration clause is not
required to be stated in any particular form. if the intention of the parties to refer the dispute to arbitration can be
clearly ascertained from the terms of the agreement it is immaterial whether or not the expression "arbitration' or
"arbitrator' has been used. nor it is necessary that it should be contained in the same contract document. an
arbitration clause may be incorporated into an existing contract by specific reference to it.
arbitration clause is distinct from other clause in the agreement
an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate
agreement. if the arbitration agreement is in the form of an arbitration clause and the contract is held to be void, it
used to be held that arbitration clause having no independent existence did not exist because the contract being
void also did not exist. to meet such a situation. section 16( 1) of the arbitration and conciliation act 1996 now provides
that the arbitral tribunal shall treat an arbitration clause which forms part of a contract as an agreement
independent of the terms of the contract and the decision that the contract is null and void shall not entail ipso jure the
invalidity of the arbitration clause; so that now the arbitration clause will stand or fail on its own validity notwithstanding
that may be only a clause in a contract.
power of court to refer parties to arbitration in terms of arbitration agreement [section 8]
(1) a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement
shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the
parties to arbitration,
(2) the application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original
arbitration agreement or a duly certified copy thereof.
(3) notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial
authority, an arbitration may be commenced or continued and an arbitral award made.
section 8 of the arbitration and conciliation act, 1996 empowers the court for referring parties to arbitration where an
arbitration agreement exists.
section 8(1) of the act provides that the application for referring the parties to the arbitration can be filed at any time
not later than the first statement of the substance of dispute is filed. thus, application tinder section 8(1) of the act
can be filed at any time prior to or at the time of f i l i n g of w r i t te n statement. ( i n d i a lease development, ltd.
verses thimmakka.)
section 8(2) of the act specifically provides that an application for referring the parties to arbitration shall not be
entertained unless it is accompanied with original or duly certified copy thereof.
essential ingredients of section 8
in branch manager magna leasing and finance ltd. verses potluri madhavilata, supreme court held the following as
the ingredients of section 8:
(1) that there exists an arbitration agreement;
(2) that action has been brought to the court by one party to the arbitration agreement against the other party;
(3) that subject-matter of the suit is the same as the subject-matter of the arbitration agreement;

78
(4) that the other party before he submits his first statement of the substance of the dispute moves the court for
referring the parties to arbitration; and
(5) that along with the application, the other party tenders the original arbitration agreement or duly certified copy
thereof.
section 8 is in the form of a legislative command to the court which provides that once the conditions of section 8 are
satisfied, the court must refer the parties to arbitration.
interim measures, etc. by court [section 9]
a party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is
enforced in accordance with section 36, apply to a court
(1) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings;
or
(2) for an interim measure of protection in respect of any of the folio wing matters, namely:
(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in
arbitration, or as to which any question may arise therein and authorizing for any of the aforesaid purposes any person
to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any
observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining
full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to the court to be just and convenient,
and the court shall have the same power for making orders as it has for the purpose of, and in relation to, any
proceedings before it.
an application to the court to grant interim measures can be made on specified purposes under the act,
(1) for the appointment of a guardian for a minor or person of unsound mind for the arbitral proceeding;
(2) to obtain custody, preservation and sale of any goods provided such goods is the subject-matter of an
arbitration agreement;
(3) to cause recovery of the amount as a result of an arbitral award;
(4) to detain, preserve and inspect any property or thing which is subject-matter of an arbitration agreement;
(5) to obtain interim injunction;

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(6) to appoint a receiver.
section 9 of the arbitration act is a replica of article 9 of unicitral model law on international commercial arbitration.
article 9 of unicitral model law on international commercial arbitration reads on next page:
"it is not incompatible with an arbitration agreement for a party to request, before or during arbitral
proceedings, from a court an interim measure of pro te c ti on and for a court to grant the protection.
the intention of the legislators in enacting or incorporating section 9 is clear and explicit, that the party before arbitral
proceedings or at anytime after making of the award but before enforcement can apply to the court for interim relief
under section 9 [olex focas pvt. ltd. verses. skoda export co. ltd., ].
section 17 of the act also provides for interim measures grantable by the arbitral tribunal but the powers under section 9
are much wider.
section 9 empowers the courts to grant interim measures at its discretion. thus it is discretionary power of the court. the
court has to take into account every aspect of each case and also requirement of a case. this power of the court to
grant interim measures cannot be taken away by the parties by consent as it is the requirement of the act. so it is non-
derogable in nature.
under section 9 usual requirement of:
(a) prima facie case
(b) balance of convenience
(c) irreparable injury or loss etc all come into play.
section 9 is a self contained provision permitting a party to make independent application. it is apparent that the
courts have no power to adjudicate on the merits of the dispute by passing interim reliefs because such jurisdiction has
been assigned to arbitral tribunal only.
similarly the courts cannot grant in favour of the applicant something which he could have been entitled to only after
the final decision on the merits of the case in his favour. section 9 does not specify all the interim measures that the
court may grant as the question is left to be decided by the court after taking into account the facts, circumstances
and needs of each case. hence the court would consider the various aspects of the matter and find whether the loss
would be huge and beyond economic repair, if suitable interim measures are not granted. but it has to be cautious, that
such measures granted in the aid of arbitration proceedings do not frustrate them. [jammu & kashmir state forest
department verses. abdul karim wani,].
purpose of interim measures under section 9 and section 17
the supreme court in a case noted the need for separately enacting sections 9 and 17. the court said that the arbitral
tribunal is empowered by section 17 to make orders by way of interim measures. the need for section 9, in spite of the
enactment of section 17 was that section 17 would operate only during the existence of an arbitral tribunal and its
being functional. during that period, the power conferred on the arbitral tribunal under section 17 and the power
conferred on the court under section 9 may overlap to some extent. but for the period prior to the commencement
of arbitration proceedings and after termination of the proceedings, the only help for interim measures is the court.

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effect of interim measures
an interim measure does not put to rest the rights of the parties. the rights of the parties are required to be
adjudicated finally when a reference is made. the court has the authority and jurisdiction to pass interim orders for-
protection and preservation of rights of the parties during the arbitration proceedings but that does not necessarily
mean that if a party has availed of a benefit under this jurisdiction, the other party cannot put his claim in the main
proceeding which is before the arbitrator. the interim arrangement made by the court has to be given the interim
status. where an arbitration clause exists in a contract and an order relating to the contract is passed and the parties
do not abdicate the arbitration clause and, on the contrary, take recourse to the same, all the disputes, inclusive of
benefits arising or having already arisen, have to be decided by the arbitrator. (arvind iron & steel co. verses steel
authority of india ltd.)
jurisdiction for interim measures
the court for purposes of interim measures means the principal civil court of original jurisdiction. for the purposes of
interim measures the pecuniary limit of the jurisdiction of that court would bb irrelevant. the jurisdiction under
section 9 is different from that under section 11. the application under section 9 for interim measures lies before a
court whereas an application under section 11 for appointment of arbitrator lies before the designated officer who
functions for that limited purpose not as a court.

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chapter 4
composition of arbitral tribunal
[sections 10-15]
arbitral tribunal simply means sole arbitrator or a panel of odd numbers of arbitrators appointed in accordance
with the provisions of section 10 and 11. it is the arbitrator who adjudicates, arbitrates and gives the award.
without an arbitrator there cannot be any arbitration proceedings. section 10 to 15 of the act deals with the
composition of arbitral tribunal.
number of arbitrators for arbitral tribunal [section 10]
section 10(1) of the arbitration and conciliation act, 1996 which is based on the provisions of article 10 of the uncitral
model law provides hat number of arbitrators for arbitral tribunal will be determined according o the free choice of the
parties to the dispute. such freedom of choice is restricted by one limitation that the number of arbitrators, so chosen,
shall lot be an even number.
section 10(2) provides that in the event of failure to determine the number of arbitrators by the parties, (only uneven)
the arbitral tribunal shall be composed of a sole arbitrator.
this section provides for the appointment of a sole arbitrator or more than one arbitrator but such arbitrators shall not
be even in number. but where the number of arbitrator is three, the third arbitrator will be appointed by the two
arbitrators nominated by one each of the two parties. the 'third arbitrator' shall act, not as an umpire but as "presiding
arbitrator." the two arbitrators will appoint the third arbitrator called the presiding arbitrator within a period of thirty days
from the date of their appointment. the three arbitrators will participate in the decision making process of the tribunal
and the award of majority shall prevail. the supreme court in m.m.t.c. ltd. verses sterlite industries (india) ltd has held
that an arbitration agreement specifying even number of arbitrators cannot be a sole ground to render arbitration
agreement invalid.
in narayan prasad lohia & others verses nikunj kumar lohia & others, has observed that even as a matter of public
policy it cannot be said that section 10 compulsorily preclude the appointment of an even number of arbitrators.
where the parties agree to even number of arbitrators and the composition of the arbitral tribunal or the arbitration
procedure are in accordance with the agreement of the parties, they cannot be allowed to resile the award if it is not to
their liking.
the provision contained in section 10 that the number of arbitrators shall not be an even number is a derogable
provision. therefore, any agreement which permits parties to appoint an even number of arbitrators would not be
contrary to provision of section 10 and such an agreement would not be invalid and void. where the parties agreed
upon an even number of arbitrators and objection as to the composition of arbitral tribunal is not taken before
the tribunal itself or within the prescribed time limit under section 16 (2) of the act, it will be deemed as a waiver of
objection under section 4 and consequently the award so passed by the arbitral tribunal cannot be set aside
under section 34 (2) (a)(5) because the composition of tribunal was in accordance with agreement between
parties.
appointment of arbitrators [section 11]

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after prescribing the number of arbitrators in section 10 the act deals with the procedure of appointment of arbitrators in
section 11. to understand the section better it has been divided into different parts which are as follows:
1. nationality of arbitrator: under section 11(1) a person of any nationality can be appointed as an arbitrator
except where there is an agreement to the contrary.
2. party autonomy: section 11(2) leaves it to the parties to agree on procedure for appointment of arbitrator subject to
section 11(6).
3. three arbitrators: section 11(3) provides that where the tribunal is to consist of three arbitrators and the parties fail to
agree on names, each party shall nominate one arbitrator and the two appointed arbitrators shall appoint the third
arbitrator who will act as presiding arbitrator and not umpire.
4. powers to chief justice or his nominees to appoint arbitrator under [sections 11(4) to (6)1: in continuation of
section 11(3) section 11 (4) deals with cases in which a party fails to appoint an arbitrator or the arbitrators fail to agree
on the third arbitrator and they want to avoid unreasonable delay in the matter. section 11(4) authorizes the chief
justice of india or the chief justice of the concerned high court or any person designated by him to make the
appointment upon the request of a party to appoint an arbitrator within 30 days from the receipt of a request to that
effect.
section 11(5) deals with the procedure for the appointment of a sole arbitrator failing any agreement referred to in
section 11 (2).
section 11(6) provides that in case of failure to act as required under the agreed procedure then in such a case the
chief justice may be approached for necessary measure unless the alternate method for appointment is
provided in the agreement.
5. finality of the chief justice's decision [section 11(7)]: it provides that decision of the chief justice on the matter
entrusted to him by sections 11(4), 11(5) or 11(6) is final.
6. qualification of an arbitrator: section 11(8) lays down guidelines which have been given to the chief justice in the
appointment of arbitrator. while no specific qualifications are prescribed for an arbitrator, it is otherwise implicit that
the appointment would be independent as well as impartial.
7. nationality of the arbitrator in the case of international commercial arbitration: under section 11(9) in case of
international commercial arbitration if the parties belong to different nationalities then the person to be appointed must
belong to nationality other than the nationality of the parties. it is not permissible to appoint an arbitrator of a nationality of
one of the party to the arbitration.
8. chief justice's scheme: as per section 11(10) in all the matters entrusted under section 11(4) to 11(6) the chief
justice is authorised to prepare an appropriate scheme.
9. situation where more than one chief justice have been approached: section 1 1 ( 1 1 ) provides that where
more than one chief justice of different high court have been approached, the jurisdiction under these provisions shall
be exercised by the chief justice of the high court which has been approached first.
10. territorial jurisdiction of chief justice: section 11(12) provides that in case of international commercial arbitration
reference is to be made to the chief justice of india and in case of domestic commercial arbitration reference is to be
made to the chief justice of high court within whose local limit the principal court is situated and where the high court
itself is the court referred to in that clause, then the chief justice of the high court. so, in a way section 11(12)
provides explanation to the expression "chief justice" under the act.

