The main legal point established in the judgment is the determination of the applicability of the provisions of the Limitation Act to a counter claim, specifically focusing on the date of accrual of the cause of action for filing the counter claim.

ORDER :

1. We have heard learned counsel for the parties and gone through the judgment and order dated 27.01.2005 passed by the High Court of Kerala in Writ Petition (C) No. 16782 of 2004(W).

2. The brief facts of the case indicate that a contract was entered into between the appellant and the respondent. The respondent cancelled the agreement on 06.03.1996 allegedly at the risk and cost of the appellant.

3. Feeling aggrieved by the cancellation of the agreement, the appellant preferred Original Suit No. 574/96 and Original Suit No. 575/96 in the court of Subordinate Judge, Thrissur challenging the termination of the contract and for consequential relief.

4. The respondent filed its written statement in response to plaint some time in the year 1997. Thereafter sometime in the year 2001, the respondent filed I.A. No. 5474/2001 and I.A. No. 5475/2001 seeking to amend the written statement and file a counter claim on 07.12.2001.

5. Learned trial judge considered the application and found that the counter claim was barred by limitation in view of the provisions of Article 55 of the Schedule to the Limitation Act, 1963.

6. Article 55 of the Schedule to the Limitation Act, 1963 reads as follows:

Description of suit	Period of Limitation	Time from which period begins to run
For compensation for the breach of any contract, express or implied not herein specially provided for.	Three years	When the contract is broken or (where there are successive breaches) when the breach in respect of which the suit is instituted occurs or (where the breach is continuing) when it ceases.

7. Learned trial judge also relied upon a decision of the Division Bench of the Kerala High Court in Delta Foundations and Constructions and Ors. v. Kerala State Construction Corporation Ltd. [2003 (1) KLT 626]. We may mention that the decision in Delta Foundations and Constructions and Ors. v. Kerala State Construction Corporation Ltd. had come up for consideration before us yesterday and the appeal filed by the Kerala State Construction Corporation Ltd. was dismissed. The decision of the Kerala High Court on the applicability of Article 55 of the Schedule to the Limitation Act, 1963 was upheld.

8. Be that as it may, the decision of the trial judge came up for consideration before the High Court. By its impugned judgment and order dated 27.01.2005, the judgment and order passed by the trial judge was set aside. The High Court referred to the decision in Delta Foundations and Constructions v. Kerala State Construction Corporation Ltd. but did not consider or deal with the decision.

9. The High Court held that the provisions of Article 113 of the Schedule to the Limitation Act would be applicable and that the trial court had not considered when exactly the cause of action for filing a counter claim arose in the case.

10. Our attention has been drawn by learned counsel for the appellant to Section 3 (2)(b)(ii) of the Limitation Act, 1963.

Section 3 reads as follows:

3. Bar of limitation.—

(1) Subject to the provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed although limitation has not been set up as a defence.

(2) For the purposes of this Act,-

(a) a suit is instituted,-

(i) in an ordinary case, when the plaint is presented to the proper officer;

(ii) in the case of a pauper, when his application for leave to sue as a pauper is made; and

(iii) in the case of a claim against a company which is being wound up by the court, when the claimant first sends in his claim to the official liquidator;

(b) any claim by way of a set off or a counter claim, shall be treated as a separate suit and shall be deemed to have been instituted-

(i) in the case of a set off, on the same date as the suit in which the set off is pleaded;

(ii) in the case of a counter