Tag Archives: DUe Diligence

Period of Limitation – Founded on the Principle of Public Policy

In Popat and Kotecha Property v. State Bank of India Staff Association, (2005) 7 SCC 510, it was held as under:
“The period of limitation is founded on public policy, it’s aim being to secure the quiet of the community, to suppress fraud and perjury, to quicken diligence and to prevent oppression. The statute, i.e. the Limitation Act is founded on the most salutary principle of general and public policy and incorporates a principle of great benefit to the community. It has, with great propriety, been termed a statute of repose, peace and justice. The statute discourages litigation by burying in one common receptacle all the accumulations of past times which are unexplained and have not from lapse of time become inexplicable. It has been said by John Voet, with singular felicity, that controversies are limited to a fixed period of time, lest they should be immortal while men are mortal.
Rules of limitation are not meant to destroy the rights of parties. They are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. The law of limitation fixes a lifespan for such legal remedy for the redress of the legal injury so suffered. Time is precious and wasted time would never revisit. During the efflux of time, newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So, a lifespan must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. The law of limitation is thus founded on public policy. It is enshrined in the maxim interest reipublicae Ut Sit Finis Litium (it is for the general welfare that a period be put to litigation). The idea is that every legal remedy must be kept alive for legislatively fixed period of time.” M/s H.K. Consumer Cooperative Society Ltd. v. State of U.P., 2017 (120) ALR 855.

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Due Diligence

The phrase “due diligence” came for consideration before the Supreme Court in Chandra Kanta Bansal v. Rajinder Singh Anand, 2005 (34) AIC 249 (SC) : (2005) 6 SCC 344, in which it has been held that the words “due diligence” have not been defined in the CPC. According to Oxford Dictionary (Edition 2006), the word “diligence” means careful and persistent application or effort. “Diligent” means careful and steady in application to one’s work and duties, showing care and effort. As per Black’s Law Dictionary (18th Edition), “diligence” means a continual effort to accomplish something, care, caution, the attention and care required from a person in a given situation. “Due Diligence” means the diligence reasonably expected from, and ordinarily exercised by a person who seeks to satisfy a legal requirement or to discharge an obligation. According to Words and Phrases (Permanent Edition 13-A) “due diligence” in law, means doing everything reasonable, not everything possible. “Due Diligence” means reasonable diligence; it means such diligence as a prudent man would exercise in the conduct of his own affairs.
The Hon’ble Apex Court again in J. Samuel v. Gattu Mahesh, 2012 (115) RD 533, held that due diligence is the idea that reasonable investigation is necessary before certain kinds of relief are requested. Duly diligent efforts are a requirement for a party seeking to use the adjudicatory mechanism to attain an anticipated relief. The term “due diligence” determines the scope of a party’s constructive knowledge, claim and is very critical to the outcome of the suit. Vidyawati v. State of U.P., 2014 (124) RD 722 (LB).

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