# M.P. Daga (since deceased) & Ors v. Pradeshiya Industrial Investment Corporation & Ors. 828 INDIAN LAW REPORTS ALLAHABAD SERIES

- **Citation:** (2016) 7 ILRA 827
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2016-07-21
- **Bench:** Sudhir Agarwal, Shamsher Bahadur Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-p-daga-since-deceased-ors-v-pradeshiya-industrial-investment-corporation-ors-44215
- **Pages:** 20

## Headnote

Limitation Act, 1963 - Ss. 3, 5 - Applicability - Recovery proceedings under U.P. Public Money (Recovery
of Dues) Act, 1972 - Held, Limitation Act applies to Courts and not to executive authorities - Recovery by
Collector as arrears of land revenue is executive action - Hence, bar of limitation under S. 3 not attracted at
stage
of
recovery
certificate
or
its
execution
Limitation - Nature - Procedural law - Effect - Limitation bars remedy and not the right (except where
expressly extinguished) - Cannot be extended to proceedings outside Courts unless statute provides
Financial Corporation - Recovery of dues - Special statute - U.P. Act, 1972 - Provides exclusive and
speedy remedy - Civil suit barred - Recovery through certificate valid - Collector acts as executive
authority
Limitation - Applicability of Articles - Loan secured by guarantee creating charge over immovable
property - Applicable provision - Art. 62 (12 years), not Arts. 19 or 21 (3 yearsLimitation - Computation -
Recovery proceedings initiated within 12 years - Not time-barred

Result - Writ petition dismissed with costs.

Case cited:

State of Kerala vs. V.R. Kalliyanikutty(1999) 3 SCC 657
Hukumdev Narain Yadav vs. Lalit Narain Mishra(1974) 2 SCC 133
Bharat Barrel & Drum Mfg. Co. vs. ESI Corporation(1971) 2 SCC 860
Kerala State Electricity Board vs. T.P. Kunhaliumma(1976) 4 SCC 634
Bombay Dyeing & Manufacturing Co. Ltd. vs. State of BombayAIR 1958 SC 328
Tilokchand Motichand vs. H.B. Munshi(1969) 1 SCC 110
Syndicate Bank vs. Prabha D. Naik(2001) 4 SCC 713

## Text

_Characters 0–39,713 of 60,051. This is a partial read: ask again with offset=39713 for what follows._

7 All. M.P. Daga (Since deceased) & Ors. Vs Pradeshiya Industrial Investment Corporation
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58. From the aforesaid, it is fully established that the proceedings for acquisition
were taken on an application of respondent no. 2 on 19.1.2004 as acquisition for a company.
When the notification was issued under section 4, the acquisition of the land was for the company
and the acquisition being not acquisition initiated by the State under any of its own projects or
scheme, could not be treated as acquisition for public purpose.

59. The above discussion answers the issue No. 2 that the acquisition was for a
company." (emphasis added)

62. For the reasons stated in Pooran and others vs. State of U.P. and others (supra), we
find that here also acquisition was for a private company but mandatory procedure under Part VII
read with Rules, 1963 has not been followed, therefore, acquisition notifications are patently
illegal.

63. The discussion made above leads to the conclusion that petitioner society in Writ
Petition no. 17029 of 2008 has to fail in its challenge to acquisition notifications in respect of land
purchased by it after notification under Section 4(1) was issued. Rest of the petitions deserves to
succeed.

64. In the result, Writ Petition no.17029 of 2008 is partly allowed. Impugned acquisition
notifications in respect to Plots no. 1040 area 0.1265 acre, 1044 area .0550 acre and 1049 area
0.4430 acre, relating to petitioner society, are hereby quashed.

65. Remaining connected 9 writ petitions are allowed and impugned acquisition
notifications in respect of disputed acquired land of these petitioners are hereby quashed.

66. Petitioners shall also be entitled to cost which we quantify to Rs.5,000/- against
respondents 1 to 3, in each set of petitions.
------------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 21.07.2016

BEFORE

THE HON'BLE SUDHIR AGARWAL, J.
THE HON'BLE SHAMSHER BAHADUR SINGH, J.