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in ranjul baruah verses numaligarh refinery ltd., gauhati high court held that sub-section (2) of section 11 of the act
of 1996 provides that the parties are free to agree on a procedure for appointment of arbitrator or arbitrators
subject to the provision of subsection (6). sub-section (5) empowers the chief justice to appoint arbitrator when the
agreement referred to in sub-section (2) fails. thus, the parties are free to agree on a procedure for appointment of
sole arbitrator, either of the parties can be vested with the powers to appoint the arbitrator. the chief justice is vested
with the powers of appointment of the sole arbitrator only when the parties fail to agree on the arbitrator as per
agreement. subsection (6) provides for a request to the chief justice to take necessary measures on happening of
one of the three contingencies mentioned therein. a combined reading of both the sub-sections (2) and (6) clearly
indicates that the chief justice come in the picture only when the parties fail to act on an agreed procedure. but, in a
given case, where the agreement provides alternately the powers of appointment with either of the parties and the
sole arbitrator is appointed by one of the parties so empowered under the agreement, such appointment cannot be
treated as illegal or contrary to the provisions of law merely because the other party does not agree to the
appointment of the person appointed by the party so empowered. it cannot be treated as a case of failure of an
agreement as referred to in subsections (2) and (6) of the act. where the appointing authority fails to forward the
pane! from the panel forwarded by the contractor, it was only then the contractor, i.e., the applicant invoked his
powers of appointment as per the terms of the arbitration agreement. the chief justice has no jurisdiction to
appoint the sole arbitrator.
grounds of challenge [section 12]
section 12(1) of section 12 of the arbitration and conciliation act, 1996 provides that when a person is approached for
appointment of arbitrator, he must disclose in writing any circumstances that are likely to give rise to justifiable doubts as
to his independence or impartiality. section 12(2) reiterates the obligation of an appointed arbitrator to disclose
any such circumstances in writing to the parties as stated in sub-section (1) above even during continuance of arbitral
proceedings.
section 2(3) of the act further lays down generally two grounds for challenge of appointment of arbitrator:
(1) circumstances leading to justifiable doubts as to his independence or impartiality
(2) the arbitrator does not possess the requisite qualification as agreed by the parties to the arbitration.
section 12(4) permits a party to challenge the appointment of its own appointed arbitrator in the event the party
comes to know or becomes aware of any reasons or circumstances of disqualification of which it was not aware at
the time of making the appointment. however, if the party appoints a person as arbitrator with full knowledge of his
disqualification or inability, it cannot be challenged on a subsequent date. the challenge has to be made within fifteen
days of the party becoming aware of the disqualification of the arbitrator otherwise the right to challenge would be
deemed to have been forfeited.
the object of section 12 is to cast a duty upon the parties to make sure that the person or persons whom they
propose to appoint as arbitrator/ arbitrators are willing to be so appointed and do not suffer from any
disqualification or position which is likely to impair their independent and impartial decision in the dispute under
arbitration. the section, however, does not contemplate any written consent or approval by the arbitrator.
procedure for appointment of third (presiding) arbitrator
in grid corporation of orissa ltd. verses aes co-operation 2002(3) supreme court held that the procedure for
appointment of third (presiding) arbitrator is described in sub-section (3) of section 11. after each party has appointed its
arbitrator, the two arbitrators so appointed have to appoint a third (presiding) arbitrator. it further held that failing any

84
agreement between the parties on the point, it is not necessary that the two appointed arbitrators should necessarily sit
at one place, deliberate jointly and take a decision in the presence of each other to appoint the presiding arbitrator. nor
is it necessary that the two appointed arbitrators must make the appointment in writing. it is enough if they have
actually consulted or conferred with each other and both or any of them have communicated to the parties the
appointment of presiding arbitrator. it is not necessary that the parties should have been consulted or involved in
the process of appointment or given a previous notice of the proposed appointment. it will be unwarranted to contend
that the arbitrator when agreeing to the appointment of third arbitrator laboured under a mistake of law. it will not
be appropriate for the party to make an application for appointment of arbitrator under section 11 (6) in that
situation. assuming that same before the plea arbitral tribunal itself.
disqualifications/grounds of challenge in the appointment of arbitrator
the following are considered as disqualifications or grounds of challenging the appointment of an arbitrator: (1)
the arbitrator is interested in the subject-matter of arbitration
(2) the arbitrator is related to a party so that the relationship is likely to bias him;
(3) the arbitrator was indebted to a party.
russel on arbitration and conciliation has suggested the grounds for challenge of appointments of arbitrators which are
as follows:
(1) where the authority accorded to the arbitrators is not used or misused;
(2) misbehaviour, non-integrity, insincerity committed on the part of the arbitrators;
(3) incompetence due to lack of requisite qualification;
(4) other matters of special circumstances hitting the independence, impartiality, expertise and sincerity of the arbitrators.
in konkan railway corp. ltd. verses rani constructions (p) ltd., it was held that the right to challenge the appointment
of composition of arbitral tribunal the arbitrator is a right that is vested with the aggrieved party. the party that has
justifiable doubts as to the independence and impartiality of the arbitrator may challenge the appointment of the
arbitrator.
refusal to act as arbitrator
if an appointment as arbitrator is offered to a person, he can decline the offer by express or implied refusal. the
refusal of the person nominated in the agreement as arbitrator does not frustrate the arbitration clause, but party can
substitute a new arbitrator in his place. the law expects utmost honesty, impartiality and confidentiality from the
arbitrators.
challenge procedure[section 13]
(1) subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator;
(2) failing any agreement referred to in sub-section (1), a party who intends to challenge an arbitrator shall, within
fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any
circumstances referred to in sub-section (3) of section 12, send a written statement of the reasons for the challenge
to the arbitral tribunal.
(3) unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the
challenge, the arbitral tribunal shall decide on the challenge.

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(4) if a challenge under any procedure agreed upon by the parties or under the procedure under sub-section (2) is
not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.
(5) where an arbitral award is made under sub-section (4), the party challenging the arbitrator may make an
application for setting aside such an arbitral award in accordance with section 34.
(6) where an arbitral award is set aside on an application made under sub-section (5), the court may decide as to
whether the arbitrator who is challenged is entitled to any fee.
section 12 prescribes the grounds to challenge the appointment of arbitrator and section 13 provides the procedure
applicable to challenge the appointment of arbitrator.
section 13 provides that the parties are free to agree on a procedure for challenging an arbitrator. in case the parties
have not prescribed any procedure, the provision of sub-section (2) would be attracted and the party challenging the
appointment of arbitrator shall send to the arbitral tribunal a written statement of reasons within 15 days after
becoming aware of the circumstances or after becoming aware of the constitution of the arbitral tribunal. after the
expiry of 15 days, the right to challenge would be deemed to have been waived by the party.
on receipt of the written statement from the party as referred to in section 13(2) the arbitral tribunal will decide the
challenge unless the arbitrator so challenged himself withdraws from his office or the other party also agrees to the
challenge in which case the arbitrator has no option but to relinquish the office.
in case of sole arbitrator,, where one party challenges his appointment and the other party also joins it, the sole
arbitrator will have to vacate the office. but where the arbitral tribunal consists of more than one arbitrators and one of
the arbitrator's appointment is challenged by a party and the tribunal has rejected the plea of challenge, there is no
option for the challenging party but to accept the decision of the arbitral tribunal because there is no provision in this
section for review by the court.
section 13(4) provides that if the challenge is rejected, the arbitral tribunal shall continue the arbitral proceedings and
make the award. there is no provision for appeal against rejection of challenge by the arbitral tribunal. section 13(5),
however, permits the challenging party to make an application to the court for setting aside the award under section 34 of
the act. section 13(6) further provides that where the court has set aside the award, it also has the power to decide
whether the arbitrator whose appointment was under challenge is entitled to any fees or not.
a reading of the various clauses of section 13 would make it clear that in cases where the arbitral tribunal consists of one
sole arbitrator and only one of the two parties have challenged his appointment and the other has not agreed with the
challenge, the arbitrator becomes a 'judge in his own cause and decides his own fate. this is rather unfortunate and
contrary to accepted principles of natural justice. in such a situation if the sole arbitrator decides to withdraw, no
problem would arise but in case he decides otherwise and rejects the challenge, then he would continue the arbitral
proceedings and make the award which would be binding on the parties including the one who had objected to his
appointment. this creates a rather unhappy situation, which the framers of the 1996 act should have taken into
consideration. the only remedy available to the aggrieved party in such a situation is to make an application to
the court to set aside the arbitrator's award.
in m. mohan reddi verses union of india, 1999, the validity of sections 13(4) and 16(5) of the act was challenged
because 13(4) permits the same arbitral tribunal to continue against whom challenge has been initiated and rejected by
the same body itself and section 16(5) prescribes the determination of its jurisdiction by the arbitral tribunal, thus in
both sections apparently violation of natural justice seems to be committed, hence both sections are unconstitutional and

86
thus be scrapped. court rejected the arguments and upheld the validity of the sections in view of the object of the statute
to provide speedy justice and solutions of the disputes through the self monitored situation of arbitration with least
interference of the courts and that is why no provision of appeal, review or revision has been provided in the act,
but section 34 is there which embodies the power to cancel the award itself.
in satish chander gupta & sons verses union of india, 2003 (1) the issue was whether sections 13(5) and 34 are ultra
vires and contrary to each other. court held that the two sections are harmoniously construable and there is absolutely
no anomaly or any conflict or contradiction. section 34 does not provide a ground of misconduct and mala fide on
the part of arbitrator or challenge to the appointment of the arbitrator itself which is provided for in section 13.
thus section 13 of the arbitration and conciliation act, 1996 provides for procedure for challenging an arbitral tribunal.
one procedure for such challenge may be agreed upon by the parties. in absence of such agreed procedure a party
who intends to challenge an arbitrator shall do so within 15 days after becoming aware of any circumstances that may
give rise as to the independence or that the arbitrator lacks required qualification. the challenge under this process
shall be made in a written statement to the arbitral tribunal. unless the arbitrator withdraws from office on such
challenge under sub-section (2) of section 13 of the act or the other party agrees to the challenge, the arbitral tribunal
shall decide on the issue of the challenge. if the arbitral tribunal decides against the challenge, the arbitral proceedings
may be continued and the arbitral award may be made. this award so made may be challenged in an application under
section 34 of the act for setting aside the award. where an arbitral award is set aside on the ground of status of an
arbitrator the court shall decide the question whether the arbitrator who is challenged is entitled to any fees. it is to be
noted that the parties are free to agree on a procedure for challenging an arbitrator.
it is suggested by leading scholars that would have been more appropriate that instead of challenge being referred
to the arbitral tribunal, a provision could have been made in this section to address the challenge to an independent panel
or board on the pattern of american arbitration law which provides for referral to challenge to the american
arbitration association (a a a). and in case the arbitrator under challenge is appointed by a permanent arbitral institution,
the objection as to the appointment of arbitrator should be referred to such institution.
failure or impossibility to act [section 14]
section 14(1) of the arbitration and conciliation act, 1996 provides for the grounds for termination of mandate of an
arbitration or failure or impossibility to act. these are:
(a) an arbitrator becomes de jure and de facto unable to perform his functions or for some other reasons fails to act
without undue delay; and
(b) he withdraws from his office or the parties agree to the termination of his mandate.
thus, the authority of an arbitrator shall be terminated, if he himself withdraws from the office or the parties agree to
do so.
section 14(2) provides that if some controversy comes into existence relating to the grounds provided in section 14( 1 )(a)
mandate of the arbitrator shall be terminated, however, a party may apply to the court for determination of the
controversy and the court shall decide upon the consensual character of arbitration.
section 14(3) provides that if the arbitrator withdraws as aforesaid (i.e. under section 14( 1)) from his office or a party
agrees to such termination of the arbitrator's mandate or authority, it shall not imply acceptance of the validity of any
ground mentioned in section 12(3) and section 14( 1).
meaning of some pharases and terms used in section 14

