V.M. Salgaocar
& Bros. Vs. Board of Trustees of Port of Mormugao & Anr [2005] Insc 207
(31 March 2005)
Ashok
Bhan & A.K. Mathur Bhan, J.
These
appeals by grant of leave are directed against the common judgment and order of
affirmation passed by the High Court of Bombay at Goa in First Appeal No.27 of 1992 and appeal from order
No.69 of 1991. The suit filed by the plaintiff-appellant (hereinafter referred
to as 'the appellant') was dismissed by the District Judge, South Goa, Mormugao
by judgment dated 30th December, 1991 on the ground that the same was not
maintainable for want of notice under Section 120 of the Major Port Trust Act,
1963 (hereinafter referred to as 'the Act') and that the suit was barred by
limitation. This judgment was challenged in First Appeal No.27 of 1992. Prior
to that District Judge vide order dated 30th April, 1991, had come to the conclusion that
Section 120 of the Act was applicable to the present case. Against this order
the appellant had filed an appeal from order 69 of 1991. The two appeals having
arisen from the same suit were heard together and disposed of by the High Court
by a common judgment. We propose to do the same.
We
would referring to the facts necessary to dispose of the appeals as found by
the High Court on which there is no dispute between the counsel for the
parties.
Loading
operation in relation to iron ore at Mormugao Port was sought to be regulated by the Mormugao Port (Shipment of Ore and Pellets from Mechanised Ore Handling
Plant at berth no.9 and related matters) Regulations, 1979. Respondent No.1-The
Board of the Trustees of Mormugao (hereinafter referred to as 'the Board') was
empowered to divide the storage area into plots of a size sufficient to hold
approximately the quantity required to be loaded and to stipulate minimum
tonnage turn over for each plot to qualify for allotment of plot.
The
appellant who is engaged in exporting iron ore were also allotted one such
plot. Rates were prescribed per tonne of iron ore, handled through Mechanised
Ore Handling Plan (MOPH) and revised from time to time. By a notification dated
26th October, 1983, the Board increased the handling
rate to Rs.28.22 per tonne and fixed minimum rental surcharge of Rs.8.80 per tonne.
The Board did this to ensure proper utilisation of berth and MOPH as it was
found that there was under utilisation of the same by exporters. The
justification for imposing the surcharge of Rs.8.80 per tonne was that the
Board had to pay Rs.260.30 lakhs to the contractors for dredging a channel and
widening the channel, so that all sea going vessels could use berth no.9. It is
further the Board's case that Rs.7.16 lakhs towards income tax and Rs.20.00 lakhs
towards estimated liability arising out of the contract labour legislation had
to be disbursed. As the Board had incurred heavy losses on account of level of utilisation
of MOPH between Rs.55.00 lakhs tonnes to 60.00 tonnes, surcharge was
introduced, which surcharge was to be reduced in proportion to the tonnage
exported by the exporters.
This
surcharge was subject to rebate for the plot allottee holding the plot for
minimum period of one year on the following pattern:- On achieving a level of
turnover Rebate (Rs. Per tonne) 6.25 times of nominal plot capacity 1.00 6.50
times of nominal plot capacity 2.00 6.75 times of nominal plot capacity 3.00
7.00 times of nominal plot capacity 4.00 7.25 times of nominal plot capacity
5.20 7.50 times of nominal plot capacity 6.40 7.75 times of nominal plot
capacity 7.60 8.00 times of nominal plot capacity 8.80 Appellant had challenged
the levy of surcharge of Rs.8.80 per tonne being illegal, without jurisdiction
null and void as it was not co- related to any service rendered by the Board
and that the levy was falling outside the purview of Section 48 of the Act. The
High Court rejected the said challenge relying upon a judgment of this Court in
M/s. V.S. Suppl. (2) SCC 349]. An exporter had earlier challenged the levy of
surcharge with graded system of rebates in a writ petition before the High
Court. The writ petition was dismissed and the order of the High Court was
upheld in appeal filed by the writ petitioner. In view of the fact that the
power to levy surcharge had already been upheld by this Court the counsel for
the appellant did not argue this point before us.
