Supreme Court Upholds Limitation Act in Property Dispute: R. Nagaraj (Dead) vs. Rajmani (2025)

Date of the Judgment: April 09, 2025
Citation: 2025 INSC 478
Judges: Justices J. B. Pardiwala and R. Mahadevan

Can a delay of 17 years in challenging a property sale be excused? The Supreme Court of India recently addressed this critical question in a property dispute case. The core issue revolved around the applicability of the Limitation Act, 1963, and whether the High Court of Judicature at Madras was justified in remanding the matter to the trial court for a fresh trial on the issue of limitation. Justices J. B. Pardiwala and R. Mahadevan, in a recent judgment, overturned the High Court’s decision, emphasizing the importance of adhering to limitation periods and protecting the rights of bona fide purchasers.

Case Background

The case originates from a joint Hindu family consisting of Rangappa Gowdar and his sons, Dasappa Gowdar and Samiappan. In 1965, Samiappan’s wife and daughter (Respondent Nos. 6 and 7) filed a suit (O.S.No.851 of 1965) seeking maintenance against Samiappan, Rangappa Gowdar, and Dasappa Gowdar. The court decreed the suit on August 26, 1965, and the suit properties were attached for the maintenance amount.

During the execution proceedings, Rangappa Gowdar and Dasappa Gowdar passed away, and their legal heirs were brought on record. Subsequently, one Karivarada Gowdar purchased the suit ‘A’ schedule property through a court auction. The sale was confirmed on September 25, 1970. Later, Karivarada Gowdar filed a suit (O.S.No.1978 of 1972) for a permanent injunction against Samiappan, which was decreed on June 11, 1973. Respondent Nos. 8 to 10 then purchased the ‘A’ schedule property from Karivarada Gowdar and also secured a decree for permanent injunction in O.S.No.3390 of 1981 on July 24, 1982. Eventually, Appellant Nos. 1 and 2 purchased the property.

In 1982, Respondent Nos. 1 to 3 (daughters and wife of Dasappa Gowdar) filed a suit (O.S.No.257 of 1982) seeking to set aside the 1965 decree and partition the suit ‘A’ and ‘C’ schedule properties. They sought 5/12 shares and a permanent injunction against the subsequent purchasers.

Timeline

Course of Proceedings

The trial court dismissed the suit (O.S.No.257 of 1982) on September 8, 1994. Respondent Nos. 1 to 3 then filed Appeal Suit No. 207 of 1994, which the Additional District Judge, Coimbatore, dismissed on January 28, 1997. Challenging this, Respondent Nos. 1 to 3 filed S.A.No.406 of 1998 before the High Court, which was allowed on February 17, 2020. The High Court remitted the matter to the trial court for framing additional issues regarding limitation and conducting a fresh trial.

Legal Framework

The Supreme Court considered the following legal provisions:

✓ Section 100 of the Code of Civil Procedure (CPC), 1908: This section defines the conditions under which a second appeal can be entertained by the High Court. Specifically, it requires the High Court to be satisfied that the case involves a substantial question of law.

The provision states:
“[100. Second appeal. —(1) Save as otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to the High Court, if the High Court is satisfied that the case involves a substantial question of law.]”

✓ Limitation Act, 1963: This act prescribes the time limits within which legal actions must be initiated. Article 59 of the Limitation Act deals with setting aside decrees and specifies a period of three years from when the right to sue accrues.

Arguments

Arguments by the Appellants:

• The appellants contended that Respondent Nos. 1 to 3 were aware of the execution proceedings in O.S.No.851 of 1965 and that the second suit (O.S.No.257 of 1982) was filed after a period of 17 years, making it barred by limitation.
• They argued that the suit ‘A’ schedule property could no longer be considered joint family property after being brought into court auction and sold. Respondent Nos. 1 to 3 did not take steps to set aside the sale.
• The appellants also pointed out that the suit was not dismissed solely on the ground of limitation but also on merits, observing that Respondent Nos. 1 to 3 were not entitled to any relief since they had knowledge about the earlier suit.
• They submitted that the High Court should have decided the question of law relating to limitation instead of remitting the case to the trial court.

