Telangana High Court
M/S. Agni Aviation Consultants vs State Of Telangana on 21 April, 2020
Author: M.S.Ramachandra Rao
Bench: M.S.Ramachandra Rao, K.Lakshman
THE HIGH COURT OF JUDICDATURE FOR THE STATE OF
TELANGANA : HYDERABAD
****
W.P.NO.1135 OF 2016
M/s Agni Aviation Consultants and another .. Petitioners
Vs.
State of Telangana represented by Secretary
AH & RSAD Secretariat Hyderabad and others .. Respondents
DATE OF THE JUDGMENT PRONOUNCED: 21.04.2020
SUBMITTED FOR APPROVAL:
HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE K.LAKSHMAN
1. Whether Reporters of Local newspapers Yes/No
may be allowed to see the judgment?
2. Whether the copies of judgment may be Yes/No
marked to Law Reporters/Journals
3. Whether Their Lordships wish to Yes/No
see the fair copy of the judgment?
___________________________
M.S.RAMACHANDRA RAO, J
_____________________
K.LAKSHMAN, J
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*HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTSICE K.LAKSHMAN
+ W.P.NO.1135 OF 2016
% DATED 21st APRIL, 2020
# M/s Agni Aviation Consultants and another .. Petitioners
Vs.
$ State of Telangana represented by Secretary
AH & RSAD Secretariat Hyderabad and others .. Respondents
<Gist:
>Head Note:
! Counsel for the Petitioners : Sri M.Papa Reddy
^Counsel for 1st Respondent : Advocate General
(Telangana)
^Counsel for 2nd Respondent : Sri P.Govind Reddy
^Counsel for 3rd Respondent : Sri V.Ramachander Goud
? CASES REFERRED:
1. (2004)3 SCC 553
2. Civil Appeal No.1600 of 2020 decided on 14.02.2020 by a
Three Judge Bench headed by Chief Justice of India, Justice
B.R.Gavai and Justice Suryakant
3. (2018) 8 SCC 215, at page 225
4. AIR 1961 SC 1236
5. (2010) 1 SCC 512
6. (1974) 3 SCC 554
7. AIR 1972 KERALA 103
8. 1979 (4) SCC 176
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9. 1985 (3) SCC 737
10. (2015) 7 SCC 728
11. (2004) 12 SCC 360
12. (2008) 2 S.C.C. 444
13. (2006) 4 S.C.C. 484
14. (1971) 1 SCC 67
15. MANU/DE/4093/2018
16. MANU/DE/6446/2012
17. (1969) 74 ITR 224 (AP)
18. AIR 1952 Madras 1361
19. AIR 1958 SC 328
20. 2004 (1) A.L.D. 818
21. A.I.R. 1983 Allahabad 270
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HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE K. LAKSHMAN
WRIT PETITION NO.1135 of 2016
O R D E R:e (Per Hon'ble Sri Justice M.S. Ramachandra Rao) The 1st petitioner is a partnership Firm engaged in the business of aviation, power, water-related projects of which the 2nd petitioner is the authorized representative / partner.
2. The 1st petitioner had expertise in cloud-seeding operations where aircraft, radar and other equipment and personnel would be deployed to increase rainfall over the target area and conduct research studies for scientific purposes of the cloud physics of the region. Before bifurcation of the composite State of Andhra Pradesh w.e.f 2.6.2014
3. In the erstwhile composite State of Andhra Pradesh, there were certain rainfall deficit districts where drought conditions were found to exist constantly causing hardship to farmers.
4. After studies by two expert committees constituted by it vide G.O.Ms.No.1 dt.10-1-2006 and G.O.Ms.No.1 dt.9-1-2007, the then State of Andhra Pradesh came to the conclusion that Cloud Seeding technology was not only scientific, but is also a proven technology and an effective weapon to fight recurring droughts, and that results showed that it enhances the rainfall to the tune of 15% on an average, in public interest, decided to adopt the same to augment the rainfall in MSR,J & KL,J ::5:: wp_1135_2016 these areas. It proposed to conduct Cloud Seeding operations for 120 days each year from 2007.
5. The Centre for Atmospheric Sciences and Weather Modification (Cloud Seeding) Technologies, the Jawaharlal Technological University, Hyderabad (3rd respondent) was roped in by the State as a nodal agency to carry out these operations.
6. It is not in dispute that directives were issued by the then Government of Andhra Pradesh pursuant to which the 3rd respondent's governing authority elected to pursue the Cloud Seeding program, with the primary objective of increasing rainfall over a target area in a safe and efficient manner and also to conduct research studies for scientific studies of the cloud physics of the region; and the then Government of Andhra Pradesh had, through a tender Committee had selected the 1st petitioner to conduct the precipitation enhancement program.
7. Thus there is not even an iota of doubt that there is a clear public law element involved in the Cloud Seeding operations to be done by the 1st petitioner and public interest would greatly stand to benefit if they were done.
The first contract dt.4.7.2007
8. On 19.06.2007, the then undivided State of Andhra Pradesh, through the Jawaharlal Nehru Technological University MSR,J & KL,J ::6:: wp_1135_2016 (3rd respondent), issued a tender notification for 'Cloud-Seeding Operations'.
9. The 1st petitioner submitted bid and deposited earnest money of Rs.50 lakhs.
10. A Committee constituted for the said purpose selected the 1st petitioner Firm and after due deliberations and negotiations, a contract was signed on 04.07.2007 by the 3rd respondent with the 1st petitioner for contract value Rs.20.79 crores.
