Bonafide Litigation at Wrong Forum Excludes Time from Limitation Calculation under Limitation Act - Supreme Court

Supreme Court rules that time spent in genuine litigation at an incorrect forum is exempt from limitation calculation under the Limitation Act.

The Supreme Court, led by Justices Sanjay Karol and Aravind Kumar, ruled that time spent in bona fide litigation at an incorrect forum should be excluded when calculating the period of limitation under Section 14(2) of the Limitation Act.

Reversing the High Court's decision, the bench highlighted Section 14(2)'s provision, which exempts the limitation period when proceedings are pursued diligently and in good faith in a court unable to entertain them due to jurisdictional defects.

"The provision of Section 14(2) must be understood in conjunction with Sections 14(1) and 14(3) of the Limitation Act," noted the judgment authored by Justice Sanjay Karol, aligning with the precedent set in Sesh Nath Singh v. Baidyabati Sheoraphuli Coop. Bank Ltd.

The case centered on the rejection of an execution application seeking to enforce a decree under Section 182 of the J&K Limitation Act. The trial court rejected the application, citing limitation, as the appellant had spent time contesting litigation at the Tehsildar Court, which lacked jurisdiction.

Despite the High Court's affirmation of the trial court's decision, the appellant appealed to the Supreme Court.

Arguing before the apex court, the appellant contended that Section 14(2) of the Limitation Act, akin to Section 182 of the J&K Limitation Act, warranted exclusion of the time spent in pursuing the remedy at the Tehsildar Court.

The Supreme Court concurred, asserting that the appellant was entitled to the benefits of Section 14(2) of the Limitation Act, applicable to J&K. Thus, the time spent in good faith litigation at the Tehsildar Court would be excluded when computing the limitation period for filing the execution application.

The court referenced Consolidated Engg. Enterprises v. Principle Secy, Irrigation Department, laying down conditions for invoking Section 14, all of which were satisfied in the appellant's case.

Ultimately, the court concluded that the time spent by the appellant in contesting the application in good faith at the wrong forum should be excluded when computing limitation before the competent jurisdiction.

"We do not find the reasoning of the High Court sustainable," remarked the court, emphasizing the appellant's bona fide and diligent pursuit of the matter before what it believed was the appropriate forum.