New Delhi Municipal Committee Vs. Kalu
Ram & ANR [1976] INSC 121 (20 April 1976)
GUPTA, A.C.
GUPTA, A.C.
SINGH, JASWANT
CITATION: 1976 AIR 1637 1976 SCR 87 1976 SCC
(3) 407
ACT:
Public Premises (Eviction of Unauthorised
Occupants) Act, 1958, S. 7, whether creates new right or merely provides
special procedure, whether subject to limitation.
HEADNOTE:
In 1950, the appellant allotted small
pre-fabricated stalls to several displaced persons including the respondent, at
the licence fee of rupee thirty payable per month. Later, these allottees
applied for a fixation of standard rent but ultimately lost in the Punjab High
Court at Delhi, Meanwhile, the respondent fell in arrears in paying the licence
fee. In December, 1960, the appellant demanded from him the entire amount in
arrears from May 1950 to April 1957 but he failed to pay. In September 1961,
the Estate Officer ordered the respondent under section 7(1) of the Act, to pay
the sum, overruling his objection that the claim was barred by limitation. The
respondent's appeal to the Additional District Judge was rejected, but the
Punjab High Court at Delhi allowed his writ petition on the ground that section
7 could not be availed in case of time barred claims.
The appellant contended before this Court
that the Limitation Act only barred the remedy by way of suit and did not
extinguish the right which could still be exercised through section 7 of the
Act. Section 7 did not put a time limit for taking action under it, and was,
therefore, not subject to the limitation prescribed for a suit to recover the
amount.
Dismissing the appeal, the Court,
HELD: Section 7 only provides a special
procedure for the realisation of rent in arrears and does not constitute a
source or foundation of a right to claim a debt otherwise time-barred. The word
"payable" in Section 7 in the context in which it occurs, means "legally
recoverable". [90 B & D] Hans Raj Gupta and others v. Official
Liquidator of the Dehradun Mussoorie Electric Tramway Co. Ltd. 60 I.A. 13,
followed.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 988 of 1968.
(From the Judgment and order dated the
8-4-1965 of the Punjab High Court, Circuit Bench Delhi-now the High Court of
Delhi in Civil Writ No. 228-G of 1962).
Hardyal Hardy, B. P. Maheshwari, Suresh Sethi
and Bikaramjit Nayar; for the appellant.
A. K. Sen, D. P. Bhandare, Mrs. Laxmi Arvind
Mathur and S. S. Khanduja; for the respondents.
The Judgment of the Court was delivered by
GUPTA, J.-Respondent Kalu Ram was pavement vendor in Connaught place, New
Delhi. In 1950 the appellant. New Delhi Municipal Committee, provided a number
of displaced persons with small pre-fabricated stalls to enable them to do
their business. Kalu 88 Ram who was also a displaced person was allotted one
such stall on Irwin Road. Rupees thirty was the licencee fee payable per month
by the allottees of these stalls. Later, the allottees, including the
respondent, applied to the Rent Controller for reducing the rent. It is not
necessary to refer to the various proceedings arising from these applications
for fixation of standard rent which were ultimately dismissed by the Circuit
Bench of the Punjab High Court at Delhi as not maintainable. In the meantime,
many of the allottees fell in arrears in paying the licence fees. So far as the
respondent is concerned, the appellant took no steps to recover the dues till
December 1960 when it demanded the entire amount in arrears from May 1950 to
April 1957. The respondent not having paid, the appellant asked the Estate
Officer, appointed under section 3 of the Public Premises (Eviction of
Unauthorised Occupants) Act, 1958, to take steps to recover the amount in
arrears under section 7 of that Act. The Estate Officer, who is the second
respondent herein, made an order on September 28, 1961 under section 7(1) of
the Act asking the respondent to pay the sum overruling his objection that the
claim was barred by limitation. The respondent's appeal to the Additional
District Judge from the Estate Officer's order was disallowed. The respondent
then filed a writ petition before the Circuit Bench of the Punjab High Court at
Delhi challenging the order against him. One of the grounds of challenge was
that section 7 could not be resorted to for recovery of the sum as the claim
was time-barred. The High Court accepted the contention and allowed the
petition. In this appeal by certificate, the appellant, New Delhi Municipal
Committee, questions the correctness of the High Court's decision.
The only contention raised before us by Mr.
