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Smart Summary

Structured Summary of the Legal Opinion

Factual and Procedural Background

This is the plaintiffs' appeal from the decree in Civil Suit No. 7-B of 1950 of the Court of the District Judge, Raigarh, which dismissed their suit on the point of limitation.

The plaint was originally filed in the Court of the Additional Civil Judge, Class I, Bilaspur, on 25 November 1947 against the firm "Balaram Rameshwar" of Kharsia, said to be owned by (1) Balaram and (2) Rameshwar (both joined as defendants). The plaintiffs alleged that the defendants resided and carried on business at mauza Tundri in tahsil Janjgir, district Bilaspur — the sole ground of jurisdiction alleged in the plaint. The claim arose from dealings between the plaintiffs' firm Lalchand Nathmal and the defendants' firm during 1944 (account entries referenced from February to December 1944).

The defendants' case was that in October 1944 there was a family partition: Balaram began carrying on business at Tundri under new styles (Balaram Rameshwardas and Bhagwandas Rameshwardas) while Rameshwar carried on business elsewhere (named as "Nanhooram Rameshwar"). The defendants asserted that the dealings were entered into by Rameshwar alone, who did not reside within the Bilaspur Court's jurisdiction; accordingly the Bilaspur Court lacked jurisdiction and Balaram had no liability.

The suit was tried on all issues, including jurisdiction. Judgment was delivered on 10 September 1949: it found that Balaram had no share in the dealings (and dismissed the suit as against him); it also found that Rameshwar's residence within the Bilaspur Court's jurisdiction was not proved and directed that the plaint be returned for presentation to the proper Court.

Procedural steps after judgment: the Bilaspur Court ordered the plaint returned only after a certified copy was filed; delays occurred while the certified copy and a court-fee issue were addressed (extensions given and an additional court-fee of Rs. 460 was directed to be paid). The certified copy was filed on 14 November 1949; the court-fee was paid (record indicates payment on 2 December 1949); the plaint was ultimately returned on 12 December 1949 and presented in the Court of the Civil Judge, Class I, Raigarh, on 24 December 1949. The District Judge, Raigarh, later took the suit and disposed of it (decree challenged on limitation).

Legal Issues Presented

  1. Whether the period between 25 November 1947 (institution of the suit in Bilaspur) and 12 December 1949 (return of the plaint) should be excluded under section 14(1) of the Indian Limitation Act, 1908.
  2. Whether the plaintiffs prosecuted the suit with due diligence and in good faith (requirements of section 14(1)), given the jurisdictional objections and the defendants' contention that the plaintiffs deliberately invoked Bilaspur jurisdiction.
  3. Whether the lower Court correctly excluded the period between 10 September 1949 and 12 December 1949 (and whether any further period should be excluded) for the purpose of limitation.

Arguments of the Parties

Plaintiffs' (Appellants') Arguments

  • The plaintiffs genuinely believed both defendants resided at Tundri within the Bilaspur Court's jurisdiction when they instituted the suit and throughout the proceedings until the judgment of 10 September 1949.
  • They prosecuted the suit with due diligence — they took all necessary steps in the Bilaspur Court and committed no default; delays after judgment were due to the Bilaspur Court's directions (requirement of certified copy, court-fee assessment) and reasonable requests for time to pay the additional fee.
  • Time spent in the Bilaspur Court up to 10 September 1949 and the subsequent period up to 12 December 1949 should be excluded under section 14(1) because the suit could not be entertained in Bilaspur for a jurisdictional defect and the plaintiffs acted in good faith and with due diligence.
  • The factual matters up to 12 December 1949 were known to both parties and proper issues had been framed; the defendant could not claim prejudice from lack of additional pleading details.

