Section 17. Effect of fraud or mistake
(1) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act-
(a) the suit or application is based upon the fraud of the defendant or respondent or his agent; or
(b) the knowledge of the right or title on which suit or application is founded is concealed by the fraud of any such person as aforesaid; or
(c) the suit or application is for relief from the consequences of a mistake; or
(d) where any 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 the mistake 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:
Provided that nothing in this section shall enable any suit to be instituted or application to be made to recover or enforce any charge against, or set aside any transaction affecting, any property which-
(i) in the case of fraud, 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 had been committed, or
(ii) in the case of mistake, has been purchased for valuable consideration subsequently to the transaction in which the mistake was made, by a person who did not know, or have reason to believe, that the mistake had been made, or
(iii) in the case of concealed document, 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.
(2) Where a judgement-debtor has, by fraud or force, prevented the execution of a decree or order with the period of limitation, the court may, on the application of the judgement-creditor made after the expiry of the said period extend the period for execution of the decree or order:
Provided that such application is made within one year from the date of the discovery of the fraud or the cessation of force, as the case may be.
Sec. 17 is an enabling section which postpones the starting point of limitation for suits and applications. Once limitation started running subsequent acts of fraud would not prevent running of time. Thus, there must be fraud at the time when the cause of action arises.
If the plaintiff could have discovered the fraud or mistake with due diligence that will be sufficient to start the limitation running against him.
The fraud mentioned in this section must be committed by the party against whom a right is sought to be enforced i.e. the defendant or his agent.
If the plaintiff claims exemption on the ground of fraud on the part of the defendant, he must prove the fraud. The court will not presume it from the mere existence of suspicious circumstances. When the plaintiff proves it then the burden shifts upon the defendant/respondent to show that the plaintiff had clear knowledge of the facts constituting the fraud at a time which is too remote to allow him to bring the suit.
Though a party could, with reasonable diligence, discover a mistake of fact even before a court makes a pronouncement, it is seldom that a person can even with reasonable diligence; discover a mistake of law before a judgment adjudging the validity of the law.