Appellant's
case further is that in the event the validity of levy of surcharge is upheld,
the action of the Board for refusing full rebate to the appellant and in
collecting surcharge of Rs.7.80 is illegal, arbitrary, unreasonable, contrary
to the Act and Rules and Regulations as well as Article 14 of the Constitution
on the ground that the surcharge of Rs.7.80 per tonne has been levied without
taking into consideration lapses on the part of the Board as well as
non-consideration of shortfall in export of the appellant's due to the factors
beyond their control. The appellant had also raised dispute relating to the
extent of alleged storage plot and the turnover required to be achieved by the
appellant during the year to be eligible for full rebate under Notification
dated 26th October,
1983. According to the
appellant it was entitled to the full rebate on 8,66,192 metric tonnes. The
lapses pointed out on the part of the Board were stated to be failure of its
obligation by providing barge unloaders to the appellant, commensurate with the
appellant's export commitments, insufficient barge allocation, break-down of reclaimer
no.2, port and dock workers strike etc. According to the appellant, considering
the plot capacity of 1,08,274 tonnes, the turnover of 8,66,192 metric tonnes
would entitle the appellant a full rebate at the rate of Rs.8.80 per tonne
which comes to Rs.62,46,548.10 paise, instead of Rs.7,09,835/-, which the Board
had agreed to pay. As per appellant, it had in fact exported through berth
no.9, 10,52,910 tonnes and even if nominal capacity of the plot was taken as
1,50,000 tonnes, the appellant would be entitled for full rebate at the rate of
Rs.8.80 per tonne, having turned over its plot of 1,50,000 tonnes. This
calculation was based upon the appellant's plea that they must be deemed to
have exported through berth no.9, 3,14,000 tonnes, which the appellant was
prevented from loading through berth no.9 due to insufficient barge
allocations, break-down of reclaimer no.2 and port and dock workers strike, which
amounted to 90,000 tonnes, 70,000 tonnes and 1,54,000 tonnes respectively, thus
totalling 3,14,000 tonnes. Alternatively, the appellant claim that the Board
had committed breach of statutory duty by failing to provide adequate barrage
unloading timings as prescribed by the regulations and by refusing to permit
them to load its vessels by trans shippers when the reclaimer of the Board was
broken down.
Another
challenge put by the appellant was that, the suit against Central Government or
the State Government could be filed within 3 years after giving notice under
Section 80 of Code of Civil Procedure.
The
provision of shorter period of limitation of 6 months under Section 120 of the
Act to the Board and its officers who are performing duties and functions
similar to the Union and the State Government was irrational, unreasonable and
unrelated to the object sought to be achieved by the Act and as such, Section
120 of the Act was unconstitutional and violative of the fundamental rights
guaranteed by Article 14 of the Constitution. It was further pleaded that in
case the Court finds that Section 120 of the Act was valid, letter dated 12th April, 1984 addressed by it to the defendant
Board, be treated as notice under Section 120 of the Act. In short, the appellant
prayed for a declaration that the minimum rental surcharge levied by
Notification dated 26th October, 1983 bearing No.3-GA(8)/83 issued by the Board
be declared as illegal, unconstitutional, null and void; to declare the
recovery to the tune of Rs.62,46,548.10 paise as illegal being
unconstitutional, null and void; and to pay damages/compensation being
equivalent to full rebate aggregating to the sum of Rs.62,46,548.10 paise and
to declare Section 120 of the Act as unconstitutional, null and void.
Another
fact which needs to be mentioned is that the Board had admitted in their letter
dated 6th April, 1984 that the appellant was entitled to receive rebate of
Rs.7,09,835/- as the appellant had turned over the plot for 6.39 times and were
ready and willing to pay over the said amount of Rs.7,09,835/- to the
appellant. In view of the admission made by the Board, the appellant sought
judgment on admission for the said sum of Rs.7,09,835/- under Order 12, Rule 6
of C.P.C. The Board in its reply to the application under Order 12, Rule 6
stated that the Board had no objection to the passing of a decree for Rs,7,09,835/-
in favour of the appellant but objected to the payment of 18% interest on the
said amount with effect from 6.4.84. In this view of the matter, by judgment on
admission under Order 12, Rule 6 C.P.C. dated 12.8.87 the appellant's claim to
the tune of Rs.7,09,835/- was decreed. The question of payment of interest and
costs was left to be decided at the time of final disposal of the suit.
The
Board in its defence took up the plea that the appellant had achieved turnover
of only 6.25 times the nominal capacity of the plot and was entitled to the
rebate of only Re.1/- per tonne and that the surcharge of Rs.7.80 per tonne was
neither illegal nor unconstitutional.
The
allegations relating to deemed export claimed by the appellant, was denied. It
was pleaded that since no notice under Section 120 of the Act had been given by
the appellant to the Board the suit was not maintainable. It was further pleaded
that the suit which had been filed beyond the period of 6 months from the date
of accrual of cause of action, was barred by limitation permitted under Section
120 of the Act.
On the
pleadings of the parties numbers of issues were framed. In view of the finding
recorded on issues No.12, 13 and 15 which were answered in favour of the Board,
the suit was dismissed. Issues Nos.12, 13 and 15 are as under:-
"12.
Whether the suit is not maintainable for want of notice under Section 120 of
the Major Port Trusts Act, 1963?
13.
Whether the suit is barred by the provisions of Section 120 of the Major Port
Trusts Act, 1963?
15.
Whether the plaintiff proves that Section 120 of the Major Port Trusts Act is
not applicable, to this case and, if it is applicable, it is unconstitutional
and illegal?"
By
order dated 30th July,
1991, first part of
issue No.15 was decided in the negative and the appellant's contention that
Section 120 of the Act is not attracted, was rejected and it was held that
Section 120 was applicable.
Against
this part of the order, the appellant had filed appeal from order which was
numbered as 69 of 1991. The second part of issue No.15, 12 and 13 were decided
by the impugned judgment delivered on 30th December, 1991, which was the subject matter of
challenge in First Appeal 27 of 1991.
Before
the High Court following 3 points were canvassed for determination:-
1.
