Delhi District Court
Corp. Office At vs Sh. Mathura Paswan on 5 March, 2012
IN THE COURT OF HARJYOT SINGH BHALLA :
CIVIL JUDGE-1, SOUTH DISTRICT, SAKET, NEW DELHI
Suit No.334/10
Case ID No.02403C0433312009
In The Matter of:
The Fertilizer Corporation of India Ltd.
(A Public Sector Undertaking)
Registered under the Companies Act
Having it registered office at
7, Institution Area, Scope Complex,
Core-III, Lodhi Road,
New Delhi-110019.
Corp. Office at
PDIL Bhawan
Plot no. A-14, Sector-I,
Noida-201301
Distt. Gautam Budh Nagar (U.P.) .................plaintiff
Versus
Sh. Mathura Paswan
R/o P-1/70, Mangolpuri,
New Delhi-110083.
Permanent resident of
Village Gram Labh, P.O. Tikri Labh
Distt. Gaya, Bihar. ...............defendant
SUIT FOR RECOVERY OF RS.1,27,449/- (RUPEES ONE LAC TWENTY
SEVEN THOUSAND FOUR HUNDRED FORTY NINE ONLY) AONGWITH
UPDATED INTEREST.
Date of Institution : 24.12.2009
Date of reserving the Order : Oral
Date of pronouncement : 05.03.2012
JUDGMENT (ORAL):
1 By this judgment I shall dispose of the above suit filed by the Suit no. 334/10 Page 1 of 17 plaintiff seeking decree for Rs.1,27,449/- alongwith interest pendentelite and future @18% per annum in favour of the plaintiff and against the defendant with costs.
Averments Culled Out from the Pleadings:
Plaintiff's case as per Plaint:
2 Plaintiff is a Public Sector Undertaking owned and controlled by Government of India under the aegis of Ministry of Chemicals and Fertilizers, Department of Fertilizer, New Delhi. Plaintiff is duly incorporated under the Companies Act, 1956 and has its registered office at the address mentioned in the memo of parties. The suit has been filed through Sh. Premankur Das, the Acting General Manager who is duly authorized by the Director of Finance through GPA dated 09.06.2009 to sign, verify and to file the present suit.
3 It is averred that the defendant was an employee of the plaintiff and worked as Head Watchman at the time he opted for retirement under Voluntary Separation Scheme and was relieved from his duties w.e.f. 31.10.2002. It is averred that the plaintiff incurred a loss of Rs.616.39 Crores as on 31.03.1992 and it was referred to Board of Industrial and Financial Reconstruction (BIFR) and was declared as sick company under the provision of SICA, 1985. A show cause notice was issued by BIFR to all concerned on 28.02.2001 after an inquiry and considering the proposal, the BIFR confirmed its opinion to wind-up the company vide order dated 02.11.2001.
4 An appeal was preferred against the order of the BIFR by the plaintiff, the Government of India as well as Unions of the plaintiff company before the Appellate Authority and the same was dismissed vide order Suit no. 334/10 Page 2 of 17 dated 16.04.2002.
5 Separate Writ Petitions were filed against the order of the BIFR and Appellate Authority and in Writ Petition, WP(C) no. 4310/02, the Hon'ble High Court was pleased to stay the order passed by BIFR and the order in Appeal. However, the Department of Fertilizer, Ministry of Chemicals and Fertilizer, Govt. of India, vide letter no. 40/6/94-FDB/FCA/III dated 30.07.2002 and another letter no. 40/6/94-FDB/FCA/III dated 10.09.2002, ordered the closure of the plaintiff company. It was under this letter that the VSS benefits were extended to all employees based on DPE OM-2(32)/97-DPE(WC) dated 05.05.2000 and OM-2(32)97-DPE(WC)/GL- LVI dated 06.11.2001 and subsequent clarifications. 6 The DHI Model was adopted by the plaintiff vide circular dated 16.09.2002 and plaintiff was accordingly paid sixty months salary computed on the basis of the basic pay plus DA admissible to the employees who had completed not less than thirty years of service. Other employees were paid 45 days salary for every completed year of service subject to the provisions contained in the Scheme. Defendant was paid ex-gratia payment of Rs. 7,66,365/-, however, on subsequent clarifications on the interpretation of the scheme, it was found that an amount of Rs.5,67,231/- only ought to have been paid to the defendant who had been paid an excess amount of Rs.1,99,125/-.