Writ C No.- 26169 Of 2001

M.P. Daga (since deceased) & Ors. ...Petitioners
Versus
Pradeshiya Industrial Investment Corporation & Ors. ...Respondents
828 INDIAN LAW REPORTS ALLAHABAD SERIES

Counsel for the Petitioners:
V.K. Singh, Amit Daga, G.K. Singh, H.N. Singh, Sumit Daga

Counsel for the Respondents:
C.S.C., A. Khanna, Ashish Mishra, Vivek Saran

Limitation Act, 1963 - Ss. 3, 5 - Applicability - Recovery proceedings under U.P. Public Money (Recovery
of Dues) Act, 1972 - Held, Limitation Act applies to Courts and not to executive authorities - Recovery by
Collector as arrears of land revenue is executive action - Hence, bar of limitation under S. 3 not attracted at
stage
of
recovery
certificate
or
its
execution
Limitation - Nature - Procedural law - Effect - Limitation bars remedy and not the right (except where
expressly extinguished) - Cannot be extended to proceedings outside Courts unless statute provides
Financial Corporation - Recovery of dues - Special statute - U.P. Act, 1972 - Provides exclusive and
speedy remedy - Civil suit barred - Recovery through certificate valid - Collector acts as executive
authority
Limitation - Applicability of Articles - Loan secured by guarantee creating charge over immovable
property - Applicable provision - Art. 62 (12 years), not Arts. 19 or 21 (3 yearsLimitation - Computation -
Recovery proceedings initiated within 12 years - Not time-barred

Result - Writ petition dismissed with costs.

Case cited:

State of Kerala vs. V.R. Kalliyanikutty(1999) 3 SCC 657
Hukumdev Narain Yadav vs. Lalit Narain Mishra(1974) 2 SCC 133
Bharat Barrel & Drum Mfg. Co. vs. ESI Corporation(1971) 2 SCC 860
Kerala State Electricity Board vs. T.P. Kunhaliumma(1976) 4 SCC 634
Bombay Dyeing & Manufacturing Co. Ltd. vs. State of BombayAIR 1958 SC 328
Tilokchand Motichand vs. H.B. Munshi(1969) 1 SCC 110
Syndicate Bank vs. Prabha D. Naik(2001) 4 SCC 713

(Delivered by Hon'ble Sudhir Agarwal, J.)

1. In this writ petition, an interesting question of application of limitation to recovery
proceedings has been raised, which is of wider public implication.

2. Brief facts, giving rise to present case, are that M/s Rainbow Steel Limited (hereinafter
referred to as "Company") is a Company incorporated and registered under provisions of
Companies Act, 1956 (hereinafter after referred to as "Act, 1956") and petitioners are Directors of
aforesaid Company. On 06.08.1990, Company sought financial assistance from Pradeshiya
Industrial and Investment Corporation of U.P. Limited (respondent 1) (hereinafter referred to as
"PICUP") under Equipment Refinance Scheme initiated by Industrial Development Bank of India
(hereinafter referred to as "IDBI") for installation of 15 tons continuous casting machine for the
plant used in manufacturing of Ingots/Billots. PICUP sanctioned a loan of Rs. 80.60 lacs on
22.08.1990 under aforesaid Scheme. The bond of guarantee was executed on 29.11.1990 between
PICUP and petitioners wherein guarantors agreed for repayment of loan in case of default by
Borrower, i.e., Company.
7 All. M.P. Daga (Since deceased) & Ors. Vs Pradeshiya Industrial Investment Corporation
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3. The agreement stipulates that on demand, guarantors shall pay to PICUP, whole of such
principal sum and/or interest and/ or other moneys which may be due to PICUP and will indemnify
all loss of principal sum/interest or other moneys secured by mortgage and all costs, charges and
expenses whatsoever which PICUP may incur by reason of any default on the part of Company.

4. First instalment was released to Company on 31.01.1991. Therefore, repayment schedule
as per Deed of Hypothecation commenced on 28.02.1992. Last instalment was payable on
31.08.1995. Company committed default in repayment of loan amount and interest, whereupon
PICUP issued notices dated 23.03.1992, 25.05.1992 and 14.10.1992 under Section 29 of State
Financial Corporation Act, 1951 (hereinafter referred to as "Act, 1951"). Thereafter, in Company
Petition No. 8 of 1994 filed by another person, this Court passed order on 09.03.1995 for winding
up. Sale by Official Liquidator, except lot no. 1, was confirmed by Court's order dated 22.11.1995.

5. A demand notice for the first time was issued to petitioner-1 on 21.03.2001 demanding a
sum of Rs. 4,56,19,798.29 in terms of Bond of Guarantee, which was replied by them raising an
objection that demand is barred by limitation. PICUP, however, issued recovery certificates
whereupon impugned recovery citations dated 02.07.2001 have been issued by Tehsildar and that
are under challenge.

