Nav Rattanmal & Ors Vs. The State of
Rajasthan  INSC 176 (24 April 1961)
AYYANGAR, N. RAJAGOPALA GAJENDRAGADKAR, P.B.
GUPTA, K.C. DAS
CITATION: 1961 AIR 1704 1962 SCR (2) 324
CITATOR INFO :
R 1967 SC1581 (19,20) RF 1974 SC2009 (3,23) R
1984 SC 95 (13)
Limitation-Sixty years for suits by the
Government-Constitutionality of-Indian Limitation Act, 1908 (IX of 1908), Art.
149-Constitution of India, Art. 14.
The Government filed a suit on the basis of a
security bond executed by a Government Treasurer and certain sureties who
joined in the execution of the bond. The contention in defence, inter alia, was
that art. 149 Of the Indian Limitation Act prescribing a 60 years period of
limitation for suits by the Government was unconstitutional as violative of
Art. 14 Of the Constitution and as such the suit was barred under art. 83.
Held, that statutes of limitation are
designed for the beneficent public purpose of preventing the taking away from
one what he has been permitted to consider his own for a long time and on the
faith of which he plans his future life.
If the suit was by a private individual the
suit would have fallen under art. 83 and would have been barred by it but
different considerations arise in the case of the State and there is a
distinction between claims by the Government and those of private individuals.
Article 149 Of the Limitation Act, 1908, which fixes a period of 60 years for
suits by the Government has a reasonable basis of classification between the
Government and private individuals, and the exact period that should be allowed
to the Government to file a suit would be a matter of legislative policy and as
such its constitutional validity cannot be questioned under Art. 14 Of the
Purushottam Govindji Halai v. Desai,  2
S.C.R. 887, Collector of Malabar v. Ebrahim,  S.C.R. 970 and Mannalal v.
Collector of Jhalway,  2 S.C.R. 962, applied.
CIVIL APPELLATE, JURISDICTION: Civil Appeal
No. 454 of 1957.
Appeal from the judgment and order dated
December 16, 1954, of the Court of Judicial Commissioner, Ajmer in Civil Appeal
No. 134 of 1952.
A. V. Viswanatha Sastri, S. N. Andley,
Rameshwar Nath and P. L. Vohra, for the appellants.
G. C. Kasliwal, Advocate-General, Rajasthan,
S. K. Kapur and T. M. Sen, for the respondent.
325 1961. April 24. The Judgment of the Court
was delivered by AYYANGAR, J.-This is an appeal on a certificate granted by the
Judicial Commissioner, Ajmer, and is directed against the judgment of that
Court dated December 16, 1954 by which the decree in favour of the
respondent-Union of India-was affirmed.
Seth Lal Chand Kothari-the original first
appellant in the appeal before us (he died pending this appeal and his heirs
have been brought on record as his legal representatives appellants 1 to 6) was
appointed by the Commissioner Ajmer Merwara as Government Treasurer,
Ajmer-Merwara, by an order dated February 20, 1940, the treasuries to be under
his charge being two-that at Ajmer and a subtreasury at Beawar.
Before accepting office he had, under the
rules, to deposit Government promissory notes to the extent of Rs. 60,000 and
also execute a Security Bond for a like amount with two sureties to cover any
loss to the Government in these treasuries. He accordingly made the deposit,
and a security bond was executed by him on February 27, 1940 with Seth Phool
Chand-who is now the 7th appellant in the appeal and one Seth Kanwarlal Ranka
who died even before the suit and was not impleaded in it. Thereupon Lal Chand
Kothari was directed to take charge of the office as Treasurer and he did so on
March 6, 1940.