7 Vide letter dated 01.05.2003, the plaintiff called upon the defendant to refund the excess amount alongwith interest with set off of Rs. 1,82,302/- payable to the defendant towards gratuity, leave encashment, etc., from the said amount based on the completed service year factor of 29.61. However, the defendant failed to do so and plaintiff filed a suit for Suit no. 334/10 Page 3 of 17 recovery being suit no. 526/06 (filed in the year 2003). However, due to instructions issued vide letter dated November, 2006 alongwith letter dated 25.09.2006 and 12.05.2004 the said matter was settled out of the court and statements were recorded.
8 It is averred that inadvertently while calculating the amount of ex-gratia due to be paid to the defendant his qualifying service had been taken as 31 years instead of 29 years and 7 months. His date of joining service being 21.03.1973. The defendant was in daily rated service between 01.08.1971 to 20.03.1973, which ought to have been excluded. Thus, a total amount of Rs.1,27,449/- was paid in excess. The factum of excess payment was discovered during audit of the company. On discovering the error the plaintiff called upon the defendant to refund the excess amount vide letter dated 19.07.2007. The defendant failed to make the payment. A meeting was held on 16.06.2008 and the matter was considered at length.
9 Another demand was made by letter dated 19.07.2009 but the defendant has not paid. It has been averred that cause of action arose firstly on 31.10.2002 when the defendant was relieved and excess payment was made to him. It further arose on 18.11.2006 when the earlier suit filed by the plaintiff was settled. It again arose on 19.07.2007 when a notice of demand had been sent to the defendant for refund of the suit amount and the cause of action continues to subsist. It has been further averred that the fact of excess payment came in the knowledge of the plaintiff firstly on 19.07.2007 when the notice of demand was sent. There is no delay in filing the present suit and same is being filed with the limitation prescribed for such purposes.
Suit no. 334/10 Page 4 of 17Defendant's case as per written statement:
10 Defendant filed his written statement. Defendant has not disputed that he opted for VSS, but, he has raised a preliminary objection that the suit is barred by limitation having been filed beyond the period of three years from date of accrual of cause of action. He has also taken his objection that the present suit is barred by Order 23 Rule 1 of CPC and Order 23 rule 3A of CPC in view of the statements and the unconditional withdrawal of the suit no. 526/06 by the plaintiff. It is further averred that earlier suit was unconditionally withdrawn and there was no settlement out of the court and only statement of the plaintiff had been recorded. 11 Averments as to the mistake and incorrect calculations have been denied for want of knowledge. However, it has been specifically denied that after the clarification and interpretation of the scheme only Rs.
5,67,231/- was due and payable to the defendant. Defendant has categorically averred that he was not paid any excess amount as alleged. The defendant has denied that his qualifying service has been taken as 30 years instead of 29 years and 7 months. It has been averred that nothing was recoverable from the defendant. It has been averred that since no excess amount was paid there was no question of levy of interest. All other averments in the plaint have been denied.