When no objection relating to limitation was raised in relation to the part
decree passed on admission under Order 12, Rule 6 C.P.C., whether the defendant
Board could raise objection relating to limitation in respect of the remaining
amount claimed by the appellants and part of the suit could be dismissed on the
ground of limitation?
2.
Whether Section 120 of the said Act is applicable and if the answer is in the
affirmative, whether letter dated 12.4.84 can be treated as notice under
Section 120 of the said Act and further whether the suit is barred by
limitation thereunder?
3.
Whether Section 120 of the said Act is unconstitutional?
The
High Court answered all the three questions in favour of the respondent by
holding that the respondent did not waive the plea of limitation for the
remaining amount of Rs.55,36,710.10 paise. That Section 120 was applicable to
the present case. The letter dated 12.04.1984 addressed by the appellant to the
respondents could not be considered as a notice under Section 120 of the Act
and that Section 120 of the Major Port Trust Act, 1963 was constitutionally
valid. The High Court affirmed the judgment of the District Judge regarding the
legality and constitutional validity of Section 120 and rejected the contention
put forth by the appellant's counsel that by prescribing the limitation of 6
months against the Board and its employees as against the period of 3 years in
respect of suits against the Government or Government Officers for an act or
order passed in discharge of official capacity was violative of Article 14 of
the Constitution. It was held that the suit was barred by time having been
filed beyond the period of limitation provided under the Act and the same was
also not maintainable for want of service of notice.
During
the course of arguments Shri R.F. Nariman, learned senior counsel for the
appellant had conceded the first part of point no.2 framed by the High Court to
the effect that Section 120 of the Act was applicable to the present case and
made his submissions on point no.1, the second part of point no.2 and point
no.3 In the written note submitted on behalf of the appellant, the appellant has
confined his submissions to point nos.1 and 3 only. Since the second part of
point no2 goes to the root of the matter regarding maintainability of the suit
and its being barred by limitation we would deal with the same.
Point
No.1 Although we have already narrated the factual matrix giving rise to the
dispute but it would be necessary to refer to few facts in order to decide
point no.1. The respondent port trust commissioned a Mechanised Ore Handling
Plan (hereinafter referred to as "MOPH") at berth no.9 at Mormugao
and prescribed rates for handling ore at MOPH.
On
28.10.1983 the Board issued a notification increasing the rates levying
surcharge and prescribing a rebate on the basis of achieving a particular
turnover. It is during this period that the issue arose as to the actual plot
capacity handed over to the appellant and whether a particular turnover on the
plot was achieved. According to the appellant, considering plot capacity of
1,08,274 tonnes, the turnover of 8,66,192 metric tonnes would entitle the
appellant to full rebate at the rate of Rs.8.80 per tonne, which would come to
Rs.62,46,548.10 paise, instead of Rs.7,09,835/- which the respondent Board had
agreed to give. The respondent Board informed the appellant that they had
turned around the plot only 6.25 times on the basis of the plot capacity of 1.5
lakh tonnes and were therefore entitled to rebate of Rs.7,09,835/- only. On
12.04.1984 the appellant represented to the port trust and demanded full rebate
@ Rs.8.80 per tonne. Port trust by its letter dated 16.06.1984 refused to grant
the full rebate as claimed by the appellant.
On
11.09.1986 the appellant filed Civil Suit No.55/1986 for various reliefs
referred to in the earlier part of the judgment. Port trust on 14.02.1997 filed
its written statement raising the plea of limitation and failure to give
statutory notice as per Section 120 and also denying the claim on merits. The
appellant made an application under Order 12 Rule 6 for the decree on admission
in view of the port trust's letter dated 16.06.1984 referred to above. The
appellant had claimed interest @ 18% on the amount due from the date the amount
became payable till its actual payment. The port trust in reply to the
application under Order 12 Rule 6 admitted the claim of Rs.7,09,835/- but
denied its liability to pay any interest on the said amount. The Trial Court on
12.08.1987 passed a decree on admission with regard to the sum of Rs.7,09,835/-
leaving the question of interest on the aforesaid amount open which was to be
decided at the time of the adjudication of the main suit. The main suit was
dismissed by the District Judge as being barred by time and not maintainable
for want of notice.
Counsel
for the appellant has contended that the port trust in its reply to application
under Order 12 Rule 6 while admitting the claim did not raise any objection as
to the plea of limitation or statutory notice.
That
on the passing of the decree on admission under Order 12 Rule 6 on 12.08.1987,
the respondent Board was estopped from urging the point of limitation or
statutory notice. The said issue would be deemed to have been waived. That
statutory notice under Section 120 and issue of limitation being the rights
created in favour of the Board could be waived by the Board. Since the decree
on admission under Order 12 Rule 6 of the Code of Civil Procedure was passed
without any reservation being made to the issuance of statutory notice or
limitation, the Board is estopped from raising such a plea at this stage. It is
further submitted that the issue of waiver of limitation and statutory notice
was raised by the appellant before the High Court and the same has been
adjudicated upon by the High Court, the objection now raised by the counsel for
the respondents that waiver had not pleaded was untenable.
It was
submitted that the dismissal of the suit on the ground of being barred by
limitation under Section 120 and for want of statutory notice under Section 120
of the Act by the High Court was clearly erroneous.
