Definition of Special Law
The term Special Law is defined under Indian Penal Code, where Sec 41 defines it as a law applicable to a particular subject. The Supreme Court has also defined Special Law in the case of Kaushalya Rani vs Gopal Singh, 1964 AIR 260. The Court Stated that:
“A ‘special law’, therefore, means a law enacted for special cases, in special circumstances, in contradis- tinction to the general rules of the law laid down, as ap- plicable generally to all cases with which the general law deals. In that sense, the Code is a general law regulating the procedure for the trial of criminal cases, generally; but if it lays down any bar of time in respect of special cases in special circumstances like those contemplated by s. 417(3) & (4), read together, it will be a special law contained within the general law. As the Limitation Act has not defined ‘special law’, it is neither necessary nor expedient to attempt a definition.”
Applicability of Sec 29(2) of the Limitation Act with regard to the Amendment in the Indian Contract Act Sec 28
a. The Supreme Court in case of Mukri Gopalan vs Cheppilat [1995 AIR 2272], while dealing with the issue of calculating the limitation period under sec 18 of the Kerala Buildings (Lease and Rent Control) Act, 1965, held that sec 29(12) will be applicable. The Court applied the Limitation act as the Rent Act fulfilled the requisites laid down by the court. The conditions quoted by court was:
“A mere look at the aforesaid provision shows for its applicability to the facts of a given case and for importing the machinery of the provisions containing Sections 4 to 24 of the Limitation Act the following two requirements have to be satisfied by the authority invoking the said provision. (i) There must be a provision for period of limitation under any special or local law in connection with any suit, appeal or application. (ii) The said prescription of period of limitation under such special or local law should be different from the period prescribed by the schedule to the Limitation Act.
If the aforesaid two requirements are satisfied the consequences contemplated by Section 29(2) would automatically follow. These consequences are as under: (i) In such a case Section 3 of the Limitation Act would apply as if the period prescribed by the special or local law was the period prescribed by the schedule. (ii) For determining any period of limitation prescribed by such special or local law for a suit, appeal or application all the provisions containing Sections 4 to 24(inclusive) would apply insofar as and to the extent to which they are not expressly excluded by such special or local law.”
The Court further also stated that:
“15. After repealing of Indian Limitation Act, 1908 and its replacement by the present Limitation Act of 1963 a fundamental change was made in Section 29 (2). The present Section 29(2) as already extracted earlier clearly indicates that once the requisite conditions for its applicability to given proceedings under special or local law are attracted, the provisions contained in Sections 4 to 24 both inclusive would get attracted which obviously would bring in Section 5 which also shall apply to such proceedings unless applicability of any of the aforesaid sections of the Limitation Act is expressly excluded by such special or local law. By this change it is not necessary to expressly state in a special law that the provisions contained in Section 5 of the Limitation Act shall apply to the determination of the periods under it. By the general provision contained in Section 29(2) this provision is made applicable to the periods prescribed under the special laws. An express mention in the 21
special law is necessary only for any exclusion. It is on this basis that when the new Rent Act was passed in 1965 the provision contained in old Section 31 was omitted. It becomes therefore apparent that on a conjoint reading of Section 29(2) of Limitation Act of 1963 and Section 18 of the Rent Act of 1965, provisions of Section 5 would automatically get attracted to those proceedings, as there is nothing in the Rent Act of 1965 expressly excluding the applicability of Section 5 of the Limitation Act to appeals under Section 18 of the Rent Act.”
