Malicious Prosecution U/A 74 Limitation Act To Be Reckoned From Date Of Appellate Order, Not Date Of Original Termination Of Prosecution: Delhi High Court
The Bench noted that coordinate Bench judgments in Tirlok Chand Bansal and Laxmi Narayan Soni affirmed while interpreting Article 74 of Limitation Act.
Justice Tushar Rao Gedela, Delhi High Court
The Delhi High Court has held that, for the purposes of Article 74 of the Limitation Act, 1963, the expression "prosecution is otherwise terminated" must be reckoned from the date of the appellate order and not from the date of dismissal by the court or tribunal of first instance, rejecting a defendant's plea that a suit for malicious prosecution was time-barred.
Holding that reading the provision otherwise would render the word "otherwise" surplusage and could lead to anomalous outcomes, such as a suit becoming infructuous if an appellate court later reverses an acquittal relied upon for computing limitation, the Court found that a composite suit filed by a real estate group against a business partner and two media platforms was filed within one year of the NCLAT's dismissal of the defendant's appeal, and was therefore within limitation.
A Single Bench of Justice Tushar Rao Gedela observed, “A cumulative reading of both the judgments leave no doubt in the mind of this Court that the interpretation rendered in the preceding paragraphs above, clearly align with the ratio laid down by the Coordinate benches of this Court in the aforesaid two judgements. In other words, the term ‘...... prosecution is otherwise terminated’ in Article 74 of the Limitation Act for the purposes of calculating limitation shall be reckoned from the date when the appellate order is passed”.
Senior Advocate H.L. Tiku appeared for the plaintiff and Advocate Avishkar Singhvi appeared for the defendant.
The plaintiffs, three companies engaged in real estate development, had sued their former business partner for malicious prosecution arising out of a Section 7 insolvency petition filed against them before the NCLT, which was dismissed on February 14, 2023 and whose subsequent appeal was dismissed by the NCLAT on December 13, 2023. The suit also sought a mandatory injunction against two financial news platforms to take down or update articles reporting the now-dismissed insolvency proceedings, alleging continuing reputational harm.
Notably, the defendants entered appearance even before summons were issued and sought dismissal of the suit in limine, contending that the plaint disclosed no cause of action and that the suit was barred under Articles 74 and 75 of the Limitation Act, the former governing malicious prosecution, reckoned from when the "prosecution is otherwise terminated", and the latter governing libel, reckoned from the date of publication.
The Court first addressed the procedural question of whether a defendant could be heard prior to issuance of summons, holding, relying on the Division Bench judgment in Bright Enterprises Private Limited & Anr. v. MJ Bizcraft LLP & Anr. 2017 SCC OnLine Del 6394 and the coordinate Bench decision in Tajnunissa & Anr. v. Vishal Sharma & Ors. decided on 23.07.2021 that a court may indeed hear a defendant even pre-summoning on objections falling within Order VII Rule 11 CPC, and may reject a plaint at that stage if grounds are made out, as clarified by the Supreme Court in Dahiben v. Arvindbhai Kalyanji Bhanusali 2020 (7) SCC 366.
On limitation, the Court reasoned that treating dismissal at the first stage as the trigger point would make the phrase "otherwise terminated" redundant, since an acquittal alone would already trigger limitation under the first limb of Article 74.
Relying on the reasoning in Tirlok Chand Bansal v. Bharat Bhushan Bansal and Laxmi Narayan Soni v. Roop Chand Soni, the Court held that where an order is appealed, limitation runs from the date the appellate proceedings conclude. Since the plaintiffs' e-filing acknowledgment showed the suit was filed on December 12, 2024, within a year of the NCLAT's order dated December 13, 2023, the suit was held to be within time.
On the separate objection concerning libel under Article 75, the Court declined to decide the issue at the pre-summoning stage, noting that the allegations against the two media platforms were intertwined with those against the principal defendant and may require evidence, leaving the question open to be raised after summons.
Accordingly, the Court directed registration of the plaint as a suit, ordered issuance of summons, and listed the matter for completion of pleadings before the Joint Registrar on October 09, 2026 and before the Court on November 30, 2026.
Cause Title: Sanskar Projects and Housing Limited and Others v. Realpro Realty Solutions Private Limited and Others (Neutral Citation: 2026:DHC:6139)
Appearances:
Plaintiffs: H.L. Tiku, Senior Advocate, Yashmeet Kaur, Bharti Kochhar and Llitesh Wadhwa, Advocates.
Defendants: Avishkar Singhvi, Bharat Garg and Naved Ahmed, Advocates.