Per
contra, learned counsel for the respondent Board submitted that the High Court
has taken the correct view in holding that there was no waiver of limitation by
the respondent Board regarding the remaining claim of the appellant. The mere
fact that the suit was partly decreed would not preclude the respondent Board
from raising the plea of limitation regarding the balance claim put forward by
the appellant. It was argued that the Board had not waived the plea of
limitation for the remaining claim of Rs.55,36,710.10 paise; that limitation
under the Limitation Act cannot be waived and even if a limitation is waived by
a party, it cannot give the jurisdiction to the Court to entertain a time
barred suit. That the appellant had never pleaded waiver and therefore, the
same cannot be urged by the appellant. Merely because the Board had agreed to
pay the admitted amount due to the appellant @ Re.1/- per tonne it would not
amount to waiver of the plea of limitation giving jurisdiction to the Court to
try a time barred suit.
Section
3 of the Limitation Act reads:- "Section 3 Bar of limitation –
(1)
Subject to the provisions contained in sections 4 to 24 (inclusive), every suit
instituted, appeal preferred, and application made after the prescribed period
shall be dismissed although limitation has not been set up as a defence.
(2)
For the purposes of this Act
(a) a
suit is instituted
(i) in
an ordinary case, when the plaint is presented to the proper officer;
(ii) in
the case of a pauper, when his application for leave to sue as a pauper is
made; and (iii) in the case of a claim against a company which is being wound
up by the court, when the claimant first sends in his claim to the official
liquidator;
(b) any
claim by way of a set off or a counter claim, shall be treated as a separate
suit and shall be deemed to have been instituted –
(i) in
the case of a set off, on the same date as the suit in which the set off is
pleaded;
(ii) in
the case of a counter claim, on the date on which the counter claim is made in
court;
(c) an
application by notice of motion in a High Court is made when the application is
presented to the proper officer of that court." The mandate of Section 3
of Limitation Act is that it is the duty of the Court to dismiss any suit
instituted after the prescribed period of limitation irrespective of the fact
that limitation has not been set up as a defence. If a suit is ex-facie barred
by the Law of Limitation, a Court has no choice but to dismiss the same even if
the defendant intentionally has not raised the plea of limitation.
This
Court in Manindra Land & Building Corporation Ltd. held (para 9):-
"Section 3 of the Limitation Act enjoins a Court to dismiss any suit
instituted, appeal preferred and application made, after the period of
limitation prescribed therefor by Schedule I irrespective of the fact whether
the opponent had set up the plea of limitation or not. It is the duty of the
Court not to proceed with the application if it is made beyond the period of
limitation prescribed. The Court had no choice and if in construing the
necessary provision of the Limitation Act or in determining which provision of
the Limitation Act applies, the subordinate Court comes to an erroneous
decision, it is open to the Court in revision to interfere with that conclusion
as that conclusion led the Court to assume or not to assume the jurisdiction to
proceed with the determination of that matter." A perusal of paragraph 13
of the plaint shows that the lis between the parties is, the refusal of rebate
of corresponding levy of surcharge to the extent or Rs.7.80 per metric tonne
aggregating to Rs.55,36,710.10 paise for the year April, 1983 to March, 1984.
By agreeing to pay Rs.7,09,835/- which the respondent Board was always ready
and willing to pay, would not affect the Board's legal contention regarding the
claim of Rs.55,36,710.10 paise being not maintainable in the absence of a
notice under Section 120 of the Act. Order 12 Rule 6 empowers the Court where
an admission of fact is made either in the pleadings or otherwise, whether
orally or in writing to make such order or such judgment as it thinks fit
either on the application of a party or on its own motion and without waiting
for the determination of any other questions between the parties. Therefore, by
passing a decree on admission under Order 12 Rule 6 it cannot be said that
there was any determination of the question of limitation or maintainability of
the suit. Simply because the Board had agreed to pay the sum of Rs.7,09,835/-
as committed by them in their letter dated 06.04.1983 would not mean that the
Board had given up the determination of the question of limitation or the
maintainability of the suit for want of statutory notice.
The
appellant had at no stage of proceedings had pleaded waiver of the plea of
limitation or of the giving of the notice under Section 120 of the Act. The
plaint was filed on 01.09.1986, Board had filed its written statement raising
objections of limitations and maintainability of the plaint for want of notice
on 18.02.1987. Application for decree on admission was filed on 12.04.1987 and
reply to the said application was filed by the Board on 18.07.1987. The decree
on admission was passed by the Trial Court for the sum of Rs.7,09,835/- on
12.08.1987. After the framing of issues and after an application was made to
try issues no.12 and 13 as preliminary issues on 22.12.1989, an application was
filed by the appellant to amend the plaint. On 06.01.1990, a further
application was filed by the appellant for further amendment of the plaint.