Replication:
12 Plaintiff has filed replication. It has been averred that the payment of excess amount is a matter of record and subject to mathematics only and denial of the defendant is of no value. It has been clarified that defendant has qualifying service of 29 years and 7 months only and inadvertently it was taken as 31 years including his daily rated Suit no. 334/10 Page 5 of 17 services for the period from 01.08.1971 to 20.03.1973. Issues 13 On the basis of the pleadings filed following issues were framed in the suit vide order dated 09.09.2011:
1. Whether the plaintiff is entitled to claim extension of Limitation on grounds of mistake?OPP
2. Whether the plaintiff is entitled to recover the suit amount?OPP
3. Whether the plaintiff is entitled to any interest? If so, at what rate?OPP
4. Relief.
14 The PW1 Sh. Premankur Das, Acting General Manager of plaintiff appeared in the witness box as a witness and exhibited his affidavit as Ex. PW-1/A. He has exhibited Certificate of incorporation as Ex. PW1/1, Copy of extract of board resolution as Ex.PW1/2, Copy of GPA as Ex.PW1/3, Copy of memorandum dated 31.10.2002 as Ex.PW1/4, Memorandum no. 2(32)/97-DPE (WC) dated 05.05.2000 as Ex.PW1/5, Copy of OM no. 2(32)/97-DPE (WC)/GL-LV1 dated 06.1.2001 as Ex.PW-1/6, Circular dated 16.09.2002 as Ex.PW1/7, Letter dated 06.11.2001 as Ex.PW 1/8, Letter of demand dated 19.07.2007 as Ex.PW 1/9 (objected to on the ground that this document was never a part of record and the date is also incorrect in the copy supplied to the defendant therefore, the same cannot be exhibited/produced at this stage), Board resolution dated 16.06.2008 as Ex.PW1/10, Extract of board resolution dated 30.07.2008 as Ex.PW1/11, Copy of letter dated 19.07.2009 as Suit no. 334/10 Page 6 of 17 Ex.PW 1/12 (objected to on the ground that this document was never a part of record and same cannot be exhibited/produced at this stage), Copy of letter dated 10.09.2007 as Ex.PW1/13, Letter dated 10.09.2007 as Ex.PW1/14, Letter dated 1.08.2007 as Ex.PW1/15, Order dated 22.12.2006 Ex.PW 1/16 and Statement of account as Ex.PW 1/17. 15 On behalf of the defendant, the Defendant himself entered the witness box, the witness was cross examined. 16 I have gone through the record and perused the pleadings and the documents filed. Having examined the issues framed and having sifted the evidence adduced I am proceeding to deliver my issue wise findings Issue wise findings:
17 Issue no. 1:Whether the plaintiff is entitled to claim extension of Limitation on grounds of mistake? Onus of proving this issue was on the plaintiff. The mistake committed by the plaintiff while calculating retiral benefits to the defendant has been spelled out in para no.
20 of the plaint, read with para nos, 14, 16 and 19 of the plaint. It has been averred that instead of treating the total service period of defendant as 29 years and seven months, the same was taken as 31 years. This error led to the benefit being calculated on the basis of clause 4.2.2 of circular dated 16.09.2002 instead of clause 4.2.1 of the said circular. The relevant provisions of the circular are reproduced herein below:-
Para no.14. That the DHI Model (Department of Heavy Industries Model) as per the plaintiff's circular dated 16.09.2002 provides as follows:
4.2.1 The compensation under VSS will consist of ex-gratia payment equivalent to 45 days emoluments (Basic pay plus DA) for each Suit no. 334/10 Page 7 of 17 completed year of service or the monthly emoluments at the time of retirement multiplied by the balance months of service left before the normal date of retirement, whichever is less. 4.2.2. Those who have completed not less than 30 years of service will be eligible for a maximum of 60 months salary as compensation.
This will be subject to the amount not exceeding the salary / wages for the balance period of service left at the time of voluntary separation.
