India - Time Bars

Last updated November 2018

In India, the law for the limitation of suits and other proceedings is governed by the Limitation Act, 1963.  Indian law statutorily recognises that limitation for institution of a legal action is a limitation on the availability of a legal remedy during a certain period of time; and different periods are prescribed for various remedies.

Section 3 of the aforesaid Act specifically lays down that every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence.  Consequently, it is the duty of the Court to consider whether such suit / application, etc. is filed within time and, if not, to dismiss such suit / application, even if limitation is not raised by the Defendants / Respondents.  To that extent, Indian law is different from the Law of Limitation in England, where a person, entitled to the benefit of limitation, can waive limitation. In India, in view of the wordings of Section 3, there cannot be any extension of time by agreement of the parties.

The Schedule to the Limitation Act, 1963, sets out the prescribed period for various suits / actions.  The Article in the Schedule applicable to a suit must be determined with reference to the nature of the Plaintiffs’ claim.

As far as limitation is concerned, the Courts have ruled that the Rules of Limitation are not meant to destroy the rights of parties — and they are meant to see that parties do not resort to dilatory tactics, but seek their remedy within the time fixed by the legislature.  Courts have further held that provisions of section 3 of the Act only bar the remedy, it does not extinguish a right.  ‘Limitation’ would be a mixed question of law and fact, generally.

Subject to the type of claim and which Article of the Schedule to the Limitation Act, 1963, the claim fails under, the limitation period in India for commencing proceedings is three (3) years from the date of the accrual of the cause of action.  Under most Articles, the period is 3 years from the date the Plaintiff becomes entitled to assert his right.

For the Government to file suit, the time period is 30 (thirty) years.

Under the Act, there are certain matters which would stop running of the time.  These are as follows:

• acknowledgement of the debt or liability — fresh period of limitation shall be computed from the time when acknowledgement was so signed;
• where there is an on-account payment or any payment towards a liability - a fresh period of limitation shall be computed from the time payment was made;
• for appeals, revision, review, etc. of orders / judgements / decree, time taken for obtaining certified copy of the order / judgement / decree appealed against, is excluded from calculation.  In respect of appeals alone, there is provision in the Act which gives discretion to courts, for good cause shown by the applicant, to condone delays, if any.

The above described is the limitation and / or prescribed period of time within which action is required to be commenced in India, failing which the action will be dismissed.

The above described is the limitation and / or prescribed period of time within which action is required to be commenced in India, failing which the action will be dismissed.

For example, under the (Indian) Carriage of Goods by Sea Act, 1925, the carrier and the ship shall be discharged from all liability in respect of loss or damage, unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered.

Whilst considering the above clause, the Hon’ble Supreme Court of India (the highest Court of the land), in a case reported in AIR 1960 SC 1058, also followed and applied AIR 1973 SC 105, has held that the one year limitation provided by this Statute is not a mere question of time limit, but the right to sue itself stands extinguished one year after delivery or on the date when the delivery ought to have taken place.  Consequently, the one year time limit to bring suits against a carrier / vessel for damage or loss of goods, and / or non-delivery of the goods, is not just an issue of time but, after the period of one year, the right to bring any such action itself stands extinguished.

Under Section 24 the Multimodal Transport of Goods Act, 1993, in cases of multimodal transportation where a registered multimodal transport operator has issued a multimodal transport document, the multimodal transport operator shall not be liable under any of the provisions of that Act, unless action against him is brought within nine (9) months of the date of delivery of the goods or the date when the goods should have been delivered or the date on and from which the party entitled to receive delivery of the goods has right to treat goods as lost, under sub-section 2 of Section 13. Section 13 (2) provides that, if the consignment has not been delivered within 90 consecutive days following the date of delivery expressly agreed upon or within a reasonable time, the Claimant may treat the consignment as lost.
Following the decisions of the Supreme Court referred to in the COGSA cases, in Multimodal Transport cases, after the period of 9 months, claims if any, would stand extinguished.  Again, this is not a period of limitation but it is the right to sue itself that stands extinguished.

