When does the right to sue accrue? - Limitation Act, 1963

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As per Article 58 of, under Part II of the Schedule of the Limitation Act, 1963, ("the Act") the period of limitation to obtain any declaration (other than those classes of declarations mentioned in Articles 56 and 57 of the Act) is three years from the date the 'right to sue first accrues'. 

Article 113, on the other hand, which is the residuary article states that the period of limitation for any suit for which no period of limitation is provided elsewhere the Schedule, is three years from the date the 'right to sue accrues'.

It is often difficult to ascertain when the right to sue accrues, especially in declaratory suits in which there may not even be a clear cause of action. Courts have analyzed these phrases and laid down guidelines to determine when the 'right to sue accrues' or when the 'right to sue first accrues'. 

The Supreme Court in State of Punjab and Ors. vs.  Gurdev Singh (AIR1991SC2219, AIR1992SC111, 1992(40(1))BLJR276,  1991(63)FLR529], JT1991(3)SC465, (1992)ILLJ283SC, 1992(1)PLJR14, 1991(2)SCALE365, (1991)4SCC1, [1991]3SCR663, (1992)1UPLBEC50) has stated that:

“The Court has to find out when the "right to sue" accrued to the plaintiff. If a suit is not covered by any of the specific articles prescribing & period of limitation, it must fall within the residuary article. The purpose of the residuary article is to provide for cases which could not be covered by any other provision in the Limitation Act. The residuary article is applicable to every variety of suits not otherwise provided for. Article 113 (corresponding to Article 120 of the Act 1908) is a residuary article for cases not covered by any other provisions in the Act. It prescribes a period of three years when the right to sue accrues. Under Article 120 it was six years which has been reduced to three years under Article 113. According to the third column in Article 113, time commences to run when the right to sue accrues. The words "right to sue" ordinarily mean the right to seek relief by means of legal proceedings. Generally, the right to sue accrues only when the cause of action arises, that is, the right to prosecute to obtain relief by legal means. The suit must be instituted when the right asserted in the suit is infringed or when there is a clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted (See: (i) Mt. Bole v. Mt. Koklam and Ors.  and (ii) Gannon Dunkerley and Co. v. The Union of India”

Even recently, the Supreme Court of India has held in Khatri Hotels Private Limited And Another vs Union Of India & Anr. ([2011] 15 (ADDL.) S.C.R. 299) :

"While enacting Article 58 of the 1963 Act, the legislature has designedly made a departure from the language of Article 120 of the 1908 Act. The word ‘first’ has been used between the words `sue’ and `accrued’. This would mean that if a suit is based on multiple causes of action, the period of limitation will begin to run from the date when the right to sue

first accrues. To put it differently, successive violation of the right will not give rise to fresh cause and the suit will be liable to be dismissed if it is beyond the period of limitation counted from the day when the right to sue first accrued."

(Full text of the judgement can be found here.) 

The Hon’ble Bombay High Court in National Sports Club Of India vs Nandlal Dwarkadas Chhabria (1997 (3) BomCR 565) has made the following observations: “…..In Kandasami Pillai and others v. Munisami Mudaliar and others, the above Privy Council decision was followed and the same principle was reiterated. That was a case where the suit was filed for a declaration that a mortgage regarding trust property was unenforceable against the trust property. Though the plaintiffs were aware of the mortgage, there was no threat to infringe the plaintiffs right till the defendants of that suit filed a suit to enforce the right under the mortgage, then within 6 years from that date suit was filed under old Article 120 of the Limitation Act. It was held that there was a threat to plaintiff's right only when the mortgage suit was filed and the cause of action arose from that time and not from the date of mortgage deed….

…..In Ibrahim v. Smt. Sharifan, an identical question arose for consideration. Further, that is a decision under Article 58 of the Limitation Act, which according to the learned Counsel for the Club applies to this suit. That was a case where there was a mutation entry made in the name of defendant regarding half share in the property in dispute. Inspite of that mutation entry, the plaintiff had continued in possession. But when the plaintiff apprehended actual interference, in the enjoyment of land, he filed a suit in 1969. But the argument on behalf of the defendant was that there was a cloud on plaintiff's right in view of the mutation entry in 1957 and the suit should have been filed under Article 58 within 3 years from that date. The High Court negatived this contention and held that the cause of action arose to the plaintiff in April, 1969, when the defendant actually threatened to take forcible possession. Therefore, the suit filed within 3 years from that date was within time. It was pointed out that notwithstanding the change of mutation entry, the plaintiff had continued in possession and therefore he can come to Court as and when there was actual interference with his possession……