6. A counter affidavit has been filed by PICUP giving details of outstanding dues in para 9
as under:

(Rupees in Lacks)

i)
Loan Sanctioned
80.60

ii)
Loan Disbursed
77.30

iii)
Loan Overdue and not paid
77.30

iv)
Interest at the rate of 15 per cent per annum on
overdue principal loan (inclusive of penal interest)
Period 01.11.2001 to 31.01.2002
3,40,967.12

v)
Overdue interest (as on 01.11.2001)
4,32,45,621.00

vi)
Interest on overdue interest
19,07,546.57

Interest on Overdue Principal (iv)+ Overdue
Interest (v) + Interest on overdue interest (vi) 4,54,94,134.80

Total Overdue = Rs. 77,30,000.00+ Rs. 4,54,94,134.80

= Rs. 5,32,24,134.80 only
830 INDIAN LAW REPORTS ALLAHABAD SERIES

7. It is, however, stated that Company approached Board of Industrial Finance and
Reconstruction (hereinafter referred to as "BIFR") by filing an application for rehabilitation under
Section 15 of Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as
"Act, 1985"). PICUP also received notice dated 27.05.1994 to appear before BIFR and participate
in the proceedings. Reference was ultimately rejected by BIFR on 28.02.1995 as untenable
observing that Company is not in a position of rehabilitation. BIFR also decided to forward the
matter to High Court for winding up of Company. Thereafter, Company preferred an appeal before
Appellate Authority, i.e., Appellate Authority for Industrial and Financial Reconstruction
(hereinafter referred to as "AAIFR"). The appeal was dismissed on 10.10.1996. It is also said that
recovery proceedings are not time barred, Statute of limitation has no application to the
proceedings under U.P. Public Money (Recovery of Dues) Act, 1972 (hereinafter referred to as
"UP Act, 1972") and even otherwise proceedings earlier could not be initiated against Company
since matter was pending before BIFR and AAIFR under Act, 1985 and also before this Court in
Winding Up Petition.

8. Sri H.N. Singh, learned Senior Advocate, has advanced only single submission that
under Article 19 of Schedule to Limitation Act, 1963 (hereinafter referred to as "Act, 1963"),
period of limitation is three years from the date amount is due. In the present case limitation would
commence on 31.08.1995, which was the date of payment of last instalment by Company. Since
even demand notice has been issued for the first time only on 21.03.2001, i.e., almost five and half
years from the last date of payment of last instalment, recovery proceedings are barred by
limitation and in this regard he placed reliance on State of Kerala and others Vs. V.R.
Kalliyanikutty and another 1999 (3) SCC 657, Maharashtra State Financial Corporation Vs.
Ashok Kumar Agarwal and others JT 2006 (4) SC 197 and a Division Bench judgment of this
Court in Narendra Kumar and another Vs. Collector, Bulandshahar and others 2004 (2)
UPLBEC 2037.

9. Learned counsel appearing for PICUP, however, contended that recovery proceedings
under UP Act, 1972 are neither quasi judicial nor judicial proceedings. He submitted that Section 3
of Act, 1963 bars a Court from entertaining a suit or other proceedings, if it is barred by limitation.
In the present case, when Collector proceeds to recover dues as arrears of land revenue on the basis
of recovery certificate received by it from a Financial or Banking Institution, he acts as a Revenue
Authority discharging executive function of realization of dues, and, therefore, is not supposed to
comply bar under Section 3 of Act, 1963, hence question of application of limitation under Act,
1963 does not arise.

10. We have heard Sri H.N. Singh, learned Senior Advocate, assisted by Sri Sumit Daga,
Advocate, for petitioners and Sri Ashish Mishra, Advocate, appearing for respondent-Pradeshiya
Industrial Investment Corporation.

11. The issue of limitation raised by learned Senior Advocate has to be examined in the
light of the following questions: (i) whether Act, 1963 is applicable to recovery proceedings of
certain dues as arrears of land revenue through Revenue Authorities; (ii) whether there is a
7 All. M.P. Daga (Since deceased) & Ors. Vs Pradeshiya Industrial Investment Corporation
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831
limitation prescribed for such recovery proceedings; (iii) whether bar under Section 3 of Act, 1963
shall be applicable to the Financial institutions or authorities like PICUP or Collector in proceeding
to recover dues under UP Act, 1972; (iv) what is the period of limitation, if any, in the present case,
and, (v) when limitation will continue?

12. All these questions we propose to consider together.

13. There are some basic principles with regard to limitation. It is a plea in defence and
where limitation apply and has exhausted, the remedy shall stand barred but right will not stand
barred. For this purpose, it would be appropriate to have historical evolution of principles and
provisions pertaining to limitation. Nature of the statute on limitation has been considered in C.
Beepathuma and others Vs., Valasari Shankaranarayana Kadambolithaya and others, AIR
1965 SC 241 and it says:

"There is no doubt that the Law of Limitation is a procedural law and the
provisions existing on the date of the suit apply to it."