The Multimodal Transport of Goods Act, 1993, amended certain provisions of the Indian COGSA.  One of the provisions which was amended is the one relating to time limits / extinguishment of right.  By the amendment, it was provided that the period of one year may be extended if the parties so mutually agree for such extension, after the cause of action has arisen.  The proviso thereto prescribes the further period of not more than 3 (three) months, as may be allowed by the Court.  Therefore, if there is no agreement between the parties for extension of time, and if proceedings are filed beyond the period of one year but within the period of 3 months from the expiry of the one year period, it is left to the discretion of the Court to permit the claim or not.

Under the Consumer Protection Act, for filing any consumer complaint to the Consumer Forum, the time period is 2 (two) years from the date of the cause of action.

Earlier this year (1-4-2018) with the coming into force of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017, India has legislated in relation to the time period for extinguishment of Maritime Liens. Under Section 9(2) of the Act and subject to the provisos of the said section, unless prior to expiry of the stipulated period (one year and two years respectively) the vessel has been arrested / seized for enforcement of such lien, the lien expires. In respect of Maritime Lien for Salvage services including special compensation etc.; Port / Canal / Waterways / Pilotage / Statutory dues; and claims based on tort arising out of loss or damage caused by the operation of the vessel; the prescribed period is one year; and for personal injury / death claims, the prescribed period is two years. This is not a period of limitation per se but what is extinguished is only the right to sue as Maritime Lien Holder. The Claimant’s claim will only cease to be a Maritime Lien but the claim will continue to fall under the category of a ‘Maritime Claim’.

The Insolvency & Bankruptcy Code, 2016, has also been enacted, to facilitate recoveries from Companies registered under the Companies Act. The said Act provides a procedure and time period for the various steps to be taken for commencement of proceedings under this Act.

The above described is the general position of the limitation law in India.

The below links will give access to the Limitation Act, 1963, which contains the Schedule, which has the relevant time periods for various actions in India.

http://comtax.up.nic.in/Miscellaneous%20Act/limitation-act-1963.pdf
www.lawnotes.in/Limitation_Act,_1963
 
Summarizing the position under Indian law, as relating to shipping / maritime matters, the time bar (limitation), is as follows:

