Plaintiff was given employment by Respondent in 1985. Promoted as Vice President in 1986. Services were terminated by one month's notice vide letter dated 12.4.1991. Plaintiff filed suit on 6.6.1994 claiming termination was invalid. Respondent contends suit is barred by limitation as services were terminated vide notice dated 12.4.1991 and three years period expired on 11.4.1994. Whether respondent is correct in computing period from date of notice?

Governing rule

For a suit seeking a declaration that termination is invalid, Article 58 or the residuary Article 113 of the Limitation Act is generally applied, both giving a three-year period from the date when the right to sue first accrues. The decisive question is therefore: when did the plaintiff first have a complete and enforceable cause of action?

A mere notice dated 12.4.1991, saying that services will end after one month, does not always mean the cause of action arose that very day. If the termination was to take effect only after the expiry of the notice period, the right to sue would ordinarily accrue on the effective date of cessation, not on the date of the notice itself.

Applying the facts

Here, the notice was dated 12.4.1991 and gave one month’s notice. On that footing, the termination would ordinarily become effective only after one month, around 12.5.1991. If so, a suit filed on 6.6.1994 would be within three years from the effective termination date.

The respondent’s computation from 12.4.1991 treats the notice as though it were the final act of dismissal. That approach is too rigid unless the contract expressly makes the notice date itself the termination date. The better view is to compute limitation from the date when the termination actually took effect, because until then the employment relationship had not fully ended.

Case law

In Union of India v. M.S. Nossan, the Supreme Court explained that where dismissal or termination is the operative act giving rise to the challenge, limitation begins from the date of dismissal or from the date the cause of action becomes complete, not from an earlier, incomplete stage. In A. Valliammai v. K.P. Murali, the Court reiterated that the limitation clock starts when refusal or the operative breach occurs, not from some earlier communication that merely points toward it.

The Allahabad High Court decision in the material provided also treats Article 113 as the governing provision for a declaration that termination is void, and it recognised that the suit turns on when the termination actually affects the plaintiff’s legal rights. The principle is consistent: limitation follows the accrual of a real cause of action, not a merely prospective threat.

Illustration

If an employer serves a one-month notice on 1 January stating that service will end on 31 January, the cause of action for challenging the termination is ordinarily linked to 31 January, not 1 January. The notice is only the step leading to termination; the injury arises when the termination becomes operative.

Decision

The respondent’s objection should be rejected on the facts stated. The suit filed on 6.6.1994 is not barred if the one-month notice dated 12.4.1991 meant that termination took effect only after the notice period expired, because limitation would then run from the effective termination date and not from 12.4.1991 itself.