Even though, the plaint was exhaustively amended after the decree on admission,
plea of waiver was not taken in the plaint. The point regarding waiver was not
argued before the Trial Court at any stage and even in the memo of appeal filed
before the High Court ground of waiver was not taken. The question of waiver
was taken up for the first time at arguments stage before the High Court. The
respondent Board objected to the taking of the said point before the High Court
for the first time during the course of arguments. This Court in M/s. Motilal
[(1979) 2 SCC 409] has held that waiver is a question of fact and it must be
properly pleaded and proved. No plea of waiver can be allowed to be raised
unless it is pleaded. This Court observed in para 5 as follows:-
"We
shall first deal with the question of waiver since that can be disposed of in a
few words. The High Court held that even if there was an assurance given by
respondent 4 on behalf of the State Government and such assurance was binding
on the State Government on the principle of promissory estoppel, the appellant
had waived its right under it by accepting the concessional rates of sales tax
set out in the letter of respondent 5 dated January 20, 1970. We do not think
this view taken by the High Court can be sustained. In the first place, it is
elementary that waiver is a question of fact and it must be properly pleaded
and proved. No plea of waiver can be allowed to be raised unless it is pleaded
and the factual foundation for it is laid in the pleadings. Here it was common
ground that the plea of waiver was not taken by the State Government in the
affidavit filed on its behalf in reply to the writ petition, nor was it
indicated even vaguely in such affidavit. It was raised for the first time at
the hearing of the writ petition. That was clearly impermissible without an
amendment of the affidavit in reply or a supplementary affidavit raising such
plea. If waiver were properly pleaded in the affidavit in reply, the appellant
would have had an opportunity of placing on record facts showing why and in
what circumstances the appellant came to address the letter dated June 25, 1970
and establishing that on these facts there was no waiver by the appellant of
its right to exemption under the assurance given by respondent 4. But in the
absence of such pleading in the affidavit in reply, this opportunity was denied
to the appellant. It was, therefore, not right for the High Court to have
allowed the plea of waiver to be raised against the appellant and that plea
should have been rejected in limine." In the present case, plea of waiver
had neither been taken in the original plaint nor in the amended plaint which
was amended subsequent to the passing of the decree on admission for the sum of
Rs.7,09,835/- nor even in the grounds of appeal before the High Court. Question
of waiver is not a pure question of law which could be permitted to be raised
by the appellant at any stage of the proceedings. The High Court was right in
observing that the plea of limitation put up by the Board has to be examined on
its own merit. We do not find any merit in the submission of the learned senior
counsel appearing for the appellant that the suit having been partly decreed on
admission, could not subsequently be dismissed on the ground of limitation for
the remaining amount.
Second
part of Point No.2 Shri R.F. Nariman, learned senior counsel appearing for the
appellant conceded before us the first part of the point no.2 that Section 120
of the Act is applicable in the present case. He addressed on the second part
of question no.2, "whether the letter dated 12.04.1984 can be treated as
notice under Section 120 of the said Act and further whether the suit is barred
by limitation thereunder." Section 120 of the Act reads as under:-
"Section 120 Limitation of proceedings in respect of things done under
the Act No suit or other proceeding shall be commenced against a Board or any
member or employee thereof for anything done, or purporting to have been done,
in pursuance of this Act until the expiration of one month after notice in
writing has been given to the Board or him stating the cause of action, or
after six months after the accrual of the cause of action."
The
Major Port Trust Act, 1963 is a special Act and Section 120 of the said Act
provides limitation of proceedings in respect to the things done under the Act.
A perusal of this Section shows there are two requirements in the Section and
both the requirements have to be read conjunctively and not alternatively. The
suit has to be filed within six months of the accrual of the cause of action
and it has to be preceded by one month notice. Admittedly, in the present case
formal notice under Section 120 had not been issued. It was contended by the
learned senior counsel that requirement of Section 120 of the Act would be
satisfied if the plaintiff before filing the suit complies with one of the two
requirements herein. This submission has been made on the basis that the word
'or' occurs between giving of the notice in writing and the filing of the suit
after six months of the accrual of the cause of action.
The
Andhra Pradesh High Court in The Shipping Corporation of India the view that the two requirements
of the said Section have to be read conjunctively and not alternatively. That
not only the suit has to be filed after the accrual of cause of action it has
to be preceded by one month's notice given in the prescribed manner. The word
'or' employed between the two clauses in the Section if read alternatively
would defeat the very object and intention of the said provision and would lead
to absurdity.
We
respectfully agree with the view expressed in the aforesaid judgment and
endorse the same.
Even
on facts we find that the letter dated 12.04.1984 cannot be treated as a notice
under Section 120 of the Act. The respondent Board by its letter dated
06.04.1984 had informed the appellant that the appellant has become eligible to
receive the rebate of Rs.7,09,835/- @ Re.1/- per tonne for having turned over
the plot allotted to it 6.39 times during the financial year 1983-84. In reply
thereto, the appellant by their letter 12.04.1984 set out various arguments to
justify the ground for full rebate and requested for the refund of the entire
sum of Rs.62,46,584.10 paise. In reply thereto, the respondent Board by its
letter dated 16.06.1984 declined the request of the appellant contained in its
letter dated 12.04.1984. The appellant in para 30 of its plaint has stated that
the illegal levy/refusal of rebate was made on 16.06.1984. Thus the cause of
action arose to the appellant for the first time on 16.06.1984 and, therefore,
the letter dated 12.04.1984 by no stretch of imagination can be said to be a
notice under Section 120 of the Act, which requires the cause of action to be
set out in the said statutory notice. In the plaint there is no averment to the
effect that the appellant had given the notice under Section 120. Appellant in
paragraph 31 has taken the stand that the appellant was not prevented by
Section 120 and 121 of the Act from filing the suit. If that be the case, then
the letter dated 12.04.1984 cannot be treated as a notice under Section 120 of
the Act. Requirement of giving of notice under Section 120 is mandatory and a
pre condition to the filing of the suit, and since the suit was filed without
giving the notice the same was not maintainable. The cause of action arose to
the appellant on 16.06.1984 and the present suit was filed on 11.09.1986 which
is much beyond the period of six months provided for filing the suit. The suit
is thus held to be not maintainable in the present form as well as barred by
limitation.
