SUPREME COURT OF INDIA
V.M. Salgaocar and Bros.
Vs
Board of Trustees of Port of Mormugao
Civil Appeal Nos. 4662-4663 of 1999
(Ashok Bhan and A.K.Mathur)
31/03/2005
ASHOK BHAN. J.
1. 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.
2. 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.
3. 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, 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
7.20 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
4. 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. Dempo & Co. Pvt. Ltd. vs. Board
of Trustees and Another 2). 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.
5. 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 to 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.
6. 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 be 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.
7. 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
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.
8. 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
findings 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?" *
9. 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.
10. 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.
11. 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?
12. 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 constitutional 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.
13. 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 confirmed 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.
14. 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 28.10.1993 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 16.6.1984 refused to grant the full rebate as claimed by the
appellant.
15. On 11.9.1986 the appellant filed Civil Suit No. 55/1986 for various reliefs
referred to in the earlier part of the judgment. Port trust on 14.2.1997 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 16.6.1984 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 12.8.1987
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.
16. Counsel for the appellant has contended that the port trust in its reply to
application under Order 12 Rules 6 while admitting the claim did not arise 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 12.8.1987, 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.
17. 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.
18. 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." *
19. 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. #
20. This Court in Manindra Land & Building Corporation Ltd. vs. Bhutnath
Banerjee and others reported in 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 confusion
as that conclusion led the Court to assume or not to assume the jurisdiction to
proceed with the determination of that matter." *
21. 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
6.4.1983 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.
22. 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 1.9.1986, Board had filed its written statement raising
objections of limitations and maintainability of the plaint for want of notice
on 18.2.1987. Application for decree on admission was filed on 12.4.1987 and
reply to the said application was filed by the Board on 18.7.1987. The decree
on admission was passed by the Trial Court for the sum of Rs. 7,09,835/- on
12.8.1987. 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 6.1.1990, 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 Padampat
Sugar Mills Co. Ltd. vs. State of Uttar Pradesh and others 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." *
23. 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
24. 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."
25. 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." *
26. 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 Ltd. vs. The
Union of India and another [(1976) A.P. 261] has taken 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.
27. 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.
28. 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.
If 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, provisions has been made for condoning the delay on sufficient
cause being shown to mitigate the hardship caused to the litigants. The 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 reasonable
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
Corporation of Greater Mumbai vs. Hasham Ismail Mamsa 1972 AIR(Bom) 350) and
the other of this Court in the Trustees of the Port of Bombay vs. The Premier
Automobiles Ltd & another reported in 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 cannot be treated as a precedent in the present case.
29. 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 Articles 14 of the Constitution, much less
Article 19(1)(f) thereof. It was observed in paragraph 9:-
"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." *
30. 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.
31. 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....." *
32. 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
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 statues
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'." *
33. 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 though 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.
34. 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.
35. 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
"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." *
36. 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.
37. 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 the 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
which a suit can be filed by a statutory body. # In Nav Ratanmal vs. State
of Rajasthan 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:-
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." *
38. 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.
39. 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 of 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 and 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. #
40. 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
41. 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.