11. The Cloud Seeding Operation were to be taken in 10 districts - Anantapur, Kadapa, Chittoor, Nellore, Guntur, Kurnool, Mahabubnagar, Nalgonda and Ranga Reddy Districts. Clause 3.3. of the contract set out the schedule of payments.
12. For the Cloud Seeding operations done by the 1st petitioner in 2007, the then State of Andhra Pradesh paid the 1st petitioner certain amounts leaving a balance of Rs.69,13,956/-.
The 2nd contract dt.25.7.2008
13. In 2008 also, the 3rd respondent-University issued another tender notification on 03.06.2008 for Cloud Seeding operations on behalf of the undivided State of Andhra Pradesh. The 1st petitioner submitted its bid along with E.M.D. of Rs.30 lakhs on 18.06.2008.
14. Initially the tender notification was cancelled by G.O.Ms.No.10 dt.21.07.2008, but later a fresh contract was awarded to the 1st MSR,J & KL,J ::7:: wp_1135_2016 petitioner by the 3rd respondent on 25.07.2008 for Cloud Seeding operations to be taken up in 12 districts, i.e, Anantapur, Kadapa, Chittoor, Nellore, Guntur, Kurnool, Mahabubnagar, Nalgonda, Ranga Reddy District, Prakasam, Medak and Karimnagar for a cost of Rs.22,86,90,400/-.
15. According to the petitioners, though Cloud Seeding operations were done in 2007 and 2008 as well, the balance payments for 2007 were not released and the E.M.D. was also not returned. So, petitioners addressed letters dt.30.07.2008, dt.30.07.2008, dt.31.07.2008, dt.11.08.2008 and dt.11.08.2008.
16. According to petitioners, even mobilization advance was not released for 2008 for which it addressed letters dt.11.08.2008, 23.08.2008, 28.08.2008, 04.09.2008, 19.09.2008, 13.10.2008, 16.10.2008, 20.10.2008 and 23.10.2008.
17. Ultimately, the E.M.D. of Rs.30 lakhs paid by the petitioner was returned on 16.12.2008. However, the balance payment for Cloud Seeding operations for 2007 and full payment for such operations in 2008 were not released even though petitioners addressed letters dt.29.12.2008, 02.02.2009 and 19.09.2009.
18. Much later the 3rd respondent issued letter dt.11.06.2009 certifying that the 1st petitioner is due Rs.22,67,88,907/-. But, notwithstanding the same, no payments were released.
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The 3rd contract dt.20.7.2009
19. Thereafter, in 2009 also a short tender notice for Cloud Seeding operations was issued by the then State of Andhra Pradesh on 14.06.2009.
20. Again, the 1st petitioner submitted its bid and a contract was awarded to it by the 3rd respondent on 20.07.2009 for taking up said operations in the above 12 districts costing Rs.25,40,57,800/-. The 1st petitioner successfully carried out the said operations also. Only part payment was made to the 1st petitioner leaving a balance of Rs.18,94,94,517/- .
The dues payable according to petitioners
21. For 2007-08, as against total dues of Rs.22,16,05,956/-, petitioners contend that Rs.21,46,92,000/- was paid leaving a balance of Rs.69,13,956/-.
22. For 2008-09, according to 1st petitioner, it has to be paid Rs.20,64,38,907/- .
23. For 2009-10, as against contractual value of Rs.25,41,57,800/-, Rs.18,94,94,517/- is payable by the respondents.
24. So, in all Rs.40,28,47,380/- out of Rs.49,26,00,000/- is payable according to petitioners.
25. Petitioners rely on copies of the note file furnished to the petitioners by the Assistant Secretary to the Government, Finance on MSR,J & KL,J ::9:: wp_1135_2016 30.09.2013 (Page 44) and upon other information furnished on 21.01.2014 also under the Right to Information Act, 2005 which are filed as Annexures XVII and XVIII in this regard. Contentions of petitioners
26. According to petitioners, the then Chief Minister Sri Kiran Kumar Reddy also endorsed on the file at page no.72 granting approval for para no.256 at page no.69 for sanction of Rs.40,28,47,380/- on 09.01.2013.
27. Petitioners contend that the then State Government sought for opinion from the then Advocate-General on 28.09.2010 for the amount payable to the 1st petitioner; and that opinion dt.26.12.2010 of the then Advocate-General (furnished under communication dt.24.11.2011 to the petitioners-Annexure XIX) also shows that there is no dispute about the quantum of the amount payable to the petitioners. Petitioners also rely upon letter No.JNTUH/CEA&WMT/2011/28 dt.20.06.2011 certifying to the Secretary, Rain Shadow Areas Development Department, Government of Andhra Pradesh that Rs.48,77,60,663/- is payable to the petitioners.
28. The petitioners contend that there is no dispute of the amount payable to the petitioners but the respondents are not releasing the same in spite of a legal notice dt.21.03.2012 (Annexure XXI) got issued by the petitioners.
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29. According to them, a reply dt.28.03.2012 was issued by the Special Chief Secretary to Government, Rain Shadows Areas Development Department stating that the proposal for balance of pending payments to the 1st petitioner in regard to the Cloud Seeding operations in the erstwhile Andhra Pradesh State is under consideration in consultation with the Finance Department (Annexure XXII).
30. The 1st petitioner issued another legal notice on 11.04.2014 (Annexure XXXII) to which a reply dt.02.05.2014 was issued by the 2nd respondent that the issue of payment of amounts to the 1st petitioner is under consideration and that they were awaiting certain clarifications from the Vice-Chancellor of the 3rd respondent- University.
