Prosecution Of Suit Even After Being Put On Notice With Regard To Non-Maintainability Cannot Be Said To Be Bonafide To Claim Benefit U/S. 14 Limitation Act: Kerala HC
The Court said that prosecuting a suit despite being aware of the statutory bar under Section 69(2) of the Partnership Act cannot be considered bona fide and disentitles plaintiffs from relief under Section 14 of the Limitation Act.
Justice Sathish Ninan and Justice P. Krishna Kumar, Kerala High Court
The Kerala High Court has held that a prosecution of the suit even after being put on notice with regard to the non-maintainability was at their peril and cannot be said to be bonafide to claim benefit under Section 14 of the Limitation Act.
A Division Bench of Justice Sathish Ninan and Justice P. Krishna Kumar observed, “Law in the said regard, as notice supra, is categoric that such prosecution of the suit even after being put on notice with regard to the non-maintainability was at their peril and cannot be said to be bonafide prosecution. Hence, we have no hesitation to hold that the plaintiffs are not entitled for the benefit of exclusion for the period of limitation under Section 14 of the Limitation Act. We are unable to agree with the view adopted by the trial court to the contrary.”
Senior Advocate T. Krishnanunni appeared for the Appellants, while Advocate T.S. Athira represented the Respondents.
Brief Facts
The Respondents, a partnership firm engaged in spice trading, and its two partners, filed a suit for recovery of money from Appellants for the same relief had been dismissed on the ground that the firm was unregistered, attracting the statutory bar under Section 69(2) of the Indian Partnership Act. The Defendants got the firm registered and filed a suit, which was decreed by the Trial Court. Aggrieved, the Appellants challenged the decree on the ground that the suit was barred by limitation and that the plaintiffs were not entitled to the benefit of Section 14 of the Limitation Act.
Reasoning Of The Court
The Court adverted to Section 14 of the Limitation Act which reads, “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.”
The Court noted that for the applicability of the Section, the following ingredients had to be satisfied:
“(1) Both proceedings must be civil proceedings in a court.
(2) The earlier proceeding must have been prosecuted with due diligence.
(3) The earlier proceeding must have been in respect of the same matter in issue.
(4) The earlier proceeding must have been prosecuted in good faith in a court which enable to entertain the suit for defect of jurisdiction or other cause of a like nature.”
Applying these principles to the facts, the Court noted, “It reveals that, even in the plaint it was pleaded that the plaintiff firm is an unregistered one, and that the defendants in their written statement had specifically urged the plea that the suit is not maintainable in view of Section 69(2) of the Indian Partnership Act. An issue was raised on the maintainability of the suit. Still the plaintiffs chose to proceed to trial and invited the judgment.”
Responding to arguments for a liberal interpretation of Section 14, the Court further observed, “Though the learned Senior Counsel appearing for the respondents would place a host of decisions to contend that a liberal approach is to be taken in interpreting the provisions of the Limitation Act, especially under Section 14, to save a lis and not to abort it, we are afraid that how much ever be the elasticity given, unless the ingredients mentioned in Section 14 are not satisfied, the parties cannot claim its benefit.”
The Court concluded that the Respondents, having failed to prosecute the earlier suit with due care and attention despite being aware of the legal bar, were not entitled to any exclusion under Section 14 of the Limitation Act.
Consequently, the Court allowed the appeal and set aside the Trial Court's decree, and dismissed the suit.
Cause Title: M/s National Collateral Management Services Ltd. & Anr. v. Valiyaparambil Traders & Ors. (Neutral Citation: 2025:KER:36901)
Appearance:
Appellants: Senior Advocate T. Krishnanunni; Advocates K.Narayanan (Parur), Gilbert George Correya
Respondents: T.S. Athira, M.P. Joseph Tijo, Millu Dandapani, Premchand R. Nair, Priyanka Ravindran, Roshen D. Alexander, Roy Thomas Muvattupuzha, Tanya Joy, S. Vishnu
