REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2514 OF 2020
(Arising out of SLP (C) No. 30209/2017)
Shakti Bhog Food Industries Ltd............................... Appellant(s)
Versus
The Central Bank of India & Anr............................... Respondent(s)
With
CIVIL APPEAL NO. 2515 OF 2020
(Arising out of SLP (C) No. 30210/2017)
J U D G M E N T
A.M. Khanwilkar, J.
CIVIL APPEAL NO. 2514 OF 2020
(Arising out of SLP (C) No. 30209/2017)
1.
Leave granted.
2.
This appeal takes
exception to the judgment and order dated 2.1.2017 passed by the High Court of
Delhi at New Delhi
Signature Not Verified
Digitally signed by
DEEPAK (SIfNGoH r short, “the High Court”) in R.S.A. No. 391/2016, whereby the
Reason:
High Court affirmed the decision of the Court of Civil Judge–05,
Central
District, Tis Hazari Courts, Delhi, dated 6.1.2016 in C.S. No. 950/2014
allowing the application filed by the respondents/defendants for rejection of
the plaint under Order VII Rule 11 of the Code of Civil Procedure, 1908 (for
short, “the CPC”), instituted by the appellant/plaintiff. The Additional
District & Sessions Judge, Central, Tis Hazari Courts, Delhi, vide order
dated 23.7.2016 in R.C.A. No. 61794/2016 had also affirmed the order of
rejecting the plaint. The appellant had filed the stated suit on 23.2.2005 for
a decree for rendition of true and correct accounts in respect of the
interest/commission charged and deducted by the respondentBank relating to
current account No. CCM 20225 of the appellant for the period between 1.4.1997
and 31.12.2000 and also for recovery of the excess amount charged by the
respondentBank consequent to rendition of accounts with interest at the rate
of 18% per annum from the date of deduction including interest pendente lite
realization of the amount and future interest.
3.
The
plaint came to be rejected by the trial Court under Order VII Rule 11(d) of the
CPC on the ground that it was barred by law of limitation, as it was filed
beyond the period of three years prescribed in Article 113 of the Limitation Act, 1963 (for
short, “the
1963 Act”), as applicable to the present case, from the date when the right to
sue accrued to the appellant in October, 2000. The entire discussion of the
trial Court in that regard can be traced to paragraphs 10 and 11, which read
thus:
‘‘10. As stated above the plaintiff by way of
present suit has sought two reliefs i.e. rendition of account and repayment of
excess money. Limitation Act, 1963 does not provide any specific article with
regard to time period within which accounts can be sought by party from its
bank. As such, Article 113 of Limitation Act came into picture which provides a
limitation period of three years for suits for which no limitation period is
provided, from the date when right to sue accrues.
11. In the present case in hand, as per
averments made by the plaintiff in his plaint, the facility was availed by the
plaintiff from the defendants till October 2000. Further as per averments made
in the plaint the alleged amount so charged by the defendant from the
plaintiff, in excess from agreed amount, was till October, 2000. As such, at
best can be said right to sue accrues in favour of the plaintiff in October,
2000. Considering the law as stated in above paragraph, plaintiff could have
filed the present suit i.e. for rendition of account and repayment of excess
amount till October 2003 ”
After
so observing, the trial Court considered the submission of the appellant that
the cause of action had accrued to the appellant only upon rejection of the
representation by the respondentBank entailing in refusal or denial of
liability, communicated to the appellant vide letters dated 19.9.2002 and
3.6.2003 and after the final legal notice
was served upon the
respondents on 7.1.2005. That contention has been rejected by adverting to the decision of the same High Court in C.P. Kapur vs. The Chairman & Ors.1, wherein
it is held that exchange of correspondence between the parties cannot extend the limitation
period for institution of a suit, once the right to sue had accrued,
which in this case had accrued
in October, 2000, as has been
asserted
even in the plaint. Whereas, the suit was filed in February, 2005 beyond the
period of three years from the date on which right to sue accrued to the
appellant, as prescribed in Article 113 of the 1963 Act. The view so taken by
the trial Court commended to the District Court in first appeal and also the
High Court in second appeal, which judgment is the subject matter of challenge
in the present appeal.
4.
We
have heard Mr. Nischal Kumar Neeraj, learned counsel for the appellant and Mr.
Anuj Jain, learned counsel for the respondents.
5.
Be it noted that
the appellant had relied on Articles 2, 3 and 22 of the 1963 Act to urge that
the suit filed in February, 2005 was within limitation. This plea, however, did
not impress the trial Court, the first appellate Court or the High Court. The
1 (2013) 198 DLT 56
Courts
proceeded on the basis that Article 113 is attracted in the facts of the
present case, as the reliefs claimed by the appellant were not covered under
any specific Article with regard to time period within which accounts can be
sought by party from its bank, as noted by the trial Court in paragraph 10 of
its judgment reproduced above.
6.
The
central question is: whether the plaint as filed by the appellant could have
been rejected by invoking Order VII Rule 11(d) of the CPC? Indeed, Order VII
Rule 11 of the CPC gives ample power to the Court to reject the plaint, if from
the averments in the plaint, it is evident that the suit is barred by any law
including the law of limitation. This position is no more res integra.
We may usefully refer to the decision of this Court in
Ram Prakash Gupta
vs.