With
reference to point no.3 formulated for determination regarding the
constitutional validity of Section 120 of the Act, it has been contended by Shri
R.F. Nariman, learned senior counsel appearing for the appellant that the
shorter period of limitation of 6 months prescribed under the Act is
unconstitutional and violative of Article 14 and 19 of the Constitution of
India as it singles out cases under the Act without intelligible differentia.
It has no nexus with the objective sought to be achieved under Section 120 of
the Act. It was pointed out that in respect of suits against Government and
public officers under other laws, longer period of limitation has been
prescribed and there is no reason whatsoever to prescribe shorter period of
limitation under the Act.
Elaborating
this submission further learned senior counsel pointed out that under the
Indian Limitation Act, 1963 there are three divisions of the schedule to the
Act. The first division concerns itself with suits where the minimum period in
the column of limitation is one year going up to 30 years. In the second
division which deals with appeals much shorter period of limitation is provided
ranging from 30 days to 90 days.
Similarly,
in the third division relating to filing of applications again a very short
period of limitation is prescribed ranging from 10 days to 90 days. Article 134
to 137 providing for longer periods of limitation are an exception to the rule.
Section 5 of the Limitation Act allows for condonation of delay in filing the
appeals or applications but not suit.
According
to him, it is so because the longer period of limitation is provided for filing
the suit and since short period is given for filing of the appeals and
applications, provision has been made for condoning the delay on sufficient
cause being shown to mitigate the hardship caused to the litigants. That
Section 120 which provides for short period of limitation of six months for
filing the suit without prescribing for the condonation of delay to mitigate
the hardship of the litigants is arbitrary, excessive, disproportionate and
unreasonable restriction on the appellant's rights under Article 14 and
19(1)(f) of the Constitution of India. That the High Court wrongly felt bound
by two decisions cited before it. The first being of the Bombay High Court in
Municipal 1972 Bom. 350) and the other of this Court in the Trustees of the
Port of (4) SCC 710. So far as Municipal Corporation of Greater Mumbai's case
(supra) is concerned it was contended that this was not a decision on the point
at all in as much as the counsel for the plaintiff had not pressed the point
regarding constitutional validity of the provision though the same had been
raised. In so far as the Trustees of the Port of Bombay's case (supra) it was
pointed out that the constitutional validity of Section 87 of the Bombay Port
Trust Act had not been challenged at all. That the observations made in the
aforesaid cases are in the nature of obiter dicta and therefore connot be
treated as a precedent in the present case.
Before
the Bombay High Court in Municipal Corporation of Greater Mumbai's case (supra)
the challenge had been laid to Section 527 of the Bombay Municipal Corporation
Act on the ground that the same was illegal and ultra vires as it violated the
fundamental rights guaranteed to plaintiff under Article 14 and 19(1)(f) of the
Constitution of India. The learned counsel appearing for the plaintiff did not
press the challenge to the constitutional validity of Section 527 but the
Division Bench found that there was no merit in the contention raised by the
plaintiff to the constitutional validity of Section 527 and observed that
merely because a statute not dealing with limitation in general prescribed a
special period of limitation different from the one in the Indian Limitation
Act, it does not follow that the provision prescribing the special period of
limitation violates Article 14 of the Constitution, much less Article 19(1)(f)
thereof. It was observed in paragraph 9:- " xxx Mr. Adik for the plaintiff
did not press the constitutional point raised in the above paragraph of the
plaint and obviously for good reasons. It is obvious that there is no substance
in that contention. Merely because a statute not dealing with limitation in
general prescribes a special period of limitation different from the one in the
Limitation Act, it does not follow that the provision prescribing the special
period of limitation violates Article 14 of the Constitution, much less Article
19(1)(f) thereof." No doubt the learned counsel appearing for the
plaintiffs in that case had given up his challenge to the constitutional
validity of Section 527 of the Bombay Municipal Act, but all the same the High
Court recorded its reasons for upholding the validity of the Section by
recording valid reasons which in our view are correct. We agree with the
observations made by the Division Bench in the said case that merely because a
statute not dealing with the limitation in general prescribed period of
limitation different from the one in the Indian Limitation Act, 1963 it does
not follow that the provisions prescribing the said period of limitation
violates Article 14 or 19(1)(f) of the Constitution of India.