Defendant's (Respondent's) Arguments

  • The defendants contended that Rameshwar did not reside within the Bilaspur Court's jurisdiction and that the plaintiffs knew this fact but nevertheless alleged jurisdiction at Tundri to wrongfully confer jurisdiction on the Bilaspur Court.
  • The defendant contested the plaintiffs' entitlement to exclude the period between 10 September 1949 and 12 December 1949 and also disputed exclusion of the earlier period on the ground that the plaintiffs lacked good faith and due diligence.
  • The defendant argued that the plaint did not supply proper details to entitle the plaintiffs to the benefit of exclusion of time under section 14(1), and that they were thereby prejudiced.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Gnanacharya Swamigal v. Saravanapirumal, I.L.R. 1941 Madras 347 = A.I.R. 1941 Mad. 319 That the burden of proving the conditions of section 14(1) (due diligence, good faith, and inability of Court to entertain suit) rests on the plaintiff. Quoted to emphasise that plaintiffs bore the onus of proving they satisfied section 14(1).
Ghusulal Ganeshilal v. Gumbhirmull, I.R. 1938 Cal. 377 Holds that negligence on the part of the plaintiff would bar application of section 14 of the Limitation Act. Cited and distinguished: the Court held the present case did not involve such negligence and so section 14 could apply.
Sheonarayan v. Ramprasad, (1925) 8 V.L.J. 76 = A.I.R. 1923 Nag. 241 That an ulterior motive or lack of genuine belief disentitles a party to relief under section 14. Cited and distinguished: the Court found no evidence of ulterior motive or lack of genuine belief by the plaintiffs.
Naik Lalloolal & Others v. Naik Vishnu & Another, S.A. No. 550 of 1948, Dated 18-2-1954 (Bhutt J.) Explained how to determine whether due care and attention has been exercised, adopting the standard of proof from section 3 of the Indian Evidence Act (definition of "proved"). The Court applied the reasoning that "proved" requires a pragmatic, common-sense standard (possible human errors notwithstanding) and used that approach to find plaintiffs acted with due care and attention.
Nagubai v. B. Shama Rao, A.I.R. 1956 S.C. 593 Dictum that where facts up to a certain date are known to both parties and proper issues have been framed, a defendant cannot complain of prejudice from lack of additional particulars in pleadings for the purpose of excluding time up to that date. Applied to reject the defendant's contention that lack of pleading detail prejudiced him as to the period up to 12 December 1949.

Court's Reasoning and Analysis

The Court's analysis proceeded by applying the three conditions of section 14(1) of the Indian Limitation Act, 1908:

  1. Identification of statutory requisites: the Court set out that clause (1) of section 14 requires (i) prosecution with due diligence, (ii) prosecution in good faith, and (iii) that the Court was unable to entertain the suit due to a jurisdictional defect or like cause. The Court observed that the burden of proof on these points rested on the plaintiffs (citing Gnanacharya Swamigal).
  2. Jurisdictional posture and plaintiffs' belief: the Court examined the factual matrix about the parties' residences and business locations. It noted that (i) Kharsia lay in the quondam State of Raigarh, (ii) the plaintiffs themselves carried on business there and were defending suits at Raigarh, and (iii) there was no material to show that the plaintiffs knew of the partition in the defendants' family which would have put them on notice that one defendant (Rameshwar) no longer resided at Tundri.
  3. Application of Civil Procedure Code provision: the Court observed that clause (b) of section 20 of the Code of Civil Procedure allows a Court to grant leave to prosecute a suit even if some defendants do not reside within its jurisdiction. From this the Court concluded that the Bilaspur Court was not absolutely devoid of jurisdiction and that the plaintiffs' failure to seek leave "only strengthens the inference that they were under a genuine belief" that both defendants resided at Tundri. The plaintiffs' witness (P.W.1) had given uncontradicted evidence that he believed both defendants resided there.
  4. Assessment of "due diligence" and "good faith": the Court rejected the lower Court's finding that plaintiffs lacked good faith. It held that the plaintiffs had prosecuted the suit with due diligence — they took all necessary steps and committed no default. The Court reviewed authorities (Ghusulal Ganeshilal and Sheonarayan) and concluded this was not a case of negligence or ulterior motive. The question reduced to whether plaintiffs exercised the due care and attention the circumstances required.
  5. Standard of proof for "due care": relying on Naik Lalloolal, the Court applied the Indian Evidence Act's section 3 definition of "proved" — a pragmatic standard: facts are proved where the Court believes them or considers their existence probable enough that a prudent man would act on the supposition. The Court emphasised that ordinary human errors do not necessarily negate good faith.
  6. Application of the standard to the facts: accepting plaintiffs' uncontradicted evidence that they believed both defendants resided at Tundri and noting absence of information about the partition, the Court held there was no reason for plaintiffs to make the enquiry they now argue in hindsight they should have made. Thus, the time spent in the Bilaspur Court up to 10 September 1949 was covered by section 14(1).
  7. Analysis of the post-judgment period (10 September 1949 to 12 December 1949): the Court examined the sequence of procedural constraints — the Bilaspur Court's direction that the plaint not be returned until a certified copy was filed, delays caused by the judge's leave, the subsequent withholding for determination of additional court-fee, the reasonable grant of time to pay (and payment within the granted time), and the judge being otherwise engaged on the date the fee was paid. On these facts the Court considered the plaintiffs had acted with reasonable care in attempting to retrieve the plaint as soon as practicable and therefore the lower Court was right to exclude the period between 10 September 1949 and 12 December 1949.
  8. Pleading sufficiency objection: on the complaint that plaintiffs had not supplied proper details in the plaint to justify exclusion of time, the Court reasoned that facts up to 12 December 1949 were known to both parties and proper issues had been framed covering that period. Applying the principle in Nagubai v. B. Shama Rao, the Court held that the defendant could not claim prejudice from lack of further particulars.
  9. Overall temporal conclusion: combining the findings, the Court held that time from 25 November 1947 up to 10 September 1949, and the subsequent period up to 12 December 1949, were properly excluded under section 14(1). Consequently, even if the short period from 12 December 1949 to 24 December 1949 were not excluded, the suit would still be within the prescribed limitation period.