Rajiv Kumar Gupta &
Ors.2. In paragraph Nos. 13
to
20 of the reported decision, the
Court
observed as follows:
“13. As per Order 7 Rule 11, the plaint is liable to be rejected
in the following cases:
“(a) where it does not disclose a cause of
action;
(b)
where the relief
claimed is undervalued, and the plaintiff, on being required by the court to
correct the valuation within a
2 (2007) 10 SCC 59
time to be fixed by the court, fails to do so;
(c)
where the relief
claimed is properly valued but the plaint is written upon paper insufficiently
stamped, and the plaintiff, on being required by the court to supply the
requisite stamp paper within a time to be fixed by the court, fails to do so;
(d)
where the suit
appears from the statement in the plaint to be barred by any law;
(e)
where it is not filed in duplicate;
(f)
where the
plaintiff fails to comply with the
provisions of Rule 9.”
14.
In Saleem Bhai
v. State of Maharashtra [(2003) 1 SCC 557] it was held with
reference to Order 7 Rule 11 of the Code that
“9. … the relevant facts which need to be looked into for deciding
an application thereunder are the averments in the plaint. The trial court can
exercise the power … at any stage of the suit — before registering the plaint
or after issuing summons to the defendant at any time before the conclusion of
the trial. For the purposes of deciding an application under Clauses (a)
and (d) of Rule 11 of Order 7 CPC, the averments in the plaint are
germane; the pleas taken by the defendant in the written statement would be
wholly irrelevant at that stage,…” (SCC p. 560, para 9).
15.
In I.T.C. Ltd.
v. Debts Recovery Appellate Tribunal [(1998) 2 SCC 70] it was held
that the basic question to be decided while dealing with an application filed
under Order 7 Rule 11 of the Code is whether a real cause of action has been
set out in the plaint or something purely illusory has been stated with a view
to get out of Order 7 Rule 11 of the Code.
16.
“The trial court
must remember that if on a meaningful—no formal—reading of the plaint it is
manifestly vexatious and meritless in the sense of
not disclosing a clear right to sue, it should exercise its power under
Order 7 Rule 11 CPC taking care to see that the ground mentioned therein is
fulfilled. If clever drafting has created the illusion of a cause of action,
[it has to be nipped] in the bud at the first hearing by examining the party
searchingly under Order 10 CPC.”
(See T. Arivandandam v.
T.V. Satyapal [(1977) 4 SCC 467], SCC p. 468.).
17.
It is trite law
that not any particular plea has to be considered, and the whole plaint has to
be read. As was observed by this Court in Roop Lal Sathi v. Nachhattar
Singh Gill [(1982) 3 SCC 487], only a part of the plaint cannot be rejected
and if no cause of action is disclosed, the plaint as a whole must be rejected.
18.
In Raptakos
Brett & Co. Ltd. v. Ganesh Property [(1998) 7 SCC 184] it was
observed that the averments in the plaint as a whole have to be seen to find
out whether Clause (d) of Rule 11 of Order 7 was applicable.
19.
In Sopan
Sukhdeo Sable v. Asstt. Charity Commr. [(2004) 3 SCC 137] this Court
held thus: (SCC pp. 14647, para 15)
“15. There cannot be any compartmentalisation, dissection, segregation and inversions of
the language of various paragraphs in the plaint. If such a course is adopted
it would run counter to the cardinal canon of interpretation according to which
a pleading has to be read as a whole to ascertain its true import. It is not
permissible to cull out a sentence or a passage and to read it out of the
context in isolation. Although it is the substance and not merely the form that
has to be looked into, the pleading has to be construed as it stands without
addition or subtraction or words or change of its apparent grammatical sense.
The intention of the party concerned is to be gathered primarily from the tenor
and terms of his pleadings taken as a whole. At the same time it should be
borne in mind that no pedantic approach should
be
adopted to defeat justice on hairsplitting technicalities.”
20.
For our purpose,
Clause (d) is relevant. It makes it clear that if the plaint does not
contain necessary averments relating to limitation, the same is liable to be
rejected. For the said purpose, it is the duty of the person who files such an
application to satisfy the court that the plaint does not disclose how the same
is in time. In order to answer the said question, it is incumbent on the part
of the court to verify the entire plaint. Order 7 Rule 12 mandates where a
plaint is rejected, the court has to record the order to that effect with the
reasons for such order.”
On the same lines, this Court in Church of Christ Charitable Trust
& Educational Charitable Society
vs.
Ponniamman
Educational Trust3, observed as
follows:
“10 … It is clear from the above that where the plaint does not disclose
a cause of action, the relief claimed is undervalued and not corrected within
the time allowed by the court, insufficiently stamped and not rectified within
the time fixed by the court, barred by any law, failed to enclose the required
copies and the plaintiff fails to comply with the provisions of Rule 9, the
court has no other option except to reject the same. A reading of the above
provision also makes it clear that power under Order 7 Rule 11 of the Code can
be exercised at any stage of the suit either before registering the plaint or
after the issuance of summons to the defendants or at any time before the
conclusion of the trial.
11.
This position was
explained by this Court in Saleem Bhai vs. State of Maharashtra, (2003)
1 SCC 557, in which, while considering Order 7 Rule 11 of the Code, it was held
as under: (SCC p. 560, para 9)
3
(2012) 8 SCC 706
“9. A perusal of Order 7 Rule 11 CPC makes it clear that the relevant
facts which need to be looked into for deciding an application thereunder are the
averments in the plaint. The trial court can exercise the power under
Order 7 Rule 11 CPC at any stage of the suit — before registering the plaint or
after issuing summons to the defendant at any time before the conclusion of the
trial. For the purposes of deciding an application under clauses (a) and (d) of
Rule 11 of Order 7 CPC, the averments in the plaint are germane; the pleas
taken by the defendant in the written statement would be wholly irrelevant at
that stage, therefore, a direction to file the written statement without
deciding the application under Order 7 Rule 11 CPC cannot but be procedural
irregularity touching the exercise of jurisdiction by the trial court.”
