Where in the case of any suit or application for which a period of limitation is prescribed by the Limitation Act, the suit or application is based upon the fraud of the defendant or respondent or his agent ; or the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of the defendant or respondent or his agent, or where lany document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him ; the period of limitation shall not begin to run until the plaintiff or applicant has discovered the fraud or could with reasonable diligence have discovered it, or in the case of a concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production (Sec. 17 (1).
It should however, be noted that suspension of limitation in case of fraud does not take place in case of any suit to be instituted or application to be made to recover or enforce any charge against any property or to set aside any transaction affecting any property, which has been purchased for valuable consideration by a person who was not a party to the fraud and did not, at the time of the purchase, know or have reason to believe, that any fraud has been committed.
In the case of concealed documents also there is no suspension of limitation if the property has been purchased for valuable consideration by a person who was not a party to the concealment and, did not, at the time of purchase, know or have reason to believe, that the document had been concealed.
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ADVERTISEMENTS:
Where the execution of a decree or order within the period of limitation has been prevented by fraud or force of judgment- debtor, the court may, on the application of the judgment-creditor made after the expiry of the period of limitation extend the period for the execution of the decree order. But such an application must be made by the judgment creditor within one year from the date of the discovery of the fraud or the cessation of force, as the case may be. [Sec. 17 (2)].
The principle underlying the section is that the right of a party defrauded cannot be affected by lapse of time or by anything else done or omitted to be done by him so long as he remain without any fault of his own, is ignorance of the fraud which had been committed. But as the circumstances constituting the fraud become known to him, subsequent lapse of time will operate as a bar.
Those who fraudulently appropriate the property of others should be assured that no time will secure to them the fruits of their dishonestly’, but that their children’s children will be compelled to restore the property of which their ancestors have fraudulently possessed themselves.
ADVERTISEMENTS:
The reason why, if fraud has been concealed by one party and until it has been discovered by the other, the statute should not operate as a bar is that it ought not, in conscience to run the conscience or the party being so affected that he ought not to be allowed to avail himself of the length of time.