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1. meaning of de jure and de facto
dictionary meaning of de facto is in fact, in deed or actually. the phrase de facto is used to characterise an officer,
a government, a past action, or a state of affairs which must be accepted for all practical purposes, but is illegal or
illegitimate. in this sense, it is the contrary of de jure which means rightful, legitimate, just or constitutional. thus, an
officer, king, or government de facto is one who is in actual possession of the office or supreme power, but by
usurpation, or without lawful title; while an officer, king, or governor dejure is one who has just claim and rightful title
to the officer or power but has never had plenary possession of it, or is not in actual possession. the term de facto is
also frequently used independently of any distinction from de jure', thus a blockade de facto is a blockade which is
actually maintained, as distinguished from a mere paper blockade.
2. termination of the mandate
this phraseology used in section 14(3) implies that 'termination of the mandate does not mean termination of
arbitration agreement but it denotes the termination of the authority by which the arbitrator i.e. the arbitral
tribunal has entered upon the 'reference' of dispute for arbitration. thus the effect of termination of the mandate
of arbitrator is on the arbitration proceedings and not on the arbitration agreement and the 'reference' to
arbitration, both of which remain unaffected. the effect of the termination of the mandate of arbitrator under section
14 (1) (b) is that a vacancy of arbitrator is caused and a substitute arbitrator shall be appointed as provided under
section 15 (2) of the act.
3. unable to perform his functions
the words "unable to perform his functions", used in section 14 (1) (a) refer to incapability of the arbitrator to
perform his functions as an arbitrator. the incapacity may either be physical or it may also be of some other
kind, for example, arbitrator having acquired some interest in the subject-matter of the dispute renders him dejure
incapable to continue acting as arbitrator.
an arbitrator who leaves india to settle abroad or an arbitrator appointed ex officio but his office having been abolished
would be deemed to have become incapable of acting de facto as arbitrator. de facto incapacity may also be
caused due to withdrawal of arbitrator from the arbitral tribunal or where he expresses inability to proceed with the
arbitration after entering upon the reference.
substitution of arbitrator or termination of mandate [section 15]
section 15 of the arbitration and conciliation act, 1996 provides for termination of mandate and substitution of
arbitrator.
section 15(1) provides that in addition to the provisions relating to grounds for removal of arbitrator as provided in
section 13 and section 14 of the act, the mandate of arbitrator may be terminated on the following grounds:
(a) where he withdraws from office for any reason or
(b) by or pursuant to agreement of the parties.
section 15(2) provides that where the mandate of an arbitrator terminates, a substitute arbitrator shall be
appointed according to rules that were applicable to the appointment of the arbitrator as replacement.

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section 15(3) provides for continuity of arbitration proceedings by substitute-arbitrator from the place where it ended
by the former arbitrator according to the discretion of the substitute-arbitral tribunal.
section 15(4) lays down that the change in composition of the arbitral tribunal will not affect an order or ruling made by the
former arbitral tribunal.
this section is complimentary to preceding sections 13 and 14 in as much as arbitrator withdrawing from his office
for any reason may be replaced unless otherwise agreed by the parties. though apparently the provisions contained
in section 14 (1) (b) and section 15 (1) (a) appear to be overlapping but in fact it is not so. while section 14 (1) (b) provides
for the termination of the mandate of an arbitrator when he withdraws from his office, section 15 (1) (a) will apply
when the reason of termination is any other than specified in section 14 (1) (a) i.e., de jure or de facto inability or
neglect.
in ram pal sharma verses. somnath sharma, (hp) court held that where parties agreed before sub-judge that award of
arbitral tribunal be set aside and another arbitrator be appointed it amounts to termination of mandate of arbitrator
by consent of parties and such order is not improper.
in kifayatullah haji gulam rasool verses. bikish is mail mehsanta, court held that where a consent order containing
agreement of the parties that the authority of the arbitrator to complete arbitration proceedings shall come to an
end on a particular date. thus, mandate of an arbitrator stands terminated on the said date by efflux of time and also
due to failure on the part of the arbitrator to act without undue delay.

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chapters 5
jurisdiction of arbitral tribunal
[sections 16-17]
competence of arbitral tribunal to rule on its jurisdiction [section 16]
(1) the arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the
existence or validity of the arbitration agreement, and for that purpose,
(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other
terms of the contract; and
(b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the
arbitration clause.
(2) a plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the
statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has
appointed, or participated in the appointment of, an arbitrator.
(3) a plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged
to be beyond the scope of its authority is raised during the arbitral proceedings.
(4) the arbitral tribunal may, in either of the cases referred to in subsection (2) or sub-section (3), admit a later plea if
it considers the delay justified.
(5) the arbitral tribunal shall decide on a plea referred to in subsection (2) or sub-section (3) and, where the
arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral
award.
(6) a party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award
in accordance with section 34.
section 16 of the arbitration and conciliation act, 1996 confers power on arbitral tribunal to rule on its own
jurisdiction. the provision of section 16 corresponds to article 16 of the uncitral model law.
section 16(1) of the act provides that 'arbitral tribunal may rule' on its own jurisdiction, including ruling on any
objections with respect to the existence or validity of the arbitration agreement.
in determining the said questions, the arbitral tribunal shall keep in mind the following:

90
(a) an arbitration clause which forms part of a contract is to be treated as an agreement independent of the other
terms of the contract, and
(b) even the arbitral tribunal holds that the contract is null and void, it shall not entail ipso facto the invalidity of the
arbitral clause.
in section 16(1) the phrase 'the arbitral tribunal may rule' means it is the discretionary powers of an arbitral tribunal
which may exercise on its own motion or at the request of a party. an arbitrator cannot be compelled to exercise
those powers. the powers conferred are mandatory. in gas authority of india ltd. verses keti construction (i) ltd.,
court held that the expression used in section 16(1) of the act that the 'arbitral tribunal may rule' on any objections
with respect to the existence or validity of the arbitration agreement shows that the arbitral tribunals authority
under section 16 of the act is not confined to the width of the jurisdiction, but goes to the very root of its jurisdiction
and there is no impediment in contending before the arbitral tribunal that it had been wrongly constituted.
in m. dayanand reddy verses. a.p. infrastructural crop., court held that section 16(1) contains principle of
'autonomy' and distinguishes arbitration clause from other clauses in the agreement. so, arbitration clause is
independent of other terms of contract and the arbitration clause while invalidating the other clauses of an
agreement.
in olympus superstructures pvt. ltd. verses. meena vijay khetan,
court held that under the arbitration and conciliation act, 1996 the arbitral tribunal is vested with powers under
section 16(1) to rule on its own. 'jurisdiction including ruling on any objection with respect to the existence or
validity of arbitration agreement and for that purpose the arbitration clause which forms part of the contract
shall be treated as an agreement independent of any other terms of the contract and any decision by the arbitral
tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
in hindustan petroleum corporation ltd. verses. pink city midway petroleums, the petroleum company
stopped supply to its dealer who had allegedly indulged in short supply and tampering of seals etc. the dealership
agreement amongst other provisions, empowered the company to stop supply in case of breach of any clause in
the agreement. therefore the court held that action taken by company was in exercise of contractual power and
dispute arising out of such action was referable to arbitration under section 16 of the arbitration act, 1996 and
it was mandatory for the civil court to refer the dispute to arbitration. the court further ruled that section 16(1)
empowers the arbitral tribunal to rule on its own jurisdiction including rule on any objection with respect to the
existence or validity of the arbitration agreement. the provisions of section 16(1) clearly provide that if there is
any objection as to the applicability of the arbitration clause to the facts of the case, the same will have to be
raised before the concerned arbitral tribunal and the civil court has no jurisdiction to embark upon an inquiry in
regard to applicability of the arbitration clause to the facts of the case.
section 16(2) provides plea to raise objections to jurisdiction but no time limit is prescribed. the arbitral tribunal
itself may move motion relating to question of jurisdiction, however under the section the parties have also vested
rights to raise objections to jurisdiction but 'not later than the submission of the statement of defence'. a party
shall not be deprived of such right to raise objections to jurisdiction merely on the ground that he has
appointed or participated in the appointment of an arbitrator. thus, an aggrieved party has an opportunity to
raise a jurisdictional plea before an arbitral tribunal even after appointment of an arbitrator.
in delhi development authority verses. chandra kanta & co.,
court held that section 16(2) provides that the objection as to 'jurisdiction' has to be raised not later than the
submission of the statement of defence. but sub-section (4) empowers the arbitral tribunal to entertain the

91
objection even after the submission of the statement of defence if in its view, the delay is justified. delay in raising
the objection as to arbitrability i.e., arbitrator's jurisdiction would normally amount to waiver of the right to challenge
the jurisdiction.
in n.p. lohiya verses. n.k. lohia & others, supreme court observed that under section 16, a party can challenge the
composition of the arbitral tribunal before the arbitral tribunal itself. but such objection must be taken under section
16 (2), not later than the submission of the statement of defence. section 16 (2) makes it clear that such a
challenge can be taken even though the party may have participated in the appointment of arbitrator and/or
may have himself appointed the arbitrator. if the party so chooses, it may not raise any objection as to the
composition of the arbitral tribunal. thus a conjoint reading of sections 10 and 16 shows that an objection to the
composition of the arbitral tribunal is a matter which is derogable. however, if the party chooses not to object
within the time prescribed by section 16 (2), it will be deemed as a waiver of right to challenge under section 4 of
the act.
in olympus superstructure pvt. ltd. verses. meena vijay khetan the apex court has observed that sections 16 (2)
and 16 (3) are relevant when an application for setting aside of an arbitral award is sought on the ground that the
arbitrator exceeded jurisdiction in terms of arbitration agreement. sections 16(2) and 16(3) refer to two types of
pleas and the stages at which they can be raised.
under section 16(2) a plea that the arbitral tribunal does not have jurisdiction shall be raised not later than
submissions of the statement of defence: however a party shall not be precluded from raising such a plea
merely because he has appointed or participated in the appointment of an arbitrator.
under section 16(3) a plea that the arbitral tribunal is exceeding the scope of its authority shall be raised an soon as
the matter alleged to be beyond the scope of its authority is raised during the arbitral proceeding.
these limitations in sections 16(2) and 16(3) are subject to the power given to the arbitrator under section 16(4)
that the arbitral tribunal, may in either of cases under section 16(2) and 16(3) admit a plea later on, if it considers
the delay justified.
section 16(5) provides that the arbitral tribunal shall decide on a plea referred to in sections 16(2) and (3), and where
the arbitral tribunal takes a decision rejecting the plea, it shall continue with arbitral proceedings and make an
arbitral award.
section 16(6) provides that a party aggrieved by such an arbitral award may make an application for setting aside
such an arbitral award in accordance with section 34.
section 16(5) and 16(6) are not modeled on the basis of model law, although these two sections are to be read
together, because they express that a plea of objections to jurisdiction made by a party before an arbitral tribunal
and an arbitral tribunal proceeds by rejecting such plea and also make an award, in such cases, an aggrieved party
may approach to the court for setting aside such an arbitral award according to section 34 of the act as this
provisions is available to an aggrieved party under section 16(6) of the act.
in conclusion, it may be reiterated that section 16 of the act confers on the arbitral tribunal the power to rule on
its own jurisdiction with respect to existence or scope of the arbitration agreement. the parties desirous of
challenging the jurisdiction of arbitral tribunal shall raise the objection not later than submission of the statement
of defence. where it appears that arbitral tribunal is exceeding its scope of authority, a plea to this effect shall be
raised as soon as the matter alleged to be beyond the scope of authority is raised during the arbitral
proceedings, failing which it will be deemed that the party had waived his right to challenge and shall not be
entertained at a subsequent stage. even where the arbitral tribunal rejected the objection, it can go ahead with