After bifurcation of the composite State of Andhra Pradesh
31. Subsequently, the composite State of Andhra Pradesh was bifurcated into the new State of Telangana (1st respondent) and the residuary State of Andhra Pradesh (2nd respondent) w.e.f. 02.06.2014.
32. The petitioners contend that they sent reminders dt.12.09.2014 to the Chief Ministers, Chief Secretaries and Secretaries of G.A.D. Department of both States (Annexures XXIII to XXVIII) seeking Rs.40,28,47,380/- though it is entitled to Rs.49.26 crores.
33. Petitioners contend that there were disputes between the 2nd petitioner and the other partner Sri Arvind Sharma which were MSR,J & KL,J ::11:: wp_1135_2016 adjudicated by a sole arbitrator on 19.10.2013 by consent memo permitting the 2nd petitioner alone to collect payment and to issue valid receipt to the agencies for the payments payable to the 1st petitioner (Annexures XXX and XXXI).
34. According to the petitioners, it had executed the Cloud Seeding operations by obtaining loans from financial institutions and incurring huge interest burden thereon and the action of the respondents in not releasing payments due to the petitioners is arbitrary and illegal and the respondents are to be directed to pay back the same with interest @ 18% per annum; and that both respondents ought to share the liability jointly and severally.
Events after filing of the Writ Petition
35. The matter was first listed before a learned Single Judge on 19-1-2016 and the 3rd respondent's Standing Counsel took notice and notices were directed to be taken out to respondents 1 and 2. Though the case was adjourned to 8-2-2016, it was listed only on 17-8-2016. At request of petitioner's counsel it was adjourned to 18-8-2016.
36. On 18-8-2016, the Court directed the Advocates General of the States of Telangana and the State of Andhra Pradesh to assist the Court and the mater was posted to 18-8-2016.
37. It was next listed on 29-8-2016 and was adjourned to 30-8-2016.
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38. On 30-8-2016, matter was adjourned to 19-9-2016 for filing of counter affidavits by the respondents. But this was not done.
39. On 19-9-2016, the Court asked the Secretaries of the AH& RSAD Departments of both States to appear before the Court if no counter affidavit is filed in 10 days. Matter was adjourned to 29-9-2016.
40. On that date, the Secretaries appeared and as a last chance 4 weeks time was granted to the respondents to file counter affidavits as a last chance.
41. On 29-10-2019, the learned single Judge before whom the matter was listed, directed it to be listed before a Division Bench as by then the bifurcation of the composite State of Andhra Pradesh had occurred on 2-6-2014 and matters relating to both States were being heard by a designated Division Bench as per the roster.
42. For the next 3 years the matter was not listed till 3-12-2019. No counter affidavits were filed by the respondents even by then.
43. On 3-12-2019, the Court gave time till 17-12-2019 for filing counter affidavits as a last chance to the respondents 1-3.
44. Counter-affidavits were then filed by the State of Telangana (respondent no. 1) and the residuary state of Andhra Pradesh (respondent no. 2) on 16.12.2019 opposing grant of relief to petitioners. No counter affidavit is filed by 3rd respondent.
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45. It is very important to note that along with the counter affidavits filed by respondents 1 and 2, not a single document is filed wherein the respondents had denied the claim of the petitioners prior to the filing of the instant Writ petition.
46. Arguments were heard on 2-1-2020 and 7-1-2020 and orders were reserved.
47. To avoid repetition of the contentions they are discussed under various headings mentioned below and dealt with by us.
(a) Whether the existence of alternative remedy by way of a Civil Suit is a bar to entertaining the Writ Petition?
48. It is the contention of the respondents that there are disputed questions of facts arising for consideration in the Writ Petition and that the petitioners should therefore approach the Civil Court for appropriate relief and the Writ Petition ought to be dismissed as not maintainable.
49. This contention is without any merit because the Supreme Court in ABL International Ltd. and another Vs. Export Credit Guarantee Corporation of India Ltd. and others1 has held that merely because one of the parties to the litigation raises a dispute in regard to the facts of the case, the Court entertaining a petition under Article 226 of the Constitution of India is not always bound to relegate the parties to a suit; and that in an appropriate case, Writ Court has jurisdiction to entertain a Writ Petition involving disputed 1 (2004)3 SCC 553 MSR,J & KL,J ::14:: wp_1135_2016 questions of fact and there is no absolute bar for entertaining a Writ Petition even if the same arises out of a contractual obligation and/or involves some disputed questions of fact.
It held that merely because a question of fact is raised, the High Court will not be justified in requiring the party to seek relief by the somewhat lengthy, dilatory and expensive process by a Civil Suit against a Public Body.
50. This decision was reiterated recently in Popatrao Vyankatrao Patil Vs. State of Maharshtra and others2.
The Supreme Court held therein that when a petition involves disputed questions of fact and law, the High Court would be slow in entertaining the petition under Article 226 of the Constitution of India; however it is only a rule of self-restraint and not a hard and fast rule; even if there are disputed questions of fact which fall for consideration but if they do not require elaborate evidence to be adduced, the High Court is not precluded from entertaining a petition under Article 226 of the Constitution.
It observed that such power is to be exercised in exceptional circumstances where the High Court finds that the action of the State or its instrumentality is arbitrary and unreasonable and as such violative of Article 14 of the Constitution of India. It applied the decision in ABL International (1 supra).