Thus, as per the plaintiff, the mistake was in treating total service of defendant as 31 years and consequential grant of salary subject to maximum limit of 60 months, whereas as per the plaintiff, it ought to have been calculated as ex-gratia payment equivalent to 45 days emoluments for each completed year of service. As per the plaint, this mistake was discovered by the plaintiff pursuant to the audit of the plaintiff company. 18 It is pertinent to note that in the plaint no averment has been made as to the date of audit nor any documents had been filed to show when the audit was carried out and where the mistake had been pointed out. However, remarkably in the affidavit by way of evidence also no date of the alleged audit has been given nor any document / audit report has been filed to prove the alleged fact of discovery of mistake. 19 Not only has the plaintiff failed to discharge the onus placed upon it, rather in the cross examination of the plaintiff's witness PW2, the averment that mistake was discovered on audit have been disproved. In the cross examination dated 25.11.2011, PW2 MS. Sion Kongari, Chief Personnel Officer (Est.) admitted and I quote:
"I discovered about the fact of excessive payment only when an audit was conducted in August/ September, 2007. It is correct that the defendant cannot be Suit no. 334/10 Page 8 of 17 blamed for any mistake committed by calculating his dues and the mistake if any was on the part of the plaintiff.
Q: What was the issue raised in the earlier suit? Ans: In the old suit no. 526/06, the issue which was raised was that the employees who have been approved VSS are to be paid 45 days salary for each completed year of service. Further, the employee who have completed not less than 30 years of service were to be paid 60 months salary as ex-gratia. However, subsequently clarifications were issued by Deptt of Fertilizers that even for the employees who have completed not less than thirty years of service the calculation of exgratia is to be made on the basis of 45 days salary for each completed years of service. Accordingly, the employees who were paid 60 months salary, recovery suit were filed."
20 PW1 Sh. Premankur Das, Acting General Manager of the plaintiff also made the following admissions:
"Only one issue was framed in the earlier suit no. 251/2003 (changed to suit no. 526/06). The issue that was framed was regarding the contention, of the computation no. of days which was paid on the basis of 60 days instead of 45 days. This issue is also framed in the present suit no. 334/10."
Thus, admittedly the same issue had been raised in the previous suit between the parties while suit had been filed in the year 2003 itself. Thus, the plaintiff was well aware of the mistake in calculating the benefit payable and paid to the defendant even before the filing of the present suit. 21 There is yet another aspect. In the plaint and the affidavit by way of evidence of both the witnesses produced by the plaintiff, it is recorded that the previous suit had been settled out of the court and statement of parties had been recorded. During their respective cross Suit no. 334/10 Page 9 of 17 examination both the witnesses admitted and I quote:
PW1: It is correct that the earlier suit was not withdrawn on the basis of settlement with the defendant.
(Attention of the witness drawn to para no. 18 last three lines to which the witness replied this lines/facts are true).
PW2: It is correct that the suit was withdrawn by the plaintiff. (Vol. on the instructions of the Ministry). Attention of the witness has been drawn to para no. 11 of the affidavit. I was not aware that withdrawal does not amount to a settlement out of court.
Thus, the plaintiff's witnesses also admitted that not only was the issue in the earlier suit same as the issue in the present suit, the earlier suit was withdrawn unconditionally. The order dated 22.12.2006 PW1/16 and the statement of Sh. Sant Ram, Law Officer of the plaintiff recorded in the suit no. 526/06 (Old no. 251/03) are a matter of record and reflect that the suit had been withdrawn unconditionally. Therefore, the witnesses do not even appear to be credible.
Therefore, this issue is liable to be decided against the plaintiff.
Argument as to applicability of Article 112 of the Limitation Act:
22 It may not be out of place to deal with an argument which was advanced by the Ld. Counsel for the plaintiff in his written submissions dated 24.02.2012. It has been submitted that the present suit is governed by Article 112 of the Limitation Act and therefore, the period of limitation in the present case would be 30 years and this issue has been wrongly framed. Reliance has been placed upon Pradeep Kumar Biswas Vs. Indian Instutite of Chemical Biology (2005) 5 SCC 111 to contend that Suit no. 334/10 Page 10 of 17 the plaintiff is "State" of India and therefore, entitled to the benefit of Article
112. 23 In my view, the reliance upon the decision in Pradeep Kumar Biswas is of no avail for the following reasons:
1) Article 12 of the Constitution of India defines the term "State"
only for the purposes of guaranteeing and enforcing fundamental rights and the definition is meant only for the purpose of Part III of the constitution.