We are not concerned with the treasury at
Ajmer, but only with that at Beawar. Lal Chand, at the time of his taking
charge, executed a receipt headed " charge-report" and in it is
recited that he had taken over from the previous incumbent (VI. L. Patni) the
amount of cash which tallied with what had to be in the treasury according to
Nothing happened between 1940 and 1948 and
the business at the treasury appeared to be proceeding regularly and according
to the rules. It may be mentioned that there were the usual periodical checks
and audits by 42 326 Government officials but no impropriety was discovered
during these checks or audits. On March 31, 1948, the Extra Assistant
Commissioner, Ajmer, made a check of the treasury at Beawar. The treasury staff
who ought to have been there were however absent in spite of their having had
prior intimation of his arrival and there-upon he directed the treasury to be
sealed. There were two cash chests at this sub-treasury-one secured with a
single lock, the key of which was with the staff of the Treasurer and the other
with doublelocks, the keys of which were held, one by the employee of the
Treasurer and the other by the Government Treasury Officer-the Tahsildar. A
verification of the balance in the two chests disclosed that a sum of 7 annas,
9 pies was missing from the single-lock chest and Rs. 84,215 from the chest
with the double-lock. The Government thereupon took proceedings to realise the
missing amount from the security of Rs. 60,000 which had been under deposit.
The Government securities were sold and they realized about rupees 58 thousands
and odd leaving a sum of Rs. 25,786-13-9 ,still due. The Union of India
thereupon filed a suitCivil Suit 125 of 1951 before the Sub-Judge First Class,
Beawar on the security bond dated February 27, 1940 against Lal Chand Kothari
and Seth Phool Chand for recovery of this sum. Several defences were raised by
the defendants but they were all rejected by the learned Subordinate Judge who
granted the respondents a decree in terms prayed for in the suit. The
defendants filed an appeal to the Judicial Commissioner who dismissed it, but
having regard to the fact that some of the defences turned on the
interpretation of the security bond dated February 27, 1940, granted a
certificate under Art. 133(1) of the Constitution and that is how the appeal is
now before US.
Neither the factum of the loss by
embezzlement nor its amount is in question, and the only points raised for
consideration are: (1) whether on the terms of the bond the decree in favour of
the appellants could be sustained; (2) whether the claim in the suit was not
barred by limitation.
The argument on this second 327 point was
that if art. 83 of the Indian Limitation Act governed the claim it would be
barred, and that the provision contained in art. 149 prescribing a 60-year
period of limitation for suits by the Government was Si, unconstitutional as
violative of Art. 14 of the Constitution. It is this last plea that has led to
the appeal being heard by this larger Bench.
As regards the first point that the suit
claim was not comprehended within the terms of the security bond, learned
Counsel made three submissions: (1) In order to render the defendants liable,
the loss sustained by the Government must be proved to have occurred on or
after March 6, 1940 on which date alone Lal Chand Kothari took charge of the
Though loss to the extent set out in the
plaint did occur at the treasury in Beawar, learned Counsel urged, the plain.
tiff-respondent had not proved that it
occurred after March 6, 1940. In other words, the argument was that there was
no physical checking on March 6, 1940 when he took over and because of this one
could not be certain whether it was a loss which had occurred during the period
of the previous incumbent in office or could with certainty be attributed to
the period subsequent to March 6, 1940. This argument was rejected by the
courts below and, in our opinion, correctly.
In the face of the receipt executed by Lal
Chand Kothari it would not be open to him to contend that the recitals in it
were not correct, and in any event it would be for him to show that it was
incorrect and, of course, there was no possibility of his establishing this.
(2) It was next urged that on the terms of
the Bond read in the context of the surrounding circumstances Lal Chand Kothari
would be liable only for the deficiency in the chest with the single-lock and
not for the loss or embezzlement or deficiency in the other chest with the
double-lock. The whole basis of this argument was that the security deposit of
Rs. 60,000 and the security bond for the like amount executed by the Treasurer
was an indication that it was with reference to the amount which was the
maximum in the chest under the single-lock and from this feature it was 328
urged that it was the intention of the parties that Lal Chand Kothari would not
be responsible for any embezzlement, loss or deficiency in the other chest.