14. Before the British, during the period when Muslims ruled the Country, it appears that
personal laws governed all matters. Muslim law does not recognize limitation; while in Hindu
personal laws, on certain aspects, in different schools, some provisions for limitation were
prescribed which are not common to all Hindus. Hindu Law recognizes both prescription and
limitation while Muslim jurisprudence recognises neither of them. In some of Smritis a period of
20 years was prescribed for acquisition of title by prescription. It appears that since agriculture was
the main occupation of people, Smritis concentrated more on land and on the rights therein.

15. Thus, in ancient scriptures applicable to natives of this land before entry of Muslims
and Christians, principles of prescription of limitation were recognized vis-a-vis property, i.e., land
and rights thereon. In Christianity, attempt to enforce payment of a debt which, time and
misfortune has rendered the debtor unable to discharge, was forbidden.

16. Before 1857 there were Regulations framed by East India Company governing Courts
in three Presidencies of Fort William, Madras and Bombay. Courts set up by British Government as
also three Supreme Courts adopted English law of limitation. The three Presidencies were governed
by Regulations, namely, Bengal; Regulation III of 1793, Regulation II of 1805, Regulation VIII of
1831, Madras; Regulation II of 1802, Bombay; Regulation I of 1800 and Regulation V of 1827.
Later on, they came to be governed by Act 1 of 1845, Act 12 of 1848 and Act 11 of 1859.
Interestingly, Regulations did not apply to certain Non-Regulation Provinces, like Punjab and
Oudh. It is in these circumstances, after Crown took over Indian Territory from East India
Company in 1857, it enacted Act 14 of 1859.

17. Cause of action with respect to the statutes of Limitation as applicable in England in
one of the earliest cases came to be considered in 1849 as to when it would run. Privy Council in
The East India Company Vs. Oditchurn Paul 1849 (Cases in the Privy Council on Appeal
832 INDIAN LAW REPORTS ALLAHABAD SERIES

from the East Indies) 43 held that the Statute runs from the time of breach, for that constitutes the
cause of action. With reference to East India Company, it observed that statute of limitation was
extended to India by Indian Act No.XIV of 1840. The appeal against Supreme Court of Judicature
at Fort William in Bengal (Calcutta) was allowed by Privy Council. It also observed therein if the
matter would have been tried by Hindu law, the limitation of suits, under Hindu law, would have
been twelve years.

18. The first codified statute was Act No. XIV of 1859, enacted to amend and consolidate
laws relating to limitation of suits. This Act received the assent of Governor General on 5th May,
1859. It was repealed by Act No. IX of 1871, Act XV of 1877 and thereafter by Act IX of 1908
(hereinafter referred to as "Act, 1908"). Presently, even Act, 1908 has been repealed and Courts in
India are now governed by Act, 1963.

19. Section I of Act XIV of 1859 says that no suit shall be maintained in any Court of
Judicature within any part of British territories in India in which this Act shall be in force, unless
the same is instituted within the period of limitation, hereinafter made applicable to a suit of that
nature, any Law or Regulation to the contrary notwithstanding. The territory upon which the said
Act was made operative, was provided in Section XXIV as under:

"XXIV. This Act shall take effect throughout the Presidencies of Bengal, Madras,
and Bombay, including the Presidency Towns and the Straits Settlements; but shall not take effect
in any Non-Regulation Province or place until the same shall be extended thereto by public
notification by the Governor-General in Council or by the Local Government to which such
Province or place is subordinate. Whenever this Act shall be extended to any Non-Regulation
Province or place by the Governor-General in Council or by the Local Government to which such
Province or place is subordinate, all suits which, within such Province or place, shall be pending
at the date of such notification, or shall be instituted within the period of two years from the date
thereof, shall be tried and determined as if this Act had not been passed; but all suits to which the
provisions of this Act are applicable that shall be instituted within such Province or place after the
expiration of the said period, shall be governed by this Act and by no other law of limitation, any
Statute, Act, or Regulation now in force notwithstanding."

20. Though Act no. XIV of 1859 was drafted in a language much more precise than the
loose phraseology of earlier Regulations, but Privy Council in The Delhi and London Bank Vs.
Orchard, I.L.R. 3 (1876) Calcutta 47 (PC) observed it as an "inartistically drawn statute".

21. Act IX of 1871 extended the scope and made provisions relating to limitation to suits,
appeals and certain applications to Courts. It received the assent of Governor General on 24th
March, 1871.