It is clear that in order to consider Order 7 Rule 11, the court has to
look into the averments in the plaint and the same can be exercised by the
trial court at any stage of the suit. It is also clear that the averments in
the written statement are immaterial and it is the duty of the Court to
scrutinize the averments/pleas in the plaint. In other words, what needs to be
looked into in deciding such an application are the averments in the plaint. At
that stage, the pleas taken by the defendant in the written statement are
wholly irrelevant and the matter is to be decided only on the plaint averments.
These principles have been reiterated in Raptakos Brett & Co. Ltd. vs.
Ganesh Property, (1998) 7 SCC 184 and Mayar (H.K.) Ltd. vs. Vessel M.V.
Fortune Express, (2006) 3 SCC 100.
12.
It is also useful
to refer the judgment in T. Arivandandam vs. T.V. Satyapal, (1977) 4 SCC
467, wherein while considering the very same provision i.e. Order 7 Rule 11 and
the duty of the trial court in considering such application, this Court has
reminded the trial Judges with the following observation: (SCC p. 470, para 5)
“5. … The learned Munsif must remember that if on a meaningful – not
formal – reading of the plaint it is manifestly vexatious, and meritless, in
the sense of not disclosing a clear right to sue, he should exercise his power
under Order 7, Rule 11 C.P.C. taking care to see that the
ground mentioned therein is fulfilled. And, if clever drafting has
created the illusion of a cause of action, nip it in the bud at the first
hearing by examining the party searchingly under Order 10, C.P.C. An activist
Judge is the answer to irresponsible law suits. The trial courts would insist
imperatively on examining the party at the first hearing so that bogus
litigation can be shot down at the earliest stage. The Penal Code is also
resourceful enough to meet such men, (Chapter XI) and must be triggered against them.”
It is clear that if the allegations are vexatious and meritless and not
disclosing a clear right or material(s) to sue, it is the duty of the trial
Judge to exercise his power under Order 7 Rule 11. If clever drafting has
created the illusion of a cause of action as observed by Krishna Iyer J., in
the above referred decision, it should be nipped in the bud at the first
hearing by examining the parties under Order 10 of the Code.”
We may also advert to the exposition of this Court in Madanuri
Sri Rama Chandra Murthy vs. Syed Jalal4. In paragraph 7 of
the said decision, this Court has succinctly restated
the
legal
position as follows:
“7. The plaint can be rejected under Order 7
Rule 11 if conditions enumerated in the said provision are fulfilled. It is
needless to observe that the power under Order 7 Rule 11, CPC can be exercised
by the Court at any stage of the suit. The relevant facts which need to be
looked into for deciding the application are the averments of the plaint only.
If on an entire and meaningful reading of the plaint, it is found that the suit
is manifestly vexatious and
meritless in the sense of not disclosing any right to sue, the court should
exercise power under Order 7 Rule 11 CPC. Since the power conferred on the
Court to terminate civil action at the threshold is drastic, the conditions
enumerated under Order 7 Rule 11 CPC to the exercise of
4 (2017) 13 SCC 174
power of rejection of plaint have to be
strictly adhered to. The averments of the plaint have to be read as a whole to
find out whether the averments disclose a cause of action or whether the suit
is barred by any law. It is needless to observe that the question as to whether
the suit is barred by any law, would always depend upon the facts and
circumstances of each case. The averments in the written statement as well as
the contentions of the defendant are wholly immaterial while considering the
prayer of the defendant for rejection of the plaint. Even when the allegations
made in the plaint are taken to be correct as a whole on their face value, if
they show that the suit is barred by any law, or do not disclose cause of
action, the application for rejection of plaint can be entertained and the
power under Order 7 Rule 11 CPC can be exercised. If clever drafting of the
plaint has created the illusion of a cause of action, the court will nip it in
the bud at the earliest so that bogus litigation will end at the earlier
stage.”
Keeping
in mind the well settled legal position, we may now proceed to analyse the averments in the plaint, as filed by
the appellant, to discern whether it was a fit case for rejection of the plaint
under Order VII Rule 11(d) of the CPC. As noticed from the trial Court
judgment, it is evident that the trial Court did not make any attempt to
analyse the plaint in the manner predicated in the aforesaid decisions. Even
the District Court dealing with first appeal and the High Court with second
appeal omitted to do so. It is the bounden duty of the Court to examine the
plaint as a whole and not selected averments therein. For that, we need to
advert to the averments in the plaint.
Paragraphs 8 to 15 of the
plaint, which according
to us, are the relevant averments, read as follows:
‘‘8. That the facility as referred to in the
foregoing paras was extended with effect from 01.04.1997 and somewhere in the
month of July, 2000 it was noticed by the Plaintiff that the Defendants were
charging interest/commission @ Rs.4/ per thousand rupees on local cheques and
drafts in an arbitrary manner in violation of the assurance given to the Plaintiff.
9.
That
after the detection of the above overcharging of interest/commission the
Plaintiff sent a letter to the Defendants on 21.07.2000 complaining about the
overcharging and thereafter the interest/commission was charged as per
assurance given.
10.
That
the amount overcharged as commission/interest was not refunded to the Plaintiff
and the Plaintiff sent the following letters addressed to the Bank i.e. General
Manager and Senior Manager indicating therein that amount overcharged should be
refunded to the Plaintiff with interest thereon:
Letter dated 12.10.2000, 24.10.2000, 30.10.2000,
7.11.2000, 24.12.2000, 01.03.2001, 28.03.2001,
22.5.2001 and 20.06.2001. In all the above
letters requests were made to clarify as to how the commission were calculated
and deducted from the Plaintiff.
