Economy

Covid-19 lockdown: SC extends limitation period for Arbitration Act, cheque dishonour cases

K.R.Srivats New Delhi | Updated on May 07, 2020 Published on May 07, 2020

Both the litigants and lawyers to get relief from this move

If you are one of the litigants in a cheque bounce case or waiting for an Arbitral Tribunal award, then don’t worry about the Covid-19 induced lockdown eating into the limitation period prescribed under the law.

This is because the Supreme Court has now extended all periods of limitation prescribed under the Arbitration and Conciliation Act, 1996 and under section 138 of the Negotiable Instruments Act 1881 with effect from March 15 till further orders.

Put simply, this period from March 15 will not be counted towards limitation. If the limitation was to expire anytime after March 15, it would automatically stand extended till the time lockdown is there, said legal experts. This effectively means one can erase this period (from March 15 till the end of lockdown) from the calendar when one is counting limitation.

This has been done to ensure that litigants and lawyers don’t face difficulties in coming physically to file such proceedings in respective Courts/Tribunal across the country, including the Supreme Court. Whenever dishonour of cheques or cheque bounce happens, one has to file the matter within a limitation period of three years. The current relief comes in respect of both Arbitration and cheque bounce issues.

In case the limitation has expired after March 15, then the period from March 15 till the date on which the lockdown is lifted in the jurisdictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown, the SC has said in its directions under a Suo Motu writ.

Abir Lal Dey, Partner, L&L Partners, a law firm, said that the step taken by the honourable Supreme Court is a much-needed relief to the litigants and lawyers during the lockdown period. “The present order is in line with it's earlier order of March extending the limitation period for filing appeals. The Apex court has exercised its special powers granted to it under Article 142 of the Constitution of India”, he said.

Aseem Chawla, Managing Partner, ASC Legal said: “The said order of the Hon'ble Apex Court is seemingly in furtherance of the earlier order passed by the Court on March 23 suo motu taking notice of the hardship being faced by litigants in pursuing legal remedies. Now with the present order all period of limitation under Negotiable Instrument Act and Arbitration Act has been extended effect from March 15; 2020. This is indeed a welcome respite and would subserve the interest of justice".

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Published on May 07, 2020
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