2022 (1) TMI 1364 - SC - Indian Laws

Maintainability of suit - time limitation - whether the plea of the appellant is proved would depend upon evidence adduced at the trial? - HELD THAT - The course of action which was followed by the learned trial Judge of directing the parties to address arguments on the issue of limitation was irregular. The issue of limitation in the present case would require evidence to be adduced. Order XIV Rule 2 of the CPC stipulates that when issues of both law and facts arise in the same suit, the Court may dispose the suit by trying the issue of law first. For this purpose, the provision specifies two questions of law, which are (i) jurisdiction of the Court; and (ii) a bar to the suit created by any law for the time being in force. Before this Court in NUSLI NEVILLE WADIA VERSUS IVORY PROPERTIES ORS. 2019 (10) TMI 1314 - SUPREME COURT , the issue was whether the issue of limitation can be determined as a preliminary issue under Order XIV Rule 2. The three-judge bench of this court observed that if the issue of limitation is based on an admitted fact, it can be decided as a preliminary issue under Order XIV Rule(2)(b). However, if the facts surrounding the issue of limitation are disputed, it cannot be decided as a preliminary issue. Since the determination of the issue of limitation in this case is not a pure question of law, it cannot be decided as preliminary issue under Order XIV Rule 2 of the CPC - Appeal allowed.

Summary

Issues:
- Suit dismissal on the ground of limitation
- Interpretation of loan transactions vs. commission payments
- Application of Order XIV Rule 2 of the CPC for determining limitation as a preliminary issue

Analysis:
1. The appellant filed a suit for recovery against the respondent, claiming repayment of loans granted, while the respondent argued that the payments were commissions for real estate services. The trial court and High Court dismissed the suit based on limitation, citing the last payment date. The appellant contended that the loans were to be repaid within a year, as per the plaint, and argued for a trial based on evidence rather than oral arguments alone.

2. The defense denied the existence of loan transactions and highlighted the lack of a written agreement. The conflicting versions of the transactions necessitated evidence-based determination. The issue of limitation could not be isolated from the transaction nature, requiring evidence for resolution. The trial court's directive to address limitation orally was deemed irregular, as evidence should have been presented.

3. The Supreme Court referred to Order XIV Rule 2 of the CPC, stating that the issue of limitation, when disputed, cannot be decided as a preliminary issue. Citing the Nusli Neville Wadia case, the Court emphasized that disputed facts surrounding limitation preclude its determination as a preliminary issue. As the limitation issue was not solely a question of law, the Court set aside the previous judgments and directed its resolution with other issues at trial.

4. The judgment allowed the appeal, emphasizing the need for evidence-based determination on the limitation issue. The Court's decision highlighted the importance of factual disputes in determining legal issues and the inappropriateness of deciding limitations as a preliminary issue under Order XIV Rule 2. The case serves as a precedent for resolving similar disputes based on evidence rather than oral arguments alone.