Arguments by the Respondents:

• Respondent Nos. 1 to 3 argued that the issue of limitation is a mixed question of fact and law and that the trial court and the First Appellate Court should have framed an issue on limitation.
• They relied on the decision of the Supreme Court in Vaish Aggarwal Panchayat v. Inder Kumar & Others [(2020) 12 SCC 809].
• The respondents further submitted that the decree obtained in O.S. No. 851 of 1965 was a result of fraud and collusion.
• They cited Ramesh B. Desai & Ors. v. Bipin Vadilal Mehta & Others [(2006) 5 SCC 638] to support their argument that the matter should be remanded for framing a specific issue regarding limitation.

Issues Framed by the Supreme Court

1. Whether the High Court was justified in remanding the matter to the trial court for a fresh trial on the issue of limitation, despite the existence of concurrent findings, when Section 100 of the Code of Civil Procedure, 1908 empowered the High Court to decide the matter.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

Regarding the scope and application of Section 100 CPC:

• Santosh Hazari v. Purushottam Tiwari (Deceased) by LRs [(2001) 3 SCC 179] – Supreme Court of India
• Surat Singh (Dead) v. Siri Bhagwan & Others [(2018) 4 SCC 562] – Supreme Court of India
• Mehboob -Ur-Rehman (Dead) Through Lrs. V . Ahsanul Ghani [AIR 2019 SC 1178/(2019) 19 SCC 413] – Supreme Court of India
• Vijay Arjun Bhagat and others v. Nana Laxman Tapkire and others , [(2018) 6 SCC 727] – Supreme Court of India
• Ramakrishnan Kadinhipally & Ors. v. P.T. Karunakaran Nambiar [2023 SCC OnLine SC 323] – Supreme Court of India

Regarding the object and purpose of the Limitation Act:

• Bharat Barrel & Drum Mfg. Co. Ltd . and Another v. Employees State Insurance Corporation [AIR 1972 SC 1935] – Supreme Court of India
• N. Balakrishnan v. M. Krishnamurthy [(1998) 7 SCC 123] – Supreme Court of India

Regarding the duty of the court to consider limitation:

• V.M. Salgaocar and Bros. v. Board of Trustees of Port of Mormugao and another [(2005) 4 SCC 613] – Supreme Court of India

Regarding the interpretation of procedural laws:

• Sardar Amarjit Singh Kalra (Dead) by L.R s. & Others v. Pramod Gupta (Smt.) (Dead) by L.Rs. and Others [MANU/SC/1214/2002 : (2003) 3 SCC 272] – Supreme Court of India
• Kailash v. Nanhku and Ors. [MANU/SC/0264/2005 : (2005) 4 SCC 480] – Supreme Court of India
• Sugandhi (Dead) by LRs & Others v. P. Rajkumar [MANU/SC/0792/2020 : (2020) 10 SCC 706] – Supreme Court of India

Judgment

How each authority was viewed by the Court?

• Santosh Hazari v. Purushottam Tiwari (Deceased) by LRs [(2001) 3 SCC 179]: Cited to emphasize that the High Court has the authority to entertain second appeals strictly on substantial questions of law and adjudicate them directly, without remanding the matter to the trial court.
• Surat Singh (Dead) v. Siri Bhagwan & Others [(2018) 4 SCC 562]: Cited to emphasize the mandatory procedure under Section 100 CPC for framing and deciding substantial questions of law.
• Mehboob -Ur-Rehman (Dead) Through Lrs. V . Ahsanul Ghani [AIR 2019 SC 1178/(2019) 19 SCC 413]: Cited to reiterate the contours of the powers of High Court under the proviso to sub -section (5) of Section 100 CPC.
• Ramakrishnan Kadinhipally & Ors. v. P.T. Karunakaran Nambiar [2023 SCC OnLine SC 323]: Cited to criticize the High Court for remanding a case to the trial court without proper justification, especially when concurrent findings of fact existed.
• Bharat Barrel & Drum Mfg. Co. Ltd . and Another v. Employees State Insurance Corporation [AIR 1972 SC 1935]: Cited to describe the object of the Statutes of Limitations to compel a person to exercise his rights of action within a reasonable time as also to discourage and suppress stale, fake or fraudulent claims.
• N. Balakrishnan v. M. Krishnamurthy [(1998) 7 SCC 123]: Cited to explain that the Limitation Act is based upon public policy which is used for fixing a life span of a legal remedy for the purpose of general welfare.
• V.M. Salgaocar and Bros. v. Board of Trustees of Port of Mormugao and another [(2005) 4 SCC 613]: Cited to mandate that it is the duty of the court to dismiss any suit instituted after the prescribed period of limitation irrespective of the fact that limitation has not been set up as a defence.
• Sardar Amarjit Singh Kalra (Dead) by L.R s. & Others v. Pramod Gupta (Smt.) (Dead) by L.Rs. and Others [MANU/SC/1214/2002 : (2003) 3 SCC 272]: Cited that laws of procedure are meant to regulate effectively, assist and aid the object of doing substantial and real justice and not to foreclose even an adjudication on merits of substantial rights of citizen under personal, property and other laws.
• Kailash v. Nanhku and Ors. [MANU/SC/0264/2005 : (2005) 4 SCC 480]: Cited that all the Rules of procedure are the handmaid of justice and the object of prescribing procedure is to advance the cause of justice.
• Sugandhi (Dead) by LRs & Others v. P. Rajkumar [MANU/SC/0792/2020 : (2020) 10 SCC 706]: Cited that procedural and technical hurdles shall not be allowed to come in the way of the court while doing substantial justice.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to uphold the principles of the Limitation Act, protect the rights of bona fide purchasers, and ensure that litigation is not unduly prolonged. The Court emphasized that the Respondent Nos. 1 to 3 were aware of the earlier proceedings and the decree passed in the first suit. The auction purchaser’s title was confirmed by court orders, and subsequent transfers were properly registered and recorded. Therefore, the Court found no plausible reasons for the delay in challenging the sale.