2 Civil Appeal No.1600 of 2020 decided on 14.02.2020 by a Three Judge Bench headed by Chief Justice of India, Justice B.R.Gavai and Justice Suryakant MSR,J & KL,J ::15:: wp_1135_2016
51. We shall now consider whether really there are any disputed questions of fact warranting dismissal of the Writ Petition, in the instant case ?
52. Clause 3.3 of each of the Cloud Seeding contracts for 2007, 2008 and 2009 specified that petitioners would be paid Rs.20,79,00,400/- (2007) , Rs.22,86,90,400/- (2008) and Rs.25,40,57,800/- (2009). Schedule of payment is also mentioned in all three contracts.
53. As mentioned above, the petitioners had filed correspondence exchanged with the then Principal Secretary, Rain Shadow Area Development Department of the composite State of Andhra Pradesh, the 3rd respondent University as well as File notings obtained under the RTI Act, 2005.
54. In his letter dt.11.06.2009, the Centre for Atmospheric Sciences and Weather Modification (Cloud Seeding) Technologies of the 3rd respondent University informed the Principal Secretary of the Rain Shadow Area Development Department of the composite State of Andhra Pradesh that the 1st petitioner is entitled to payment of Rs.22,67,88,907/- for the operations done in 2008 and enclosed a certificate of acceptance also.
55. Vide G.O.Rt.No.499, Finance (EXPR A & C) Department, dt.10.02.2010, the State of Andhra Pradesh released Rs.20,64,38,907/- to the petitioners for Cloud Seeding operations in 2008.
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56. The Note File C.No.7980/364/A2/EAC/2011 at page 27 (running page 131 in the paper book filed by the petitioners) of the Finance (EAC) Department contains a statement dt.22.08.2011 that Rs.40,28,47,380/- has to be paid to the 1st petitioner for Cloud Seeding operations for 2007-08, 2008-09, 2009-10.
57. The Note File C.No.327/RS-II/09 (at running page 204 to 211 of the paper book filed by the petitioners) records on 29.08.2011 from page 43 onwards details of the work done by the petitioners for 2007, 2008 and 2009, that Rs.69,13,956/- is payable to the 1st petitioner for 2007-08, that Rs.22,67,88,907/- ought to be paid after deducting Rs.2,03,50,000/- for violating orders to shift the aircraft from Bangalore to Tirupati (i.e. Rs.20,64,38,907/-) and for 2009-10, the 1st petitioner has to be paid Rs.18,94,94,517/- and that the total amount payable to 1st petitioner is Rs.40,28,47,380/-.
58. At page 68 of Note File C.No.327/RS.II/2009 on 18.07.2012 (running page 229 of the paper book filed by the petitioners) also it is stated that Rs.40,28,47,380/- is payable to the 1st petitioner.
59. On 20.06.2011, Centre for Atmospheric Sciences and Weather Modification (Cloud Seeding) Technologies of the 3rd respondent University informed the Principal Secretary of the Rain Shadow Area Development Department of the composite State of Andhra Pradesh that Rs.48,77,60,663/- is payable to the 1st petitioner.
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60. Another letter No.96/RS.II/2012 dt.28.03.2012 addressed by the Special Chief Secretary to Government, Rain Shadow Areas Development (RS.II) Department dt.28.03.2012 also informed to the Advocate for the petitioners M/s. Juris Consult in reply to the legal notice dt.21.03.2012 that "matter of balance payment to M/s. Agni Aviation Consultants in regard to Cloud Seeding operations in Andhra Pradesh is under consideration in consultation with Finance Department of Government of Andhra Pradesh".
61. At page 69 para no.256 in File C.No.327/RS.II/2009 (Page 230 of the papers filed by the petitioners) there is an endorsement;
'in view of the above, the file may be circulated to Hon'ble C.M. through Principal Secretary Fin (R&E) / Chief Secretary / Minister (RSAD) / Minister (Finance) for sanction of an amount of Rs.40,28,47,380 towards pending payment to M/s. Agni Aviation Consultants for conducting Cloud Seeding Operations during the years 2007, 2008 and 2009 and for placing the matter before the Cabinet'. (emphasis supplied)
62. Thereafter, at page 72 of the Note File at para no.266 (on page 233 of the papers filed by the petitioners) it is endorsed:
'The report of Sri K. Narasimha Murthy Consultant may be seen in the statement at flag A. There is no dispute regarding the figure of Rs.40.28 crores given by him. The amount is towards dues pending payment of Messrs Agni Aviation for the years 2007, 2008 and 2009. The advice of the Advocate General at pp.117-121 C.F. may be perused, especially 'X' at page 120 C.F'. (emphasis supplied)
63. Below this endorsement are are signatures of the then Minister (RSAD) (on 07.09.2012), Minister (Finance) (on 11.09.2012) and the MSR,J & KL,J ::18:: wp_1135_2016 then Hon'ble Chief Minister Kiran Kumar Reddy (on 09.01.2013) below the above endorsement.
64. This indicates that at the highest level there was approval to make payment of Rs.40.28 crores to the petitioners and that the said liability was thus expressly admitted by the then State of Andhra Pradesh.
65. As pointed out above, not a single material paper is filed by respondents 1 and 2 showing that at any point of time they had denied the claim of the petitioners for the amount of Rs.40.28 Crores for Cloud Seeding operations done by the petitioners in 2007,2008 and 2009.
