Section 14, Limitation Act, 1963 – No Good faith & bona fides, no exclusion of time taken in previous proceedings

Every person has a right to approach a civil court to seek redressal of his grievances. But this right is subject to exceptions. For instance, a) where law itself bars jurisdiction of civil courts by creating tribunals / forums, b) where parties decide to redress their grievance by subjecting themselves to arbitration, etc.,

While so, there are many instances, wherein, parties do knock the doors of court(s) / forum(s), which lack jurisdiction to adjudicate the issues involved. However, by the time, such court(s) / forum(s) confirm their lack of jurisdiction, much time is over, wherefore, subsequently when the parties do approach the correct court / forum, their claims are barred by the law of Limitation. 

To cure this defect, such Parties can take help of Section 14 of the Limitation Act, 1963 which provides for exclusion of the time of proceeding ‘bona fide’ in court without jurisdiction. The test of ‘bona fide’ comes into play. In other words, such Parties have to give ‘bona fide’ reasons to the court explaining why they chose to first approach the court / forum which lacked jurisdiction. Court shall exclude the time taken provided the reasons stated shall be in 'Good faith' and ‘bona fide’.

Reference can be made to a recent decision of the Hon’ble Chhattisgarh High Court in Brij Bhushan Verma Vs South Eastern Coalfields Ltd, whereby, the Hon’ble Court refused to exclude the time taken since the reasons stated lacked ‘good faith’ and ‘bona fides’  as well. In this case, even though there was no arbitration agreement, the Appellant sought appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 and subsequently on dismissal, approached the competent court having jurisdiction. Refusing to exclude the time taken in proceedings under Section 11(6) petition, the Hon’ble Court held “10. In the instant case, the appellant/plaintiff was having full knowledge that there was no arbitration clause in the agreement and even after that proceeding for appointment of the arbitrator was filed. Mr. Dubey has argued that SO(C) Gevra area, in a meeting, had assured that the said matter may go in arbitration, therefore, the plaintiff firstly gave an application to the C.M.D. for appointment of an arbitrator and when the said application was not responded, then the above proceeding was filed. This is the self same statement of the appellant/plaintiff. There is not a single document of the defendant which may show that either such discussion had taken place between the appellant/plaintiff and SO(C) Gevra or that SO(C) Gevra had assured the appellant/plaintiff that there may be an arbitration on the orders passed by the C.M.D.. That apart SO(C) Gevra was not a competent authority to give such advise or to take such a decision in the matter on behalf of the respondent.

11.We also note that as soon as the arbitration proceeding was filed, the defendant had taken an objection about non-existence of the arbitration agreement between the parties, but the same was not accepted by the appellant, who continued the above proceeding and took a chance till its final rejection on merits.

13. In the instant case, neither there was an arbitration agreement nor a mutual consent between the competent parties to the agreement. Thus it cannot be said that in the above fact situation the appellant/plaintiff was prosecuting the arbitration proceeding with due diligence. On the contrary it would appear from the conduct of the appellant/plaintiff, as per pleadings taken in the plaint vide Para-45 and other paragraphs, that the appellant/plaintiff did not do things with due care and attention and the arbitration proceeding was not prosecuted in good faith.”