22. Some of the feature of Act IX of 1871 are:
7 All. M.P. Daga (Since deceased) & Ors. Vs Pradeshiya Industrial Investment Corporation
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833
(a) Section-3 defines term 'minor means a person who has not completed his age of
eighteen years;

(b) Section-7 deals with legal disability, Section 9 provides continuous running of
time, Sections 23 and 24 deals with continued cause of action or renewal of cause of action and 29
for the first time provides for extinction of rights of a person in respect to any land or hereditary
office and read as under:

"7. If a person entitled to sue be, at the time the right to sue accrued, a minor, or
insane, or an idiot, he may institute the suit within the same period after the disability has ceased,
or (when he is at the time of the accrual affected by two disabilities) after both disabilities have
ceased, as would otherwise have been allowed from the time prescribed therefor in the third
column of the second schedule hereto annexed. When this disability continues upto his death, his
representative in interest may institute the suit within the same period after the death as would
otherwise have been allowed from the time prescribed therefor in the third column of the same
schedule.

Nothing in this section shall be deemed to extend, for more than three years from
the cessation of the disabilities or the death of the person affected thereby, the period within which
the suit must be brought"

" 9. When once time has begun to run, no subsequent disability or inability to sue
stops it : Provided that where letters of administration to the stage of a creditor have been granted
to his debtor, the running of the time prescribed for a suit to recover the debt shall be suspended
while the administration continues."

"23. In the case of a suit for the breach of a contract, where there are successive
breaches, a fresh right to sue arises, and a fresh period of limitation begins to run, upon every
fresh breach; and where the breach is a continuing breach, a fresh right to sue arises, and a fresh
period of limitation begins to run, at every moment of the time during which the breach continues.

Nothing in the former part of this section applies to suits for the breach of
contracts for the payment of money by instalments, where, on default made in payment of one
instalment, the whole becomes due."

"24. In the case of a continuing nuisance a fresh right to sue arises, and a fresh
period of limitation begins to run at every moment of the time during which the nuisance
continues."

"29. At the determination of the period hereby limited to any person for instituting
a suit for possession of any land or hereditary office, his right to such land or office shall be
extinguished."
834 INDIAN LAW REPORTS ALLAHABAD SERIES

23. Drafting of this statute received better observations from Privy Council in Maharana
Futtehsangji Vs. Dessai Kullianraiji, (1873) LR 1 IA 34 and it commented as a "more carefully
drawn statute".

24. The Act gave for the first time some recognition to the doctrine of prescription by the
Legislative Council of India, viz. the doctrine of extinctive prescription as to land and hereditary
offices, and of positive prescription as to easements. It lived short and was replaced by Act 15 of
1877 which extended principle of extinctive prescription to movable property and the principle of
positive or acquisitive prescription to profits a prendre.

25. Law of Prescription prescribes the period at the expiry of which not only the judicial
remedy is barred but a substantive right is acquired or extinguished. A prescription by which a right
is acquired, is called an "acquisitive prescription". A prescription by which a right is extinguished
is called "extinctive prescription". The distinction between the two is not of much practical
importance or substance. The extinction of right of one party is often the mode of acquiring it by
another. The right extinguished is virtually transferred to the person who claims it by prescription.
Prescription implies that the thing prescribed for is the property of another and that it is enjoyed
adversely to that other. In this respect it must be distinguished from acquisition by mere occupation
as in the case of res nullius. The acquisition in such cases does not depend upon occupation for any
particular length of time.

26. Then came Act XV of 1877, which received assent of Governor General on 19th July,
1877 and came into force on 1st October, 1877.

27. Section 2 of Act XV of 1877 makes it very clear that the right to sue if already barred
shall not revive by said enactment. It reads as follows:

"2. All reference to the Indian Limitation Act, 1871, shall be read as if made to this
Act; and nothing herein or in that Act contained shall be deemed to affect any title acquired, or to
revive any right to sue barred, under that Act, or under any enactment, thereby repealed; and
nothing herein contained shall be deemed to affect the Indian Contract Act, section 25."

28. Section 4 makes it obligatory for Court to dismiss a suit if presented after expiry of
period of limitation. Section 7 deals with the legal disability which is virtually pari materia with the
earlier provision of 1871 Act though slightly worded differently and says:

"7. If a person entitled to institute a suit or make an application be, at the time
from which the period of limitation is to be reckoned. A minor, or insane, or an idiot, he may
institute the suit or make the application within the same period, after the disability has ceased, as
would otherwise have been allowed from the time prescribed therefor in the third column of the
second schedule hereto annexed.
7 All. M.P. Daga (Since deceased) & Ors. Vs Pradeshiya Industrial Investment Corporation
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When he is, at the time from which the period of limitation is to be reckoned,
affected by two such disabilities, or when, before his disability has ceased, he is affected by another
disability, he may institute the suit or make the application within the same period after both
disabilities have ceased, as would otherwise have been allowed from the time so prescribed.