11.
That
the Assistant General Manager, Sh. P.S. Bawa of Regional OfficeB, Delhi vide
letter dated 9.7.2001 informed the Plaintiff that the comments of the Branch
Office have been invited on the representation of the Plaintiff in respect of
the local cheques/DDs discounted during the relevant period and the matter will
be decided as early as possible. No progress was made in the matter and the
Plaintiff had to submit letter dated 31.10.2001 to the Hon’ble Finance
Minister, Govt. of India, New Delhi.
12.
That
the Defendants have charged interest for some time for the actual number of
days for the Defendants remained out of funds.
13.
That
vide letter dated 08.05.2002, the Senior Manager informed the Plaintiff that
the cheques were being purchased at the prevailing rates. That reply was given
to sidetrack the real issue in respect of which letter dated 09.07.2001 was
received from Shri
P.S. Bawa, Assistant General Manager of
Regional Office as referred to in the foregoing paras.
14.
That,
thereafter, the Plaintiff sent letters dated 12.07.2002, 22.09.2002, 24.3.2003
alongwith which the details of the proposed/estimated excess amount charged
were given and it was requested that a sum of Rs.31,57,484/ approximately
appears to have been charged in excess of what should have been actually
charged and the exact amount should be calculated and refunded to the
Plaintiff. No reply was given by the Bank to these letters.
15.
That
Senior Manager of the Defendant No. 2 vide letter dated 19.09.2002 had informed
that everything was done according to rules and the matters need not to be
pursued any further and thereafter the Plaintiff sent another letter dated
03.06.2003.”
(emphasis supplied)
Again, in
paragraph 28 of the plaint, it is stated as follows:
“28. That the cause of action to file the
suit accrued in favour of the Plaintiff and against the Defendants when the
illegal recoveries were noticed and letter dated 21.07.2000 was sent to the
Defendants to clarify as to how the interest was being calculated and recovered
and on various other dates when the letters were sent to the Defendants with
request for refund of the excess amounts charged and on 9.7.2001 when assurance
for proper calculation and refund was conveyed to the Plaintiff and on 8.5.2002,
12.7.2002 and 22.9.2002 when requests were again made to settle the matter on
19.9.2002, 3.6.2003 and the cause of action arose on 23.12.2003 when the legal
notice was served upon the Defendant and on 28.12.2003 when the reply to the
notice was received
and finally on 07.01.2005. When the legal
notice for rendition of accounts was served upon the Defendants and the cause
of action still subsists as the accounts have not been rendered so far nor the
excess amount charged has been refunded by the
Defendants.”
From
the averments in the plaint, if read as a whole, it would appear that the
assertion of the appellant is that the respondents had extended financial
facility with effect from 1.4.1997 till October, 2007, but somewhere in the
month of July, 2000, the appellant noticed that the respondents were
unilaterally charging interest/commission at the rate of Rs.4 per thousand
rupees on local cheques and drafts in an arbitrary manner in violation of the
assurance given to the appellant. Immediately thereafter, the appellant wrote
to the respondentBank vide letter dated 21.7.2000 for taking corrective steps
in the matter. Then correspondence ensued between the parties in that regard
and the appellant was assured by the Regional Office of the respondentBank
that an appropriate decision will be taken at the earliest. The relevant
assertion in that regard is found in paragraph 11 of the plaint, wherein it is
mentioned that the Assistant General Manager Shri P.S. Bawa of Regional
OfficeB, Delhi, vide letter dated 9.7.2001 informed the appellant that
comments from the concerned Branch
Office have been invited
and
appropriate decision will be taken on its representation as early as possible.
Thereafter, on 8.5.2002, the Senior Manager of the respondentBank informed the
appellant that the cheques were being purchased at the prevailing rates; which
plea, according to the appellant, was to deviate from the position stated by
the Assistant General Manager of Regional Office in his letter dated 9.7.2001
referred to earlier. Resultantly, the appellant wrote to the officials of the
respondentBank vide letters dated 12.7.2002, 22.9.2002 and 24.3.2003. Notably,
it is averred in paragraph 15 of the plaint that the Senior Manager of the
respondentBank vide letter dated 19.9.2002 had informed the appellant that
everything was being done in accordance with the rules and the appellant need
not pursue the matter any further. It is asserted that despite this intimation,
the appellant continued to correspond with the respondentBank with a sanguine
hope that the issue will be resolved at the appropriate level by the Bank and finally
issued a legal notice on 28.11.2003, which was duly responded to by the
respondentBank vide Advocate’s letter dated 23.12.2003. Nevertheless, the
appellant gave another legal notice on 7.1.2005 and thereafter, proceeded to
file the subject suit in February, 2005.
7.
