The Hon'ble Supreme Court has in the matter of S. Shivraj Reddy (Deceased) thru hisLegal Heirs vs. Raghuraj Reddyset aside a judgment of a Division Bench of the Andhra Pradesh High Court and held that a suit which is time barred must be dismissed by the Court even if the plea of limitation is not set up as a defence. The Hon'ble Court placed reliance on the case of V.M. Salgaocar and Bros. v. Board of Trustees of Port ofMormugao and Another, (2005) 4 SCC 613 and observed that as per the mandate of Section 3 of the Limitation Act, 1963 ("Limitation Act") the court is duty bound to dismiss any suit instituted after the prescribed period of limitation regardless of the fact that limitation has not been set up as a defence.
Background
The Respondent No 1 along with the Defendant Nos 2, 3 and 4 and deceased M. Balraj Reddy had constituted a partnership firm i.e., Defendant No 1, M/s Shivraj Reddy & Brothers ("firm"). Thereafter the Respondent No 1 filed a suit in the year 1997 being
O.S. No 67 of 1997 before the Learned II Additional Chief Judge, City Civil Court, Hyderabad ("Trial Court") seeking dissolution of the firm and rendition of accounts. The Trial Court allowed the original suit and passed a decree in favour of Respondent No 1 and directed that the firm be dissolved.
Being aggrieved by the same, the firm and S. Shivraj Reddy filed an appeal before the Hon'ble Andhra Pradesh High Court at Hyderabad, wherein the Learned Single judge allowed the appeal and held that the suit was barred by limitation since one of the partners in the firm i.e., Shri M.Balraj Reddy expired in 1984 and therefore the firm stood dissolved immediately. Being aggrieved by the same, the Respondent No 1 impugned the decision of the Learned Single Judge before the Learned Division Bench of the High Court, who allowed the appeal and set aside the impugned order.
CONTENTION OF PARTIES
The Appellant therefore, impugned the said order before the Hon'ble Supreme Court and contended that as per Section 42(c) of the Partnership Act, 1932 ("Partnership Act"), the firm stood automatically dissolved in the year 1984 following the death of one of the partners. Furthermore, it is the duty of the Court to dismiss any suit instituted after the prescribed period of limitation even though limitation has not been set up as a ground of defence.
The Respondents contended that despite the death of one of the partners, the firm continued to exist and its business activities continued even after the death of the partner. Furthermore, the plea of limitation was never raised before the trial court and thus the same could not be taken at the appellate stage.
ISSUES CONSIDERED
Whether a suit barred by limitation should be dismissed even if the plea of limitation has not been set up as a defence.
HELD
The Hon'ble Supreme Court placed reliance on the case of V.M. Salgaocar and Bros. v.Board of Trustees of Port of Mormugao and Another, (2005) 4 SCC 613, wherein it was held that as per the mandate of Section 3 of the Limitation Act, it is the duty of the Court to dismiss any suit instituted after the prescribed period of limitation irrespective of the fact that the limitation has not been set up as a defence. If a suit is ex facie barred by the law of limitation, a court has no choice but to dismiss the same even if the defendant intentionally has not raised the plea of limitation.
The Court further relied upon the case of Narne Rama Murthy v. RavulaSomasundaram and Ors (2005) 6 SCC 614 wherein it was held that when limitation is a pure question of law and from the pleadings itself it becomes apparent that a suit is barred by limitation, then it is the duty of the Court to decide limitation at the outset even in the absence of a plea. However, when limitation is a mixed question of facts and law, then the facts necessary to prove limitation must be pleaded, an issue raised and then proved.
The Hon'ble Court thereafter held that in the present case the firm dissolved in the year 1984 on the death of Shri M Balraj Reddy and thus the suit could have been instituted within a period of 3 years thereafter. The suit however, came to be filed in the year 1996 and is clearly time-barred and therefore the Learned Single Judge of the Andhra Pradesh High Court was justified in allowing the appeal and rejecting the suit as being barred by limitation.
MHCO Comment:
The Judgment strengthens the jurisprudence vis-à-vis the role of the Courts to identify and dismiss suits which are time-barred. It further highlights the importance of
approaching the courts in a time bound manner and the consequences faced by parties who sleep over their rights and approach the Courts with a significant delay.
This article was released on 26 July 2024
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.