Holding and Implications

Holding: The appeal is allowed and the cross-objection is dismissed. The decree of the lower Court is set aside and the suit is remitted to that Court for decision in accordance with law. Costs shall abide the result. A certificate shall be issued for refund of the court-fees on the appeal. (Final line in the opinion: "Appeal allowed.")

Implications:

  • The direct consequence is that the plaintiffs succeed on their appeal against the limitation point: the period during which the plaint remained in the Bilaspur Court (from institution on 25 November 1947 through return on 12 December 1949) was held to be excludable under section 14(1) of the Limitation Act as interpreted and applied to these facts.
  • The suit is remitted to the lower Court for further proceedings and decision on the merits in accordance with this ruling (i.e., not barred by limitation under the facts found).
  • The opinion applies established authorities and evidentiary standards to the facts of the case but does not purport to lay down any novel legal principle; the ruling turns on the application of section 14(1) to the particular factual matrix and the proper application of the standard of proof for good faith and due diligence.

No other parties, additional issues, or further precedential holdings were introduced in the provided opinion beyond those summarized above.

    Firm Lalchand Nathmal And Others v. Firm Balaram Rameshwar And Others

    This is plaintiffs' appeal from the decree in Civil Suit No. 7-B of 1950 of the Court of the District Judge, Raigarh, demising their suit on the point of limitation.

    2. The plaint was initially filed in the Court of the Additional Civil Judge, Class I, Bilaspur, on 25th November 1947. The suit was instituted against Firm Balaram Rameshwar of Kharsia, said to be owned by (1) Balaram and (2) Rimeshwar who were joined as defendants. It was alleged that the defendants were residing and carrying on business at manza Tundri in tahsil Janjgir, district Bilaspur. This was the solitary ground on which the Court was alleged to have jurisdiction to entertain the suit. The claim was based on the dealings between the plaintiffs' firm Lalchand Nathmal and the defendants' firm between 23-2-1-944 and 10-12-1944. At the time the dealings began, the defendant-firm was carrying on business at Tundri within the jurisdiction of the Court. Till 17-10-1944, it was styled as 'Balaram Rameshwar', and subse­quently, as 'Rameshwar', in the plaintiffs' account-books. According to the defendants, in the month of Karlik, Sambat 2000 (this should be 2001), corresponding to October 1944, there was a partition in the family when Balaram began dealings at mauza Tundri in the name of 'Balaram Rameshwardas' and 'Bhagwandas Rameshwardas', and Rameshwar carried on business at Charisma in the name of 'Nanhooram Rameshwar'. Their case was that the dealings ware entered into by Rameshwar alone who did not reside within the jurisdiction of the Court. It was accordingly alleged that the Court had no jurisdiction to entertain the suit and there was no liability against Balaram for the dealings.

    3. The suit was tried on all points including that of jurisdiction. Judg­ment was delivered on 10-9-1949, holding that Balaram had no share in the dealings which were entered into by Rameshwar alone. The suit was thus dis­missed as against Balaram. So far as Rameshwar was concerned, it was held that his residence within the jurisdiction of the Court was not proved and accordingly the suit was not maintainable in the Court of Bilaspur. In this view, the plaint was directed to be returned for presentation to the proper Court.

    4. It appears from the order-sheets of the suit that on 10-9-1949, when the judgment was delivered, the Court passed an order that the plaint would be returned only alter a certified copy thereof was filed. The case was accordingly directed to be put up on 25-9-1949. As the copy was not obtained till then, further time was granted till 10-10-1949. The time was again extended up to 14-11-1949 as the Judge was on leave and the copy of the plaint was not ready till then for delivery. The copy was filed on this date. The Court thereupon directed the original plaint to be returned to the plaintiffs' counsel. However, immediately after it passed an order withholding the plaint as the question of court-fees on the claim against Balaram had to be considered. This point was decided on 15-11-1949 when the plaintiffs were directed to pay an additional court-fee of Rs.460 before the plaint could be returned. Time for payment was given till 2-12-1949, and although on that date the plaintiffs were granted further time till 9-1-1950, the amount was later on paid on the same date. Afterwards, the plaint was returned on 12-12-1949 and was presented in the Court of the Civil Judge, Class I, Raigarh, on 24-12-1949. Later the suit was taken up by the District Judge, Raigarh, and disposed of by him.

