Saturday, 25 July 2015

When court should not decide issue of limitation as preliminary issue?

 Be it stated, the aforesaid pronouncement was made
before the amendment of the Code of Civil Procedure in 1976.
18. In Ramesh D. Desai and others v. Bipin Vadilal
Mehta and others3
, while dealing with the issue of limitation,
the Court opined that a plea of limitation cannot be decided as
an abstract principle of law divorced from facts as in every
case the starting point of limitation has to be ascertained
which is entirely a question of fact. The Court further
proceeded to state that a plea of limitation is a mixed question
of fact and law. On a plain consideration of the language
employed in sub-rule (2) of Order 14 it can be stated with
3 (2006) 5 SCC 638
certitude that when an issue requires an inquiry into facts it
cannot be tried as a preliminary issue. In the said judgment
the Court opined as follows: -
“13. Sub-rule (2) of Order 14 Rule 2 CPC lays down
that where issues both of law and of fact arise in the
same suit, and the court is of the opinion that the
case or any part thereof may be disposed of on an
issue of law only, it may try that issue first if that
issue relates to (a) the jurisdiction of the court, or (b)
a bar to the suit created by any law for the time
being in force. The provisions of this Rule came up
for consideration before this Court in Major S.S.
Khanna v. Brig. F.J. Dillon and it was held as under:
(SCR p. 421)
“Under Order 14 Rule 2, Code of Civil Procedure
where issues both of law and of fact arise in the
same suit, and the court is of opinion that the
case or any part thereof may be disposed of on
the issues of law only, it shall try those issues
first, and for that purpose may, if it thinks fit,
postpone the settlement of the issues of fact
until after the issues of law have been
determined. The jurisdiction to try issues of law
apart from the issues of fact may be exercised
only where in the opinion of the court the whole
suit may be disposed of on the issues of law
alone, but the Code confers no jurisdiction upon
the court to try a suit on mixed issues of law
and fact as preliminary issues. Normally all the
issues in a suit should be tried by the court; not
to do so, especially when the decision on issues
even of law depend upon the decision of issues
of fact, would result in a lopsided trial of the
suit.”
Though there has been a slight amendment in the
language of Order 14 Rule 2 CPC by the amending
Act, 1976 but the principle enunciated in the
abovequoted decision still holds good and there can
be no departure from the principle that the Code
confers no jurisdiction upon the court to try a suit on
mixed issues of law and fact as a preliminary issue
and where the decision on issue of law depends
upon decision of fact, it cannot be tried as a
preliminary issue.”
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
 CIVIL APPEAL NO. 5954 2014
(Arising out of S.L.P. (Civil) No. 33200 of 2014)
Satti Paradesi Samadhi & Philliar Temple … Appellant
Versus
M. Sankuntala (D) Tr. Lrs. & Ors. …Respondents
Citation;(2015) 5 SCC674
Dipak Misra



2. In this appeal by special leave the plaintiff-appellant has
called in question the legal sustainability of the judgment and
order passed by the Division Bench of the High Court of
Judicature at Madras in OSA No. 229 of 2006 whereby it has
affirmed the judgment dated 24.07.2003 passed by the
learned single Judge in S.C. No. 673 of 1997 whereunder he,
after framing of issues on the basis of prayer being made by
the defendant, has dealt with the issue No. 1 as a preliminary
issue and dismissed the suit.Page 2
2
3. The factual expose’ which arise for disposal of the present
appeal are that the plaintiff instituted a suit for declaration
seeking that the three settlement deeds dated 27.3.1978
executed by the former trustee in favour of his two daughters
and a granddaughter as null and void, and for the relief of
recovery of possession of the land to the trust.
4. The defendant filed the written statement resisting the
claim of the plaintiff on many a ground and one of the grounds
was that the suit was barred by limitation and, therefore, did
not deserve any adjudication.
5. The learned single Judge framed the following issues for
consideration: -
“(1) Whether the suit for declaration that the three
settlement deeds, all dated 27.3.1978 and
registered as Document Nos. 248, 249 and 443 of
1978 with the Sub Registrar’s Office, Royapuram, is
barred by limitation of time?