92
the arbitral proceedings and make an award. it is only after the award having been given that the parties can
challenge the award so made in a court of law.
power of arbitral tribunal to order for interim measure of protection [section 17]
(1) unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order a party to make
any interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of
the dispute.
(2) the arbitral tribunal may require a party to provide appropriate security in connection with a measure ordered
under sub-section (1).
section 17 of the arbitration and conciliation act, 1996 which corresponds to article 17 of the uncitral model law
provides for power of arbitral tribunal to order interim measure for protection of subject-matter of the dispute. the
arbitral tribunal may even require a party to provide appropriate security in connection with a measure ordered by it.
this power can be exercised by the arbitral tribunal if there is no agreement by the parties to the contrary.
difference between section 9 and section 17
the provisions contained in section 17 are analogues to those contained in section 9 of the act. however, there are
differences between two.
section 9 of the act provides for the making of interim measures by the court in certain matters.
section 17 on the other hand empowers the arbitral tribunal to order interim measures for the protection of the subject
matter of the dispute and also provides for appropriate security in respect of such a measure. but $o far as their effect is
concerned, the two differ in the following aspects:
(1) the court's power to order interim measures under section 9, is unrestricted but arbitral tribunal's power under
section 17 is conditioned by the words unless otherwise agreed by the parties."
(2) the court is empowered to make orders under section 9 before, during or after the arbitral proceedings, but the
arbitral tribunal can exercise its power to order interim measures only during the arbitral proceedings. thus the arbitral
tribunal's power under section 17 is far more restrictive.
(3) the court can exercise its power under section 9 only when a party applies to it for an interim measure for
protection.
an arbitral tribunal can also makes an order of interim measure at the request of a party as provided in sub-section (1)
of the section but subsection (2) authorises the arbitral tribunal to require a party to provide appropriate security in
connection with measures ordered under sub section (1).
in m.d. army welfare housing organisation verses sumangal services (p) ltd., supreme court held that the power
conferred on the arbitrator under section 17 is a limited one. it cannot issue any direction which would go beyond the
reference or the arbitration agreement. the interim order made by the arbitral tribunal under section^ 17 must relate
to the protection of subject matter of dispute and the order may be addressed only to a party to the arbitration. it
cannot be addressed to other parties. but no power has been conferred on the arbitral tribunal under this section to
enforce its order nor does it provide for judicial enforcement thereof.
appeal

93
the order for interim measures made by arbitral tribunal under section 17 are appealable under section 37 (2)(b)
of the act. it is significant to note that the arbitration and conciliation act, 1996 has not provided for any mechanism
for execution of order made by the arbitral tribunal under section 17, neither in the section itself nor in any other
section of the act. so, this provision seems as paper tiger and wholly depends upon the morality of the parties.
interim measures in foreign arbitral proceedings
there are different countries which have adopted the uncitral model law. in scotland an order for interim measure
"shall take the form of an award". in australia and bermuda such an order is considered as if it was an award and
provisions have been used for its enforcement. in icc arbitrations, interim measures are usually made in the form of an
award.

94
chapter 7
making of arbitral award and termination of arbitral proceedings
[sections 28-33]
settlement [section 30]
section 30 of the arbitration and conciliation act, 1996 provides for settlement of arbitral dispute.
it permits settlement of the dispute with mutual agreement between the parties through mediation, conciliation
and other forms of settlements during the arbitral proceedings itself.
section 30(1) of the act states that an arbitral tribunal shall encourage the parties for settlement of their dispute at
anytime during the arbitral proceedings either through mediation, conciliation or other procedures with the use
of office by the arbitral tribunal.
section 30(2) provides that when the parties settle their dispute during the arbitral proceedings and at the request
of the parties and without objection of the arbitral tribunal, it shall record the settlement in the form of >an arbitral
award on agreed terms.
section 3q(3) provides that the arbitral award shall be made on agreed terms in accordance with section 31 of the act
which deals with the form and contents of arbitral award.
section 30(4) of the act provides that an arbitral award on agreed terms shall have the same status and effect or
any other arbitral award on the substance of the dispute.
settlement reached during arbitral proceedings
if the parties have reached a settlement during the arbitral proceedings, the arbitral tribunal shall terminate the arbitral
proceedings and shall record the settlement in the form of an award in accordance with section 31 of the act, if it is
so desired by the parties by a written request. however, if the settlement is reached between the parties but not
recorded in the form of an arbitral award, it would be treated like a 'settlement agreement' as provided under
section 73 of the arbitration and conciliation act, 1996. the only difference is that a settlement agreement under
section 73 is formulated by a conciliator whereas a settlement agreement reached between the parties during
arbitration proceedings is formulated by the arbitrator. such a settlement should also be distinguished from a
settlement which is reached between the parties after the award is made.
form and contents of award section 31]
section 31 of the act deals with form and contents of interim award, interest to be paid and costs borne by parties as to
the arbitral proceedings. further this section -also makes it mandatory for the arbitral tribunal to state the reasons
for the award.
section 31(1) provides that the award must be made in writing and shall be signed by the members of the arbitral
tribunal.

95
section 31(2) provides that if the arbitral tribunal consists of more than one arbitrator than it will be sufficient if a
majority of the members of the tribunal sign it, provided reasons are given for the omitted signatures.
section 31(3) provides that an arbitral tribunal must state reasons for its award. except:
(a) when the parties have agreed that no reason to be given, or
(b) when the award on agreed terms under section 30.
section 31(4) requires the arbitral award to state the date of signing of the award and place at which it was signed.
section 31(5) requires each party to get a signed copy after the arbitral tribunal has made the award.
section 31(6) empowers the arbitral tribunal to make an interim award. the interim award can be on any matter with
respect to which the tribunal can make a final award. an arbitrator must have a proper hearing before making the
interim award. the arbitrator has a discretion to submit more than one interim award.
no decree is required to be passed by the court as the award itself is executable as decree of the court.
section 31(7)(a) provides for the grant of interest by the arbitral tribunal on an award for the payment of money
for the period between the date on which the cause of action arose and till the date on which the award was made. ,
the tribunal may grant interest: (1) at a rate it considers reasonable,
(2) on the whole or part of the money found due.
(3) for the whole or any part of the period.
section 31(7) (b) provides for the grant of interest on the sum of money awarded for the period from the date of the award
to the date of the payment at the rate of 18% per annum. the courts cannot increase the mutually agreed interest
rate between the parties.
section 31(8) deals with the provision as to the costs. the tribunal may decide what costs to be paid, by whom, to
whom and in what manner.
speaking or non-speaking award
it is now settled law under section 31 of the act that the arbitral tribunal shall give a speaking award unless the parties
agree to making a non-speaking award by the arbitral tribunal.
a speaking award or reasoned award is one which discusses or sets out reasons which led the arbitrator to make the
award. only in a speaking award the court can look into the reasoning of an award. where no reasons are given in the
award, it is not open to the court to probe the mental process of the arbitrator and speculate as to what impelled
the arbitrator to arrive at his conclusion.
but in the case of a non-speaking award, the court can examine whether the award was in accordance with law.
the law with respect to non-speaking awards was summed up by the supreme court in rajasthan state mines &
minerals verses. eastern engineering enterprises jt .

96
(a) it is not open to the court to speculate, where no reasons are given by the arbitrator, as to what impelled the
arbitrator to arrive at his conclusion.
(b) it is not open to the court to admit to probe the mental process by which the arbitrator has reached his
conclusion where it is not disclosed by the terms of the award.
(c) if the arbitrator has committed a mere error of fact or law in reaching his conclusion on the disputed
question submitted for his adjudication then court cannot interfere.
(d) if no specific question of law is referred, the decision of the arbitrator on that question is not final, however
much it may be within his jurisdiction and indeed essential for him to decide the question incidentally. in a case
where specific question of law touching upon the jurisdiction of the arbitrator was referred for the decision of the
arbitrator by the parties, then the finding of the arbitrator on the said question between the parties may be binding.
(e) in a case of non-speaking award, the jurisdiction of the court is limited. the award can be set-aside if the
arbitrator acts beyond his jurisdiction.
(f) to find out whether the arbitrator has travelled beyond his jurisdiction, it would be pecessary to consider
the agreement between the parties containing the arbitration clause. arbitrator acting beyond his jurisdiction is a
different ground from the error apparent on the face of the award.
(g) in order to determine whether the arbitrator has acted in excess of his jurisdiction what has to be seen is whether
the claimant could raise a particular claim before the arbitrator. if there is a specific term in the contract or the law
which does not permit or give the arbitrator the power to decide the dispute raised by the claimant or these is a
specific bar in the contract to the raising of the particular claim then the award passed by the arbitrator in respect
thereof would be in excess of jurisdiction.
(h) the award made by the arbitrator disregarding the terms of reference or the arbitration agreement or the terms
of the contract would be a jurisdictional error which requires ultimately to be decided by the court. he cannot award
an amount which is ruled out or prohibited by the terms of the agreement. because of specific bar stipulated by the parties
in the agreement, that claim could not be raised.
(1) the arbitrator could not act arbitrarily, irrationally, capriciously or independently of the contract. a
deliberate departure or conscious disregard of the contract not only manifest the disregard of his authority or
misconduct on his part but it may tantamount to malafide action.
(2) the arbitrator is not a conciliator and cannot ignore the law or misapply it in order to do what he thinks just and
reasonable; the arbitrator is a tribunal selected by the parties to decide the disputes according to law.
termination of arbitral proceedings [section 32j
section 32 provides that when the dispute is resolved by making an award and the arbitral tribunal passes an order
regarding the termination of proceedings, the arbitral tribunal becomes functus officio i.e. the function and existence of the
arbitral tribunal comes to an end.
section 32( 1) provides that the arbitral proceedings shall be terminated by the final arbitral award or by an order of the
arbitral tribunal.
section 32(2) provides three circumstances under which an arbitral tribunal shall issue an order terminating
arbitration proceedings:

97
(a) the claimant withdraws the claim without any objection of the respondent and with the approval of the
arbitral tribunal;
(b) the parties agree on the termination of the proceedings; or
(c) the arbitral tribunal finds that the continuation of the proceedings has, for any other reasons, become
unnecessary or impossible.
section 32(3) provides that subject to section 33 of the act which deals with correction, interpretation and making
of additional award and section 34(4) of the act which deals with the power of the court to remit the arbitral award
to the arbitral tribunal for reconsideration of the award, the mandate of the arbitral tribunal shall terminate with the
termination of the arbitral proceedings.
correction and interpretation of award and additional award [section 33]
section 33 of the arbitration and conciliation act, 1996 corresponding to article 33 of the uncitral model law deals with
correction and interpretation of an award and also with the power of making an additional award.
section 33 of the 1996 act envisages three types of situations which may arise after making and signing of an award.
first, there may be a request by a party with notice to the other party within thirty days from the date receipt of the
request to the arbitral tribunal to correct certain errors which are apparent on the face of the award.
the second situation may arise with regard to interpretation of a specific point or part of the award. the period
of time of thirty days to make the request may be extended by an agreement of the parties.
section 33(2) of the act provides that if the arbitral tribunal considers that the request of the party for correction or
interpretation of the award is justified, it shall make the correction or give the interpretation within thirty days from the
date of receipt of the request and the same shall form part of the arbitral award.
section 33(3) the arbitral tribunal is conferred power to make any apparent correction of error on the award of its
own initiative within thirty days from the date of the award.
the third situation may arise by a request from a party to the arbitral tribunal with notice to the other party within
thirty days from the receipt of the arbitral award for making an additional award in respect of a claim presented in the
arbitral proceedings, but the arbitral tribunal has omitted the same from the arbitral award.
section 33(5) provides that if the arbitral tribunal considers such request to be justified, it shall make the additional
award within sixty days form the date of receipt of such request.
section 33(6) confers power on the arbitral tribunal to extend the period of thirty days for correction and interpretation
of the award and also to extend the period of sixty days for making additional award.
section 33(7) of the act provides that the provisions of section 31 of the act shall apply to a correction, or
interpretation of the award as well as to making an additional award.

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chapter 8
recourse against arbitral award and validity of arbitral award [section 34]
section 34 provides for the grounds and circumstances when an arbitral award may be set aside. in madan lal
verses sunder lal, court held that this section empowers the courts to review the whole, arbitration process
followed in a case and also to examine constitutionality of the arbitration process and the parties are not
permitted to lessen the dignity of it.
scope of section 34
the effect of giving an award under section 34 is that the parties cannot appeal against it and the court cannot
interfere with it on merits. but this does not mean that there is no check on the arbitrators' conduct. in order to ensure
proper conduct of the proceedings, the law allows certain remedies against an award. these remedies can be obtained
through a court of law having jurisdiction over the matter.
grounds for setting aside an award
the grounds on which an award can be set aside are stated in section 34 as follows:
1. incapacity of party [section 34(2)(a)(1)]: if a party to arbitration is not capable of liking his own interests and is not
represented by a person who can protect his interest then the award will not be binding on him and may be set aside
on his application. example: in case of a minor or a person of unsound mind.
2. invalidity of agreement [section 34(2) (a) (2)]: if the arbitration agreement is invalid then in such a case the
award given on the basis of such agreement would also be invalid and can be set aside.
the invalidity of arbitration agreement may arise because the agreement was with respect to a matter which
could not be referred to arbitration. for example, question of genuineness of will-cannot be referred to arbitration and
so arbitration agreement to refer such a question would be invalid because that question must be decided in
accordance with law dealing with probate of wills under the succession act, questions relating to non-compoundable
criminal matters may not be referred to arbitration.
the plea about invalidity of arbitration agreement may be raised before the arbitral tribunal itself to contend that it
lacks jurisdiction to arbitrate. there is no jurisdiction to arbitrate if the arbitration agreement is either non-existent
or invalid. if the plea is accepted by the arbitral tribunal, the other party feeling aggrieved by that order may file an
appeal against that order under section 37(2)(a) of the act. on the other hand, if the plea is rejected by the arbitral
tribunal, the party contending about the invalidity of the arbitration agreement will have to wait until the award is
made by the arbitral tribunal. once the award is made, the party may then make an application under section 16(6)
read with section 34 of the act to the court for setting aside of the arbitral award.

99
another ground of invalidity of arbitration agreement is found in clause (2) of section 34(2)(a), where it is stated
that a party may set up the ground of invalidity directly before the court for setting aside an arbitral award, on the
plea that it was not raised before the arbitral tribunal and the case of the party does not fall within section 16(6). in
this regard, this plea about invalidity of arbitration agreement would seem to differ from the plea about non-
existence of arbitration agreement as the latter plea must have been taken before the arbitral tribunal itself and
it is only on rejection of that plea by the arbitral tribunal that the plea can be raised in proceedings under section
16(6).
unless the case fell within section 16(6), it may be open to take the plea about non-existence of arbitration agreement,
which does not expressly exist as a ground in any of the clauses of sub-section (2) of section 34. * but the ground about
invalidity of arbitration agreement expressly exists in clause (a) (2) of sub-section (2) of section 34 and hence, it is
submitted, that it may be raised even for the first time before the court in proceedings for setting aside the arbitral award.
there appears to be no rational reason to make such a distinction between the pleas of non-existence of arbitration
agreement and invalidity of arbitration agreement. section 33 of arbitration act 1940 permitted parties to challenge both
the existence and validity of arbitration agreement on equal footing by making an application to the court under that
provision.
3. notice not given to the party [section 34(2) (a) (3)|: it permits challenge to an award on the ground:
(a) that the party was not given proper notice of the appointment of arbitrator;
(b) that the party was not given proper notice of the arbitral proceedings;
(c) that the party was unable to present its case.
4. award beyond the scope of reference [section 34(2)(a)(4)j: the reference of a dispute under an agreement
defines the limits of the authority and jurisdiction of the arbitrators.
an arbitration is a creature of the agreement itself. it is, therefore, bound by the terms of the agreement and cannot
adjudicate a matter beyond the agreement itself. a decision against the terms of the contract may be said to be outside
the submission. a submission can and is always made for matters arising with in the ambit of the contract. hence, if any
matter is decided in conscious disregard or against the terms of the contract, it may be said that that is on a matter
beyond the scope of the submission. such a defect in the award will fall within clause (a)(4) of sub-section (2) of section
34 of the act.
5. illegality in the composition of tribunal or in arbitral procedure [section 34(2)(a)(5)]: an application under
section 34 for setting aside an arbitral award can be made on the grounds:
(a) that the composition of the tribunal was not in accordance with the agreement or,
(b) that the procedure agreed to by the parties was not followed in the conduct of the proceedings.
(c) that in the absence of the agreement the procedure prescribed by the act was not followed.
6. dispute not arbitrable [section 34(2) (b) (1)]: all the matters in dispute not being of a criminal nature may be
referred to arbitration.
7. public policy: fraud and corruption [section 34(2) (b) (2)]: it provides that an application for setting aside an arbitral
award can be made if the arbitral award is in conflict with the public policy. moreover, if an award is obtained by
fraud or corruption then also it would be barred by law.

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chapter 9
finality and enforcement of arbitral awards
[sections 35 to 37]
finality of arbitral awards [section 35]
section 35 of the arbitration and conciliation act, 1996 provides that subject to the provisions of part 1 of this act
an arbitral award shall become final and binding on the parties and persons claiming under them respectively.
the expression final award' implies an arbitral award complete in all respects leaving nothing more to be done by
the arbitral tribunal. such an award is legally binding on the parties.
this section envisages that the arbitral award is final and binding between the parties and other persons claiming
under them.
to give finality to the award, this section provides (1) the time aspect, and (2) the legal proceedings aspects, specifying
when the award becomes final:
(1) where the time provided for preferring an appeal to set aside the arbitral award as per section 34 has expired;
here the award shall become final at the date at which the time for preferring an application to the court has expired.
(2) the application for setting aside the award has been rejected after consideration by the court.
here the award shall become final at the date when the court has rejected the application for setting aside the award.
the expression "persons claiming under them" includes assignees of the contract containing arbitration clause, legal
representatives representing the estate of a deceased party, or persons who have participated in arbitral proceedings
either to enforce the claim or defend the claim on behalf of a party. a receiver under section 41 (1) or an administrator
of assets which constitute the subject-matter of the dispute under arbitration will also be bound by the award being
the person claiming under the parties.

101
in m/s. oriental structural engineers ltd. verses. m/s. rites & another,
delhi high court held that finality of award makes it a rule of court enforceable as decree of the court. in this case
award in respect of claim of other items in bill was passed and made a rule. arbitrator also gave finding that
dispute relating to omitted claim could not be raised after submission of final bill. the contractor accepted the
payment which indicated that there was total accord and satisfaction. thus arbitrator gave the award on merits in
respect of which proceeding was filed in high court for making the award a rule of the court and in pursuance of
which, the award was made a rule of the court. the high court of delhi held that since the contractor did not choose
to challenge the aforesaid part of award and accepted the payment unconditionally, the contract stood discharged
and extinguished insofar as it relates to claims of the contractor. therefore the second petition for referring the
dispute to the arbitrator stood barred.
award enforceable as decree of court [section 36]
section 36 of the act contemplates that the arbitral award shall be enforceable as a "decree" of the court. it
presumes that the arbitral award has the mandate of law similar to a judgement of the court.
conditions for enforcement of arbitral award
the conditions for enforcement of arbitral award as the decree of court are that it must fulfill either of the two
conditions, (1) the time of making the application for setting aside of arbitral award under section 34 has expired
or, (2) if such application having been made, has been refused.
meaning of expression as it were a decree of court
the expression "as it were a decree of court" introduced a fiction that an arbitral award is a judgement of the court as
the same is not in a suit. the provisions of code of civil procedure, 1908, applicable to the execution of decree shall
apply mutatis mutandis to the enforcement of an arbitral award. section 36 makes the arbitral award capable of being
executed in its own right and it is no longer required to be filed in a court to make it a decree i.e., rule of the court.
thus though the award is a judgment of a private tribunal, it is now at par with the judgment of a court of law which is
enforceable by its own force.
limitation of section 36
section 36 contains provision for enforcement of awards in india only and the conditions for enforcement of foreign
awards are contained in section 48 of part 2 of the act.
in hindustan copper ltd. verses. m/s centrotrade minerals & metals,
court held that the criteria to decide whether award is foreign or not is to consider whether indian court would be
competent to entertain challenge to the award. where the parties have expressly stipulated that the law
governing arbitration shall be indian law and the award, will not be a foreign award and therefore will not be
enforceable under part 2 '(section 48) of the act but it will be enforceable under section 36 of part 1 of the act.
constitutionality of section 36
in madhavapura mercantile co-operative bank ltd. verses. shah bhimani chemicals pvt. ltd. & ors., the
constitutionality of section 30 was challenged on the ground that delay it entails, which is against the spirit of 1996 act.