This submission is without any foundation, because the liability under the Bond
would depend upon its terms and in the face of the language used in the
document learned Counsel realised that the submission could not be seriously
(3) The last submission under this head was
that the loss having occurred in the chest with the doublelock, this could not
have been without the connivance of Government officials and that therefore the
liability of the Treasurer was excluded. Learned Counsel also drew our
attention to the fact that the terms of the bond made Lal Chand liable even for
embezzlement by government officers, notwithstanding that he had no control
over them. But if Lal Chand agreed to those terms-and this is not disputed, the
terms must prevail. Apart from the terms of the security bond however, it would
be apparent that if the key of one of the locks was with the employee of the
Treasurer the defecation could not have occurred without such employee's
connivance or negligence. If so, the fixing of liability upon the employer
could not be characterised even as unreasonable apart from the liability
flowing from the terms of the Bond, and such a vicarious liability for the negligence
or misconduct of his servants, is not lessened by reason of the assistance or
negligence of Government officials.
These exhaust the points urged based on the
terms of the Bond. It remains to deal only with the contention that the claim
is barred by Limitation under art. 83 of the Limitation Act on the plea that
art. 149 of the Limitation Act which fixes a period of 60 years for suits by
the Government is unconstitutional as violating Art. 14 of the Constitution. It
is urged that there is no rational basis for treating claims by Government
differently from those of private individuals in the matter of the time within
which they could be enforced by suit.
Learned Counsel urged that statutes of
limitation were statutes of repose and enacted to ensure that stale 329 claims
were not agitated, so that after a reasonable length of time people might
proceed on the footing that they would not be held liable for possible claims
against them. Basing himself on these principles, the argument of the learned Counsel
was that for the purpose of agitating claims no distinction could be drawn
between Government and private ' individuals and that on no rational basis
could a legislation which permitted a longer period of limitation for claims by
the State be sustained.
It is, no doubt, true that Lord Kenyon
described statutes of limitation as "Statutes of repose" (vide per
Dallas, C. J. in Tolson v. Kaye (1)) and Bramwell, B. as "Statutes of
peace" (Hunter v. Oibbons (2)), though sometimes contrary opinions have
been expressed. In re Baker (3), Cotton, L.
J. observed that pleas of limitation would
never be looked upon with any favour since they are used to defeat debts
clearly due. It is however unnecessary to examine further the theory underlying
statutes of limitation. We shall proceed on the generally accepted basis that
they are designed to effectuate a beneficent public purpose, Viz. to prevent
the taking away from one what he has for long been permitted to consider his
own and on the faith of which he plans his life,, habits and expenses.
This however does not militate against there
being a rational basis for a distinction being drawn between the claims of the
State and the claims of the individual in the matter of a provision of a bar of
limitation for enforcing them. In considering this matter two points have to be
kept separate: (1) whether a distinction could be drawn or a classification
supported between the provision of any variation in the time that should be
available for enforcing claims by private individuals and claims by the State,
(2) whether, if such a classification were good, the period of 60 years
provided by art. 149 of the Indian Limitation Act is such a long period of time
as to be unreasonable. We are drawing attention to the distinction between
these two points because learned Counsel laid (1) (1822) 2 Brod. & B. 217,
223: 129 E.R. 1267, 126g.
(2) (1856) 26 L.J. Ex. 1, 5.
(3) (1890) 44 Ch. D. 262, 270.
330 much stress on the fact that the period,
of limitation fixed by art. 149 was 60 years and that this was an unreasonably
long period of time. If learned Counsel is right in his submission that there
is no rational basis for placing private individuals and the Government in
different classes while framing a legislation providing for limitation for
actions he might succeed; but if he is wrong there and the correct view is that
there is a rational basis of classification, then the period that should be
allowed to the Government to file a suit would be a matter of legislative
policy and could not be brought within the scope or purview of a challenge
under Art. 14 or indeed of any other article in the Constitution. It is
sufficient therefore if we confine ourselves to the first point, viz., whether
there is a rational basis for treating the Government differently as regards
the period within which claims might be put in suit between the Government on
the one hand and private individuals on the other.
