The date of application for addition of a party should be treated as the date of institution of suit against that party, even if the order of the Court on such an application is made beyond the prescribed period of limitation.

Headnote:
LIMITATION ACT, 1963 - SECTION 21(1) - APPLICATION FOR ADDITION OF PARTY - DATE OF APPLICATION AS DATE OF INSTITUTION OF SUIT - PROVISO TO SECTION 21(1) - NOT APPLICABLE.
Fact of the Case:

The petitioner filed a suit against three defendants for recovery of money. Defendant No. 2 was a Co-operative Bank to which a cheque for Rs. 68,907.32, drawn by the petitioner in favor of Indian Explosives Ltd, was paid through defendant No. 2. The petitioner realized the infirmity in the suit and requested the Court to delete respondent No. 2. Almost four months thereafter, an order for deletion of respondent No. 2 was made. The petitioner then again made an application for addition of respondent No. 2 as a party, which was allowed. On 9th August 1978, the suit had already become barred by limitation against respondent No. 2 on the basis of the cause of action shown in the plaint. The petitioner made an application on 9th August 1978, requesting the Court to exercise its discretion under the proviso to section 21(1) of the Limitation Act, 1963 (hereinafter referred to as “the Act of 1963”). This application was rejected by the trial Court.
Finding of the Court:

The Court held that the suit against defendant No. 2 must be treated as having been filed on 13th July 1977 when the application for joining defendant No. 2 as party was made. The Court further held that the proviso to section 21(1) of the Act of 1963 was not applicable in the present case.
Issues: 1. Whether the date of application for addition of a party should be treated as the date of institution of suit against that party? 2. Whether the proviso to section 21(1) of the Act of 1963 is applicable in a case where the application for addition of a party is made within the period of limitation but the Court takes time to dispose of it?
Ratio Decidendi: 1. The Court held that in a case where a plaintiff or defendant has applied before the expiry of the prescribed period of limitation for any person to be joined as a party but for some reason or the other application could not be disposed of within the prescribed period of limitation for the suit, the party must be deemed to have been joined on the date on which the application for joining a person as a party is made, though the order of the Court on such an application has been made beyond the prescribed period of limitation. 2. The Court held that the proviso to section 21(1) of the Act of 1963 is intended to relieve a party of the possible penal consequences following the delayed joining a party to a suit if the omission to join as plaintiff or defendant was due to a mistake in good faith. However, if a party is joined as a plaintiff or a defendant before the expiry of the prescribed period of limitation prescribed for the suit in question, it will not be necessary for the powers of the Court under the proviso to be invoked.
Final Decision: The petition was partly allowed and the rule made absolute accordingly. However, in the circumstances there will be no order as to costs. The trial Court shall now proceed with the suit.

JUDGMENT - Chandurkar M.N. Actg. C. J. -The petitioner in this petition is the plaintiff, who had initially filed a suit against all the three defendants-respondents. It is not necessary to refer to the details of the plaint and it is sufficient to mention that substantially the suit was for recovery of Rs. 73,698-12 with interest on the ground of wrongful conversion or monies had and received or alternatively for .damages. The petitioner's claim was that a cheque for Rs. 68,907.32, which was drawn by the petitioner in favour of Indian Explosives Ltd and sent to the said Company was not received-by the Company, but it was later learnt that this amount was paid through defendant No. 2, which is a Co-operative Bank to one M/s. Mansukhlal Shashi-kant Trading Corporation. Defendant No. 3 is a constituent of defendant No. 3-Bank who is said to have introduced the person in whose account the amount has actually been credited. The suit was filed on 30th January 1975. The cause of action shown in the suit is said to have arisen on 11th September 1974 and 27th September 1974. 11th September 1974 is the date of payment of the amount of the cheque to M/s. Mansukhlal Shashikant Trading Corporation. It Appeared that after the suit was filed, a notice under section 164 of the Maharashtra Co-operative Societies Act,” 1960, was served on defendant No. 2 on 23rd July 1975.

2. It Appeared that the petitioner realised the infirmity in the suit filed before the expiry of the period of notice under section 164 of the Maharashtra Co-operative Societies Act and requested the Court on 3rd March 1977 for deletion of respondent No. 2. Almost four months thereafter, an order for deletion of respondent No. 2 was made on 5th July 1977. The petitioner then again made an application for addition of respondent No. 2 as a party on 13th July 1977. That application was ultimately allowed on 9th August 1978. On 9th August 1978 the suit had already become barred by limitation against respondent No. 2 on the basis of the cause of action shown in the plaint. It Appeared that an objection on the ground of limitation was raised by respondent No. 2. The petitioner, therefore, made an application on 9th August 1978, that is, on the some day on which the order was passed but after the order, requesting the Court to exercise its discretion under the proviso to section 21 (1) of the Limitation Act, 1963 (hereinafter referred to as “the Act of 1963?). This application was rejected by the trial Court. The trial Court took the view that respondent No. 2 having been originally joined as a party but having subsequenly been deleted, this was not a case which was covered by the proviso to section 21(1) of the Act of 1963. The trial Court found that this was not a case in which omission on the part of the petitioner to include respondent No. 2 could be said to be due to a mistake made in good faith. This order is challenged by the petitioner.

3. Now, the main question in this petition is when can the respondent No. 2 be said to have been validly joined as a party defendant and can the suit be treated as having been instituted against it within the prescribed period of limitation. It is undoubtedly true that on 9th August 1978 when the trial Court passed the order allowing the application of the petitioner to join respondent No. 2 as a party, the period of three years from the date of the cause of action had already expired but yet the trial Court had granted the application for addition of respondent No. 2. It is obvious that the petitioner was constrained to seek the aid of the proviso to section 21 (1) of the Act of 1963 having regard to the objection raised on the ground of limitation.

4. According to the petitioner, respondent No. 2 must be treated as having been joined as a party to the suit on the date on which the suit itself was filed. Under no circumstances can such a request be granted because the date on which the suit was instituted, i.e. 30th of July 1975, “the suit cou

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