PublicationsThe Non-Applicability Of Limitation Act Towards Tribunals

February 10, 20210
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ABSTRACT

The debate regarding the recognition of the Tribunals to be akin to the courts have been a long-standing issue which has gathered an interesting insight after the recent Supreme Court judgement of Ganesan v. Commissioner[ii] last year which categorized the Tribunals as different to the functioning of the courts for the application of the Limitation Act and departed from the settled precedents on the said issue. The main purpose of the Limitation law was frustrated due to which Tribunals became a stage for flowering pot claims. The paper analyses the said legal lacuna prevailing in the law and provides a critical note on the same with a suggestion relying on the UK Model.

INTRODUCTION

The Limitation Act 1963[iii] (referred to as the ‘Act’) was enacted by the Legislature with an intent that the courts will pass order/orders within a prescribed time frame in order to adjudicate the reliefs based on any cause of action arising between the parties. The object of the Act is based on public policy by fixing a life span for the legal remedy for the general welfare.[iv] However, it has been observed that the Limitation Act exclusively apply to the judicial authorities such as civil courts and not to quasi-judicial authorities like Tribunals. A tribunal is bound to consider the provisions of Limitation Act only wherein the specific statute governing the matters in the Tribunal states. For instance, the provisions of the Limitation Act apply to the National Company Law Tribunal (NCLT) and its appellate authority because of the presence of specific provision in the form of section 238A of the Insolvency and Bankruptcy Code, 2016.[v]

However, Tribunals and Courts are very similar in their functioning and there seems to be no justification as to why the presumption that the Limitation Act does not apply exists in their case. This paper discusses that the Limitation Act should be applied in Tribunals until it has been proven otherwise.

The paper is structured to establish the lack of a definition of the word ‘court’ in the Act thus showing the uncertain application of the Limitation Act and leaving it to judicial interpretation. In discussing the judicial interpretation of the phrase ‘court’ the authors shall highlight the clashing interpretations of the Supreme Court in which the Tribunal are considered to be akin to Courts but at the same time states that the Limitation Act does not apply to Tribunals until expressly stated in their respective statute. This implies that there is a presumption of inapplicability of the Limitation Act in Tribunals and as a result, it leads to many complexities which are discussed in detail by the authors.

LITERAL INTERPRETATION OF ‘COURTS’

The position of the Judiciary on this aspect has been two-fold. On one side, historically the Courts have been inclined to literally interpreting the word ‘Courts’ as civil courts. This interpretation has existed from a long time since the year 1969 provided by the Hon’ble Supreme Court of India in cases of Nityananda Joshi v. LIC,[vi] then reinforced in the cases of Town Municipal Council v. Presiding Officer[vii] in 1970 and Sushila Devi v. Ramanand Prasad[viii] in 1976 by the same Apex Court. These judgements were finally referred to in the case of Sakuru v. Tanaji[ix] where the Supreme Court had once again settled the question by categorically stating that it was a settled position since the inception of the Act to construe ‘Courts’ in its literal sense and not to extend the scope to other judicial bodies such as Tribunals or executive authorities in the context of Section 5 of the Limitation Act.[x] This affirms the implication that the Limitation Act does not apply to quasi-judicial authorities.

The above-discussed principle has been again discussed in a  recent case of Ganesan v. The Commissioner, Tamil Nadu Hindu Religious and Charitable Endowments Board (2019).[xi] The issue, in this case, was whether the Commissioner of Endowment Board be categorized as ‘court’ and if so whether an application of condonation of delay under Section 5 of the Limitation Act is applicable in this case.[xii] The Apex Court while considering and interpreting various judgements by the Judiciary on this issue, held that all suits, appeals and applications filed under the Limitation Act, the authority must be before a Court and not a Tribunal or any other statutory authority unless a special or local law vide statutory scheme can make any provision of the Limitation Act applicable.[xiii] It is observed that in these cases, there is inadequate reasoning for excluding Tribunals from the scope of the Limitation Act, instead the court only gives a simple assertion regarding its inapplicability.

TRIBUNALS REGARDED AKIN TO COURTS

The second set of arguments by the judiciary disclose the nature of Tribunals and other quasi-judicial authorities being akin to that of the Courts. The Supreme Court in its judgements has stated that some Tribunals may qualify as Courts. Some Tribunals also perform wholly judicial functions one of them being the National Green Tribunal. The primary function of the court is to adjudicate between parties and advance substantial justice.[xiv] On similar lines, the case of Union of India v. Namit Sharma[xv] draws a parallel between Civil Courts and Tribunals and reasoned that Tribunals are quasi-judicial authorities that have been given the power to adjudicate disputes and hence they are a part of the hierarchy of justice.[xvi] While stating this the court also acknowledged multiple international jurisdictions have treated Tribunals to be a part of the court attached system of the administration of justice.[xvii]

The case of P. Sarathy v. State Bank of India [xviii] is also one such case dealing over the same where the judges laid the test as to which authorities determine a ‘court’:

In order to constitute a ‘court’ in the strict sense of the term, an essential condition is that the court should have, apart from having some of the trappings of a judicial Tribunal, power to give a decision or a definition judgment which has finality and authoritativeness which are the essential tests of a judicial pronouncement.[xix]

By using this test, one can bring Tribunals under the ambit of the word ‘courts’ and apply the Law of Limitation apart from the specific provision which is already present for the Act to apply.