102
the court held that no unconstitutionality could be pointed out in section 36 neither it is outside the legislative
competence of the parliament or opposed to any of the constitutional provisions.
appeals [section 37]
section 37 of the act specifies the scope of appeal from the order of the court and the arbitral tribunal. no period of time
is, however, specified for filing an appeal. but, the provision of article 116 of the schedule of limitation act, 1963 will
apply in matters of appeals made under this section.
in union of india verses. east coast board builders & engineers ltd.,
court held that the provisions of section 37 of the 1996 act are made consciously by the legislature to provide relief
to the aggrieved party at that stage of arbitral proceedings where the arbitral tribunal decides the issue of
jurisdiction in its favour. otherwise section 37 would have been enacted differently. section 37 had been enacted in
such manner so as to minimize the supervisory role of courts in the arbitral proceedings at that stage.
section 37( 1) provides for appeal against 'orders' and not against the 'award'. the orders against which an appeal lies
are specifically laid down and no other orders are appealable. the appeal lie from the following orders:
(a) granting or refusing to grant any measure under section 9.
(b) setting aside or refusing to set aside an arbitral award under section 34.
section 37(2) provides that an appeal shall also lie to a court from the following order of the arbitral tribunal:
(a) an order upholding the objection of a party that the arbitral tribunal does not have jurisdiction or it has exceeded its
scope of authority.
(b) order granting or refusing to grant an interim measure under section 17(1) or 17(2).
section 37(3) of the act provides that no second appeal shall lie from an order passed in appeal under this section,
but nothing in this section shall effect or take away any right to appeal to the supreme court.
under article 133 of the constitution of india an appeal will lie to the supreme court provided the provisions of the
said article are complied with.
in kanpur nagar palika verses. narain das, court held that though, no second appeal would lie from an appellate order
passed , under section 37 of the act, but no statute is capable to take away the right to appeal to the supreme court, as
this jurisdiction has been conferred on the supreme court by the constitution of india, 1950.
in west bengal verses. gauranga lal, supreme court held that no appeal will lie on the grounds of misconduct or
corruption of arbitrator as this ground is not included in this section 3 relating to appeal against the orders of the
arbitral tribunal. similarly, in neelkantha verses. superintending engineer, supreme court held that there is no
appeal from the decision of the arbitrator and the court has no power to correct any error or mistake in the
arbitrator's verdict nor can it review the award.
whether order passed under section 37 is revisable?
in i.t.i. ltd. verses siemens public communications network ltd.,

103
supreme court held that an appellate order passed by a court under section 37 is revisable by the high court under
section 115 of the code of civil procedure, 1908. section 37(3) bars only a second appeal and not revision. merely
because the new act of 1996 has not provided about the code of civil procedure being applicable, an inference cannot
be drawn that civil procedure code is inapplicable to the proceedings under the act. the power of revision under
section 115 of the code cannot be readily inferred to have been excluded by the provisions of a special act unless such
exclusion is clearly expressed by the act.

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chapter 10
international commercial arbitration
the term 'international commercial arbitration' has three elements. first is that there is an arbitration agreement,
second, the arbitration is of international as opposed to domestic in character and third, it relates to commercial
matters.
according to article 1(3) of uncitral model law on international commercial arbitration, an arbitration is international
in character if
(a) the parties to an arbitration have, at the time of the conclusion of the agreement, their places of business in
different states or
(b) one of the following places is situated outside the state in which the parties have their places of business:
(1) the place of arbitration if determined in or pursuant to the arbitration agreement,
(2) any place where a substantial part of the obligations of the commercial relationship is to be performed or the
place with which the subject-matter of the dispute is most closely connected; or
(c) the parties have expressly agreed that the subject-matter of arbitration agreement relates to more than one
country.
the arbitration and conciliation act, 1996 provides for certain aspects of international commercial arbitration. the
term "international commercial arbitration" has been defined in section (2) (l) (f) of the arbitration and
conciliation act, 1996 as follows:
"international commercial arbitration means an arbitration relating to disputes arising out of legal relationships,
whether contractual or not, considered as commercial under the law in force in india and where at least one of
the parties is
(1) an individual who is a national of, or habitually resident in, any country other than india; or
(2) a body corporate which is incorporated in any country other than india; or
(3) a company or an association or a body of individuals whose central management and control is exercised in any
country other than india; or
(4) the government of a foreign country, or an arbitration to be considered as international arbitration within the
meaning of this definition it is necessary that;
(a) the dispute must arise out of a legal relationship which is commercial, irrespective of the fact whether such
relationship is contractual or not; and
(b) at least one of the parties to the dispute is a foreign national or a company registered in a foreign country or a
company, management and control of which is exercised from a foreign country or the government of a foreign
country.

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part 2 of the act, deals with enforcement of certain foreign awards and consist of two chapters.
chapter 1 deals with new york convention awards which are supplemented by the first schedule to the 1996 act.
chapter 2 deals with geneva convention awards which is to be read with the second schedule and third schedule of the
1996 act.
thus, the foreign awards which can be enforced in india are (1) new york convention award and (2) geneva convention
award.
new york convention, 1958 [schedule 1 read with section 44]
article 1 of the new york convention declares that the convention applies to the recognition and enforcement of
arbitral award made in the territory of state other than the state where the recognition and enforcement of such awards
are sought with respect to the differences which arise between the persons. the convention does not lay down any
distinction in respect of commercial or other contracts and left it open for the signatories of the convention that they may
agree only on the arbitration in respect of commercial contracts.
definition of "foreign award"
according to section 44 of the arbitration and conciliation act, 1996 the expression "foreign award" means an arbitral
award on differences between persons arising out of legal relationship whether contractual or not considered as
commercial under the law in force in india.
so, india has confined the scope of foreign awards to the "commercial contracts".
the first schedule lays down 16 articles relating to the new york convention on the recognition and enforcement of
foreign arbitral awards.
in the case of ntpc verses singer company the apex court has held that an award is "foreign" not merely because it
is made on the territory of a foreign state but because it is made in such a territory on an arbitration agreement not
governed by the law of india. an award which is made outside india on an arbitration agreement by the law of india
is not treated in india as a 'foreign award' due to saving clause in section 9 of the foreign awards act, 1961.
similarly delhi high court in gas authority of india ltd. verses. spie capag s.a. has held that for being a foreign award
it should have a foreign element or flavour involving international trade and commerce. it has also held that section 9 of
the act of 1961 has application only in respect of domestic awards and it has no application to arbitration agreement.
power of judicial authority to refer parties to arbitration [section 45]
section 45 gives power to judicial authority to refer parties to arbitration at the request of one of the parties or any
person claiming through such party, the court may refer the parties to arbitration according to the agreement entered
into between them. the court may refuse reference only if it finds that the agreement is null and void, inoperative or
incapable of being performed.
when foreign award is binding [section 46]
section 46 of the arbitration and conciliation act, 1996 states that any foreign award which would be enforceable
under chapter 1 of part 2 of this act shall be treated as binding for all purposes on persons as between whom it was made,
and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal

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proceedings in india and any reference in this chapter to enforcing a foreign award shall be construed as including
references to relying on an award.
evidence [section 47]
section 47 of the act lays down the method of producing the evidence and proof for the enforcement of the foreign award.
it prescribes that what evidence the party has to make prima facie before the court for enforcement of a foreign award.
conditions for enforcement of foreign award or refusal of enforcement of foreign awards [section 48]
section 48 of the arbitration and conciliation act, 1996 enumerates the conditions required for the enforcement of
foreign award in india. in other words this section lays down the conditions or grounds for refusal to enforce foreign
awards.
section 48(1) states that enforcement of a foreign award may be refused at the request of a party against whom it is
invoked provided that party furnishes any of the following proofs to the court:
(a) the parties to the agreement referred to in section 44 were (1) under some incapacity, or (2) the said agreement is not
valid according to the law applicable to it or to the parties or to the award.
(b) the party against whom the award is invoked was not given proper notice (1) of the appointment of the arbitrator,
or (2) of arbitral proceedings, or (3) was unable to present his case.
(c) the award (1) deals with a difference not contemplated by or not falling within the terms of the submission to
arbitration, or (2) it contains decisions on matters beyond the scope of the submission to arbitration. but where the
decisions on matters submitted to arbitration can be separated, the part of the award which contains decisions on
matters submitted to arbitration may be enforced.
(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the law of the
country where the arbitration took place.
(e) the award has not yet become binding on the parties, or has been set aside 6r suspended by a competent authority
of the country in which or under the law of which that award was made,
section 48(2) lay down other grounds for refusal to enforce an arbitral award by court. these are as follows:
(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of india.
(b) the enforcement of the award would be contrary to the public policy of india. an award is in conflict with the
public policy of india if the making of the award was induced or affected by fraud or corruption.
section 48(3) provides that if an application for setting aside or suspension of the award is made to a competent
authority, the court may adjourn the decision on the enforcement of the award and may also, on the application of the
party claiming enforcement of the award order the other party to give suitable security.
enforcement of foreign award as decree [section 49]
section 49 of the act is borrowed from section 6(1) of the foreign awards (recognition and enforcement) act, 1961.
section 49 provides that where the court is satisfied that the foreign award is enforceable under this chapter 1 of part
2 of the act, the award shall be deemed to be a decree of the court.

107
appealable orders [section 50]
section 50(1) provides that an appeal shall lie from the order refusing to (a) refer the parties to arbitration under
section 45 and (b) enforce a foreign award under section 48 of the court authorised by law to hear appeals from such
order.
section 50(2) provides that there is no provision for a second appeal but the section does not preclude the right of
the parties to appeal to the supreme court against the order passed by the appellate court.
geneva convention, 1927 [schedule iii read with section 53]
foreign award
section 53 of the arbitration and conciliation act, 1996 defines "foreign award" in the context of geneva convention
which means an arbitral award on differences relating to matters considered as commercial under the law in force in
india made after july 28, 1924.
(a) in pursuance of an arbitration agreement to which the protocol set forth in the second schedule to this act applies;
and
(b) between persons out of whom one is subject to the 'jurisdiction of some one of such powers as the central
government may by notification in the official gazette, declare to be parties to the convention set forth in the third
schedule to this act and of whom the other is subject to the jurisdiction of some other of the powers aforesaid and
(c) in one of such territories as the central government on the reciprocal provisions may; by notification, declare to
be territories to which the said convention applies.
it is further provided in this section that for the purposes of chapter 2 of this part, an award shall not be deemed to be
final if any proceedings relating to validity of the award are pending in the country in which it is made.
power of j udi c i al authority to refer parties to arbi t rat i o n [section 54]
section 54 of the act makes it mandatory for any judicial authority when seized of a dispute regarding a contract made
between the parties to whom section 53 applies to refer the parties to arbitration on an application by either party.
when foreign awards is binding [section 55]
section 55 of the arbitration and conciliation act, 1996 provides that a foreign award which is enforceable under
chapter 12 of part ii of this act shall be treated as binding for all purposes on the persons as between whom it was
made, and may accordingly be relied on by any of those persons by way of:
(1) defence
(2) set off or
(3) otherwise in any legal proceedings in india.
evidence [section 56]

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section 56 provides for the method of proof. it provides that the burden of proof is on the party applying for the
enforcement of a foreign award.
conditions for enforcement of foreign award [section 57]
section 57 of the arbitration and conciliation act, 1996 lays down the conditions which are required to be satisfied for
enforcement of foreign awards.
section 57(1) provides that there are 5 conditions which are necessary to be satisfied for enforcement of a foreign
award under chapter 2 of part 2 of the act. these are:
(1) validity of submission to arbitration [section 57(1)(a)]
(2) arbitrability of the dispute under the law of india [section 57( 1 )(b)]
(3) validity of arbitral tribunal making the award [section 57(1 )(c)]
(4) finality of the award in accordance with the law of the country in which it has been made. [section 57(1 )(d)]
(5) award not contrary to the public policy or the law in india. [section 57(1 )(e)] making of an award made by
inducement or fraud or corrupt practice is against the public policy of india. grounds of refusal to enforce foreign
award [section 57(2)]
section 57(2) provides that grounds or conditions for refusal to enforce a foreign award. they are as follows:
(1) the award has been annulled in the country in which it was made [sub-section 2(a)]
(2) notice of arbitration proceedings was not given in sufficient time to enable the aggrieved party to present his case
[sub-section 2(b)]
(3) the aggrieved party was not properly represented due to legal incapacity [sub-section 2(b)]
(4) the award does not deal with differences as per terms of the submission to arbitration [sub-section 2(c)]
(5) the award is beyond the scope of the submission to arbitration [sub-section 2(d)]
when the award has not covered all the differences submitted to the arbitral tribunal. the court may postpone
such enforcement or grant it subject to such guarantee as it may deem fit.
section 57(3) provides further that if a party against whom the award is made proves that under the law governing
the arbitration procedure there is a ground other than the grounds referred to in clauses (a) and (c) on sub-section (1)
and clauses (b) & (c) of sub-section (2) entitling him to consent the validity of the award, the court may either
refuse the enforcement of the award or adjourn the consideration thereof, giving such party a reasonable time within
which to have the award annulled by a competent tribunal.
foreign award as decree when [section 58]
section 58 of the act, corresponds to section 6 of the arbitration (protocol and convention) act, 1937 provides that
where the court is satisfied that the foreign award is enforceable under chapter 2 of part 2 of the act, the award shall
be deemed to be a decree of the court.