b. In Hukumdev Narain Yadav vs. Lalit Narain Mishra [(1974) 2 SCC 133], Supreme Court examined the provisions of the Representation of the People Act and Section 29(2) of the Limitation Act while dealing with election petition under the Representation of People Act. The Court on the point of limitation for filing an election petition, held that:
“17. ….. Even assuming that where a period of limitation has not been fixed for election petitions in the Schedule to the Limitation Act which is different from that fixed under Section 81 of the Act, Section 29(2) would be attracted, and what we have to determine is whether the provisions of this Section are expressly excluded in the case of an election petition. It is contended before us that the words “expressly excluded” would mean that there must be an express reference made in the special or local law to the specific provisions of the Limitation Act of which the operation is to be excluded. As usual the meaning given in the Dictionary has been relied upon, but what we have to see is whether the scheme of the special law, that is in this case the Act, and the nature of the remedy provided therein are such that the Legislature intended it to be a complete code by itself which alone should govern the several matters provided by it. If on an examination of the relevant provisions, it is clear that the provisions of the Limitation Act are necessarily excluded, then the benefits conferred therein cannot be called in aid to supplement the provisions of the Act. In our view, even in a case where the special law does not exclude the provisions of Sections 4 to 24 of the Limitation Act by an express reference, it would nonetheless be open to the court to examine whether and to what extent the nature of those provisions or the nature of the subject-matter and scheme of the special law exclude their operation. The provisions of Section 3 of the Limitation Act that a suit instituted, appeal preferred and application made after the prescribed period shall be dismissed are provided for in Section 86 of the Act which gives a peremtory command that the High Court shall dismiss an election petition which does not comply with the provisions of Sections 81, 82 or 117.”
c. The Supreme Court followed this position in the cases of The Commissioner of Sales Tax, Uttar Pradesh, Lucknow vs. M/s. Parson Tools and Plants, Kanpur [AIR 1975 SC 1039], Anwari Basavaraj Patil & Ors. vs. Siddaramaiah & Ors. [(1993) 1 SCC 636] and Gopal Sardar vs Karuna Sardar (2004) 4 SCC 252.
d. The Supreme Court in case of Vidyacharan Shukla vs Khubchand Baghel And Others [ 1964 AIR 1099]has also held that:
“’This observation clearly supports the position that s. 29(2) would apply even to a case where a difference between the special law and the Limitation Act arose by the omission to provide for a limitation to a particular proceeding under the Limitation Act.”
Sec 28 of the Indian Contract Act
The Law Commission of India(LCI) in its 97th report released in March 1984 discussed the scope of Section 28 of the Indian Contract and held that the then current provisions created an unfair advantage for the large corporations and also resulted in creating uncertainty in transactions. The Commission relied on judgments of the Kerala High Court and Bombay High Court specifically to illustrate its point, though reference was also given to other judgments.
In the Kerala High Court judgment, the Court has categorically held that Section 28 of the Indian Contract Act does not specifically hits at the time limit of the contract.
The LCI recommendation led to the 1997amendment to the Indian Contract Act, whereupon a clause was to sec 28 as: “…which extinguishes the rights of any party thereto under, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period, so as to restrict any party from enforcing his rights, is void to that extent.”
This amendment caused uncertainty with regard to the guarantees specially given by the financial institutions. It is evident in the press release of the Central Government where one of the salient features of the Banking amendment 2012 has been stated as:
“To exempt guarantee agreements of banks from the purview of the section 28 of the Indian Contract Act, 1872 to bring finality to redemption of such guarantees.”
In light of the judgment in case of Kerala Electrical and Allied Engineering Co Ltd v. Canara Bank and the discussion in the LCI report, it is clear that sec 28 stipulated a prescription to the contracting parties to decide the extent of their rights though this prescription is a subset of the limitation which is stated under Limitation Act, it is only confined to define the legal validity of the contract. The Current amendment does not hit upon the time limit of the Contract but attempts to provide clarity for redemption of such guarantees in the contract.
 Kerala Electrical and Allied Engineering Co Ltd v Canara Bank, AIR 1980 Ker 151
 New India Assurance Co v R.M.Khandelwal, AIR 1974 Bom 228
 Kerala Electrical and Allied Engineering Co Ltd v Canara Bank, AIR 1980 Ker 151
 AIR 1980 Ker 151