### Exclusion of time under Section 14 Limitation Act applies if writ proceedings sought identical alternative relief.

The Appellant, a real estate developer, was sanctioned a loan of Rs. 40 crores by the Respondent Bank on 26.11.2015

The Appellant deposited Rs. 30,91,500/- as upfront fees

Although the sanction’s validity was originally until 13.05.2016, the Bank continued to engage with the Appellant, including applying for a NOC on 02.06.2016 and requesting formalities on 10.01.2017

On 31.03.2017, the Bank finally informed the Appellant that the sanction had lapsed

The Appellant filed two writ petitions; the second was amended on 30.01.2018 to include an alternative prayer for refund of upfront fees

After withdrawing the writ with liberty on 09.10.2019, the Appellant filed a recovery suit on 20.02.2020

The Commercial Court dismissed the suit as barred by limitation, refusing to apply Section 14 of the Limitation Act, 1963

Whether the Commercial Court was justified in holding that the suit was barred by limitation and in declining the benefit of Section 14 of the Limitation Act to the Plaintiff?

Whether the cause of action for refund accrued on the date of expiry of the original sanction letter (13.05.2016) or upon the final refusal by the Bank (31.03.2017)?

The court primarily applied Section 14 of the Limitation Act, 1963, which provides for the exclusion of time spent bona fide in a court without jurisdiction or other cause of like nature

It relied on *Consolidated Engineering Enterprises v. Principal Secretary, Irrigation Department*, which outlines the essential ingredients for invoking Section 14

Furthermore, for the return of earnest money/fees, the court referenced *Kailash Nath Associates v. DDA*, establishing that forfeiture is impermissible under Section 74 of the Indian Contract Act, 1872, without proof of actual loss

The procedural requirement for trial courts to decide all issues when evidence is recorded was governed by Order XIV Rule 2 of the CPC

The High Court found the Commercial Court’s determination that the cause of action arose on 13.05.2016 to be "legally unsustainable" because the Bank's conduct (e.g., applying for NOC in June 2016 and seeking formalities in Jan 2017) proved the contract was treated as subsisting

The Court held the cause of action actually crystallized on 31.03.2017

Regarding Section 14, the Court held that the Plaintiff acted with "due diligence and good faith" by amending the writ petition to include the refund prayer on 30.01.2018 and prosecuting it until its withdrawal on 09.10.2019

The Court rejected the lower court's finding that the reliefs were different, noting that once the writ was amended/prayed for refund, the "identity of relief" was established under Section 14(2)

Consequently, excluding the 20 months spent in writ proceedings, or even taking the 2017 accrual date, the suit filed in Feb 2020 was within the 3-year limitation

The Court concluded that the Appellant was entitled to the exclusion of time under Section 14 and that the limitation period had not expired given the revised accrual date of 31.03.2017

The matter was remitted to the Commercial Court for adjudication on the remaining merits/issues based on evidence already recorded

The parties were directed to appear before the Commercial Court on 25.03.2026