….Similarly, even in the present case the Club issued the circulars of 1986 and 1989 demanding levy of sports development fee and consequences for non-payment, still no action was taken by the Club admittedly for 10 years from 1986 to 1996 and the plaintiff's rights as members were not interfered with, there was no necessity for the plaintiff to rush to the Court for filing the suit. The test is as to when exactly the plaintiffs rights to continue as members or their enjoyment of the privilege of rights as members was interfered with. I have already pointed out that the rejoinder letter of the Chairman dated 12-6-1995 and the subsequent denial of duplicate identity card to the first plaintiff's daughter and the oral assertion by the management to the first plaintiff that identity card will not be issued unless he pays the arrears, make out a cause of action for filing a suit. Even if 12-6-1995 is taken as first cause of action for filing the suit, under Article 58 of the Limitation Act, the suit is within time being filed within 3 years from 12-6-1995. I am not impressed by the argument of learned Counsel for the Club that the cause of action first accrued in 1986, when the resolution was circulated to the members. As already stated the right to sue accrues only when the plaintiff's rights were actually threatened to continue as members. It is an admitted case that for the last 10 years the Club took no action to terminate the membership of the plaintiff or to debar them or to deprive their rights as members till 1995-96. Hence, the right to sue mentioned in Article 58 of the Limitation Act did not accrue till the first plaintiff's daughter was denied the identity card or at least till 12-6-1995 when the Chairman issued a rejoinder asserting that action will be taken as per rules which according to the plaintiffs, compelled them to file a suit……”

In the above case the Court also considers the scenario where along with declaratory reliefs, other reliefs are prayed for and further observed that:

“25. The learned Counsel for the Club contended that the suit is governed by Article 58 of the Limitation Act. It may be noted that Article 58 applies to suit to obtain declaratory relief. 

But it may not be applied to a suit, where in addition to the declaratory relief, there are other reliefs like injunction or partition or possession etc. To such a suit proper Article is residuary Article namely Article 113 of the Limitation Act. But in my view this question is also purely academic since, the period of limitation is three years, whether we apply Article 58 or Article 113. In both the cases, the period of limitation starts when the right to sue accrues. It may be in Article 58, there is an additional word to say that the limitation begins to run when the right to sue 'first' accrues. In my view even if we apply Article 113 of the Limitation Act, if it is shown that the cause of action has commenced, then, the suit must be filed within 3 years from that date. In my view, whether we apply Article 58 or Article 113, the suit is within time, since according to my view, the cause of action arose either in 1996 or latest by 1995 and not earlier. The suit was filed in 1996 itself.”

The same view was reiterated in Annamalai Chettiar vs A.M.K.C.T. Muthukaruppan Chettiar (1930) I.L.R. 8 Rang. 645 and Gobinda Narayan Singh v. Sham Lal Singh (1930- 31) L.R. 58 I.A. 125. In Rukhmabai v. Laxminarayan (supra), the three-Judge Bench noticed the earlier judgments and summed up the legal position in the following words: 

“The right to sue under Article 120 of the 1908 Act accrues when the defendant has clearly or unequivocally threatened to infringe the right asserted by the plaintiff in the suit. Every threat by a party to such a right, however ineffective or innocuous it may be, cannot be considered to be a clear and unequivocal threat so as to compel him to file a suit. Whether a particular threat gives rise to a compulsory cause of action depends upon the question whether that threat effectively invades or jeopardizes the said right."

In Harendra Chandra Nath And Ors. vs Bijoy Krishna Nath And Ors.( AIR 1993 Gau 52) it was held that:

“Time, for filing a suit for declaration, under Article 58 of the Limitation Act will run from the date when the right of sue first accrues. Section 34 of the Specific Relief Act provides in general terms that any person entitled to any legal character, or to any right to property, may institute a suit against any person denying, or interested to deny, his title to such character or right, and the Court may in its discretion, make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any further relief. A suit can be instituted not only against the person denying, but even against one merely interested to deny. The cause of action arises only when the denial occurs, or when the plaintiff apprehends that the defendant may actually deny. In that case, the cause of action arises only when the denial occurs, by a formal act, or an oral denial made to a third person or a denial made in writing. If, however, such denial is not communicated to the plaintiff, when cause of action will arise in that case? Normally, the right to sue accrues when the right in respect of which the declaration is sought is denied or challenged and the person who seeks the declaration has knowledge about.

8. In Mt. Bolo v. Mt. Koklan, AIR 1930 PC 270, the Privy Council held thus (at page 272) :--

".. .There can be no "right to sue" until there is an accrual of the right asserted in the suit and its infringement or at least clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted. No doubt Mt. Koklan's right to the property arose on the death of Tara Chand, but in the circumstances of this case their Lordships are of opinion that there was no infringement of, or any clear and unequivocal threat to her right till the year 1922, when the suit, as stated above, was instituted."

The principle laid down in Mt. Bolo’s Case (supra) was followed by the Supreme Court in Mst. Rukhmabai vs Lala Laxminarayan (1960 AIR 335, 1960 SCR (2) 253) and by the Bombay High Court in Laxmichand Kalyanji vs Municipal Corporation Of Greater (AIR 2002 Bom 217, (2002) 3 BOMLR 518, 2002 (2) MhLj 210).

The above judgments are in consonance with the Apex Court’s decision in C.Mohammed Yunus vs Syed Unissa (1961 AIR 808, 1962 SCR (1) 67) which with respect to the Old Limitation Act also held that “there could be no right to sue until there is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right.” The decision of C.Mohammad Yunus (supra) has been followed by the Supreme Court in Daya Singh & Anr. vs Gurdev Singh(Dead) By Lrs. & Ors. decided on 7 January, 2010. 

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Keywords: Limitation Act, 1963, Supreme Court of India, bombay high court, india, right to sue accrues, right to sue first accrues