First and foremost there is this feature that
the Limitation Act, though a statute of repose and intended for quieting
titles, and in that sense looks at the problem from the point of view of the
defendant with a view to provide for him a security against stale claims,
addresses itself at the same time also to the position of the plaintiff. Thus,
for instance, where the plaintiff is under a legal disability to institute a
suit by reason of his being a minor or being insane or an idiot, it makes
provisions for. the extension of the period taking into account that
Similarly, public interest in a claim being
protected is taken into account by s. 10 of the Act by providing that there
shall be no period of limitation in the case of express trusts. It is not
necessary to go into the details of these provisions but it is sufficient to
state that the approach here is from the point of view of protecting the
enforceability of claims which, if the ordinary rules applied, would become
barred by limitation. It is in great part on this principle that it is said
that subject to statutory provision, while the maxim vigilantibus et non
dormientibus jura Subveniunt is a rule for the subject, the maxim nullum tempus
occurit regi 331 is in general applicable to the Crown. The reason assigned
was, to quote Coke, that the State ought not to suffer for the negligence of
its officers or for their fraudulent collusion with the adverse party. It is
with this background that the question of the special provision contained in
art. 149 of the Act has to be viewed. First, we have the fact that in the case
of the Government, if a claim becomes barred by limitation, the loss falls on
the public, i.e., on the community in general and to the benefit of the private
individual who derives advantage by the lapse of time. This itself would appear
to indicate a sufficient ground for differentiating between the claims of an
individual and the claims of the community at large. Next, it may be mentioned
that in the case of governmental machinery, it is a known fact that it does not
move as quickly as in the case of individuals. Apart from the delay occurring
in the proper officers ascertaining that a cause of action has
accrued-Government being an impersonal body, before a claim is launched there
has to be interdepartmental correspondence, consultations, sanctions obtained
according to the rules. These necessarily take time and it is because of these
features which are sometimes characterised as red-tape that there is delay in
the functioning of government offices. It is precisely for this reason that we
have from the earliest Civil Procedure Codes provisions which find place in the
Code of 1908, like O.27,rr.5 and 7 reading:
"0. 27. r. 5. The Court in fixing the
day for the Government to answer to the plaint, shall allow a reasonable time
for the necessary communication with the Government through the proper channel,
and for the issue of instructions to the Government Pleader to appear and
answer on behalf of the Government and may extend the time at its discretion.
0. 27. r. 7(1). Where the defendant is a
public officer and, in receiving the summons, considers it proper to make a
reference to the Government before answering the plaint, he may apply to the
Court to 332 grant such extension of the time fixed in the summons as may be
necessary to enable him to make such reference and to receive orders thereon
through the proper channel.
(2) Upon such application the Court. shall
extend the time for so long as appears to it to be necessary." These
matters apart, the ratio underlying the special provisions for summary recovery
of amounts due to Government without resort to suits by a procedure not
available for enforcing the dues of private individuals, like the "Revenue
Recovery Acts" and "Public Demands Recovery Acts" which, have
been on the statute book for over a century is also similar, viz., the interest
of the public and of the community in realising what is due to it
expeditiously; and the constitutional validity of such provisions have been
sustained by this Court. In Purshottam Govindji Halai v.
Desai (1) this Court held that s. 13 of the
Bombay Land Revenue Act, 1876, by virtue of which a person had been arrested in
pursuance of a warrant issued for recovery of a demand certified under s. 46(2)
of the Indian Income-tax Act, did not offend Art. 14 of the Constitution.
Similarly, in Collector of Malabar v. Ebrahim (2) the arrest of a defaulter in
respect of an income-tax demand under s. 48 of the Madras Revenue Recovery Act
was held not to offend Art.
14 of the Constitution. Perhaps another
decision of this Court of more immediate relevance, in which the point now
raised that there is no rational basis for distinguishing between the claims of
the Government and the claims of private individuals-was considered and
negatived, is that in Mannalal v. Collector, Jahalwar (3) in which judgment was
delivered on December 7, 1960. In this last case it was urged before this Court
that the summary mode of recovery of amounts due to the Government for which
provision was made by the Rajasthan Public Recovery Act there impugned a mode
of recovery which was not available to the private citizen contravened the
equal protection of (1)  2 S.C.R. 887. (2)  S.C.R. 970.
(3)  2 S.C.R. 962.
333 the laws guaranteed by Art. 14 and this
contention was repelled. The argument of learned Counsel for the appellants has
therefore to be rejected both on the around of principle as well as on the
ratio underlying the decisions of this Court.
The appeal fails and is dismissed with costs.