Limitation Act | S.14(2) Does Not Apply To Cases Where Court With Jurisdiction Erroneously Declines To Entertain Plea: Kerala High Court

For context, Section 14 of the Limitation Act deals with the exclusion of time of proceeding bona fide in court without jurisdiction.

Justice P. Krishna Kumar delivered the judgment in a case arising from a suit for recovery of money passed on January 2, 2002,by the first respondent bank. The decree holder first filed an execution petition in 2009, which the executing court returned on the ground that only the Debt Recovery Tribunal (DRT) had jurisdiction since the decretal amount exceeded ₹10 lakhs. Without approaching the DRT, the bank refiled a fresh execution petition before the same civil court in March 2015, after the 12-year limitation period prescribed under Article 136 of the Limitation Act had expired.

The Court examined whether the decree holder is entitled to get exclusion of the period during which the first execution petition was pending.

The counsel for the petitioner argued that the execution petition was time-barred. Relying on Bakhtawar Singh and Anr v Sada Kaur and Another [AIR 1996 SC 3488], it was argued that since the earlier proceeding was not rejected for want of jurisdiction or for any other cause of a like nature, as contemplated under Section 14 of the Act, the decree holder is not entitled to claim exclusion of the period during which the earlier execution petition was pending.

The counsel for the respondents submitted that Section 14 must be interpreted in a manner which advances the cause of justice rather than to defeat the proceedings on the ground of mere technicality as the underlying policy of Section 14 of the Act is to extend protection to a litigant who, in good faith and with due diligence, prosecutes a proceeding which fails for some defects.

The Court examined Section 14, and observed that the period of limitation for the refiled proceeding must be determined as if it were a new proceeding, while excluding the time during which the matter was bona fide prosecuted in the wrong forum.

It was further observed that Section 14 applies only when the earlier proceeding was instituted in a forum that in law lacked jurisdiction or was unable to entertain it for a cause of like nature.

“From the plain language of Section 14, it is manifest that, to claim the benefit of exclusion of time, it must be established that the court which declined to entertain the earlier proceeding was unable to do so by reason of a defect of jurisdiction or other cause of a like nature. The provision attracts only when a party bona fide chooses a wrong forum and then diligently prosecutes it.” the Court observed.

Relying on Bakthawar Singh v Sada Kaur, the Court observed that Section 14 does not extend to cases where the Court erroneously declines to entertain the proceeding on a mistaken perception or wrong application of legal principles. The Court observed that in such circumstances, the litigant's remedy lies in challenging the erroneous order rather than filing a fresh proceeding before the same forum.

“To permit such recourse would defeat the legislative intent of the provision and obliterate the distinction between lack of jurisdiction and erroneous exercise of jurisdiction.” the Court added.

The Court thus allowed the petition and held that the decree holder was not entitled to exclusion of time. The Court declared the second execution petition barred by limitation and dismissed it, setting aside the lower court's order.

Case Title: P T Babu v Vijaya Bank

Case No: OP(C) 1388/ 2016

Citation: 2025 LiveLaw (Ker) 456

Counsel for Petitioner: N M Madhu, C S Rajani

Counsel for Respondent: Latha Anand