"Limitation Act does not apply when statute extinguishes the right itself": Supreme Court

"Limitation Act does not apply when statute extinguishes the right itself": Supreme Court

The Supreme Court in a case dealing with Rule 30 of the Second Schedule of the Carriage by Air Act, 1972, observed that the provisions of Limitation Act will not apply when a Statute extinguishes the right itself. The distinction between barring a remedy as exception is well established, the bench observed.

The Rule 30 provides that the right to damages will be extinguished if an action is not brought within a period of two years from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.

The Trial Court held that the suit is not barred by limitation as the period prescribed in Rule 30 of the Second Schedule to the Carriage by Air Act, 1972 could be calculated from 28.10.2010, that is, the date when the Respondent had acknowledged a proposed settlement of the claim at 50% of the demand. For this purpose, Section 18 of the Limitation Act was relied on. Allowing the appeal, the Bombay High Court overruled the decision of the trial court and held that the suit is barred by limitation and dismissed the same.

"The procedural law governing the institution and adjudication of civil suits in India includes the Civil Procedure Code,1908 as well as the Limitation Act, 1963. The Limitation Act is a branch of adjectival law, and applies to all proceedings which it governs from the date of its enactment. There is however a well-established principle, which states that when the right itself is extinguished, the provisions relating to limitation have no application."

Section 11 of the Limitation Act deals with suits filed in India with respect to contracts entered in foreign countries. Following the Principle of lex fori, the Section provides that rules of limitation provided in a foreign jurisdiction are not applicable. However, the exception to this Rule is provided in Section 11 (2)(a), when the Contract i.e., the right itself expires. Similarly, Section 27 also recognizes the principle of extinguishment of Right to Property being an exception to the applicability of the Limitation Act, 1963

The Court observed that, "Once the right to damages is extinguished upon the expiry of two years reckoned from the three alternative dates mentioned in the Rule itself, nothing would remain for enforcement. Section 3 of the Limitation Act only bars the remedy, but when the right itself is extinguished, provisions of the Limitation Act have no application. For this reason, in The East and West Steamship Co., this Court held that once the right of liability is extinguished under the clause, there is no scope of acknowledging the liability thereafter."

The bench then noticed Sub-Rule (2) of Rule 30: - "(2) The method of calculating the period of limitation shall be determined by the law of the Court seized of the case." In its plain and simple language, Sub-Rule (2) seems to adopt the applicability of the Limitation Act, 1963 as Courts in India exercise jurisdiction, the bench observed. Thus it considered another issue raised whether whether the provisions of the Carriage by Air Act, 1972 expressly exclude the Limitation Act, 1963 as provided in Section 29 and answered it in the affirmative."