66. On 02.05.2014, vide letter No.164/RS.II/2014, the Secretary to the Government of Rain Shadow Area Development Department of the composite State of Andhra Pradesh replied to the legal notice issued by the petitioners through M/s Juris Consult (Advocates) on 11.04.2014 that the "matter of balance payment to M/s. Agni Aviation Consultants for conducting Cloud Seeding operations for 2007, 2008 and 2009 is under consideration and awaiting for certain clarifications from the Vice Chancellor, JNTU, Hyderabad".
67. The petitioners have also relied upon D.O.Letter No.153/RS.II/2010 dt.13.09.2010 written by the Secretary to the Government of Rain Shadow Area Development Department of the composite State of Andhra Pradesh to the Principal Accountant MSR,J & KL,J ::19:: wp_1135_2016 General (Civil Audit), Andhra Pradesh with copy marked to the Coordinator, Centre for Atmospheric Sciences and Weather Modification (Cloud Seeding) Technologies of the 3rd respondent University certifying as under:
"8. Conclusion:
From the above information it can be inferred that Cloud Seeding Operations are backed by a sound research, has world wide acceptance and application in enhancing the rainfall on an operational mode. The cost benefit ratio is anywhere ranging between 1:20 to 1:40 which is far Better compared to many water augmentation projects. The latest technological development made possible the Cloud Seeding is a very precision operation. The A.P. Cloud Seeding Programme is being carried out on a sound technological and monitoring platform and is being evaluated from time to time. It has saved standing crops on several occasions in RSAD Districts by enhancing the rainfall upto 15%. Therefore it is not true to say that an expenditure of Rs.132 Crores incurred during the period of 2004 to 2009 on Cloud Seeding Operations is of doubtful utility."
68. This categorically proves that there can be no doubt about the efficacy of the Cloud Seeding Operations done by the petitioners.
69. None of the correspondence/material filed and relied upon by the petitioners is even doubted anywhere in the counter affidavits filed by the respondents. More importantly, none of the respondents offered to produce the original note files relating to these contracts maintained by the then State of Andhra Pradesh to dispute the pleas of the petitioners.
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70. The counsel for the 2nd respondent relied upon the decision in Pimpri Chinchwad New Township Development Authority v. Vishnudev Coop. Housing Society3 wherein it was held that a mere noting in the official files of the Government while dealing with any matter pertaining to any person is essentially an internal matter of the Government and carries with it no legal sanctity; and that, once the decision on such issue is taken and approved by the competent authority empowered by the Government in that behalf, it is required to be communicated to the person concerned by the State Government. The Court explained that so long as the decision based on such internal deliberation is not approved and communicated by the competent authority as per the procedure prescribed in that behalf to the person concerned, such noting does not create any right in favour of the person concerned nor would it partake the nature of any legal order so as to enable the person concerned to claim any benefit of any such internal deliberation; and that such noting(s) or /and deliberation(s) are always capable of being changed or/and amended or/and withdrawn by the competent authority.
71. The Pimpri Chinchwad New Township Development Authority (3 Supra) related to withdrawal of a Notification issued under the Land Acquisition Act, 1894 after possession of the land acquired was taken by the State and it considered the question whether noting on the file by a Minister to release the land could be 3 (2018) 8 SCC 215, at page 225 MSR,J & KL,J ::21:: wp_1135_2016 taken to be the decision of the Government. The Court held that the Minister had no such power and he had usurped the power of the Government.
72. Assuming that notings in the File of State Government do not create any right in favour of the person, such notings in File can certainly be relied upon as 'acknowledgements of liability' under Sec.18 of the Limitation Act, 1963. This is because, as held in Shapoor Freedom Mazda v. Durga Prasad Chamaria4, an acknowledgement, as prescribed in Sec.19 of the Limitation Act,1908 (which is in pari materia with Sec.18 of the Limitation Act, 1963 ) merely renews a debt and it does not create a new right of action. It is a mere acknowledgement of the liability in respect of the right in question.
73. In the instant case, the Note File copies obtained under the Right to Information Act, 2005 and filed by the petitioners indicate that at no point of time the Government of the composite State of Andhra Pradesh disputed the claim of the petitioners. On the contrary upto the level of the then Chief Minister, there was approval for making payment of the above dues claimed by the petitioners.
74. To enable the petitioners demonstrate to the Court that the debt in their favor was periodically renewed extending the period of limitation, the file notings can certainly be relied on and the objection raised by the 2nd respondent in this regard cannot be countenanced.
4
AIR 1961 SC 1236
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75. Moreover, the note filings copies corroborate the other correspondence being relied upon by the petitioners and once the Note File copies were issued to the petitioners under RTI Act, 2005, it cannot be said that they are mere notings on the files, which are not communicated to the petitioners, and so cannot be relied upon by them. Therefore, the decision in Pimpri Chinchwad New Township Development Authority (3 supra) cannot be of any assistance to the respondents.
76. To a specific question put from the Bench whether the respondents at any point of time had disputed the payments claimed by the petitioners, the Special Government Pleaders for the State of Telangana and the State of Andhra Pradesh were unable to point out to any letter addressed either by any Officer of the composite State of Andhra Pradesh or by the Officers of the Successor States disputing the claim of the petitioners.
77. Only for the first time in the counter affidavits filed in the Writ Petition on 13.12.2019 (2nd respondent) and 16.12.2019 (1st respondent) this issue is being raised.
78. When the 1st petitioner had performed Cloud Seeding Operations between 2007 and 2010 in the erstwhile composite State of Andhra Pradesh, and even the then Chief Minister had admitted the liability and approved payment of the dues of the 1st petitioner, it is not open to MSR,J & KL,J ::23:: wp_1135_2016 the successor States to raise a dispute for the first time in December, 2019 about the genuineness of the claims of the petitioners.