2) Even otherwise, the Article 12 defines the expression "State"
and not "Government" and merely because the government as well as Local or other authorities have been treated as "State" within the meaning of Article 12 of the Constitution of India, it does not imply that the expression government or local authorities mean one and the same thing. The expression Government of India or State Government used in Article 112 of the Schedule to the Limitation Act cannot be expanded to include even Government companies or corporations as they do not mean the same thing.
3) In fact, the second decision relied upon by the plaintiff destroys the very case of the plaintiff. Plaintiff has relied upon the decision in West Bengali Agro Industries Vs. Union of India (2001) 3 CAL.L.T. 315 (HC). However, the said decision is based upon the interpretation of the Article 112 of the Schedule to the Limitation Act as applicable to the State of West Bengal after an amendment had been made to the same. In para no. 10 of the said decision, the original Article Suit no. 334/10 Page 11 of 17 112 of the Limitation Act and the Article 112 as amended for the State of West Bengal have both been compared. The original Article 112 of the Limitation Act as applicable to Delhi reads as follows:
"Article 112: Any suit (except a suit before the Supreme Court in the exercise of its original jurisdiction) by or on behalf of the Central Government or any State Government, including the government of State of Jammu and Kashmir. Thirty years; when the period of limitation would being to run under this Act against a like suit by a private person."
As per the decision in West Bengal Agro Industries (supra), the amended provision for the State of West Bengal specifically made the Article 112 of the Limitation Act applicable to Government Companies owned wholly either by the Central Government or State Government. Thus, the decision applied Article 112 to the plaintiff company in view of the amendment carried out to the provision in the State of West Bengal. Logically, it would imply that, before the amendment the provision was not applicable to government companies. In any event, the decision does not help the plaintiff.
4) The provisions of Article 112 of the Limitation Act is based on the common Law maxim, nullum tempus occurrit regi i.e. no time affects the crown. However, since in India the provision is codified in Article 112, it is subject to the language of the provision. In Bank of Baghelkhand Vs. Dr. Ram Prasad Suit no. 334/10 Page 12 of 17 AIR 1954 Vin Pra 1, it has been held that a suit by a 'State Aided' or 'State Controlled' or 'State Patronised' corporation did not fell within Article 149 of the Limitation Act 1908 which provision is pari materia to Article 112 of the Act of 1963.
5) In State Electricity Board Vs. Govindarajulu AIR 1960 Mad 571, it was held that a company capable of being sued in its own name would definitely not be covered by the expression Central Government or State Government. Since the plaintiff is admittedly a statutory corporation and not a department of the government itself and a company being wound up under the provisions of the companies Act and SICA, it cannot be treated as 'Central Government' or 'State Government'. The Government cannot be subject matter of winding up proceedings.
6) In Bharat Sanchar Nigam Ltd. Vs.tPawan Kumar Gupta (2007) 4 PLR 414 a suit for recovery had been filed by BSNL, on the basis of the fact that it acquired all the assets and liabilities of the Telecommunication Department of Government of India. The telephone was installed and remained in operation till its disconnection, telephone services were being provided by the Telecommunication Department of Government of India. It was the case of the BSNL that the Government of India on the basis of its policy decision established a Company under the provisions of Companies Act, 1956 and vide Memorandum dated 30.9.2000 transferred all the assets and liabilities of Department of Suit no. 334/10 Page 13 of 17 Telecommunication Services to the Appellant-Company with effect from 1.10.2000 and the suit for recovery was covered by Article 112 of the Limitation Act. The Punjab & Haryana High Court, relying on the definition in the General Clauses Act, held that:
The expressions "Central Government" and "State Government" are not defined under the Limitation Act. In the absence of any such definition under this Act, the definition as provided under the General Clauses Act, 1897 is to be looked into. Section 3(8) of the General Clauses Act, 1897 defines "Central Government" as under:
3(8). "Central Government" shall-
(a) in relation to anything done before the commencement of the Constitution, mean the Governor-General or the Governor-General in Council, as the case may be, and shall include,
