a. Cause of action arose when the default in payment occurred, not when the respondents were declared defaulters.
b. Suit filed beyond three years from the default period (2008-09 to 2015-16) was time-barred under Article 113 of the Limitation Act.
c. The declaration of "Defaulter" was a subsequent action and did not extend the limitation period.
d. Appeal dismissed with no costs.

(Paras: 20-36)

Acts & Sections Discussed:

Limitation Act, 1963 – Article 113 – Computation of limitation period for money recovery suits.

Code of Civil Procedure, 1908 – Order XIV, Rule 2 – Determination of preliminary issue of limitation.

Securities Contract (Regulation) Act, 1956 – Section 4(5), Section 7(A) – Rules governing commodity exchanges.

Subjects:

Limitation – Right to Sue – Cause of Action – Money Recovery – Membership Dues – Commercial Suit – Defaulter Declaration – MCX Rules – Default and Defaulter – Article 113 – Period of Limitation.

Nature of the Litigation:

Commercial appeal filed by Multi Commodity Exchange of India Ltd. (MCX) challenging the dismissal of its money recovery suit as time-barred.

Who Approached the Court & Remedy Sought:

MCX, as the appellant (original plaintiff), sought to recover ₹12,12,980/- with 18% interest per annum from the respondents (original defendants) for unpaid membership dues and penalties.

Reason for Filing the Case:

Respondents defaulted on membership fees, VSAT charges, User ID charges, and penalties from 2008-09 to 2015-16. MCX declared them defaulters in 2018 and initiated a suit in 2020, which was dismissed by the Trial Court as time-barred.

What Had Been Decided Until Now?

The Trial Court held that the suit was filed beyond the three-year limitation period under Article 113 of the Limitation Act and dismissed it.

Issues:

a. Whether the suit for recovery of ₹12,12,980/- was filed within the limitation period under Article 113 of the Limitation Act, 1963?
b. Whether the declaration of the respondents as "Defaulter" in 2018 extended the limitation period?

Submissions / Arguments:

Appellant (MCX):

• The right to sue accrued when the respondents were declared as "Defaulter" on 8 March 2018 under the MCX Rules.
• Suit filed in 2020 was within three years from this date and hence within limitation.

Respondents:

• The cause of action arose when the default in payments occurred (2008-09 to 2015-16).
• The declaration of "Defaulter" was a consequence of the default, not an independent event extending the limitation period.
• Suit was time-barred as it was filed beyond three years from the accrual of cause of action.