In Shakti Bhog Food Industries Ltd. v. The Central Bank of India and Anr., the Hon’ble Supreme Court has clarified as to when the three-year limitation period contemplated under Article 113[2] of the Limitation Act, 1963 (Act), commences. It has also reiterated the importance of considering the averments made in a plaint as a whole while determining an application for rejection of plaints under Order VII Rule 11[3] of the Code of Civil Procedure, 1908 (CPC).
In order to clearly draw the distinction between “when the right to sue accrues” and “when the right to sue first accrues”, the Hon’ble Supreme Court discussed some of its earlier decisions. These were as follows:
- A three-judge bench of the Hon’ble Supreme Court in Union of India & Ors. v. West Coast Paper Mills Ltd. & Anr, pointing out the distinction between Article 58 and Article 113 of the Act, held that in situations where the right to sue may accrue to a suitor in a given case at different points of time, in terms of Article 58, the period of limitation would be reckoned from the date on which the cause of action arose first, and in case of Article 113, the period of limitation would be differently computed depending upon the last day when the cause of action therefore arose.
- In Khatri Hotels Private Limited & Anr. v. Union of India & Anr., considering the expression used in Article 58 of the Act, in contradistinction to Article 120 of the 1908 Act, the Court pointed out that the legislature while enacting Article 58 of the Act had consciously made a departure from the language of Article 120 of the 1908 Act. The word “first” has been used between the words “sue” and “accrued”. As a result, if a suit is based on multiple causes of action, the period of limitation will begin to run from the date when the right to sue first accrues under Article 58.
- A three-judge bench in Rukhmabai v. Lala Laxminarayan held that the right to sue under Article 120 of the 1908 Act accrues when the defendant has clearly or unequivocally threatened to infringe the right asserted by the plaintiff in the suit. The Court clarified that every threat by a party to such a right, however ineffective and innocuous it may be, cannot be considered to be a clear and unequivocal threat so as to compel him to file a suit.