When his disability continues up to his death, his legal representative may institute
the suit or make the application within the same period after the death as would otherwise have
been allowed from the time so prescribed.

When such representative is at the date of the death affected by any such disability,
the rules contained in the first two paragraphs of this section shall apply.

Nothing in this section applies to suits to enforce rights of pre-emption, 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 within which any suit must be instituted or application made."

29. There were several amendments in the above statute and ultimately it was repealed and
replaced by Act 9 of 1908.

30. Act, 1908 came into force on 1st January, 1909. It continued with the provision
imposing obligation upon Court to dismiss a suit, if, while it is instituted, is already barred by
limitation vide Section 23.

31. The doctrine of limitation is founded on considerations of public policy and
expediency. It does not give a right where there exist none, but to impose a bar after a certain
period to the remedy for enforcing an existing right. The object is to compel litigants to be diligent
for seeking remedies in Courts of law if there is any infringement of their right and to prevent and
prohibit stale claims. It fixes a life span for remedy for redressal of the legal injury, if suffered, but
not to continue such remedy for an immemorial length of time. Rules of limitation do not destroy
rights of the parties and do not create substantive rights if none existed already. However, there is
one exception i.e. Section 28 of Act, 1908, which provides that at the determination of period
prescribed for instituting suit for possession of any property, his right to such property shall stand
extinguished and the person in possession, after expiry of such period, will stand conferred title.
The law of limitation is enshrined in the maxim "interest reipublicae ut sit finis litium" (it is for the
general welfare that a period be part to litigation).

32. The statute of limitation, thus, is based upon two broad principles. First, there is a
presumption that a right not exercised for a long time is non existent. Where a person has not been
in possession of a particular property for a long time, the presumption is that he is not the owner
thereof. The owners are usually possessors and possessors are usually owners. Possession thus
being normally evidence of ownership. Longer the possession has continued, the greater is its
evidentiary value. The law therefore has deemed it expedient to confer upon such evidence of
possession for a particular time, a conclusive force.
836 INDIAN LAW REPORTS ALLAHABAD SERIES

33. In Motichand Vs. Munshi, AIR 1970 SC 898, Court noticed the maxim vigilantibus
non dormientibus jura subventiunt (the law assists the vigilant not those who sleep over their
rights). Though there is a general principle ubi jus ibi remedium i.e. where there is a legal right
there is also a remedy, but there are certain exceptions to this general rule.

34. Mere expiry of limitation could have extinguished remedy but the principle embodied
in Section 28 extinguishes the right also and thereby makes the said general principle inapplicable.
Once the right of getting possession extinguished it cannot be revived by entering into possession
again [See Salamat Raj Vs. Nur Mohamed Khan (1934) ILR 9 Lucknow 475; Ram Murti Vs.
Puran Singh AIR 1963 Punjab 393; Nanhekhan Vs. Sanpat AIR 1954 Hyd 45 (FB) and
Bailochan Karan Vs. Bansat Kumari Naik 1999 (2) SCC 310].

35. Act, 1908 has been substituted by Act, 1963.

36. Act, 1963 in its "Introduction" part itself says that it is an Act to consolidate and amend
law of limitation of suits and other proceedings and for the purposes connected therewith.

37. Bar of limitation under Section 3 is on a Court and it says that subject to provisions of
Sections 4 to 24, every suit instituted, appeal preferred and application made after the prescribed
period shall be dismissed even if no limitation has been set up as a defence.

38. PICUP, therefore, in common law could not have filed suit after limitation provided for
recovery of outstanding dues from Company or guarantors has expired. However, here we are
concerned with procedure of recovery under UP Act, 1972.

39. It has been held time and again that Section 3 of Act, 1963 applies to Courts and not to
other bodies, such as quasi judicial Tribunal or even Executive authorities.

40. In A.S.K. Krishnappa Chettiar Vs. S.V.V. Somiah AIR 1964 SC 227, in para 13 of
judgment, the Court said:

"The Limitation Act is a consolidating and amending statute relating to the
limitation of suits, appeals and certain types of applications to courts and must, therefore, be
regarded as an exhaustive Code. It is a piece of adjective or procedural law and not of substantive
law. Rules of procedure, whatever they may be, are to be applied only to matters to which they
are made applicable by the legislature expressly or by necessary implication. They cannot be
extended by analogy or reference to proceedings to which they do not expressly apply or could be
said to apply by necessary implication. It would, therefore, not be correct to apply any of the
provisions of the Limitation Act to matters which do not strictly fall within the purview of those
provisions. Thus, for instance, period of limitation for various kinds of suits, appeals and
applications are prescribed in the First Schedule. A proceeding which does not fall under any of
the articles in that schedule could not be said to be barred by time on the analogy of a matter
7 All. M.P. Daga (Since deceased) & Ors. Vs Pradeshiya Industrial Investment Corporation
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which is governed by a particular article. For the same reasons the provisions of Sections to 28 of
Limitation Act cannot be applied to situations which fall outside their purview.