(i) in relation to functions entrusted under Sub-
section (1) of Section 124 of the Government of India Act, 1935, to the Government of a Province, Provincial Government acting within the scope of the authority given to it under that sub-section, and
(ii) in relation to the administration of a Chief Commissioner's Province, the Chief Commissioner acting within the scope of the authority given to him under Sub-section (3) of Section 94 of the said Act; and
(b) in relation to anything done or to be done after the commencement of the Constitution, mean the President; and shall include,
(i) in relation to functions entrusted under Clause (1) of Article 258 of the Constitution to the Government of a State, the State Government acting within the scope of the authority given to it under that clause;
Suit no. 334/10 Page 14 of 17(ii) in relation to the administration of a Part C State [before the commencement of the Constitution (Seventh Amendment) Act, 1956], the Chief Commissioner or the Lieutenant-Governor or the Government of a neighbouring State or other authority acting within the scope of the authority given to him or it under Article 239 or Article 243 of the Constitution, as the case may be] [and]
(iii) in relation to the administration of a Union Territory, the administrator thereof acting within the scope of the authority given to him under Article 239 of the Constitution:]]"
6. From the aforesaid definition, the expressions "Central Government" can include only such authorities as are indicated therein. It is admitted case of the appellant that the appellant is a Company incorporated under the Companies Act, though it has acquired the assets and liabilities of a department of the Central Government. The appellant being a Company is a separate and distinct entity from the Central Government. Whether its functioning is controlled by the Central Government as claimed by the appellant or not, is irrelevant. It may be a wholly controlled government company, but insofar as its legal and contractual rights and liabilities are concerned, it cannot acquire the status of "Central Government", by any stretch of imagination. The expression "Central Government", as defined in the General Clauses Act does not include even within its expansive definition a Government owned or controlled Company. Article 112 clearly provides the limitation in respect of a suit by Central Government or by State Government and not by any of its instrumentalities or agency, particularly a Corporation, even if established by the Central Government/State Government.
The arguments is therefore, liable to be rejected. 24 Issue no. 2 and 3:Whether the plaintiff is entitled to Suit no. 334/10 Page 15 of 17 recover the suit amount? Whether the plaintiff is entitled to any interest? If so, at what rate? Onus of proving these issues was on the plaintiff. The defendant admitted that he only worked as daily wager from 01.08.1971 to 20.03.1973 and that he had been confirmed as permanent employee w.e.f. 20.03.1973 and that he was relieved on 31.10.2002. He admitted that his total service was 29 years and 7 months only. However, the plaintiff has not furnished any calculation showing how the amount paid to the plaintiff had been arrived at and what was the factor on the basis of which calculations were made to reach the figures of Rs.7,66,356/- and subsequent figure of Rs.5,67,231/-.
25 It was incumbent upon the plaintiff to have proved that figure of Rs.7,66,356/- was based upon the calculations of total service of the plaintiff as 31 years and that salary of sixty months was paid to him. It was also incumbent upon the plaintiff to have pleaded and to have proved that the figure of Rs.5,67,231/- was on the basis of the total service of 29 years and 7 months. No calculations have been placed before the court neither has the mode of arriving at these figures been indicated in the plaint or the affidavit.
26 There is not even a whisper about the last salary paid to the defendant any where in the plaint or the affidavit. Plaintiff has, therefore, failed to prove the error as pleaded by it in the plaint. The relief therefore cannot be granted. Both the issues are liable to be decided against the plaintiff and in favour of the defendant.
27 Issue no. 4: Relief: The suit is barred by limitation and even otherwise, the plaintiff has failed to prove its case as pleaded. No relief can be granted. Suit is ordered to be dismissed.Suit no. 334/10 Page 16 of 17
28 Decree sheet be prepared accordingly. File be consigned to record room.
Announced in the open Court Harjyot Singh Bhalla, dated 05.03.2012 Civil Judge-1, South District, New Delhi.Suit no. 334/10 Page 17 of 17