Furthermore, in the case of M.P. Steel Corporation v Commissioner of Central Excise, which looks at the interpretation of the word ‘Courts’ in the context of Section 14 of the Act which deals with the exclusion of time in the Limitation period when the dispute was filed in the wrong jurisdiction in a bona fide manner. Hon’ble Justice R.F.Nariman with respect to the question of law regarding the applicability of the Act to Tribunals, one should look at the underlying principles of Section 14 of the Act[xx] and find the crux of the law and the purpose it intends to fulfil.

The court applied the historical scanning approach to finding the overarching intention behind the section. It can be stated that the term ‘Courts’ has been given a wide ambit of meaning in the section to include Tribunals and quasi-judicial authorities within it. Section 14 of the Act as interpreted by the Bench states that:

The object of Section 14 is that if its conditions are otherwise met, the Plaintiff/ Applicant should be put in the same position as he was when he started an abortive proceeding. What is necessary is the absence of negligence or inaction. So long as the Plaintiff or Applicant is bonafide pursuing a legal remedy which turns out to be abortive, the time beginning from the date of the cause of action of an appellate proceeding is to be excluded if such appellate proceeding is from an order in an original proceeding instituted without jurisdiction or which has not resulted in an order on the merits of the case.[xxi]

To illustrate the applicability of Section 14[1] in regard to Tribunals, let us take two parties (‘A’ and ‘B’), and the Limitation period for the cause of action is three years. If the matter reaches the court in five years but the parties were contending before the expiration of three years in the Tribunal then the time is excluded from the Limitation period. This is because as said in MP Steel Corporation judgement, the test for the application of Section 14 is to see whether the person was inactive or not. As the plaintiff was in addressing his/her matter in a Tribunal which is an adjudicatory mechanism similar to Courts therefore Section 14 of the Limitation Act is applicable.

The legislation is supposed to represent fairness, equity, and integrity for the purpose of public welfare and be progressive in a society which linked with the ultimate objective of justice and reason. Implementing and conveying such principles to bring tribunals within the purview of Limitation Act would be an act towards justice. The prima facie unsuitability of a section [Section 14 of the Limitation Act] must not bar application of the principles and intent of the legislature behind this section.[xxii]

CRITIQUE

The notion that the Limitation Act is not applicable to Tribunals as said in the recent Ganesan case is highly problematic. The judgement fails to acknowledge that it can be used as a loophole for the people to not take action within a reasonable time or harass people with litigation. This goes against the other objects of the Limitation Act which is to decide the lifespan of a cause of action,[xxiii] to prevent disturbance or deprivation of what may be acquired by long enjoyment or lost by a parties inaction or negligence[xxiv] and securing peace, suppressing fraud and prevent oppression.[xxv]

To briefly illustrate the loophole created by the Ganesan Judgement, let us take 2 parties, ‘A’ and the ‘B’ and the Limitation period for the cause of action is 3 years. Five years later we see that the Limitation period has expired and if we assume that the court has refused to condone the delay as per Section 151 of the Code of Civil Procedure[xxvi] and/or Section 5 of the Limitation Act then A shall be barred from filing a suit against B. However, this does not bar A to approach a Tribunal in filing a suit against B. This may lead to gross injustice to B as the Limitation period is over and the suit may be filed mala fide.

Moreover, this judgement also reignited the old notion of providing the statute with a very strict interpretation and not upholding the spirit of the living tree philosophy which holds that with the evolution in society, laws must also be adapted to such changes. Since the system of Tribunals started long after the Limitation Act in 1985, the applicability of the Limitation Act should also be changed to be consistent with the system and recognise the role and functions of the Tribunal. It is to this where Tribunals which are considered to be akin to Courts due to their functioning and structure. The judgement by not considering a Tribunal as a Court does not allow the application of the Limitation Act in Tribunals. By necessary implication, we see that unless the Tribunal Act or Rules do not specify a Limitation period or explicitly applies the Limitation Act. There is no period of limitation for civil suits in Tribunals.