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appealable order [section 59]
the provisions contained in section 59 of the act is similar to provisions of section of the act under new york
convention awards.
chapter 11
conciliation
the arbitration and conciliation act 1996 deals with two types of alternative dispute settlements as the name of
the act itself suggests of part-1 covering section 2 to 43 deals with arbitration and its various facets. part-2 deals
with enforcement of foreign awards. part-ill which includes section 61 to 81 talks about conciliation a new type of
dispute settlement incorporated in the act based on uncitral conciliation rules 1980.
definition or meaning of the term conciliation
the arbitration and conciliation act, 1996 does not define the term conciliation.
black's law dictionary defines 'conciliation' as a settlement of a dispute in an agreeable manner, a process in which a
neutral person meets with the parties to a dispute and explores how the dispute might be resolved.
in simple legal parlance we can say that conciliation is a process by which discussion between patties is kept going
through the participation of a conciliator who persuades the parties to reach an agreement or arrive at an amicable
settlement.
difference between arbitration and conciliation
the difference between arbitration and conciliation is as follows:
arbitration conciliation
1. the arbitration proceedings are quasi-judicial conciliation proceedings are non-judicial in nature
in nature
2. in arbitration proceedings the matter is in case of conciliation parties arrived at a settlement with the
adjudicated in arbitral tribunal assistance of conciliator
3. arbitration requires a prior agreement in conciliation may be initiated without such prior agreement and
writing to submit to arbitration disputes which relates generally to disputes which have already arisen
have been arisen or which may arise
4. the arbitrator does not merely assist in the role of conciliator is to assist the parties in their attempt to
resolution of a dispute he arbitrates reach an amicable settlement of their dispute
adjudicates and actually resolves an awards
5. in arbitration proceedings all information the factual information given by a party to the conciliation may
given by a party is subject to scrutiny by the be subjected to a confidentiality. the conciliator shall not
other disclose such information to the other party

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6 an award is made and signed by the arbitrator a settlement agreement may be made by the parties
but it does not require authentication themselves or with the assistance of the conciliator the
conciliator shall authenticate the settlement agreement
7 there cannot be a unilateral termination of a party can unilaterally brings the conciliation proceedings to an
arbitration proceedings end for section 76(d) states that the conciliation proceedings
shall be terminated by a written declaration o f a party the
other and the conciliation proceedings are terminated
8 an arbitrator can arbitrate only if the parties conciliator acts as amicable compositor to assist
expressly authorised him to so act or decide. the parties to reach settlement he can help decide ex aequo et
bono.
application and scope of part 3 [section 61]
section 61 of the arbitration and conciliation act, talks about the scope and ambit of part 3 of the act. it provides
that the provisions of part 3 are applicable to conciliation of disputes arising out of legal relationship, whether
contractual or not and to all proceedings relating thereto. however, section 61(1) provides that part 3 of the act shall
not apply to the following cases:
(1) where the provisions of this part are made inapplicable by any law for the time being in force, and
(2) where the parties have otherwise agreed to expressly exclude conciliation.
further, section 61(2) provides that certain disputes are not to be submitted for conciliation if the law is not is
operation and not in force at that time.
conciliation proceedings [sections 62 to 81] commencement of conciliation proceedings [section 62]
section 62 prescribes the procedure for the commencement of conciliation proceedings. for settling the dispute
through conciliation all that is required is a written proposal and acceptance thereof. the other party has an option
either to accept the invitation or reject the same. rejection may be express or implied. if the proposer does not
receive a reply within 30 days or other stipulated period it amounts to rejection and rejection will not start the
conciliation.
number of conciliators [section 63]
after the acceptance of proposal for conciliation the next step is to have a conciliator. section 63 envisages that
there will be only one conciliators. the parties cannot have more then 3 conciliators, that is the maximum limit,
section 63(2) says that in case of more than one conciliator, they ought to act jointly as a general rule.
appointment of conciliators [section 64]
two modes are preserved for appointment of conciliators: first, the parties may appoint the conciliator themselves
in accordance with the provisions of section 64( 1)
(a) a sole conciliatorthe parties may mutually agree on the name of the sole conciliator
(b) two conciliatorseach party may appoint one conciliator;

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(c) third conciliatorseach party may appoint the name of the third conciliator who shall act as the presiding
conciliator. second, the parties may seek the assistance of a suitable institution or person to appoint conciliators.
submission of statements to conciliator [section 65]
section 65 empower the conciliator to request each party to submit describing the general nature of the dispute
and the points at issue each party shall send a copy of such statement to the other party. the conciliator may ask the
parties to supplement the written statement with the documents and other evidences and may call at any stage of
the conciliation proceedings. the provisions of this section should be read with section 67(3) which elaborates
the role of conciliator in conducting the conciliation proceedings.
the role of conciliator is of utmost importance, because it is he who has to make sincere and honest efforts to
assist the parties to reach an amicable settlement of dispute. the role of conciliator is envisaged under section 67.
conciliator not bound by certain enactments [section 66]
section 66 provides that conciliator is not bound by procedure of cpc, 1908 or evidence act. 1872. it does not mean
that he is not required to follow the principles of natural justice and fair play, however it is expected from the
conciliator that he will be impartial, efficient and integrated in conduct of conciliation in most transparent manner.
role of conciliator [section 67]
(1) the conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an
amicable settlement of their dispute.
(2) the conciliator shall be guided by principles of objectivity, fairness and justice giving considerations to among other
things the rights and obligations of parties, the usages of trade concerned and circumstances surrounding the
dispute including any previous business practices between parties.
(3) the conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking
into account the circumstances of the case, the wishes the parties may express, including any request by a party
that the conciliator hear oral statements, and the need for a speedy settlement of the dispute.
(4) the conciliator may at any stage of proceedings make proposals for settlement of the dispute. such proposals need
not be in writing and need not be accompanied by a statement of reasons there for.
administrative assistance [section 68]
in order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent of the
parties, may arrange for administrative assistance by a suitable institution or person.
this section is self-explanatory and provides for administrative assistance to the conciliator in conducting the
conciliation proceedings expeditiously and effectively. the conciliator may also seek administrative assistance by a
suitable institution if the parties to the dispute consent to it.
communication between conciliator and parties [section 69]
(1) the conciliator may invite the parties to meet h i m or may communicate with them orally or in writing. he may
meet or communicate with the parties together or with each of them separately.

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(2) unless the parties have agreed on the place where meetings with the conciliator are to be held, such place shall
be determined by the conciliator, after consultation with the parties, having regard to the circumstances of the
conciliation proceedings.
the section authorises the conciliator to invite the parties to meet him or communicate with him orally or in writing. he
may communicate with both the parties together or with each one of them separately. the place of meeting will be
decided by the conciliator after consultation with the parties having regard to their convenience. however, the parties shall
have the liberty of agreeing upon the place where meetings with the conciliator are to be held and it is only when the
parties fail to decide themselves about the venue of the meetings, that the conciliator shall take decision in this regard.
disclosure of information [section 70]
section 70: provides privilege to conciliator whether to disclose information made known to him by one party to
other party.
even proviso to section 70 states that if, the party gives any information to conciliator subject to a condition that it be
kept confidential in such cases the conciliator is not allowed to disclose such information.
co-operation of parties with conciliator [section 71]
the parties shall in good faith co-operate with the conciliator, in particular, shall endeavour to comply with
requests by the conciliator to submit written materials, provide evidence and attend meetings.
section 71 underlines the need for the parties to co-operate with the conciliator in the conduct of conciliation
proceedings. it requires the parties to comply with the request by the conciliator (1) to submit relevant materials (2)
provide evidence, and (3) attend meetings as and when arranged by the conciliator. it hardly needs to be emphasised
that co-operation of parties constitutes the very core of conciliation as a dispute-resolution mechanism. therefore,
without the active co-operation of the parties, the conciliator cannot function effectively and his conciliatory effects
would not succeed.
suggestions by parties for settlement of dispute [section 72]
each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions
for the settlement of the dispute.
section 72 allows the parties that they may at their initiative or at the invitation of the conciliator, submit their
suggestions to the conciliator for speedy settlement of dispute. the suggestions made by the party or parties should,
however, be reasonable and acceptable to all of them including the conciliator. it is for the conciliator to decide and
determine the fairness of the suggestions so advanced by the party or parties.
settlement agreement [section 73]
(1) when it appears to the conciliator that there exists elements of a settlement which may be acceptable to the
parties, he shall formulate the terms of a possible settlement and submit them to the parties for their
observations. after receiving the observations of the parties, the conciliator may reformulate the terms of a possible
settlement in the light of such observations.
(2) if the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement
agreement. if requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the
settlement agreement.

113
(3) when the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming
under them respectively.
(4) the conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.
section 73(1) provides that when the conciliator is able to formulate and is of the opinion that acceptable elements of
settlement to the parties exist, then the conciliator will prepare the terms of possible settlement which shall be
subjected to observation by the parties. the conciliator on receipt of formula which has undergone observation process by
the parties, may reformulate the terms of a possible settlement keeping in view such observations.
section 73(2) provides that in situation, the parties could come to a stage to accept the settlement proposed' by the
conciliator, the parties may draw up and sign a written settlement agreement. it is at the discretion of the parties to
make such agreement in writing or not, however, the parties may request the conciliator to draw up or assist in
drawing up, the settlement agreement.
in this context, it is advisable to draw up such settlement agreement in writing, so that its contents are clear and
relevant as to settlement terms, although there is no requirement as such that the settlement agreement must
state reasons on which it has been settled under sub-section (2).
section 73(3) provides that the moment the parties sign the settlement agreement, it attains finality and would be
binding on the parties and persons claiming under them respectively.
section 73(4) provides that the conciliator is required to authenticate the settlement and would furnish a copy to each
of the parties. if, there is more than one conciliator, all conciliators are required to authenticate the settlement
agreement.
status and effect of settlement agreement [section 14]
section 74 provides that the settlement agreement shall have the same status and effect as if it is an arbitral award on
agreed terms on the substance of the dispute rendered by the arbitral tribunal under section 30.
the procedure of arriving at the settlement agreement begins with the conciliator who shall formulate a possible
settlement and submit it to the parties for their observations. on the receipt of the observations by the parties, the
conciliator may reformulate the possible settlement with necessary amendments as suggested by the parties
through their observations. on reaching the settlement, the parties may draw up the settlement agreement
and sign it themselves or may ask for the assistance of the conciliator, or entrust the conciliator to draw up it himself,
and then sign it. after the settlement is signed by both the parties and dul y authenticated by the conciliator it
becomes final and binding on the parties and persons claiming under them.
in haresh dayaram thakur verses state of maharashtra, court held that a successful conciliation proceeding comes to
an end when the settlement agreement signed by the parties comes into existence. it is such an agreement which
has the status and effect of legal sanctity of an arbitral award under section 74.
confidentiality [section 75]
section 75 relates to keeping close to their chest all matters and aspects of conciliation proceedings by the parties
concerned and also the conciliator. in other words, it prohibits strangers or outsiders to get to know any of the
matters or other details under conciliation proceedings. it not only pertains to the conciliation proceedings but also