Particulars Limitation Period Act/Statute

Liability to Stevedores, inspectors and other visitors on board, either in respect of injury or death.	Since no period of limitation has been specifically provided for such actions under the Limitation Act, 1963, the period of limitation for such suits/claims is three years from the date of accrual of the cause of action.	The Limitation Act, 1963.
Removal of wreck and associated liabilities. Any other action against the wreck owner.	The owner of any wreck in the possession of the receiver, upon establishing his claim to the same to the satisfaction of the receiver within one year from the time at which the wreck came into the possession of the receiver shall, upon paying the salvage and other charges, be entitled to have the wreck or the proceeds thereof delivered to him. Where the owner of the wreck does not appear and claim the balance of the proceeds of sale within one year from the date of sale, the said balance shall become the property of the Central Government. Three years from the date of accrual of the cause of action, i.e. when the vessel became a wreck or was stranded / sunk etc. Further, it may be noted that India has ratified the Nairobi International Convention on the Removal of Wrecks, 2007. Work is under way in respect of domestic legislation in India based on the Convention; and it is likely that local legislation based on this Convention will be notified soon.	Merchant Shipping Act, 1958. The Limitation Act, 1963.
Stowaways and refugees.	If any foreigner enters India in contravention of any provision/s of the Foreigner’s Act, 1946, or any order made thereunder, the prescribed authority may, within two months from the date of such entry, direct the master of the vessel on which such entry was effected or the owner or the agent of the owner of such vessel, to provide, to the satisfaction of the said authority and otherwise than at the expense of Government, accommodation on a vessel for the purpose of removing the said foreigner from India. Further, it may be noted that India is not a signatory to the 1951 Refugee Convention nor its Protocol of 1976	The Foreigner’s Act, 1946.
Collision with other ships.	Three years from the time / date of collision, i.e. when the right to sue accrues. This is on account of the fact that there is no express period otherwise provided by Statute. Therefore, 3 years.	The Limitation Act, 1963.
Loss or damage to property, such as shore equipment, FFO, etc.	Three years from the time when the right to sue accrues.	The Limitation Act, 1963.
Pollution Risks, including accidental discharge or escape of oil, or other substance	There is no prescribed limitation period for pollution risks. However, if the Claimant should be Government, it would be thirty years. If the Claimant should be a private party, the period would be three years.
Cargo Matters	The carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. This period may, however, be extended if the parties so agree after the cause of action has arisen: Provided that a suit may be brought after the expiry of the period of one year referred to, within a further period of not more than three months as allowed by the court. By virtue of the above provision, the limitation period for filing a suit under COGSA in India is one year from the date on which the goods were delivered or ought to have been delivered. As per the sub clause incorporated by the 1993 amendment to make the Statute in tandem with the Visby Protocol, the said time period of one year could be extended by an agreement between the parties after the cause of action has arisen. Likewise, it has also been provided in the 1993 amendment that a suit may be brought after the expiry of the period of one year within a further period of not more than three months, as allowed by the court. Thus, after the 1993 amendment, subject to the permission granted by the court, the period of limitation for filing the suit under the Carriage of Goods by Sea Act is one year and three months or as agreed to between the parties after the cause of action has arisen.	The Indian Carriage of Goods by Sea Act, 1925; as amended by the Multimodal Transportation of Goods Act, 1993.
Damage to entered ships by shore facilities or wrong handling of stevedores.	Three years from the time when the right to sue accrues.	The Limitation Act, 1963.
Fines for short/over loading, or short/over discharging, or failing to comply with regulations or declaration of goods or documentation of an entered ship, smuggling or any infringement of any Customs law.	Under Customs Law, when any duty has not been levied or has been short levied or erroneously refunded, or when any interest payable has not been paid, part paid or erroneously refunded, the proper officer is required to send a Notice for payment to the importer/exporter/owner, as the case may be, within a period of six months from the relevant date (date of the import / Bill of Entry), requiring him to show cause why he should not pay the amount specified in the notice. But in case there is an element of fraud/mis-statement or suppression of facts, the period of limitation becomes five years from the relevant date. (Section 28 – for duty). Section 116 – for shortlanding – no specific period is prescribed. But, there was one Bombay High Court Judgement which sought to set down that shortlanding proceedings must be commenced within 5 years of date of sailing of the concerned vessel, which period of 5 years unfortunately is not being followed by the Government on account of another Supreme Court decision which lays down that when Statute is silent on any limitation, courts cannot set any time limit. Accordingly, as per Statute, there is presently no time limit for Customs to initiate proceedings for any short landing / excess landing of cargo. Likewise, there is no time limit for initiation of proceedings for smuggling cases.	The Customs Act, 1962.
Application for initiation of corporate insolvency resolution process (winding up)	Three years from the time when the right to sue accrues. (The process starts with serving a demand notice on the Debtor in accordance with the format as prescribed by the Insolvency & Bankruptcy Code, 2016. If the Debtor within ten days from the date of service of notice does not pay the debt or serves a notice of dispute, an application can be filed before the Adjudicating Authority for initiating a corporate insolvency resolution process.)

NB:- ‘date of accrual of the cause of action’ should be read as the date of the incident giving rise to the concerned claims.

V. Subramanian (Kumar), Advocate,
114, Maker Chambers—III, Nariman Point, Mumbai — 400 021 (India).
 
Phone : +91 -22- 6120 6400.
Fax : +91-22-6120 6450.
Cell : +91 - 9920375143.
Email : subrama@vsnl.com