    5. The question at issue is whether the time between 25-11-1847 and 12-12-1949 should be excluded under section 14 of the Indian Limitation Act, 1908. On this question, the lower Court has held in respect of the period between 10-9-1949 and 12-12-1949 that the plaintiffs are entitled to its exclusion. This finding is contested by the defendant in his cress-objection. The lower Court, however, held that the time taken up in the Court between 25-11-1947 and 10-9-1949 could not be excluded as the plaintiffs had not acted in good faith and with due diligence in prosecuting the suit. This finding was arrived at on the view that the plaintiffs knew that Rameshwar was not resting within the jurisdiction of the Court and had made that allegation in the plaint to wrongfully give to the Court jurisdiction to entertain the suit

    6. At the time the suit was instituted in the Court at Bilaspur, Kharsia, was within the area of the quondam State of Raigarh. However, the plaintiffs were carrying on business at that place, and as appears from the evidence of the plaintiff, Nathmal (P. W. 1), suits were also filed against them at Raigarh which they were defending through their counsel of Bilaspur. Their motive in instituting the suit at Bilaspur, therefore, could not be to avoid the Courts at Raigarh. What other purpose they could have in selecting a wrong Court has not been stated by the defendant. There is also nothing on record to show that the partition effected by his family was known to the plaintiffs. The mere fact that the plaintiffs changed the name of the firm in their account-books onward* of 17-10-1944 would not necessarily indicate that they had notice of the partition. At least, Balaram, who was a partner in the firm when the dealings began, continued residing at Tundri within the jurisdiction of the Court. Also, although the Court held that Rameshwar did not reside within its juris­diction, it does not follow therefrom that the plaintiffs knew of the change of his residence from Tundri where formerly the firm was carrying on business. There is, therefore, no reason to suspect any ulterior motive on the part of the plaintiffs to have instituted the suit in the Court of Bilasptir. The case has to be judged on this basis.

    7. The question of limitation depends upon the application of sub-section (1) of section 14 of the Indian Limitation Act. This provision contemplates the following conditions: -

    (i) That the plaintiff was prosecuting the suit with due diligence; (ii) That he prosecuted it in good faith; and

    (iii) That the Court was unable to entertain the suit from defect in jurisdiction or other cause of a like nature.

    The burden of proving all these conditions was doubtless on the plaintiffs: See Gnanacharya Swamigal v. Saravanapirumal I. L. R. 1941 Madras 347 (F B)=A. I. R. 1941 Mad. 319.

    8. The case where only some of the defendants reside within the juris­diction of the Court is governed by clause (b) of section 20 of the Code of Civil Procedure. It gives power to the Court to grant leave for the institution of the suit before it, even if other defendants do not reside, or carry on business, or personally work for gain within its territorial jurisdiction. It cannot, there­fore, b2 said that the Court at Bilaspur was wholly devoid of jurisdiction to entertain the suit. It is true that the plaintiffs did not ask for the Court's leave under this provision, but that only strengthens the inference that they were under a genuine belief that both the defendants were residing at Tundri. Plaintiff Nathmal, as P. W. 1 has testified to the fact that according to his information both the defendants were residing at Tundri at the time of the institution of the suit. This statement cannot be dismissed on the mere ground that he could not recall the names of the persons who had given him the inform­ation. His evidence on the point has not been rebutted by the defendant. There is, therefore, no reason to discard it. The plaintiffs had clearly two courses open when the objection to the Courts jurisdiction was raised. They could have taken back the plaint and filed if in the Court at Eagar. Alter­natively, they could have prayed for the leave of the Court. When both, these courses were not availed of by the plaintiffs, it must be held that they genuinely believed that both the defendants were residing within the jurisdiction of the Court

    9. There is no doubt that the plaintiffs were prosecuting the suit in the 'Court at Bilaspur with due diligence as they had taken all the necessary steps and had committed no default. The lower Court, however, declined to apply section 14 of the Indian Limitation Act on the ground that they had not proved good faith, that is, due care and attention, in prosecuting the suit. This is not a case of any negligence on the part of the plaintiffs which, as held in Ghusulal ' Ganeshilal v. Gumbhirmull A. I. R. 1938 Cal. 377, would bar the application of section 14 of the Indian Limitation Act. Nor is it a case of any ulterior motive or lack of genuine belief which would disentitle them to relief; See Sheonarayan v., Ramprasad (1925) 8 V L. J. 76 = A.. I. R. 1923 Nag. 241. The only question is whether in the circumstances of the case, the plaintiffs should be deemed to have acted with due care and attention.