Even in the United Kingdom, the Tribunals are considered one and the same to judicial authorities such as Courts i.e., they are acknowledged as a part of the independent judicial system, extending to them the same guarantees of independence as applicable to the judges in the ordinary Courts.[xxvii]

CONCLUSION

Based on the above analysis we can clearly see that there is a presumption that the law of limitations does not apply to quasi-judicial authorities like Tribunals. However, the lacunas shown above prove that the contrary should be applied. In other words, it is recommended that there should be a presumption that the law of Limitations applies to every Tribunal unless proved otherwise by the parties.

This serves as a relief for the Tribunals and reduce their burden and stops parties from misusing their right to file a suit such that the Tribunals become a forum for flowering pots for claims. Pertaining to the various judicial decisions on such issue, it cannot be more emphasized on the similarity of the functioning of Tribunals and other quasi-judicial authorities with that to the Courts. Restricting the applicability of the Act to just suits, appeals or applications filed in Court provides an advantage to litigators while filing any of the above under any special or local law before any Tribunal or other authority.[xxviii] Moreover, any non-filing of such appeal or application also leads as a disadvantage to applying for an extension of the period. Further, till date, there hasn’t been any initiative, nor any clarification taken by the Legislature regarding extending the scope of the Act to such authorities. Since Tribunals are also a means of adjudication, they are very similar to that of the Courts as observed above.

References

[1] 14 Exclusion of time of proceeding bona fide in court without jurisdiction.

(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule 1 of that Order where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court or other cause of a like nature. Explanation.— For the purposes of this section,—

(a) in excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;

(b) a plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;

(c) misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.

[i] Third Year B.B.A. LL.B. (Hons.) students from Jindal Global Law School, affiliated to O.P. Jindal Global University, India.

[ii] Ganesan v. The Commissioner, Tamil Nadu Hindu Religious and Charitable Endowments Board, AIR 2019 SC 2343.

[iii] Limitation Act, 1963.

[iv] Balakrishnan v. M. Krishnamurthy, (1998) 7 SCC 123.

[v] Insolvency and Bankruptcy Code, 2016, s 238A.

[vi] Nityananda Joshi v. LIC, (1969) 2 SCC 199.

[vii] Town Municipal Council v. Presiding Officer, (1969) 1 SCC 873.

[viii] Sushila Devi v. Ramanand Prasad, (1976) 1 SCC 361.

[ix] Sakuru v. Tanaji, (1985) 3 SCC 590.

[x] Ibid.

[xi] Ganesan, supra note 2.

[xii] Ganesan, supra note 2.

[xiii] Ganesan, supra note 2.

[xiv] B.T. Purushothama Rai v. K.G. Uthaya, (2011) 14 SCC 86.

[xv] Union of India v. Namit Sharma, AIR 2014 SC 122.

[xvi] Ibid.

[xvii] Ibid. at para no. 69.

[xviii] P. Sarathy v. State Bank of India, AIR 2000 SC 2023.

[xix] Ibid.

[xx] Limitation Act, (n 1), s 14.

[xxi] M.P. Steel Corporation v. Commissioner of Central Excise, (2015) 4 MLJ 225.

[xxii] Varun Rao, ‘Application of the Limitation Act to Proceedings before Tribunals’, (The RMNLU Law Review Blog, 14 July 2019) <https://rmlnlulawreview.com/2019/07/14/application-of-the-limitation-act-to-proceedings-before-tribunals/> accessed at 4 December, 2020.

[xxiii] N. Balakrishnan v. M. Krishnamurthy, (1998) 7 SCC 123.

[xxiv] Rajendra Singh v. Santa Singh, (1973) 2 SCC 705.

[xxv] Baswaraj v. Land Acquisition Officer, (2013) 14 SCC 81.

[xxvi] The Code of Civil Procedure, 1908, s. 151.

[xxvii] Tribunals Courts and Enforcement Act, 2007, s 1 (UK).

[xxviii] Ganesan, supra note 2.

AUTHOR DETAILS
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Author: Anish Meduri

Designation: 3rd year law candidate, Jindal Global Law School

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Author: Kushal Tekriwal

Designation: 3rd year law candidate, Jindal Global Law School

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Legal Maxim (December 1, 2021) The Non-Applicability Of Limitation Act Towards Tribunals. Retrieved from https://www.legalmaxim.in/the-non-applicability-of-limitation-act-towards-tribunals/.
The Non-Applicability Of Limitation Act Towards Tribunals.” Legal Maxim – December 1, 2021, https://www.legalmaxim.in/the-non-applicability-of-limitation-act-towards-tribunals/
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The Non-Applicability Of Limitation Act Towards Tribunals.” Legal Maxim – Accessed December 1, 2021. https://www.legalmaxim.in/the-non-applicability-of-limitation-act-towards-tribunals/
The Non-Applicability Of Limitation Act Towards Tribunals.” Legal Maxim [Online]. Available: https://www.legalmaxim.in/the-non-applicability-of-limitation-act-towards-tribunals/. [Accessed: December 1, 2021]
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