These provisions do not adumbrate any general principles of substantive law nor
do they confer any substantive rights on litigants and, therefore, cannot be permitted to have greater
application than what is explicit or implicit in them."

(emphasis added)

41. In Town Municipal council, Athani Vs. Presiding Officer, Labour Court, Hubli
and others AIR 1969 SC 1335, in para 12 of judgment, Court has observed, "... we do not think
that this addition necessarily implies that the Limitation Act is intended to govern proceedings
before any authority, whether executive or quasi-judicial, when, earlier, the old Act was intended
to govern proceedings before civil courts only."

42. Court held that application under Section 33C(2) of Industrial Disputes Act, 1947
before Labour Court would not attract limitation under Act, 1963.

43. Similarly, a three-Judge Bench in Nityanand M. Joshi and another Vs. Life
Insurance Corporation of India and other AIR 1970 SC 209 held that scheme of Act, 1963 is
that it only deals with applications to Court and Labour Court is not a Court within Act, 1963,
hence limitation, if any prescribed therein, shall not be applicable to any proceedings before Labour
Court.

44. In L.S. Synthetics Ltd. Vs. Fairgrowth Financial Services Ltd. And another (2004)
11 SCC 456, a three-Judge Bench reiterating the law on the subject with regard to Act, 1963 has
said:

"The provisions of the said Act are not applicable to the proceedings before
bodies other than courts, such as quasi-judicial tribunal or even an executive authority. The Act
primarily applies to the civil proceedings or some special criminal proceedings. Even in a
Tribunal, where the Code of Civil Procedure or Code of Criminal Procedure is applicable; the
Limitation Act, 1963 per se may not be applied to the proceedings before it." (emphasis added)

45. Here we may also refer to a Single Judge judgment of this Court in Hari Raj Singh
Vs. Sanchalak Panchayat Raj U.P. and others AIR 1968 All 246 wherein plea of limitation in
respect of claim of arrears of salary of a Government Servant was raised in defence by State
Government. Repealing it, this Court said that Act, 1963 is a complete Code in itself and outside it,
there is no law of limitation except specific provisions in specific Statutes. Section 3 makes it clear
that Act, 1963 applies only to Suits or Appeals or Applications filed in Courts. It has no application
to any proceedings outside the law Court. Act, 1963 is a procedural law. It bars a suit for
enforcement of a right but does not extinguish the right itself except where a case is governed by
Section 28 of Act, 1963. Relying on Apex Court's decision in Bombay Dyeing and
838 INDIAN LAW REPORTS ALLAHABAD SERIES

Manufacturing Co. Vs. State of Bombay AIR 1958 SC 328, Court said that Statute of limitation
bars remedy and does not extinguish debt. Lapse of time does not extinguish right of a person.
Having said so, in para 15, Court said:

"15. Since limitation bars a suit for the enforcement of a right but does not destroy
the right itself a defendant in a suit can set up a right in defence though he could not have enforced
that right by a suit. There is no limitation against a defence. This again indicates how limited is the
scope of the law of limitation even in suits."

46. It also considered meaning of the words "time barred" and in para 16 of judgment said
that the concept "time-barred" cannot be extended to proceedings outside law Courts. The words
"time barred' only means that a suit for enforcement of a right is no longer available and if a
Government servant files a civil suit for recovery of his salary after expiry of prescribed period of
limitation, it shall be dismissed by Court as time-barred. But the right is not extinguished and all
other lawful means of enforcing the claim are not affected by limitation.

47. In Mohd. Ashfaq Vs. State Transport Appellate Tribunal UP and others (1976) 4
SCC 330, Court considered a similar provision which required filing of renewal application within
fifteen days which could be extended but not beyond 15 days. Court held that Section 5 of Act,
1963 is not applicable since matter was covered by Section 58 (2) and (3) of Motor Vehicles Act
1939. It further held, if application for renewal is beyond time by more than fifteen days, authority
shall not be entitled to entertain it or in other words, it shall have no power to condone delay. There
being express provision for making application for renewal, condonable only if it is not more than
15 days, the provision expressly excludes not only power of condonation of delay under section 5
but being special enactment, the said period, even otherwise, cannot be extended. Court held that
the provision may look harsh, but in the scheme of Statute, legislature has provided the same and it
should not be disturbed by Court.