(2) Whether the suit properties had ever been in
the possession of Sri B.S. Ramalingam in his
individual capacity?
(3) Whether there existed a hereditary trust in the
name of Satti Paradesi Samadhi and Pillayar Temple
Trust?
(4) Whether the plaintiff owns the schedule
properties?Page 3
3
(5) Whether the defendants are the owners of the
Schedule Properties and in possession and
occupation from the date of settlement in the year
1978?
(6) Whether the plaintiff is entitled to mesne
profits?
(7) To what relief the parties are entitled?”
6. The plaint presented by the plaintiff showed that the suit
for declaration of the settlement deeds by the defendant in
favour of daughters and granddaughter which were executed
was done 19 years earlier, the defendant made a submission
before the learned single Judge that the suit was barred by
limitation. Accepting the submission of the defendant, the
learned single Judge thought it appropriate to take up the issue
No. 1 as a preliminary issue.
7. Before the learned single Judge it was contended by the
defendant that in view of the limitation provided under Articles
56 to 59 of the Limitation Act, the suit was enormously barred
by limitation and, therefore, deserved to be dismissed. There
was also a reference to Article 26 of the Limitation Act and the
learned single Judge referring to the same opined that even
under the said Article the suit for recovery of possession was
also barred by time. The learned single Judge also referred to
Section 27 of the Limitation Act, 1963 and ruled that thePage 4
4
defendants or their legal representatives had acquired right,
title and interest by adverse possession and, therefore, the suit
was not tenable being barred by limitation.
8. On an appeal being preferred against the aforesaid
judgment the Division Bench took note of Articles 92 and 96
and came to hold as follows: -
“22. Taking the property as a trust property, under
Article 92, the suit for recovery of possession of
immovable property conveyed or bequeathed in the
Trust out to have been filed within twelve years from
the time when transfer becomes known to the
plaintiff. Under Article 92, the plaintiff should have
filed the suit within twelve years from 1978 when
the settlement became known to the plaintiff.
23. In the plaint, at paragraph No. 4, the
appellant/plaintiff has clearly alleged that
immediately after the death of settler, on
24.12.1978, the settlement were questioned by the
appellant and the mother of the appellant and the
defendants – Vijaya Saradambal, who was the earlier
trustee, promised to settle the disputes recovering
the scheduled properties to the plaintiff trust; but
only the defendants influenced her and did not
deliver the schedule properties to the plaintiff. By a
reading of plaint averments, it is clear that the
plaintiff had known about the settlement deeds even
in 1978. Having known about the settlement deeds,
way back in 1978, the plaintiff ought to have filed
the suit to set aside the settlement deeds within
twelve years from the date of his knowledge. When
plaintiff had chosen to file the suit only in the year
1977, the learned single Judge rightly held that the
suit is barred by limitation.Page 5
5
24. The only grievance of the appellant is that after
framing the issues, the learned single Judge had
taken up the question of limitation as a preliminary
issue and question of limitation is a mixed question
of law and facts and the appellant ought to have
been given an opportunity to establish that the suit
property is a trust property and also the
circumstances under which the plaintiff could not
bring the suit within the stipulated time and also to
show as to how the suit is well within the time.”
Being of this view, the Division Bench dismissed the
appeal.
9. We have heard Mr. R. Basant learned senior counsel
appearing for the appellant and Mr. Himanshu Munshi, learned
counsel for the respondent.
10. Mr. Basant, learned senior counsel appearing for the
appellant, has drawn our attention to Section 10 of the
Limitation Act. It reads as follows: -
“10. Suits against trustees and their
representatives – Notwithstanding anything
contained in the foregoing provisions of this Act, no
suit against a person in whom property has become
vested in trust for any specific purpose, or against
his legal representatives or assigns (not being
assigns for valuable consideration), for the purpose
of following in his or their hands such property, or
the proceeds thereof, or for an account of such
property or proceeds, shall be barred by any length
of time.