All
these events have been reiterated in paragraph 28 of the plaint, dealing with
the cause of action for filing of the suit. Indeed, the said paragraph opens
with the expression “the cause of action to file the suit accrued in favour of
the plaintiff and against the defendants when the illegal recoveries were
noticed and letter dated 21.7.2000 was sent to the defendants to clarify as to
how the interest was being calculated.” This averment cannot be read in
isolation. As aforesaid, on reading the plaint as a whole, it is seen that the
gravamen of the case made out in the plaint is that the appellant noticed the
discrepancy in July, 2000 and immediately took up the matter with the officials
of the respondentBank at different levels and in response, the Assistant
General Manager of Regional Office of the Bank had communicated in writing to
the appellant vide letter dated 9.7.2001 that its representation was being
examined and comments of the Branch Office have been invited and after receipt
thereof the matter will be decided as early as possible. As no further
communication was received by the appellant, it had to make a representation to
the Finance Minister, Government of India, vide letter dated 31.10.2001 and
presumably because of that, the appellant received a communication from the Senior
Manager
vide letter dated 8.5.2002 informing the appellant that the cheques were being
purchased at the prevailing rates. This stand taken by the Senior Manager was
to sidetrack the issue pending consideration before the Assistant General
Manager, Regional Office referred to in his letter dated 9.7.2001. The case
made out by the appellant is that no communication was received by the
appellant from the Assistant General Manager, Regional Office and instead, for
the first time it was informed vide letter dated 19.9.2002 sent by the Senior
Manager of the respondentBank, that all actions taken by the Bank are as per
the rules and, therefore, the appellant need not correspond in this regard any
further. This response of the Bank could also be regarded as a firm denial or
refusal by the authorised official of the Bank, giving rise to cause of action
to sue the Bank.
8.
Thus
understood, the letter dated 8.5.2002 sent by the Senior Manager of the
respondentBank, at best, be reckoned as accrual of the cause of action to the
appellant to sue the respondentBank. It is then stated that the appellant
received a communication dated 19.9.2002, informing the appellant that it
should not carry on any further correspondence with the Bank
relating to
the subject matter. Until then, the appellant was having a sanguine hope of
favourable resolution of its claim including by the Regional Office of the
respondents. The appellant, therefore, had to send a legal notice on
28.11.2003, to which the Bank responded on 23.12.2003. Reckoning these dates,
the plaint filed on 23.2.2005 was within limitation, as stated in paragraph 28
of the plaint. Resultantly, the question of rejecting such a plaint under Order
VII Rule 11(d) of the CPC did not arise.
9.
The
expression used in Article 113 of the 1963 Act is “when the right to sue
accrues”, which is markedly distinct from the expression used in other Articles
in First Division of the Schedule dealing with suits, which unambiguously refer
to the happening of a specified event. Whereas, Article 113 being a residuary
clause and which has been invoked by all the three Courts in this case, does
not specify happening of particular event as such, but merely refers to the
accrual of cause of action on the basis of which the right to sue would accrue.
10.
Concededly,
the expression used in Article 113 is distinct from the expressions used in other Articles in the First Division
dealing
with suits such as Article 58 (when the right to sue “first” accrues), Article
59 (when the facts entitling the plaintiff to have the instrument or decree
cancelled or set aside or the contract rescinded “first” become known to
him) and Article 104 (when the plaintiff is “first” refused the
enjoyment of the right). The view taken by the trial Court, which commended to
the first appellate Court and the High Court in second appeal, would inevitably
entail in reading the expression in Article 113 as – when the right to sue
(first) accrues. This would be rewriting of that provision and doing violence
to the legislative intent. We must assume that the Parliament was conscious of
the distinction between the provisions referred to above and had advisedly used
generic expression “when the right to sue accrues” in Article 113 of the 1963
Act. Inasmuch as, it would also cover cases falling under Section 22 of the
1963 Act, to wit, continuing breaches and torts.
11.
We
may usefully refer to the dictum of a threeJudge Bench of this Court in Union
of India & Ors. vs. West Coast Paper
Mills Ltd. & Anr.5, which has had an occasion to examine the
expression used in Article 58 in contradistinction to Article 113 of
5 (2004) 2 SCC 747
the 1963 Act. We may advert to paragraphs 19 to 21
of the said decision, which read thus:
“19. Articles
58 and 113 of the Limitation Act read thus:
|
|
Description of suit
|
Period limitation
|
of
|
Time
from which period begins to run
|
|
58.
|
To obtain any other declaration.
|
Three years
|
|
When the right to sue
first accrues.
|
|
|
*
|
*
|
|
*
|
|
113.
|
Any suit for which no period of
limitation is
|
Three years
|
|
When the right to sue
accrues.
|
provided elsewhere in
this Schedule.
20.
It was not a case
where the respondents prayed for a declaration of their rights. The declaration
sought for by them as regards unreasonableness in the levy of freight was
granted by the Tribunal.
21.
A distinction
furthermore, which is required to be noticed is that whereas in terms of
Article 58 the period of three years is to be counted from the date when “the
right to sue first accrues”, in terms of Article 113 thereof, the period of
limitation would be counted from the date “when the right to sue accrues”. The
distinction between Article 58 and Article 113 is, thus, apparent inasmuch as
the right to sue may accrue to a suitor in a given case at different points of
time and, thus, whereas in terms of Article 58 the period of limitation would
be reckoned from the date on which the cause of action arose first, in the
latter the period of limitation would be differently computed depending upon
the last day when the cause of action therefor
arose.”
(emphasis
supplied)
12.
Similarly, in Khatri
Hotels Private Limited & Anr. Vs.
Union of
India &
Anr.6, this
Court
considered the
expression
6
(2011) 9 SCC 126
used
in Article 58 in contradistinction to Article 120 of the old Limitation Act
(the Indian Limitation Act, 1908). In paragraph 24, the Court noted thus:
“24. The Limitation Act, 1963 (for short “the 1963 Act”) prescribes time
limit for all conceivable suits, appeals, etc. Section 2(j) of that Act
defines the expression “period of limitation” to mean the period of limitation
prescribed in the Schedule for suit, appeal or application. Section 3 lays down
that every suit instituted, appeal preferred or application made after the
prescribed period shall, subject to
the provisions of Sections 4 to 24, be dismissed even though limitation may not
have been set up as a defence. If a suit is not covered by any specific
article, then it would fall within the residuary article. In other words, the residuary article is
applicable to every kind of suit not otherwise provided for in the Schedule.”