48. In Sushila Devi Vs. Ramanandan Prasad and others AIR 1976 SC 177, Court said
that provisions of Act, 1963 apply only to proceedings in "Courts" and not to appeals or
applications before bodies other than Courts such as quasi-judicial Tribunals or Executive
Authorities, notwithstanding the fact that such bodies or authorities may be vested with certain
specified powers conferred on Courts under the Code of Civil Procedure.

49. In Nityananda M. Joshi Vs. Life Insurance Corporation of India AIR 1970 SC 209,
Court held that in view of Section 4 and 5 of Act, 1963 it would be clear that under the scheme it
only deals with applications to Courts. The "Labour Court" is not a "court" within the meaning of
Act, 1963 and, therefore, an application under Section 33C(2) of Industrial Disputes Act, 1947
cannot be held barred under Article 137 of Act, 1963 on the plea that claim was for a period
beyond three years.

50. In L.S. Synthetics Ltd. Vs. Fairgrowth Financial Services Ltd. and another AIR
2005 SC 1209, it was held that provisions of Act, 1963 have no application so far as directions
7 All. M.P. Daga (Since deceased) & Ors. Vs Pradeshiya Industrial Investment Corporation
 & Ors.
839
required to be issued by Courts under Special Court (Trial of Offences Relating to
Transactions in Securities) Act, 1992. It held:

"Limitation Act, 1963 is applicable only in relation to certain applications
and not all applications despite the fact that the words "other proceedings" were added in
the long title of the Act in 1963. The provisions of the said Act are not applicable to the
proceedings before bodies other than courts, such as quasi-judicial tribunal or even an
executive authority. The Act primarily applies to the civil proceedings or some special
criminal proceedings. Even in a Tribunal, where the Code of Civil Procedure or Code of
Criminal Procedure is applicable; the Limitation Act, 1963 per se may not be applied to
the proceedings before it. Even in relation to certain civil proceedings, the Limitation Act
may not have any application."
(emphasis added)

51. In Damodaran Pillai Vs. South Indian Bank Ltd. (2005) 7 SCC 300, Court
while considering, whether provisions of Section 5 of Act, 1963 would be applicable to the
proceedings under Order 21 of Code of Civil Procedure, observed:

"It is also trite that the civil court in absence of any express power cannot
condone the delay. For the purpose of condonation of delay in absence of applicability of
the provisions of Section 5 of the Limitation Act, the court cannot invoke its inherent
power."

52. A Division Bench of this Court (in which I was also a member) in M/S Vimal
Organics Ltd. Vs. State of U.P. and others 2008 (2) AWC 1164, considering a similar
issue in respect of appeals under Section 13 of Water (Prevention and Control of Pollution)
Cess Act, 1977 (hereinafter referred to as "Act, 1977") read with Rule 9 of the Water
(Prevention and Control of Pollution) Cess Rules, 1978 (hereinafter referred to as "Rules,
1978"), in para 18 and 19 of judgment, said:

"18. The period of limitation, as contended by learned counsel for the
petitioner, cannot be said to be a part of procedure only, as an universal proposition.
Rather it would depend upon relevant provisions of the statute and the consequences
flowing thereof, i.e., as a result of expiry of the period of limitation. In many cases, it may
result in accrual of substantive rights to the other side and in those cases, provisions
pertaining to limitation cannot be said to be directory but have to be held mandatory. For
example, under Section 6 of Land Acquisition Act, 1894, a declaration has to be made
within one year from the date of notification under Section 4. The period of one year
limitation gets extended by the period for which some interim order of any nature has been
passed by a Court of Law. If such a declaration is not made under Section 6 within the
aforesaid period, the proceedings will lapse. This view was taken by the Apex Court in
State of Haryana v. Sukhdev AIR 1994 SC 1255 and General Manager, Department of
Telecommunications, Thiruvananthapuram v. Jacob AIR 2003 SC 1308.
840 INDIAN LAW REPORTS ALLAHABAD SERIES

19. A Division Bench of this Court in Mahavir Sahkari Avas Samiti Ltd.
Vs. State of U.P. and others, 2007 (2) AWC 1162, considering the aforesaid provisions in
para 54, sub para (iii) held that "the Court does not have the power to extend the period of
limitation provided under the Statute." Similarly, in various taxing statutes where the
period of limitation expires, thereafter the authorities cannot proceed to pass orders
against the assessee treating it to be procedural only. In those cases expiry of period of
limitation provided in the statute result in vested right to the assessee like not to be
assessed or face any assessment proceedings etc. before the authority concerned under the
relevant Act. The illustrations may be multiplied but we do not wish to do so and feel
satisfied by observing that it is not always correct to say that whenever the limitation is
prescribed, it is in the nature of procedural law and, therefore, has to be read leniently
and must be treated to be directory instead of mandatory.