1. Contractual dispute — Validity of a time-limit condition for filing a claim — Section 28, Indian Contract Act, 1872. (Para 1 , 3 )
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2022 Supreme(SC) 1381
SUPREME COURT OF INDIA
Hemant Gupta, V. Ramasubramanian, JJ.
The Oriental Insurance Company Limited – Appellant
Versus
Sanjesh & Anr. – Respondents
Petition(s) for Special Leave to Appeal (C) No(s). 3978 of 2022
Decided On : 11-03-2022
Important Points
Agreements limiting the time within which a party may enforce their rights under a contract are void as per Section 28 of the Indian Contract Act, 1872.
Subject
Contract Law - Enforcement of Rights
Act Referred
Headnote
Condonable Period - Indian Contract Act, 1872 - Section 28
Legal Category Hierarchy
Advocates appeared:
Mr. Pankaj Seth, Advocate, Mrs. Manjeet Chawla, Advocate, Mr. Yashvardhan S. Soam, Advocate, For the Appellant.
Mr. Pankaj Seth, Advocate, Mrs. Manjeet Chawla, Advocate, Mr. Yashvardhan S. Soam, Advocate, For the Appellant.
Table of Contents
2. Claim filing deadline — Contention that the claim was not filed within the prescribed one-month or extendable period. (Para 1 )
3. Analysis of Section 28, Indian Contract Act — Condition limiting time to enforce rights found contrary to law and void. (Para 2 , 3 )
4. Agreements limiting the time to enforce contractual rights are void under Section 28, Indian Contract Act, 1872. (Para 2 , 3 )
5. Special leave petition dismissed; pending applications disposed of. (Para 4 , 5 , 6 )
6. Is a contractual agreement that limits the time for enforcing rights valid?
No. Under Section 28 of the Indian Contract Act, 1872, any agreement that limits the time within which a party may enforce their rights under a contract is void. (Para 2 )
7. What is the legal status of a condition requiring a claim to be filed within a specific limited period?
Such a condition is contrary to Section 28 of the Indian Contract Act, 1872, and is therefore void. (Para 3 )
8. Does Section 28 of the Indian Contract Act, 1872 apply to agreements that extinguish rights upon the expiry of a specified period?
Yes, agreements that extinguish the rights of any party or discharge any party from liability upon the expiry of a specified period to restrict enforcement are void. (Para 2 )
ORDER
1. The sole arguments raised by learned counsel for the petitioner is that the claim was not filed within a period of one month or extending condonable period of one month.
2. We do not find any merit in the said arguments in view of Section 28 of the Indian Contract Act, 1872 (for short, 'the Act') which reads as under:-
"28. Agreements in restraint of legal proceedings, void.- [Every agreement,-
(a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or
(b) which extinguishes the rights of any party thereto, or discharges any party thereto, from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to the extent.]"
3. In view of the aforesaid Section, the condition of lodging claim within a period of one month, extendable by another one month is contrary to Section 28 of the Act and thus void.
4. In view of the said fact, we do not find any ground to interfere with the order passed by the High Court.
5. The special leave petition is, accordingly, dismissed.
6. Pending application(s), if any, also stand disposed of.