(emphasis supplied)
The distinction between the two Articles (Article 58 and Article
120) has been expounded in paragraphs
27 to 30 of the reported decision, which read thus:
“27. The differences which are discernible from the language of the above
reproduced two articles are:
(i)
The period of
limitation prescribed under Article 120 of the 1908 Act was six years whereas
the period of limitation prescribed under the 1963 Act is three years and,
(ii)
Under
Article 120 of the 1908 Act, the
period of limitation commenced when the right to sue accrues. As against this,
the period prescribed under Article 58 begins to run when the right to sue
first accrues.
28.
Article 120 of
the 1908 Act was interpreted by the Judicial Committee in Bolo v. Koklan
[(192930) 57 IA 325: AIR 1930 PC 270] and it was held: (IA p. 331)
“There can be no ‘right to sue’ until there is an
accrual of the right asserted in the suit and its infringement, or at least a
clear and unequivocal threat to infringe that right, by the defendant against
whom the suit is instituted.” The same view was reiterated in Annamalai
Chettiar v. Muthukaruppan Chettiar [ILR (1930) 8 Rang 645] and Gobinda
Narayan Singh v. Sham Lal Singh [(193031) 58 IA 125] .
29.
In Rukhmabai v.
Lala Laxminarayan (AIR 1960 SC 335), the threeJudge Bench noticed the
earlier judgments and summed up the legal position in the following words: (Rukhmabai
case [AIR 1960 SC 335, AIR p. 349, para 33)
“33. … The right to sue under Article 120 of the [1908 Act]
accrues when the defendant has clearly or unequivocally threatened to infringe
the right asserted by the plaintiff in the suit. Every threat by a party to
such a right, however ineffective and innocuous it may be, cannot be considered
to be a clear and unequivocal threat so as to compel him to file a suit.
Whether a particular threat gives rise to a compulsory cause of action depends
upon the question whether that threat effectively invades or jeopardizes the
said right.”
30.
While enacting
Article 58 of the 1963 Act, the legislature has designedly made a departure
from the language of Article 120 of the 1908 Act. The word “first” has been
used between the words “sue” and “accrued”. This would mean that if a suit is
based on multiple causes of action, the period of limitation will begin to run
from the date when the right to sue first accrues. To put it differently,
successive violation of the right will not give rise to fresh cause and the
suit will be liable to be dismissed if it is beyond the period of limitation
counted from the day when the right to sue first accrued.”
(emphasis supplied) Notably, the expression used in
Article 113 is similar to that in Article 120, namely, “when the right to sue accrues”. Hence, the
principle underlying this
dictum must apply proprio vigore to Article 113.
13.
It is well established position that
the cause of action for filing a suit would consist of bundle of facts.
Further, the factum of suit being barred by limitation, ordinarily, would be a
mixed question of fact and law. Even for that reason, invoking Order VII Rule
11 of the CPC is ruled out. In the present case, the assertion in the plaint is
that the appellant verily believed that its claim was being processed by the
Regional Office and the Regional Office would be taking appropriate decision at
the earliest. That belief was shaken after receipt of letter from the Senior
Manager of the Bank, dated 8.5.2002 followed by another letter dated 19.9.2002
to the effect that the action taken by the Bank was in accordance with the
rules and the appellant need not correspond with the Bank in that regard any
further. This firm response from the respondentBank could trigger the right of
the appellant to sue the respondentBank. Moreover, the fact that the
appellant had eventually sent a legal notice on 28.11.2003 and again on
7.1.2005 and then filed the suit on 23.2.2005, is also invoked as giving rise
to cause of action. Whether this plea taken by the appellant
is genuine and
legitimate,
would be a mixed question of fact and law, depending on the response of the
respondents.
14.
Reverting
to the argument that exchange of letters or correspondence between the parties
cannot be the basis to extend the period of limitation, in our opinion, for the
view taken by us hitherto, the same need not be dilated further. Inasmuch as,
having noticed from the averments in the plaint that the right to sue accrued
to the appellant on receiving letter from the Senior Manager, dated 8.5.2002,
and in particular letter dated 19.9.2002, and again on firm refusal by the
respondents vide Advocate’s letter dated 23.12.2003 in response to the legal
notice sent by the appellant on 28.11.2003; and once again on the follow up
legal notice on 7.1.2005, the plaint filed in February, 2005 would be well
within limitation. Considering the former events of firm response by the
respondents on 8.5.2002 and in particular, 19.9.2002, the correspondence ensued
thereafter including the two legal notices sent by the appellant, even if
disregarded, the plaint/suit filed on 23.2.2005 would be within limitation in
terms of Article 113.
15.
The
respondents had relied on the exposition of this Court in Boota Mal
vs. Union of India7, S.S. Rathore vs. State of Madhya Pradesh8, Venkappa
Gurappa Hosur vs. Kasawwa C/o Rangappa
Kulgod9, and Kandimalla
Raghavaiah & Company vs. National Insurance Company & Anr.10 and of
Delhi High
Court
in C.P. Kapur (supra),
to
buttress the above
argument,
which,
as
aforesaid, is
unavailable
in light of the averments in the plaint under consideration.