79. As observed in Popatrao Vyankatrao Patil (2 supra) by the Supreme Court, the State should act as a model litigant. It quoted it's decision in Urban Improvement Trust, Bikaner vs. Mohan Lal5.
80. In Urban Improvement Trust, Bikaner ( 5 supra) the Supreme Court has criticized the attitude of Government officials in deliberately delaying taking crucial decisions affecting citizens and then contesting the same on technical pleas without justification. It declared:
"5. ... ... Statutory authorities exist to discharge statutory functions in public interest. They should be responsible litigants. They cannot raise frivolous and unjust objections, nor act in a callous and high-handed manner. They can not behave like some private litigants with profiteering motives. Nor can they resort to unjust enrichment. They are expected to show remorse or regret when their officers act negligently or in an overbearing manner. When glaring wrong acts by their officers are brought to their notice, for which there is no explanation or excuse, the least that is expected is restitution/restoration to the extent possible with appropriate compensation. Their harsh attitude in regard to genuine grievances of the public and their indulgence in unwarranted litigation requires to be corrected.
6. This Court has repeatedly expressed the view that Governments and statutory authorities should be model or ideal litigants and should not put forth false, frivolous, vexatious, technical (but unjust) contentions to obstruct the path of justice. We may refer to some of the decisions in this behalf.
5
(2010) 1 SCC 512
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7. In Dilbagh Rai Jarry v. Union of India6 this Court extracted with approval the following statement [from an earlier decision of the Kerala High Court (P.P. Abubacker case7):
"25. ... '5. ... The State, under our Constitution, undertakes economic activities in a vast and widening public sector and inevitably gets involved in disputes with private individuals. But it must be remembered that the State is no ordinary party trying to win a case against one of its own citizens by hook or by crook; for the State's interest is to meet honest claims, vindicate a substantial defence and never to score a technical point or overreach a weaker party to avoid a just liability or secure an unfair advantage, simply because legal devices provide such an opportunity. The State is a virtuous litigant and looks with unconcern on immoral forensic successes so that if on the merits the case is weak, Government shows a willingness to settle the dispute regardless of prestige and other lesser motivations which move private parties to fight in court. The layout on litigation costs and executive time by the State and its agencies is so staggering these days because of the large amount of litigation in which it is involved that a positive and wholesome policy of cutting back on the volume of law suits by the twin methods of not being tempted into forensic showdowns where a reasonable adjustment is feasible and ever offering to extinguish a pending proceeding on just terms, giving the legal mentors of Government some initiative and authority in this behalf. I am not indulging in any judicial homily but only echoing the dynamic national policy on State litigation evolved at a Conference of Law Ministers of India way back in 1957.' "
8. In Madras Port Trust v. Hymanshu International8 this Court held: (SCC p. 177, para 2) "2. ... It is high time that Governments and public authorities adopt the practice of not relying upon technical pleas for the purpose of defeating legitimate claims of citizens and do what is fair and just to the citizens. Of course, if a Government or a public authority takes up a technical plea, the Court has to decide it and 6 (1974) 3 SCC 554 7 AIR 1972 KERALA 103 8 1979 (4) SCC 176 MSR,J & KL,J ::25:: wp_1135_2016 if the plea is well founded, it has to be upheld by the court, but what we feel is that such a plea should not ordinarily be taken up by a Government or a public authority, unless of course the claim is not well founded and by reason of delay in filing it, the evidence for the purpose of resisting such a claim has become unavailable."
9. In a three-Judge Bench judgment of Bhag Singh v. UT of Chandigarh9 this Court held: (SCC p. 741, para 3) "3. ... The State Government must do what is fair and just to the citizen and should not, as far as possible, except in cases where tax or revenue is received or recovered without protest or where the State Government would otherwise be irretrievably be prejudiced, take up a technical plea to defeat the legitimate and just claim of the citizen."
10. Unwarranted litigation by Governments and statutory authorities basically stems from the two general baseless assumptions by their officers. They are:
(i) All claims against the Government/statutory authorities should be viewed as illegal and should be resisted and fought up to the highest court of the land.
(ii) If taking a decision on an issue could be avoided, then it is prudent not to decide the issue and let the aggrieved party approach the court and secure a decision.
The reluctance to take decisions, or tendency to challenge all orders against them, is not the policy of Governments or statutory authorities, but is attributable to some officers who are responsible for taking decisions and/or officers in charge of litigation. Their reluctance arises from an instinctive tendency to protect themselves against any future accusations of wrong decision-making, or worse, of improper motives for any decision- making. Unless their insecurity and fear is addressed, officers will continue to pass on the responsibility of decision-making to courts and tribunals."(emphasis supplied)
81. These observations aptly get attracted to the instant case.
9
1985 (3) SCC 737
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82. We accordingly hold that the plea about there being disputed questions of fact arising for consideration in the Writ Petition is malafide intended only to drive the petitioners to the lengthy, dilatory and expensive process by a Civil Suit.
83. We further hold that the action of the respondents is arbitrary and unreasonable and as such violative of Article 14 of the Constitution of India, there is a public law element involved in the matter as explained in para 6 and 7 supra, and the instant case falls within the exceptional circumstances warranting exercise of Writ Jurisdiction. Therefore this objection of the respondents cannot therefore be entertained.
