Limitation and fraud discovery: disputed facts must be proved before a petition can be rejected at the threshold.

Limitation for a company petition for rectification of the register could not be decided as a preliminary issue where the petition pleaded fraud and later discovery of the alleged wrongdoing. A plea of limitation raised in the nature of a demurrer must ordinarily be tested on the petition's averments alone, but where the starting point depends on discovery of fraud, the issue becomes a mixed question of law and fact. In that situation, the petition cannot be rejected under Order VII Rule 11(d) or finally disposed of under Order XIV Rule 2 without evidence, unless time-bar is apparent from the petition itself. On the pleadings, Section 17 of the Limitation Act was said to apply.

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Issues: Whether a company petition for rectification of the register could be dismissed at the threshold as barred by limitation on a preliminary issue, and whether the plea of fraud and want of knowledge raised in the petition required evidence before limitation could be decided.

Analysis: A plea that a proceeding is barred by limitation must ordinarily be tested on the averments in the petition alone, treating them as true, when raised in the nature of a demurrer. Where the starting point of limitation depends upon when the alleged fraud was discovered, the question is not a pure question of law but a mixed question of law and fact. Such a question cannot be finally decided as a preliminary issue under Order XIV Rule 2 of the Code of Civil Procedure, 1908, unless it is apparent from the petition itself that the proceeding is time-barred. The petition contained averments that the alleged fraud was discovered only later, and those averments could not be rejected without evidence. The petition therefore could not be thrown out under Order VII Rule 11(d) on limitation alone. The Court further held that, on the pleadings as they stood, the case was governed by the fraud-based postponement of limitation under Section 17 of the Limitation Act, 1963.

Conclusion: The petition was not liable to be dismissed as barred by limitation at the preliminary stage, and the contrary finding was set aside in favour of the appellants.

Ratio Decidendi: Where limitation depends on disputed facts such as discovery of fraud, the matter is a mixed question of law and fact and cannot be decided as a preliminary issue or under Order VII Rule 11(d) without evidence, on the basis of the petition alone.

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