In
respect to the judgment of this court in Trustees of the Port of Bombay's case
(supra) it is urged by the learned senior counsel appearing for the appellant
that the constitutional validity of Section 87 of the Bombay Port Trust Act,
1879 was not under challenge and therefore the said decision cannot be a
precedent for examining the constitutional validity of Section 120 of the
present Act. Section 87 reads as under:-
"Section
87. No suit or other proceeding shall be commenced against any person for any
thing done, or purporting to have been done, in pursuance of this Act, without
giving to such person one month's previous notice in writing of the intended
suit or other proceeding and of the cause thereof, nor after six months from
the accrual of the cause of such suit or other proceeding..." It is true
that the constitutional validity of Section 87 of the Act which is equivalent
to Section 120 of the present Act and similar in terms was not directly in
issue. Yet this Court examined the question of shorter period of limitation
prescribed under Section 87 of the Bombay Port Trust Act, 1879. With reference
to the relatively longer period of limitation provided under the Indian
Limitation Act for filing of the suit and after examining the said issue the
Court came to the conclusion that shorter period of limitation provided under
Section 87 of the Bombay Port Trust Act, 1879 was valid. It was observed in para
38:- "38. If the person entitled to the goods defaults in removing them
within one month of the Board coming into custody, special powers of disposal
by public auction are given by Section 64A. The Act charges the port
authorities with a wealth of functions and duties and necessarily legal
proceedings follow upon the defects, defaults and other consequences of abuse
of power. Even so, a public body undertaking work of the sort which a port
carries out will be exposed to an explosive amount of litigation and the Board
as well as its officers will be burdened by suits and prosecutions on top of
the pressure of handling goods worth crores daily, public bodies and officers
will suffer irremediably in such vulnerable circumstances unless actions are
brought when evidence is fresh and before delinquency fades; and so it makes
sense to provide, as in many other cases of public institutions and servants, a
reasonably short period of time within which the legal proceedings should be
started. This is nothing unusual in the jurisprudence of India or England and is constitutionally sound. Section 87 is illumined by
the protective purpose which will be ill served if the shield of a short
limitation operates in cases of misfeasance and malfeasance, but not non-feasance.
The object, stripped of legalese and viewed through the glasses of simple
sense, is that remedial process against official action showing up as wrong
doing or non-doing which inflicts injury on a citizen should not be delayed too
long to obliterate the probative material for honest defence. The dichotomy
between act and omission, however, logical or legal, has no relevance in this
context. So the intendment of the statute certainly takes in its broad embrace
all official action, positive and negative, which is the operative cause of the
grievance.
Although
the Act in the present case uses only the expression 'act' and omits 'neglect'
or 'default' or 'omission', the meaning does not suffer and if other statutes
have used all these words it is more the draftsman's anxiety to avoid taking
risks in Court, not an addition to the semantic scope of the word 'act'. Of
course, this is the compulsion of the statutory context and it may well be that
other enactments, dealing with different subject-matter, may exclude from an
'act' an 'omission'. This possibility is reduced a great deal by the definition
of 'act' in the various General Clauses Acts, as including 'illegal
omissions'." The question of considering the rationale of Section 87 of
Bombay Port Trust squarely arose in the said case as the contention was raised
by the Additional Solicitor General therein that if the argument of the
respondent in the said case was accepted, it would amount to misreading the
purpose of Section 87 of the Bombay Port Trust Act and similar provision in
many statues calculated to protect public officers and institutions on a
special basis. (see paragraph 7 of the judgment). The Major Port Trusts Act,
1963 charges the port authorities with a well thought out duties and functions
in respect of providing port facilities and equipment and providing services
for receiving, landing and shipping of goods or passengers from and upon sea
going vessels. As a result of these multifarious functions, major ports and
their officers are faced and burdened with an explosive amount of litigation.
The object of Section 120 is two fold, i.e. provision of giving one month's
notice setting out the cause of action is to give the port authorities an
opportunity to consider the merits of the case of the aggrieved party land make
amends when possible to save litigation. To ensure that legal action against
port authorities and its officers is initiated expeditiously when evidence is
fresh land does not obliterate the probative material for honest defence.
The
classification has a reasonable nexus to the object, it seeks to achieve. The
submission made on behalf of the appellant that though a suit may be filed
within six months, the trial of the suit could take place long after this and
that the evidence would never be fresh at that stage is fallacious in as much
as once the suit is filed against a party, the party is put on notice and will,
therefore, gather the relevant documentary evidence when fresh and preserve
such evidence for the trial whenever the same would take place.
The
submission of Shri R.F. Nariman, learned senior counsel appearing for the
appellant that in Indian Limitation Act, 1963 no provision for condonation of
delay for institution of a suit has been made because a relatively longer
periods of limitation has been provided as compared to limitation provided for
appeals and other applications and, therefore, providing relatively shorter period
of six months for filing the suit under the provisions of Section 120 of the
Major Port Trusts Act, 1963 without a provision for condonation of delay, would
make the section arbitrary, excessive, disproportionate and unreasonable
restriction on the appellant's right under Article 14 and 19(1)(g) of the
Constitution of India cannot be accepted. The statute of limitation is founded
on public policy that an unlimited and perpetual threat of litigation leads to
disorder and confusion and creates insecurity and uncertainty. Therefore the
legislature has sought to balance the public interest in providing limitation
on the one hand and at the same time not to unreasonably restrict the right of
a party to initiate proceedings on the other. Once a suit is filed the object
of limitation as a statute repose is satisfied in as much as the opponent party
knows what he has to defend.
