In an important ruling last year1, the Supreme Court of India ("Supreme Court") held that a question of limitation cannot be decided as a preliminary issue under Section 9A of the Code of Civil Procedure, 1908 ("CPC").
Question of Law:
A reference was made to the Full Bench of the Supreme Court, due to a difference of view from the Supreme Court's earlier decision in Foreshore Co-op Housing Society v. Praveen D. Desai2 with respect to a bar of limitation being decided as a preliminary issue under Section 9A of the CPC.
Section 9A of the CPC, inter alia, states that in a pending application for interim relief, a challenge to the jurisdiction of a court could be decided as a preliminary issue by the court, before deciding the interim application itself.
The Supreme Court held that under the CPC, jurisdiction meant the power of a court to adjudicate upon a matter and pass an order, whether rightly or not. It was further held that an illegal exercise of jurisdiction by a court would constitute a jurisdictional error and not an absence of jurisdiction altogether. Examples of jurisdictional errors are: (i) examination of a criminal case in the absence of inherent jurisdiction to do so; (ii) entertaining a civil dispute inspite of a separate statutory mechanism being available for the consideration of such disputes (e.g. rent control matters, insolvency and bankruptcy matters, consumer disputes, etc.)
The Supreme Court held that the dismissal of a claim as being barred by limitation by a court was an exercise of jurisdiction by that court and not an issue of lack of jurisdiction. Similarly, it was further held that an erroneous decision on the question of limitation would, by itself, not oust the jurisdiction of a court.
In view of the above, the Supreme Court held that the issue of a claim being barred by limitation could not be decided by a court as a preliminary issue under Section 9A of the CPC and must be decided along with the other issues framed in the suit.
Before concluding, the Supreme Court held that an issue of limitation could nevertheless be considered as a preliminary issue under Order XIV Rule 2(2) (b) of the CPC, subject to such a challenge being based on admitted facts and not otherwise.
The decision assumes importance in view of the useful interpretations provided on the aspect of jurisdictional issues vis-à-vis the law of limitation in India.
While Section 9A of the CPC has since been repealed by virtue of the enactment of Code of Civil Procedure (Maharashtra Amendment) Act, 2018 and the Code of Civil Procedure (Maharashtra Amendment) (Amendment) Act, 2018, the ratio laid down by the Supreme Court will continue to apply to pending issues of limitation as well as applications filed under Order XV Rule 2 of the CPC.
1 Nusli Neville Wadia v. Ivory Properties & Ors [SLP (Civil) Nos.3198231983/2013 decided on October 4, 2019]
2 (2015) 6 SCC 412
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