Explanation – For the purpose of this Section any
property comprised in a Hindu, Muslim or Buddhist
religious or charitable endowment shall be deemed
to be property vested in trust for a specific purposePage 6
6
and the manager of the property shall be deemed to
be the trustee thereof.”
11. He has also drawn our attention to Articles 92 and 96
occurring in part VIII of the Schedule of the Limitation Act. He
has emphasized on both the Articles, namely, Articles 92 and
96. The said Articles read as under: -
9
2
To recover
possession of
immovable
property
conveyed or
bequeathed in
trust and afterwards
transferred
by the trustee for
a valuable
consideration
Twelve
years
When the transfer
becomes known to
the plaintiff
9
6 By the manager
of a Hindu,
Muslim or
Buddhist religious
or charitable
endow-ment to
recover
possession of
movable or
immoveable
property
comprised in the
endowment which
has been
transferred by a
previous manager
for a valuable
consideration
Twelve
years
The date of death,
resignation or
removal of the
transfer or the date
of appointment of
the plaintiff as
manager of the
endowment,
whichever is laterPage 7
7
12. Learned senior counsel has emphatically put forth that
the learned single Judge as well as the Division Bench has
committed grave error by taking recourse to the principle of
acquisition of knowledge by the plaintiff and other aspects. It
is absolutely limpid that if there is a transfer by previous
manager for a valuable consideration then only the limitation
of twelve years or any other article would come into the play.
As far as Article 59 is concerned, it is urged by him that the
said Article is not applicable to the present case. Article 59
reads as follows: -
Description of
suit
Period of
limitation
Time from which
period begins to
run
5
9
To cancel or set
aside an
instrument or
decree or for the
rescission of a
contract
Three
years
When the facts
entitling the
plaintiff to have
the instrument or
decree cancelled
or set aside or the
contract rescinded
first become
known to him
13. The learned counsel for the respondent would contend
that the plaintiff is not a trust as understood within the
parameters of Section 10 of the Limitation Act and, therefore,Page 8
8
the learned single Judge has rightly opined that Article 59
would be applicable. The learned counsel further submits that
assuming Article 59 is not attracted and any other Article
contained in Chapter VIII would be applicable and suit would
be barred by limitation inasmuch as it was filed after nineteen
years.
14. The core question that emerges for consideration is
whether an issue of limitation could at all have been taken up
as a preliminary issue.
15. In Ramrameshwari Devi and others v. Nirmala Devi
and others1
, while dealing with Order 14, Rule 2, observed
that sub-rule (2) of Order 14 refers to the discretion given to
the court where the court may try an issue relating to the
jurisdiction of the court or the bar to the suit created by any
law for the time being in force as a preliminary issue.
16. The controversy pertaining to the provisions contained in
Order 14 Rule 2 had come up for consideration before this
Court in Major S.S. Khanna v. Brig. F.J. Dillon2
 wherein it
has been ruled thus: -
1
(2011) 8 SCC 249
2 AIR 1964 SC 497 : (1964) 4 SCR 409Page 9
9
“Under O 14, r 2 where issues both of law and of fact
arise in the same suit, and the Court is of opinion
that the case or any part thereof may be disposed of
on the issue of law only, it shall try those issues first,
and for that purpose may, if it thinks fit, postpone
the settlement of the issues of fact until after the
issues of law have been determined. The
jurisdiction to try issues of law apart from the issues
of fact may be exercised only where in the opinion of
the Court the whole suit may be disposed of on the
issues of law alone, but the Code confers no
jurisdiction upon the Court to try a suit on mixed
issues of law and fact as preliminary issues.
Normally all issues in a suit should be tried by the
Court: not to do so, especially when the decision on
issues even of law depends upon the decision of
issues of fact, would result in a lop-sided trial of the
suit.”
17. Be it stated, the aforesaid pronouncement was made
before the amendment of the Code of Civil Procedure in 1976.