Hardy appearing for the appellant is that the High Court was wrong in holding
that the amount in question could not be recovered under section 7 because the
time for instituting a suit to recover the sum had expired. Admittedly, any
suit instituted on the date when the Estate Officer made his order under
section 7(1) would have been barred by time. Mr. Hardy argued that the
Limitation Act only barred the remedy by way of suit and did not extinguish the
right, and section 7 of the Public Premises (Eviction of Unauthorised Occupants)
Act providing a different and special mode of recovery was therefore available
to recover rent in arrears beyond three years. Section 7 as it stood at the
relevant time reads :
Power to recover rent or damages in respect
of public premises as arrears of land revenue.
"7. (1) Where any person is in arrears
of rent payable in respect of any public premises, the estate officer may, by
order, require that person to pay the same within such time and in such installments
as may be specified in the order.
(2) Where any person is, or has at any time
been in unauthorised occupation of any public premises, the 89 estate officer
may, having regard to such principles of assessment of damages as may be
prescribed, assess the damages on account of the use and occupation of such
premises and may, by order, require that person to pay the damages within such
time and in such installments as may be specified in the order:
Provided that no such order shall be made
until after the issue of a notice in writing to the person calling upon him to
show cause within such time as may be specified in the notice why such order
should not be made, and until his objections, if any, and any evidence he may
produce in support of the same, have been considered by the estate officer.
(3) If any person refuses or fails to pay the
arrears of rent or any installments thereof payable under sub-section (1) or
the damages or any installment thereof payable under sub-section (2) within the
time specified in the order relating thereto the estate officer may issue a
certificate for the amount due to the Collector who shall proceed to recover
the same as an arrear of land revenue." As would appear from the terms of
the section, it provides a summary procedure for the recovery of arrears of
rent. It was argued that since section 7 did not put a time limit for taking
steps under that section and as the limitation prescribed for a suit to recover
the amount did not apply to a proceeding under this section, the High Court was
in error in upholding the respondent's objection. In support of his contention
that a debt remained due though barred by limitation, Mr. Hardy relied on a
number of authorities, both Indian and English. We do not consider it necessary
to refer to these decisions because the proposition is not disputed that the
statute of limitation bars the remedy without touching the right. Section 28 of
the Indian Limitation Act, 1908 which was in force at the relevant time however
provided that the right to any property was extinguished on the expiry of the
period prescribed by the Act for instituting a suit for possession of the
property. But on the facts of this case no question of a suit for possession of
any property arises and section 28 has no application. It is not questioned
that a creditor whose suit is barred by limitation, if he has any other legal
remedy permitting him to enforce his claim, would be free to avail of it. But
the question in every such case is whether the particular statute permits such
a course. Does section 7 of the Public Premises (Eviction of Unauthorised Occupants)
Act, 1958 create a right to realise arrears of rent without any limitation of time?
Under section 7 the Estate Officer may order any person who is in arrears of
rent 'payable' in respect of any public premises to pay the same within such
time and in such installments as he may specify in the order. Before however
the order is made, a notice must issue calling upon the defaulter to show cause
way such order should not he made and, if he raised any objection, the Estate
Officer must consider the same and the evidence produced in support of it. Thus
the Estate Officer has to determine 90 upon hearing the objection the amount of
rent in arrears which is 'payable.' The word 'payable' is somewhat indefinite
in import and its meaning must he gathered from the context in which it occurs.
'Payable' generally means that which should be paid. If the person in arrears
raises a dispute as to the amount, the Estate Officer in determining the amount
payable cannot ignore the existing laws. If the recovery of any amount is
barred by the law of limitation, it is difficult to hold that the Estate
Officer could still insist that the said amount was payable. When a duty is
cast on an authority to determine the arrears of rent, the determination must
be in accordance with law. Section 7 only provides a special procedure for the
realisation of rent in arrears and does not constitute a source or foundation
of a right to claim a debt otherwise time-barred. Construing the expression
"any money due" in section 186 of the Indian Companies Act, 1913 the
Privy Council held in Hans Raj Gupta and others v. Official Liquidators of the
Dehradun Mussorie Electric Tramway Company Ltd.(1) that this meant moneys due
and recoverable in suit by the company, and observed: "it is a section
which creates a special procedure for obtaining payment of moneys; it is not a
section which purports to create a foundation upon which to base a claim for
payment.
It creates no new rights." We are clear
that the word "payable" in section 7, in the context in which its
occurs, means "legally recoverable." Admittedly a suit to recover the
arrears instituted on the day the order under section 7 was made would have
been barred by limitation. The amount in question was therefore irrecoverable.
This being the position, the appeal fails and is dismissed with costs.
M.R. Appeal dismissed.
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