Logical Reasoning:

ISSUE: Whether the High Court was justified in remanding the matter to the trial court for a fresh trial on the issue of limitation?

Flowchart:

Concurrent Findings by Trial Court and First Appellate Court that Suit was Barred by Limitation

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High Court Remanded Matter for Fresh Trial on Limitation

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Supreme Court Examined High Court’s Decision

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Supreme Court Found High Court’s Remand Unjustified

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Supreme Court Held High Court Should Have Decided the Issue Itself

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Supreme Court Restored the Judgments of the Trial Court and First Appellate Court

The Court’s reasoning was based on the following key points:

• The High Court failed to decide the substantial question of law framed at the time of admission and only decided the additional substantial question of law framed at the time of hearing.
• The Respondent Nos. 1 to 3 had knowledge of the decree and sale, yet filed the suit after 17 years.
• The trial court, in the performance of its duty, mandated under Section 3 of the Limitation Act, 1963, has taken up the question of limitation and upon perusal of the overall pleadings and evidence, has rightly decided the same .
• The concurrent findings of the Courts below were sought to be challenged before the High Court . It is a general rule that High Court will not interfere with the concurrent findings of the Courts below.

Key quotes from the judgment:

• “The object of the Statutes of Limitations is to compel a person to exercise his rights of action within a reasonable time as also to discourage and suppress stale, fake or fraudulent claims.”
• “Section 3 of the Limitation Act enjoins a court to dismiss any suit instituted after the period of limitation prescribed therefor by Schedule I irrespective of the fact whether the opponent had set up the plea of limitation or not.”
• “Laws of procedure are meant to regulate effectively, assist and aid the object of doing substantial and real justice and not to foreclose even an adjudication on merits of substantial rights of citizen under personal, property and other laws.”

Key Takeaways

• The Limitation Act must be strictly enforced, especially when the earlier transaction or sale is well within the knowledge of the parties.
• Bona fide purchasers for value deserve protection, and their rights should not be disturbed after a long period.
• High Courts should decide substantial questions of law themselves rather than remanding matters to the trial court unnecessarily.

Directions

No specific directions were given by the Supreme Court in this judgment.

Development of Law

The ratio decidendi of the case is that the High Court should not remand a matter to the trial court for a fresh trial on the issue of limitation when concurrent findings exist and the High Court is empowered to decide the matter itself under Section 100 CPC. This decision reinforces the importance of adhering to limitation periods and protecting the rights of bona fide purchasers.

Conclusion

In R. Nagaraj (Dead) vs. Rajmani (2025), the Supreme Court allowed the appeal, setting aside the High Court’s judgment and restoring the trial court’s decision. The Court held that the High Court was not justified in remanding the matter for a fresh trial on the issue of limitation. The Supreme Court emphasized the importance of adhering to limitation periods and protecting the rights of bona fide purchasers.