18. In Ramesh D. Desai and others v. Bipin Vadilal
Mehta and others3
, while dealing with the issue of limitation,
the Court opined that a plea of limitation cannot be decided as
an abstract principle of law divorced from facts as in every
case the starting point of limitation has to be ascertained
which is entirely a question of fact. The Court further
proceeded to state that a plea of limitation is a mixed question
of fact and law. On a plain consideration of the language
employed in sub-rule (2) of Order 14 it can be stated with
3 (2006) 5 SCC 638
certitude that when an issue requires an inquiry into facts it
cannot be tried as a preliminary issue. In the said judgment
the Court opined as follows: -
“13. Sub-rule (2) of Order 14 Rule 2 CPC lays down
that where issues both of law and of fact arise in the
same suit, and the court is of the opinion that the
case or any part thereof may be disposed of on an
issue of law only, it may try that issue first if that
issue relates to (a) the jurisdiction of the court, or (b)
a bar to the suit created by any law for the time
being in force. The provisions of this Rule came up
for consideration before this Court in Major S.S.
Khanna v. Brig. F.J. Dillon and it was held as under:
(SCR p. 421)
“Under Order 14 Rule 2, Code of Civil Procedure
where issues both of law and of fact arise in the
same suit, and the court is of opinion that the
case or any part thereof may be disposed of on
the issues of law only, it shall try those issues
first, and for that purpose may, if it thinks fit,
postpone the settlement of the issues of fact
until after the issues of law have been
determined. The jurisdiction to try issues of law
apart from the issues of fact may be exercised
only where in the opinion of the court the whole
suit may be disposed of on the issues of law
alone, but the Code confers no jurisdiction upon
the court to try a suit on mixed issues of law
and fact as preliminary issues. Normally all the
issues in a suit should be tried by the court; not
to do so, especially when the decision on issues
even of law depend upon the decision of issues
of fact, would result in a lopsided trial of the
suit.”
Though there has been a slight amendment in the
language of Order 14 Rule 2 CPC by the amending
Act, 1976 but the principle enunciated in the
abovequoted decision still holds good and there can
be no departure from the principle that the Code
confers no jurisdiction upon the court to try a suit on
mixed issues of law and fact as a preliminary issue
and where the decision on issue of law depends
upon decision of fact, it cannot be tried as a
preliminary issue.”
19. In the case at hand, we find that unless there is
determination of the fact which would not protect the plaintiff
under Section 10 of the Limitation Act the suit cannot be
dismissed on the ground of limitation. It is not a case which
will come within the ambit and sweep of Order 14, Rule 2
which would enable the court to frame a preliminary issue to
adjudicate thereof. The learned single Judge, as it appears,
has remained totally oblivious of the said facet and
adjudicated the issue as if it falls under Order 14, Rule 2. We
repeat that on the scheme of Section 10 of the Limitation Act
we find certain facts are to be established to throw the lis from
the sphere of the said provision so that it would come within
the concept of limitation. The Division Bench has fallen into
some error without appreciating the facts in proper
perspective. That apart, the Division Bench, by taking
recourse of Articles 92 to 96 without appreciating the factum
that it uses the words “transferred by the trustee for a
valuable consideration” in that event the limitation would bePage 12
12
twelve years but in the instant case the asseveration of the
plaintiff is that the trustee had created three settlement deeds
in favour of his two daughters and a granddaughter. The issue
of consideration has not yet emerged. This settlement made
by the father was whether for consideration or not has to be
gone into and similarly whether the property belongs to the
trust as trust is understood within the meaning of Sectin10 of
the Limitation Act has also to be gone into. Ergo, there can be
no shadow of doubt that the issue No. 1 that was framed by
the learned single Judge was an issue that pertained to fact
and law and hence, could not have been adjudicated as a
preliminary issue. Therefore, the impugned order is wholly
unsustainable.
20. We have not expressed any opinion with regard to the
issue of limitation except saying that the present issue could
not have been taken up as a preliminary issue. As the suit is
pending since 1997 we would request the learned single Judge
of the High Court of Madras to dispose of the suit as
expeditiously as possible.
21. Resultantly, the appeal is allowed and the impugned
judgments are set aside without any order as to costs.Page 13
13
……………………….J.
[Dipak Misra]
……………………….J.
[V. Gopala Gowda]
New Delhi;
July 03, 2014.Page 14
14
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