A wrongful act which causes an injury which is complete is not a continuing wrong for the purpose of Section 23 of the Limitation Act even though the damage resulting from the act may continue

The Supreme Court reiterated that S.23 refers not to a continuing right but to a continuing wrong which maybe defined as a continuing source of injury which renders the doer of the act responsible and liable for the continuance of the said injury.

The above ratio was delivered by the Supreme Court in the case of Vashdeo R Bhojwani vs. Abhyudaya Co-operative Bank Ltd. in Civil Appeal No. 11020 of 2018 decided on 02.09.2019.

Challenge

The respondent No.2 had been declared a NPA by Abhyudaya Cooperative Bank Limited on 23.12.1999. Ultimately, a Recovery Certificate dated 24.12.2001 was issued for this amount. A Section 7 petition was filed by the Respondent No.1 on 21.07.2017 before the NCLT claiming that this amount together with interest, which kept ticking from 1998, was payable to the respondent as the loan granted to Respondent No.2 had originally been assigned, and, after a merger with another Cooperative Bank in 2006, the respondent became a Financial Creditor to whom these moneys were owed. A petition under Section 7 was admitted on 05.03.2018 by the NCLT, stating that as the default continued, no period of limitation would attach and the petition would, therefore, have to be admitted.

An appeal filed to the NCLAT resulted in a dismissal on 05.09.2018, stating that since the cause of action in the present case was continuing no limitation period would attach. It was further held that the Recovery Certificate of 2001 plainly shows that there is a default and that there is no statable defence.

The issue of limitation was the primary question before the Supreme Court for adjudication. It was urged that Section 23 of the Limitation Act would apply as a result of which limitation would be saved in the present case.

Held

The Supreme Court relied on an earlier decision of Balkrishna Savalram Pujari and Others vs. Shree Dnyaneshwar Maharaj Sansthan wherein the Court had held that S.23 refers not to a continuing right but to a continuing wrong. It is the very essence of a continuing wrong that it is an act which creates a continuing source of injury and renders the doer of the act responsible and liable for the continuance of the said injury. If the wrongful act causes an injury which is complete, there is no continuing wrong even though the damage resulting from the act may continue. If, however, a wrongful act is of such a character that the injury caused by it itself continues then the act constitutes a continuing wrong. In this connection it is necessary to draw a distinction between the injury caused by the wrongful act and what may be described as the effect of the said injury.

Relying on the said judgment the Supreme Court held that when the Recovery Certificate dated 24.12.2001 was issued, this Certificate injured effectively and completely the appellant’s rights as a result of which limitation would have begun ticking and thus the claim in the present suit was time barred.