The
Major Port Trusts Act, 1963 is a special Act. It is a settled legal proposition
that the provision of the Special Act shall prevail over with the general Act.
Section 29 of the Indian Limitation Act, 1963 relates to savings. For proper
appreciation of legal position Section 29(2) of the Limitation Act is
reproduced below:- "Section 29(2) Where any special or local law
prescribes for any suit, appeal or application a period of limitation different
from the period prescribed by the Schedule, the provisions of Section 3 shall
apply as if such period were the period prescribed by the Schedule and for the
purpose of determining any period of limitation prescribed for any suit, appeal
or application by any special or local law, the provisions contained in
Sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent
to which, they are not expressly excluded by such special or local law."
Sub-Section 2 of Section 29 envisages special or local laws which can provide a
period of limitation for suits as well as for appeals and applications,
different from the period prescribed by the schedule of Limitation Act where
provisions contained in Sections 4 to 24 can be expressly excluded by such
special or local laws. There are many special or local laws which provide for a
short period of limitation for filing of appeals as well as applications and
where the provisions of Section 5 are expressly excluded or curtailed. Under
the Arbitration and Conciliation Act, 1996, Section 34 prescribes time limit
within which an application for setting aside of an award must be made and
although the Court is given the power to extend the time on sufficient cause
being shown, the said power to extend the time is restricted but a period of 30
days only and not thereafter.
It was
then submitted by learned senior counsel for the appellant that whereas Section
120 of the Major Port Trusts Act prescribes a limitation for six months plus
one month of statutory notice for suits filed against the Port Trust and its
employees for anything done or purporting to have been done in pursuance of the
Act, no limitation is prescribed for suits which are filed by the Port Trust
under Section 131 of the same Act without a rational basis. We do not find any
merit in this submission. It is well settled that although limitation being
intended for quieting title and in that sense looks at the problems from the
point of view of the defendant with a view to provide him security against the
stale claims, addresses itself at the same time also to the position of the
plaintiff. The legislature in its wisdom can make separate provision within
which a suit must be filed by the individual from that within State of
Rajasthan (AIR 1961 Supreme Court 1704 a similar argument was raised and negatived
by this Court. In that case the Court was examining as to whether there was a
rational basis for treating the Government differently as regards period within
which the suit could be filed by the Government on the one hand and the private
individual on the other. It was held that there were sufficient grounds for
differentiating between the claims of an individual and the claims of the
Government and the actual period of limitation which should be allowed for
filing the suit by any party was a matter of legislative policy and cannot be
brought within the scope or purview under Article 14 or any other Article of
the Constitution. It was observed:- "xxxx. It is with this background that
the question of the special provision contained in Article 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 inter-departmental 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." With reference to the contention
of Shri R.F. Nariman, learned senior counsel appearing for the appellant that
there is no reasons for prescribing a shorter period of limitation for action
against the Board while suits against the Government can be filed within normal
period of limitation, it may be stated that the Government cannot be equated
with statutory body like the Major Port Trust. The Government is a vast organisation
having comparatively larger manpower and in the litigation against the
Government subject matter of disputes is under several different acts, such as
Excise Act, Customs Act, Income Tax Act, Railways Act, Land Acquisition Act
etc. Many of these Acts also contain provisions similar to, if not identical
with the provisions of Section 120 of the Major Port Trusts Act, 1963.
Therefore, the contention between a major port and Government as a whole is
totally fallacious.
A provision
of the Act providing for a shorter period of limitation cannot be declared to
be unconstitutional simply because in some of the Statutes a longer period of
limitation has been prescribed for the redressal of the litigants grievances.
The legislation enacted for the achievement of a particular object or purpose
need not be all embracing.
It is
for the legislature to determine what categories it would embrace within the
scope of legislation and merely because certain categories which would stand on
the same footing as those covered by the legislature are left out would not
render the legislation of any law being discriminatory and violative of the
fundamental rights guaranteed under Article 14 and 19(1)(g) of the
Constitution.
In the
end Mr. Nariman submitted that the Indian Ports Act, 1908 was still applicable
to various ports including Panjim Port in Goa. In the
case of exporters like the appellant using the port of Panjim, if the same
controversy was to arise there being no provision such as Section 120 of the Major
Port Trusts Act, 1963 in the Indian Ports Act, 1908 the period of limitation
available to such exporters would be three years, that there was no
intelligible differentia with the objects sought and achieved in proceeding
such as the provision as Section 120. It may be stated that nowhere in the
pleadings, is there an averment regarding the port of Panjim and in any case
the very fact that the port of Panjim is not a major port and is not governed
by the Major Port Trusts Act, 1963 and is not enjoined to perform duties which
a major port is enjoined to perform is enough of an intelligible differentia
which has a rational nexus with the objects sought to be achieved.
For
the aforesaid reasons, we do not find any merit in these appeals and the
appeals are dismissed leaving the parties to bear their own costs.
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