    10. This question was considered at some length in Naik Lalloolal and others v. Naik Vishnu and another S.A. No. 550 of 1948, D/18-2-1954, which was decided by one of us (Bhutt J.). It was boarded in t at case that the question whether or not due care and attention was exercised has to be determined with reference to the facts of each case. The standard of proof that is required to adjudge this issue cannot be higher than what is laid down in section 3 of the Indian Evidence

    Act, 1872, which defines the term 'proved' as below:

    "A fact is said to be proved when, after considering the matters before it, the Court either believes it to exist, or considers it's existence so probable that a prudent mm ought, under the circumstances of the particular case, to act upon the supposition that it exists."

    How this definition has to be applied to the facts of each case has been laid down in that case in these terms:-

    "Under this definition a broad view has to be taken and despite cer­tain errors of a human nature, if a prudent man is inclined to take a different view on the basis of other materials, that should be deemed to be proved as a fact. The star dare1 of judgment in such cases is common human conduct which admits of ordinary errors but despite pooch drawbacks may not be sufficient to negative good faith. One proceeds in human affairs on the basis that if the care and attention that a problem ordinarily requires is given there would not be any further complications. He is not expected to imagine all possible difficulties and accidents and provide against them beforehand. If such were the case, a person would be found guilty of negli­gence in each case only if an untoward result has followed. This is not the standard that the law requires."

    11. The facts of the present case are that when the suit was filed at Bilaspur, the plaintiffs genuinely believed that both the defendants were residing within the jurisdiction of the Court. This belief persisted with them until the matter was finally determined on 10-9-1949. As presumably they had no information of the partition in the defendant's family, they had no occa­sion to imagine that one of them had left the place of residence. There was, therefore, no occasion for the plaintiffs to make any enquiry on this point.. In these circumstances, it cannot be held that they did not exercise due care and attention solely because they did not undertake what they could not imagine to be a necessary enquiry. The time taken in the Court at Bilaspur up to 10-9-1949 is, there for, in our opinion, covered by clause (1) of section 14 of the Indian Limitation Act.

    12. The plaint could not be taken back by the plaintiffs at least till 14-11-1949 due to the direction of the Court prohibiting its return until its citified copy was filed. Subsequently also, the plaint could not be taken back by the plaintiffs till the amount of court-fees directed by the Court was paid. They could not obviously have expected such a direction on the date they filed the copy of the plaint. Their request for time for payment of the court-fees was, therefore, reasonable and as the Court had granted them time till 2-12-1919, the propriety of excluding time up to that date cannot be open to question. Afterwards, the plaintiffs paid the court-fees on the due date, namely, 2-12-1949. On that date, however, the Judge was busy in a session's case and it was obviously for this reason that the plaint could not then be returned. That the plaintiffs were careful in taking back the plaint as soon as possible appears from the is fact that although the Court had fixed the case for return of the plaint on 9-1-1950, they had taken it back on 12-12-1949. The lower Court was, therefore, right in holding that the time between 10-9-1949 and 12-12-1919 was liable to be excluded. However, in view of our finding above, the plaintiffs are also entitled to the exclusion of time from 25-11-1947 till 10-9-19-1-9. Accordingly, even if the time between 12-12-1949 and 24-12-1949 is not excluded, the suit would still be within limitation.

    13. It was, however, contended that the plaintiffs had not supplied proper details in the plaint to entitle them to the exclusion of time. So far as the facts up to 12-12-1949 were concerned, they were known to both the parties. Whatever further the plaintiffs could say was not material if the time till 12-12-194-9 was liable to be excluded. Proper issues were also framed covering the entire period up to 12-12-1949. This is not, therefore, a case where the parties had no knowledge of the points at issue. The case is accordingly covered by the dictum in Nagubai v. B. Shama Rao A I R 1956 S. C. 593. The defendant cannot, therefore, be permitted to complain of any prejudice for want of proper details in the pleading.

    14. The result is that the cross-objection fails and is dismissed, and the appeal succeeds and is allowed. The decree of the Court below is accordingly set aside and the suit is remitted to it for decision in accordance with law. Costs shall abide the result. Taere shall be a certificate for refund of the court-fees on the appeal.

    Appeal allowed.

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    Comments

    Firm Lalchand Nathmal And Others v. Firm Balaram Rameshwar And Others
    (Mar 14, 1957)