The Apex Court in case of Bhagwandas B. Ramchandani v. British Airways, made an observation that the provisions of Limitation Act have no applicability when the statute extinguishes the right itself.
There is a difference between barring a remedy and extinguishing the right. Such exception is well established, the bench observed in the judgment, in which it dealt with Rule 30 of the Second Schedule of the Carriage by Air Act, 1972.
The Rule 30 of the Act provides that right to damages will be extinguished if an action is not brought within a period of two years from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.
While considering an appeal against the judgement of the Bombay High Court, the Supreme Court observed that -
"The procedural law governing the institution and adjudication of civil suits in India includes the Civil Procedure Code,1908 as well as the Limitation Act, 1963. The Limitation Act is a branch of adjectival law and applies to all proceedings which it governs from the date of its enactment. There is however a well-established principle, which states that when the right itself is extinguished, the provisions relating to limitation have no application."
The said observation is made in light of circumstances wherein the right itself was extinguished by a Statute as opposed to barring of remedy, as in the case of Section 3 of the Limitation Act.
For further clarification on provisions where the right itself is extinguished, the bench illustrated Section 11 as well as Section 27 of the Limitation Act.
"Section 11 deals with suits filed in India with respect to contracts entered in foreign countries. Following the Principle of lex fori, the Section provides that rules of limitation provided in a foreign jurisdiction are not applicable. However, the exception to this Rule is provided in Section 11 (2)(a), when the Contract i.e., the right itself expires. Similarly, Section 27 also recognizes the principle of extinguishment of Right to Property being an exception to the applicability of the Limitation Act, 1963".
The Bench took note of Rule 30 of the Act and concluded that -
"Once the right to damages is extinguished upon the expiry of two years reckoned from the three alternative dates mentioned in the Rule itself, nothing would remain for enforcement. Section 3 of the Limitation Act only bars the remedy, but when the right itself is extinguished, provisions of the Limitation Act have no application."
The Court also addressed another issue which was - whether the provisions of the Carriage by Air Act, 1972 expressly exclude the Limitation Act, 1963 by virtue of Section 29, to which the Court answered in affirmative.