Suffice it to observe
that
going by the averments
in the plaint,
the
argument of the respondents that
the
appellant had placed
reliance on
the
correspondence to get
extension of the limitation
period, is
untenable. The averments
in the plaint, however, are very
explicit to the
effect that the
grievance of the appellant
about unilateral
charging of interest/commission by the
respondent Bank was firmly denied or refused by the Senior Manager of the respondentBank
vide letter dated
8.5.2002 and in particular letter
dated 19.9.2002 and again
by Advocate’s letter on 23.12.2003, giving rise to cause of action and accrual of right to
sue.
7 AIR 1962 SC 1716
8
(1989) 4 SCC 582
9 (1997)
10 SCC 66
10 (2009) 7 SCC 768
16.
The respondents had also relied on
the dictum of this Court in Fatehji
And Company & Anr. vs. L.M. Nagpal
& Ors.11. Indeed, in that case,
this Court upheld the order of rejection of plaint on the finding that the suit
was barred by limitation under Article 54 of the 1963 Act, in the fact
situation of that case. The Court was
dealing with a suit for
specific performance of a
written agreement
of sale dated 2.7.1973 and as per the terms,
the
performance of the contract was fixed for 2.12.1973. In that background, the
Court noted that the subsequent letters exchanged between the parties cannot be
the basis to extend the period of limitation. Moreover, the Court dealt with
the case governed by Article 54 of the 1963 Act, which stipulates the timeline
for commencement of period of limitation, being the date fixed for the
performance, or, if no such date is fixed, when the plaintiff has notice that
performance is refused. In cases governed by Article 113 of the 1963 Act, such
as the present case, however, what is required to be noted is – “when the right
to sue accrues” (and not when the right to sue “first” accrues).
11 (2015) 8 SCC 390
17.
Similarly,
in the case of Hardesh Ores
(P) Ltd. vs. Hede and Company12, this Court upheld the order of
rejection of plaint under Order VII Rule 11 of the CPC concerning a suit for
injunction in reference to Article 58, which expressly
postulates
that time
from which period begins to run is when the right to sue “first”
accrues. The argument of the appellant therein to apply Article 113 of the 1963
Act has been noted in paragraph 33 and rejected. In that view of the matter, the
exposition in this decision will be of no avail to the respondents.
18.
Reverting
to the decision in Kandimalla
Raghavaiah (supra),
the Court interpreted Section 24A of the Consumer Protection Act, 1986, which
defines the period of limitation to be within two years from the date on which
the cause of action had arisen. In light of that provision, the Court noted
that the cause of action in respect of subject insurance policy arose on
22/23.3.1988, when fire in the godown took place, damaging the tobacco stocks
hypothecated with the Bank in whose account the policy had been taken by the
appellant therein. In other words, the stipulation in Section 24A of the Consumer Protection Act,
1986 is analogous to the time frame specified in other Articles
12 (2007) 5 SCC 614
covered
under First Division of the Schedule to the 1963 Act regarding suits relating
to accounts; and not similar to Article 113, which envisages three years’ time
from the period when the right to sue accrues (and not when the right to sue “first”
accrues).
19.
As
regards Boota Mal (supra) and The East and
West Steamship, Georgetown, Madras
vs. S.K. Ramalingam
Chettiar13, the Court was dealing
with a case relating to Article 31 of the old Limitation Act, which provided
that the time from
which period
begins to run, is when the goods sought to be
delivered.
Even these decisions will be of no avail to the fact situation of the present
case, which is governed by Article 113 of the 1963 Act and for the reasons
already recorded hereinbefore.
20.
Similarly,
in S.S. Rathore (supra),
the Court was dealing with a case governed by Article 58 of the 1963 Act, which
specifically provides that time begins to run when the right to sue “first”
accrues. In Ram Prakash Gupta (supra), the Court dealt
with a case
governed by Article 59 of the 1963 Act, which provides that the suit could be filed when the facts entitling the
13 AIR 1960 SC 1058
plaintiff
to have the instrument or decree cancelled or set aside or the contract
rescinded “first” become known to him. The Court opined that the
knowledge mentioned in the concerned plaint could not be termed as inadequate
and incomplete. The Court reversed the judgment of the Civil Judge and the High
Court rejecting the plaint. This Court also noted that while deciding the application under Order VII Rule 11
of the CPC, few lines or passage from the plaint should not be read in
isolation and the pleadings ought to be read as a whole to ascertain its true
import. Even in that case, the trial Court and the High Court had failed to
advert to the relevant averments, as stated in the plaint, which approach was
disapproved by this Court. In the present case, as noticed earlier, the trial
Court had failed to advert to and analyse the averments in the plaint, but
selectively took notice of the assertion in the plaint in question that the
appellant became aware about the discrepancies in July, 2000, and then proceeded
to reject the plaint being barred by law of limitation having been filed in
February, 2005.
21.
Taking
overall view of the matter, therefore, we are of the considered opinion that
the decisions of the trial Court, the first appellate Court and the High Court in the fact situation of the
present
case, rejecting the plaint in question under Order VII Rule 11(d) of the CPC,
cannot be sustained. As a result, the same are quashed and set aside.
22.
In
view of the above, this appeal succeeds and the plaint stands restored to the
file of the trial Court to its original number for being proceeded in
accordance with law. All contentions
available to both parties are kept open including the issue of limitation to be
decided alongwith other issues on the basis of plea taken in the written
statement and the evidence produced by the parties in that behalf uninfluenced
by the observations made in the present judgment on factual matters. There
shall be no order as to costs. Pending interlocutory applications, if any,
shall stand disposed of.
CIVIL APPEAL NO. 2515 OF 2020
(Arising out of SLP (C) No. 30210/2017)
1.
Leave granted.
2.
