Article 102 of the Limitation Act, 1908 — A Jurisprudential Analysis of Wage-Related Claims in India

Article 102 of the Limitation Act, 1908: A Jurisprudential Analysis of Wage-Related Claims in India

1. Introduction

Article 102 of the Limitation Act, 1908 (“1908 Act”) prescribed a three-year period for suits “by a workman for wages”, commencing when the wages accrued due.[1] Although the Article is repealed and replaced by a cluster of shorter limitation periods under Articles 6–11 of the Limitation Act, 1963 (“1963 Act”), the case-law that crystallised around Article 102 continues to shape modern approaches to limitation in salary and service-related litigation. The Supreme Court still relies on the precedential line that began with the Federal Court in Punjab Province v. Tarachand (1947) while adapting it to the post-1963 statutory scheme.[2]

2. Statutory Context

2.1 Article 102 (1908 Act)

The operative text provided:

“102. By a workman for wages. — Period: three years; Time from which period begins to run: when the wages accrue due.”

The provision contained three salient elements: (i) the plaintiff-class (“workman”); (ii) the subject-matter (“wages”); and (iii) the starting point (“when the wages accrue due”). These generated recurring interpretative controversies, most notably (a) whether “salary” of public servants is encompassed in “wages” and (b) the precise moment of accrual.

2.2 Successor Provisions in the 1963 Act

The 1963 Act fragmented Article 102 into occupation-specific articles with even shorter periods.[3] While the textual landscape changed, courts have read the new provisions in pari materia with the earlier jurisprudence, particularly on accrual and continuing causes of action.

3. Judicial Construction of Article 102

3.1 Expansion of “Wages” to “Salary”

  • Tarachand held that “wages” in Article 102 is not confined to manual labour but extends to the salary of a civil servant (Federal Court, 1947).[2]
  • The ratio was affirmed in Shri Madhav Laxman Vaikunthe v. State of Mysore (1962) and Jai Chand Sawhney v. Union of India (1969), fixing Article 102 as the governing provision for arrears of salary claims.[4]
  • High Courts have uniformly followed suit (Dewan Shamsher Jang, 1965 MP;[5] Sudhir Ranjan Halder, 1961 Cal;[6] etc.).

3.2 The Accrual Debate

While early authority accepted that limitation runs month by month as wages fall due, two refinements emerged:

  1. Wrongful dismissal and reinstatement. In Maimoona Khatun (1980) the Supreme Court clarified that limitation does not await reinstatement; each unpaid wage becomes recoverable on the ordinary due date, notwithstanding a later declaration that dismissal was void.[7]
  2. Suspension pending inquiry. The Calcutta High Court in Sudhir Ranjan Halder treated wages as accruing only after an illegal dismissal because the order of suspension itself lawfully restricted pay; limitation therefore ran from the wrongful termination, not the suspension.[6]

3.3 Computation and Pleading Nuances

Article 102’s rigid three-year window is not subject to condonation under Section 5 of the Limitation Act (which applies only to appeals/applications). The Supreme Court’s equitable observations in N. Balakrishnan v. M. Krishnamurthy (1998) on liberal condonation thus have no direct application to plaint-stage delay, but they inform purposive interpretation where starting point is ambiguous.[8]

4. Doctrinal Convergences: Demand-Based Accrual

The principle that liability is triggered by demand followed by refusal—prominently articulated for continuing guarantees in Syndicate Bank v. Channaveerappa Beleri (2006)—parallels the wage-accrual discourse.[9] Both contexts require a court to pinpoint the first moment of actionable default:

  • For “on-demand” guarantees, limitation begins only when the creditor demands and the surety refuses.
  • For wages, default occurs on the contractually scheduled pay-day; no separate demand is necessary, but where wages are contingent (e.g., suspension allowances), courts examine the legality of the underlying employer decision before fixing accrual.

The shared analytical lens underscores that accrual is ultimately a question of when the plaintiff could first have sued, consistent with the broader test in Gannon Dunkerley v. Union of India (1969) that limitation runs upon a “clear and unequivocal threat to infringe the right.”[10]

5. Practical Impact on Service Litigation

5.1 Quantum of Recoverable Arrears

Courts routinely restrict decrees to wages falling within three years plus statutory notice preceding suit institution (e.g., Dewan Shamsher Jang). Litigants who delay challenging dismissal therefore forfeit substantial salary unless they timely seek interim relief or initiate proceedings expeditiously.

5.2 Declaratory Relief versus Money Claims

A declaration that dismissal is void is not subject to Article 102 but to Article 113 (residuary, three years from when the right to sue accrues). Yet, once the declaration is obtained, recovery of monetary arrears remains fettered by Article 102. This dichotomy explains outcomes such as Sakal Deep Sahai Srivastava v. Union of India (1974), where the plaintiff secured declaratory relief but arrears were limited to three years.[11]

5.3 Continuing Wrong Doctrine—Rejected

Attempts to invoke Section 22 of the Limitation Act (continuing breaches) generally fail; non-payment of wages on each month creates successive, not continuing, causes of action. The Supreme Court in Jai Chand Sawhney implicitly endorsed this view by treating each month’s salary as a distinct debt.[4]

6. Influence Beyond Service Law

Article 102’s interpretative legacy informs other wage-like claims, such as compensation to prisoners (State of A.P. v. Challa Ramkrishna Reddy) and pension arrears (Anand Swarup Singh v. State of Punjab). In insolvency practice, the Supreme Court in B.K. Educational Services v. Parag Gupta (2018) adopted a similar “first default” rule under Article 137 when applying limitation to IBC applications, reinforcing the centrality of accrual analysis.[12]

7. Conclusion

Article 102 of the 1908 Act, though repealed, continues to exert a profound jurisprudential pull. Its central themes—expansive reading of wages, monthly accrual, and strict three-year recovery window—permeate current service law and comparable domains. Practitioners must meticulously identify the first actionable date and appreciate that equitable considerations rarely override statutory prescription where suits (as opposed to appeals/applications) are concerned. The Article’s afterlife thus embodies the Limitation Act’s enduring objective: legal certainty balanced against substantive justice.

Footnotes

  1. Limitation Act, 1908, Sch. I, Art. 102.
  2. Punjab Province v. Pandit Tarachand, 1947 FCR 89 (Federal Court).
  3. Limitation Act, 1963, Sch. I, Arts. 6–11 (one year for various categories of wage claims).
  4. Shri Madhav Laxman Vaikunthe v. State of Mysore, (1962) 1 SCR 886; Jai Chand Sawhney v. Union of India, (1969) 3 SCC 642.
  5. Dewan Shamsher Jang v. State of M.P., 1965 MPLJ 1010.
  6. Sudhir Ranjan Halder v. State of West Bengal, AIR 1961 Cal 626.
  7. Maimoona Khatun v. State of U.P., (1980) 3 SCC 578.
  8. N. Balakrishnan v. M. Krishnamurthy, (1998) 7 SCC 123.
  9. Syndicate Bank v. Channaveerappa Beleri, (2006) 11 SCC 506.
  10. Gannon Dunkerley & Co. v. Union of India, (1969) 3 SCR 607.
  11. Sakal Deep Sahai Srivastava v. Union of India, (1974) 1 SCC 338.
  12. B.K. Educational Services (P) Ltd. v. Parag Gupta & Associates, (2018) 18 SCC 657.