114
prevents such disclosure of settlement agreement and its contents, except where such disclosure is necessary for
the candid purposes of implementation and enforcement of such an agreement. it is obvious that this section is
meant to pose, repose, and impose confidence between the parties and also the conciliator and in their
commercial interests. this section is designed taking into consideration proceedings, as to how they are supposed
to be conducted, maintained and carried on with all the securitization aspects.
termination of conciliation proceedings [section 76]
section 76 lays down four situations when conciliation proceeding can be terminated other than the other
grounds may be death of a party and may also be death of conciliator but it is not necessary to terminate the
conciliation proceeding by appointing a new conciliator provided parties once agreed to so.
the conciliation proceeding shall be terminated:
(1) by signing of settlement agreement by parties on date of the agreement
(2) by a written declaration of conciliator after consultation with parties to the effect that further efforts at
conciliation are no longer justified on date of declaration; or
(3) by a written declaration of parties addressed to conciliator to the effect that conciliation proceeding are
terminated on date of the declaration; or
(4) by a written declaration of a party and other party to conciliator if appointed to the effect that conciliation
proceedings are terminated on date of declaration.
resort to arbitral judicial proceedings {section 77]
section 77 prevents parties not to initiate any other arbitral or judicial proceedings in respect of a dispute that is a subject
matter of the conciliation proceedings during the ongoing proceedings.
section 77 further provides that a party may initiate arbitral proceedings elsewhere if the parties realize that resorting to
such proceedings has become inevitable for safeguarding his rights.
cost {section 78]
section 78 contains provision relating to 'costs' in context of conciliation proceedings. the expression 'costs' for
the purpose of this section means fee and expenses of the conciliator and witnesses which are summoned with the
consent of the parties and the expenses incurred in seeking expert advice which the conciliator deems necessary with
the consent of the parties. the amount of costs shall be borne equally by the parties unless the settlement
agreement provides for a different apportionment with the consent of the parties. it must, however, be stated that
neither the unc1tral law nor the rules permit appointment of an expert for seeking expert advice by the conciliator
as provided in sub-section (2) (b) of this section.
deposits {section 79]
section 79 deals with deposits. according to sub-section (1) provides that conciliator may direct each party to deposit an
equal amount as, an advance for the costs of the conciliation proceedings as mentioned in section 78 (2) of the
act. section 79(2) further authorizes him direct supplementary deposits in equal amount from each party, during
the conciliation proceedings.

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section 79(3) provides that in case the deposits requisitioned by the conciliator are not paid in full by the parties
within a period of 30 days from the date of demand, the conciliator may either suspend the conciliation proceedings or
he may even terminate the proceedings by making a written, declaration to that effect.
section 79(4) further provides that unexhausted amount, if any, shall be returned by the conciliator to the parties
in equal amount after the termination of the conciliation proceedings.
role of conciliator in other proceeding [section 80]
section 80 provides that in order to make parties fearless of disclosure of confidential information, conciliator is
debarred from acting either as an arbitrator or representation or counsel of any arbitral judicial proceeding in respect
of the same dispute nor can he become witness for any party in such proceedings. purpose is to stop conciliator
from using his gained knowledge or information against any party.
admissibility of evidence in other proceedings [section 81]
section 81 enacts four types of evidences which cannot be relied on or introduced as evidence in arbitral/judicial
proceedings, where subject matter is same as of conciliation proceedings.
(a) views expressed or suggestions made by the other party in respect of a possible settlement of the dispute;
(b) admissions made by the other party in the course of the conciliation proceedings;
(c) proposals made by the conciliator;
(d) the fact that the other party had indicated his willingness to accept a proposal for settlement made by the
conciliator.
supreme court then referred the various provisions of conciliation in the following way:
1. section 61 which deals with application and scope of the provisions, in part 3 provides, inter alia, that save as otherwise
provided by any law for the time being in force and unless the parties have otherwise agreed, this part shall apply to
conciliation of disputes arising out of legal relationship, whether contractual or not and to all proceedings relating
thereto.
2. in section 64 provision is made that the appointment of conciliators shall be by agreement of parties or if the parties
agree they may request a suitable institution or a person to appoint a conciliator on their behalf. in section 65 it is
provided, inter alia, that on being appointed the conciliator shall request each party to submit to him a brief written
statement describing the general nature of the dispute and the points at issue. each party shall send a copy of such
statement to the other party.
3. section 67 which makes provision regarding the role of conciliator provides in sub-section (1) that the conciliator shall
assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their
dispute. in sub-section (2) thereof, it is provided that the conciliator shall be guided by principles of objectivity,
fairness and justice, giving consideration to, among other things, the rights and obligations of the parties, the
usages of the trade concerned and the circumstances surrounding the dispute, including any previous business
practices between the parties. in sub-section (4) of section 67 it is laid down that the conciliator may, at any stage of
the conciliation proceedings, make proposals for a settlement of the dispute. such proposals need not be in writing
and need not be accompanied by a statement of the reasons there for. section 69 contains the provision regarding
communication between the conciliator and the parties whether orally or in writing and about the place of

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meetings etc. in section 70 provision is made regarding disclosure of information. therein it is provided, inter alia, that
when the conciliator receives factual information concerning the dispute from a party, he shall disclose the substance of
that information to the other party in order that the other party may have the opportunity to present any
explanation which he considers appropriate. in the proviso to the section it is stated that when a party gives any
information to the conciliator subject to a specific condition that it be kept confidential, the conciliator shall not disclose
that information to the other party. under section 72 it is laid down that each party may, on his own initiative or at
the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.
4. section 73 in which provision is made regarding settlement agreement reads as follows:
73. settlement agreement: (1) when it appears to the conciliator that there exist elements of a settlement which
may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the
parties for their observations. after receiving the observations of the parties, the conciliator may reformulate
the terms of a possible settlement in the light of such observations.
(2) if the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement
agreement. if requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement
agreement.
(3) when the parties sign the settlement agreement, it shall be final and binding on the parties and persons
claiming under them respectively.
(4) the conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.
5. section 74 provides that the settlement agreement shall have the same status and effect as if it is an arbitral award
on agreed terms on the substance of the dispute rendered by an arbitral tribunal under section 30.
6. section 75 which incorporates in the statute the confidentiality clause provides that notwithstanding anything contained
in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to
the conciliation proceedings. confidentiality shall extend also to the settlement agreement, except where its
disclosure is necessary for purposes of implementation and enforcement.
7. section 76 wherein provision is made regarding termination of conciliation proceedings is extracted hereunder:
76. termination of conciliation proceedings: the conciliation proceedings shall be terminated
(a) by the signing of the settlement agreement by the parties, on the date of the agreement; or
(b) by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at
conciliation are no longer justified, on the date of the declaration; or
(c) by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are
terminated, on the date of the declaration; or
(d) by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the
conciliation proceedings are terminated, on the date of the declaration.
8. section 77 contains the provision that the parties shall not initiate, during the conciliation proceedings, any arbitral or
judicial proceedings in respect of a dispute that is the subject-matter of the conciliation 1 proceedings except that a
party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his
rights.

117
from the statutory provisions noted above the position is manifest that a conciliator is a person who is to assist the
parties to settle the dispute between them amicably. for this purpose the conciliator is vested with wide powers to
decide the procedure to be followed by him untrammelled by the procedural law like the code of civil procedure or
the indian evidence act, 1872. when the parties are able to resolve the dispute between them by mutual
agreement and it appears to the conciliator that their exists an element of settlement which may be acceptable to the
parties he is to proceed in accordance with the procedure laid down in section 73, formulate the terms of a
settlement and make it over to the parties for their observations; and the ultimate step to be taken by a conciliator is
to draw up a settlement in the light of the observations made by the parties to the terms formulated by him. the
settlement takes shape only when the parties draw up the settlement agreement or request the conciliator to
prepare the same and affix their signatures to it. under sub-section (3) of section 73 the settlement agreement
signed by the parties is final and binding on the parties and persons claiming under them. it follows therefore that a
successful conciliation proceeding comes to an end only when the settlement agreement signed by the parties comes
into existence. it is such an agreement which has the status and effect of sanctity of an arbitral award under
section 74.
court said that in this case, as appears from the materials on record, no such procedure as prescribed under part-ill of
the act has been followed by the conciliator. the conciliator appears to have held some meetings with the parties in
which there was discussion and thereafter drew up the so-called settlement agreement by himself in secrecy and sent
the same to the court in a sealed cover. naturally the so-called settlement agreement drawn up by the conciliator does
not bear the signatures of the parties. as the impugned order shows, the said settlement has been given a status
higher than an arbitral award inasmuch as the court has refused to even entertain any objection against the said
settlement agreement reiterating the position that the settlement arrived at by the conciliator will be binding on the
parties. the conciliator who is a former judge of the high court and the learned judge who passed the impugned
order failed to take note of the provisions of section 73 and 74 of the act and the clear distinction between an
arbitration proceeding and a conciliation proceeding. the learned judge in passing the impugned order failed to
notice the apparent illegalities committed by the conciliator in drawing up the so-called settlement agreement,
keeping it secret from the parties and sending it to the court without obtaining their signatures on the same. the
position is well settled that if the statute prescribes a procedure for doing a thing, it has to be done according to that
procedure. thus the order passed by the high court confirming the settlement agreement received from the
conciliator is wholly untenable.

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1

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

These notes are prepared by Radhika Seth,

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

salient features of the act

1. application of the act

2. proceedings under special act

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

3. limitation only applies to institution of proceedings, not to their continuance

4. limitation and writs under the constitution

constitutional validity of the limitation act, 1963

5. act not to apply to all applications

(3) an application for revocation of a probate. (ashwini kumar verses. sukhaharan).

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

(5) an application to a court to exercise the functions of a ministerial character example. an

6. prescribed period cannot be extended or curtailed by consent

7. religious endowments and government

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

9. limitation bars suit, not defence

10. res judicata and limitation

difference between limitation and prescription

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

difference between limitation and estoppel

difference between limitation and laches

difference between laches and acquiescence

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

limitation of suits, appeals and application

bar of limitation (section 3)

scope of section 3(1)

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

suit when instituted [section 3(2) (a)]

according to section 3(2) (a) a suit is instituted:

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

1. suit in ordinary case (section 3(2) (a) (1)]

2. suit by indigent person [section 3(2) (a) (2)|

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

3. claim against a companyclaim by liquidator [section 3(2) (a) (3)|

set-off and counter claim [section 3(2) (b)]

section 3(2) (c)

res judicata and section 3

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

exception to bar of limitation le. exception to section 3

(1) expiry of prescribed period when court is closed (section 4)

(1) that there should be a prescribed period, and

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

application to special or local laws

applicability to private agreements

effect of section 4 and section 14

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

effect of section 4 and section 27

(2) extension of prescribed period in certain cases (section 5)

scope of the section

conditions/ principles for the condition of delay

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

(1) refusal to condone may result in throwing out a meritorious matter,

(2) substantial justice is to be preferred to technical laws.

(5) there should not be presumption that delay is always deliberate.

meaning of sufficient cause

what constitutes sufficient cause?

PREPARED BY RADHIKA SETH, PLEASE VOTE , BALLOT No. -2

(1) other grounds which constitute sufficient cause