Plea that in contractual matters, Writ Petitions cannot be entertained
84. Though the respondents cited the decision in Joshi Technologies International INC Vs. Union of India and others10 and sought to contend that Writ Petitions on contractual matters were not maintainable, as stated in ABL International (1 supra), in an appropriate case, a Writ Petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable. Even in Popatrao Vyankatrao Patil ( 2 supra), in a contractual dispute the Supreme Court granted relief to a party in a contractual dispute finding fault with the High court which denied it under Art.226 of Constitution of India.
10
(2015) 7 SCC 728
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85. Therefore we reject this contention of the respondents. Plea of bar of Limitation
86. The next contention raised by the 1st respondent, i.e., the State of Telangana is that the claim of the Writ Petitioner is barred by limitation. The instant Writ petition was filed by the petitioners on 7.1.2016.
87. As mentioned supra in para 32, Clause 3.3 of each of the Cloud Seeding contracts for 2007, 2008 and 2009 specified that petitioners would be paid Rs.20,79,00,400/- (2007) , Rs.22,86,90,400/- (2008) and Rs.25,40,57,800/- (2009). Schedule of payment is also mentioned in all three contracts. The said clause states:
"...
(a) Mobilization Payment : 35% of the fixed contract price of each equipment shall be paid after that equipment is deployed at each location.
(b) Balance Payments : Balance payments will be given in equal instalments, every 10 days.
(c) FSD (Fixed Security Deposit) at the rate of 5% will be recovered in each bill, except mobilization advance if taken. Upon receipt by the Department of the final report, this amount will be released."
88. In spite of a payment schedule being agreed upon in each of the contracts, this was not adhered to by the 3rd respondent/ the then State of Andhra Pradesh.
89. Article 27 of the Limitation Act, 1963 prescribes a period of three years for payment of compensation for breach of a promise to do MSR,J & KL,J ::28:: wp_1135_2016 anything at a specified time, or upon the happening of a specified contingency and the time starts running when the time specified arrives or the contingency happens.
90. Article 55 of the Limitation Act, 1963 prescribes a three year period for compensation for the breach of any contract, express or implied not specifically provided for in the Act and states that the time begins to run from the time when the contract is broken or (where there are successive breaches) when the breach in respect of which the suit is instituted occurs or (where the breach is continuing), when it ceases.
91. In either situation (Article 27 or Article 55), the period of limitation is three years from the date on which the payment was agreed to be made as per the contract or when the contract was broken.
92. According to the State of Telangana (1st respondent), the amounts payable under the Cloud Seeding contracts dt.04.07.2007, 25.07.2008 and 20.07.2009 were to be paid as per the Schedule mentioned therein on 01.04.2008, 01.04.2009 and 01.04.2010 respectively and the Writ Petition filed by the petitioners on 07.01.2016 is barred by time.
93. The petitioners relied on Section 18 of Limitation Act, 1963 which deals with extension of period of limitation by acknowledgement of liability.
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94. Sec.18 of the Limitation Act, 1963 states:
"18. Effect of acknowledgment in writing :- (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing, signed by the party against whom such property or right is claimed, or by any person through whom he derives is title or liability, a fresh period of limitations hall be computed from the time when the acknowledgment was so signed.
(2) .... .....
Explanation :- For the purpose of this section -
(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or averse that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, delivery, perform or permit to enjoy, or is coupled with a claim to set- off, or is addressed to a person other than a person entitled to the property or right;
(b) the work 'signed' means signed either personally or by an agent duly authorized in this behalf; and
(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right."
95. Another relevant provision in the Limitation Act, 1963 is Section 19 which states that if payment on account of a debt is made before the expiration of the prescribed period by the person liable to pay the debt, a fresh period of limitation shall be computed from the time when the payment was made.
Cases dealing with Section 18 where important principles were laid down :
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96. In Food Corpn. of India v. Assam State Coop. Marketing & Consumer Federation Ltd.11, the Supreme Court held that to amount to an acknowledgment of a liability within the meaning of Section 18 of the Act, it need not be accompanied by a promise to pay expressly or even by implication. Only thing required is that the acknowledgment must indicate the existence of jural relationship between the parties such as that of debtor and creditor. It declared:
"14. According to Section 18 of the Limitation Act, an acknowledgement of liability made in writing in respect of any right claimed by the opposite party and signed by the party against whom such right is claimed made before the expiration of the prescribed period for a suit in respect of such right has the effect of commencing a fresh period of limitation from the date on which the acknowledgement was so signed. It is well settled that to amount to an acknowledgement of liability within the meaning of Section 18 of the Limitation Act, it need not be accompanied by a promise to pay either expressly or even by implication.
15. The statement providing foundation for a plea of acknowledgement must relate to a present subsisting liability, though the exact nature or the specific character of the said liability may not be indicated in words. The words used in the acknowledgement must indicate the existence of jural relationship between the parties such as that of debtor and creditor. The intention to attempt such jural relationship must be apparent. However, such intention can be inferred by implication from the nature of the admission and need not be expressed in words. A clear statement containing acknowledgement of liability can imply the intention to admit jural relationship of debtor and creditor. ... ... So long as the statement amounts to an admission, acknowledging the jural relationship and existence of liability, it is immaterial that the admission is accompanied by an assertion that nothing would be found due from the person making the admission or that on an account being taken something may be found due and 11 (2004) 12 SCC 360 MSR,J & KL,J ::31:: wp_1135_2016 payable to the person making the acknowledgement by the person to whom the statement is made." (emphasis supplied)
97. In J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd. and another12 also the Supreme Court further explained that if a defendant writes to the plaintiff requesting him to send his claim for verification and payment, it amounts to an acknowledgment of liability.
