
M&A Law Offices
May 13, 2025 at 11:20 AM
*Section 17 Limitation Act: Plaintiff Must Prove Fraud Obstructed Awareness of Right to Sue, Says Supreme Court*
The Supreme Court has clarified that to claim an exemption under Section 17 of the Limitation Act, 1963, a plaintiff must establish that fraud actively concealed their right to sue—not merely allege that the underlying transaction was fraudulent. Section 17 provides that the limitation period in cases involving fraud begins only when the fraud is discovered.
A bench comprising Justices J.B. Pardiwala and R. Mahadevan delivered the judgment while hearing an appeal involving a 2008 sale deed. The plaintiff filed a suit in 2012 seeking its cancellation, claiming the fraud came to light only in 2010. However, the trial court, appellate court, and High Court all dismissed the suit as time-barred under Article 59, which prescribes a three-year limitation.
Rejecting the plaintiff’s reliance on Section 17, the Court held that the exemption applies only if the fraud prevented the plaintiff from discovering her legal right to sue. Merely alleging fraud in the execution of the sale deed was insufficient.
The Court emphasized that the plaintiff, being present at the time of execution and a property dealer by profession, was expected to exercise due diligence. It found her claim of discovering the fraud only in 2010 implausible. Additionally, the plaint lacked specific pleadings of fraud as required under Order VII Rule 6 of the CPC.
The Court concluded that Section 17 protection requires proof that fraud actively obstructed awareness of the legal remedy—not just that the transaction itself was fraudulent. Accordingly, the appeal was dismissed.
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