The Supreme Court of India recently ruled that the principle of 'reasonable time' will apply when no time limit is prescribed. In a civil appeal against the judgment of the Gauhati High Court, the Court held that the Jogighopa (Assam) Unit of Ashok Paper Mills Limited (Acquisition Transfer of Undertaking) Act, 1990, is not governed by the prescription of limitation under Article 116 of the Limitation Act, 1963.

The claimant (appellant) had supplied certain goods to a respondent company and raised bills which were only partly paid. Later, the company was declared "a sick company" under the Sick Industrial Companies (Special Provisions) Act, 1935. To revive the industry, the Government of Assam enacted the Jogighopa (Assam) Unit of Ashok Paper Mills Limited (Acquisition Transfer of Undertaking) Act, 1990. The claimant filed a claim for a sum of Rs. 1,58,375/-, against which the Commissioner of Payments awarded the principal sum but no interest. The claimant accepted the amount and raised a grievance in respect of non-payment of any interest for the period 1983-1993. A writ petition before the High Court was filed seeking direction to the Commissioner to consider an award interest on the principal amount due.

The Commissioner granted the interest, and the claimants approached the High Court again. The High Court, considering the 1993 Act under which the interest was claimed, held that the interest calculable and due would only be from September 23, 1992, as the Act was brought into force on that date. The claimants moved an application before the District Judge for condonation of delay, and the Judge observed that since no specific time has been provided for preferring an appeal upon dissatisfaction with the decision of the Commissioner, such an appeal is fit to be admitted. Hence, the appeal was filed before the Apex Court.

The Supreme Court noted that when no time limit is prescribed, a court must undertake a holistic assessment of the facts and circumstances of the case to examine the possibility of delay causing prejudice to a party. The Court further noted that when a party to a dispute raises a plea of delay despite no specific period being prescribed in the statute, such a party bears the burden of demonstrating how the delay in itself would cause the party additional prejudice or loss as opposed to the claim subject matter of dispute being raised at an earlier point in time.

The Court held that it would be inappropriate for a court to provide a limitation period when the legislature prescribes no limitation. In such a situation, the Court should consider the parties' conduct, the nature of the proceeding, the length of delay, the possibility of prejudice being caused, and the scheme of the statute in question.

The Court emphasised that, in cases where neither statute provides for a specific limitation, urgency may be absent, and shorter delays would not attract delay and laches. The Court allowed the appeal and directed the District Judge to proceed in accordance with the law.