In
the present appeal, the factual narration in the plaint is similar in material
respects, if not identical to the plaint in the companion appeal arising from
SLP(C) No. 30209/2017. To wit, it is apposite to reproduce relevant averments
from the plaint in question, which read as follows:
“8. That the facility as referred to in the
foregoing paras was extended with effect from the month of November, 1997 to
December, 1999 and somewhere in the month of July, 2000 it was noticed by the
plaintiff that the defendants were charging interest/commission @ Rs.4/ per
thousand rupees on local cheques and drafts in an arbitrary manner in violation
of the assurance given to the plaintiff.
9.
That
after the detection of the above overcharging the interest/commission the
plaintiff sent a letter to the defendants on 21.7.2000 complaining about the
overcharging and thereafter the interest/commission was charged as per
assurance given.
10.
That
the amount overcharged as commission/interest was not refunded to the plaintiff
and the plaintiff sent the following letters addressed to the Bank i.e. General
Manager and Senior Manager indicating therein that the amount overcharged
should be refunded to the plaintiff with interest thereon:
Letter dated 12.10.2000, 24.10.2000, 30.10.2000,
7.11.2000, 24.12.2000, 01.03.2001, 28.03.2001,
22.05.2001 and 20.06.2001.
In all the above letters
requests were made to clarify as to how the commission was calculated and
deducted from the plaintiff.
11.
That
the Assistant General Manager, Sh. P.S. Bawa of Regional OfficeB, Delhi vide
letter dated 9.7.2001 informed the plaintiff that the comments of the Branch
Office have been invited on the representation of the plaintiff in respect of
the local cheques/DDs discounted during the relevant period and the matter will
be decided as early as possible. No progress was made in the matter and the
plaintiff had to submit letter dated 31.10.2001 to the Hon’ble Finance
Minister, Govt. of India, New Delhi.
12.
That
the defendants have charged interest for some time for the actual number of
days for the defendants remained out of funds.
13.
That
vide letter dated 08.05.2002, the Senior Manager informed the plaintiff that
the cheques were being purchased at the prevailing rates. That reply was given
to sidetrack the real issue in respect of which letter dated 09.07.2001 was received from Sh.
P.S. Bawa, Assistant General Manager of
Regional Office as referred to in the foregoing paras.
14.
That,
thereafter, the plaintiff sent letters dated 12.07.2002, 22.07.2002, 24.03.2003
along with which the details of the proposed/estimated excess amount charged
were given and it was requested that a sum of Rs.5,39,902/ approximately
appears to have been charged in excess of what should have been actually
charged and the exact amount should be calculated and refunded to the
plaintiff. No reply was given by the bank to these letters.
15.
That
Senior Manager of the defendant No.2 vide letter dated 19.09.2002 had informed
that everything was done according to rules and the matters need not to be
pursued any further and thereafter the plaintiff sent another letter dated 3.06.2003.
16.
That
the excess amounts have been recovered/charged from the plaintiff in an
arbitrary manner, in utter violation of the assurances, rules, regulations and
established cannons of business dealings; and inspite of the protracted
correspondence made from 21.07.2000 to 03.06.2003, the defendants have failed
to account for or to justify the recovery of amounts made in an arbitrary
manner by citing any rules, regulations or any other authority.
xxx xxx xxx
18.
That
thereafter, the plaintiff got a legal notice served upon the defendant vide
registered letter No.6672 dated 03.12.2003 containing all the details relating
to the transactions as could be gathered from the books of accounts of the plaintiff.
19.
That
reply to the above noted notice was sent by the defendants through Sh. Sanjeev
Kumar Gupta, Advocate, vide letter dated 23.12.2003 wherein averments relating
to the excess charges were denied and it was stated that the interest was
charged on DD/cheques as per Central Officer
Circular No. C09495;
233 upto
01.12.1999 and thereafter as per Circular No.
CO/OPR/SCHGS/CIR/LET/20002001 dated 18.08.2000.”
(emphasis supplied)
Again, in
paragraph 28, it is stated as follows:
“28. That the cause of action to file the
suit accrued in favour of the plaintiff and against the defendants when the
illegal recoveries were noticed and letter dated 21.07.2000 was sent to the
defendants to clarify as to how the interest was being calculated and recovered
and on various other dates when the letters were sent to the defendants with
request for refund of the excess amounts charged and on 9.7.2001 when assurance
for proper calculation and refund was conveyed to the plaintiff and on 8.5.2002,
12.7.2002 and 22.9.2002 when requests were again made to settle the matter on
19.9.2002, 3.6.2003 and their cause of action arose on 28.12.2003 where the
legal notice was served upon the defendant and on 23.12.2003 when the reply to
the notice was received and finally on 08.01.2005 when the legal notice for
rendition of accounts was served upon the defendants and the cause of action
still subsists as the accounts have not been rendered so far nor the excess
amount charged has been refunded by the Defendants.”
3.
We have considered the factual
position in the present case, which is similar to the facts in the companion
appeal. Therefore, for the reasons stated in the judgment in companion appeal
arising from SLP(C) No. 30209/2017, even this appeal should succeed on the same
terms. Accordingly, this appeal is also allowed and the impugned judgment and
order of the trial Court, the first appellate Court and the High Court in
second appeal are set aside and the plaint is restored to the file of the trial
Court to be disposed of on the same terms as indicated
in the companion
appeal
(arising from SLP(C) No. 30209/2017). There shall be no order as to costs.
Pending interlocutory applications, if any, shall stand disposed of.
..................................J.
(A.M. Khanwilkar)
..................................J.
(Indira Banerjee)
New Delhi; June 05,
2020.
..................................J.
(Dinesh Maheshwari)