In that case the respondent before the Supreme Court wrote a letter dt.28-10-1978 to the appellant as under:
"Re.: Settlement of pending claims.
You had called on Chairman, OMC, recently and apprised him of the dues receivable by you in respect of certain long pending matters such as mine benches work and raising at Kaliapani Quarry I. In the matter of Kaliapani it has been decided to constitute a committee which will go separately into your claims and other facts, in which connection you are requested to give all possible help and assistance, so that your dues, if any, will be ascertainable.
In regard to other pending matters, you had indicated yourself that you will give the details of claims and payment received by you. This may be given within a day or two so as to enable OMC to settle up the above at the earliest." (emphasis supplied) It explained :
"21. It is now well settled that a writing to be an acknowledgment of liability must involve an admission of a subsisting jural relationship between the parties and a conscious affirmation of an intention of continuing such relationship in regard to an existing 12 (2008) 2 S.C.C. 444 MSR,J & KL,J ::32:: wp_1135_2016 liability. The admission need not be in regard to any precise amount nor by expressed words. If a defendant writes to the plaintiff requesting him to send his claim for verification and payment, it amounts to an acknowledgment."
(emphasis supplied) On the facts of the case, it concluded as under:
"22. We will now examine this case with reference to the said principles. In this case, the cause of action accrued on 14-4-1977 when the final bill was signed by the contractor. It is not in dispute that the final bill showed that a sum of Rs 17,69,608.73 was payable to the contractor (after giving credit to the payments made and after withholding a sum of Rs 7,45,953.83 as 5% security deposit). Towards the said sum of Rs 17,69,608.73, Rs 17 lakhs was paid on 25-2-1976 and Rs 70,000 was paid on 6-8-1977. The contractor had made some claims and OMC wrote a letter dated 28-10-1978 in regard to the pending claims of the contractor. In regard to Kaliapani matters, OMC informed the contractor that it has been decided to constitute a committee which will go into the claims of the contractor so that the dues, if any, could be ascertained. It further stated that on the details of the claims and payments received being given to the contractor, OMC will settle the pending matters at the earliest. This clearly showed an intention on the part of OMC to admit the jural relationship of contractor and employer and an intention to settle the pending claims after being satisfied about them. Therefore, the letter dated 28- 10-1978 was clearly an acknowledgment in writing insofar as the "pending claims" of the contractor. What were the pending claims is made clear in the letter dated 16-11-1978 written by the contractor enclosing a statement showing that in all, a sum of Rs 50,15,820 was due. The committee constituted by OMC examined these claims and admitted the claims only to an extent of Rs 3,52,916 as per its final report dated 7-12-1979. OMC paid Rs 3,50,000 on 4-3-1980.
23. In view of the acknowledgment in writing on 28-10-1978 and payment of Rs 3,50,000 on 4-3-1980, it can be said that in regard to the pending claims of the contractor, the limitation stood extended by three years from 4-3-1980 and at all events by three years from 28-10- 1978."
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98. In Prabhakaran and others vs. M. Azhagiri Pillai (dead) by LRs. And others13 the Court held that to amount to an acknowledgement, it need not be in a document addressed to the petitioner/plaintiff. It summed up the principles in the following terms:
"20. ... ... .... To summarise, a statement (in writing and signed) by a mortgagee can be construed as an "acknowledgment" under Section 18 of the Limitation Act, if it fulfils the following requirements:
(i) The acknowledgment of liability must relate to a subsisting mortgage.
(ii) The acknowledgment need not be in a document addressed to the mortgagor (person entitled to the property or right). But it should be made by the mortgagee (the person under liability).
(iii) The words used in the acknowledgment must indicate the existence of jural relationship between the parties and it must appear that the statement is made by the mortgagee with the intention of admitting the jural relationship with the mortgagor. (Such intention of admitting the jural relationship need not be in express terms, but can be inferred or implied from the nature of admission and the words used, though oral evidence as to the meaning and intent of such words is excluded.)
(iv) Where the statement by the mortgagee in the subsequent document (say, deed of assignment) merely refers to the mortgage in his favour which is being assigned, without the intention of admitting the jural relationship with the mortgagor, it will not be considered to be an "acknowledgment". (emphasis supplied) The various documents furnished to the petitioners under the Right to Information Act, 2005 containing admissions of liability to 13 (2006) 4 S.C.C. 484 MSR,J & KL,J ::34:: wp_1135_2016 pay the dues of the petitioners, though not addressed to the petitioners specifically, would fall in this category.
99. In Lakshmirattan Cotton Mills Co. Ltd. v. Aluminium Corpn. of India Ltd.14 it was reiterated:
"9. It is clear that the statement on which the plea of acknowledgment is founded must relate to a subsisting liability as the section requires that it must be made before the expiration of the period prescribed under the Act. It need not, however, amount to a promise to pay, for, an acknowledgment does not create a new right of action but merely extends the period of limitation. The statement need not indicate the exact nature or the specific character of the liability. The words used in the statement in question, however, must relate to a present subsisting liability and indicate the existence of jural relationship between the parties, such as, for instance, that of a debtor and a creditor and the intention to admit such jural relationship. Such an intention need not be in express terms and can be inferred by implication from the nature of the admission and the surrounding circumstances. Generally speaking, a liberal construction of the statement in question should be given. ..."(emphasis supplied)
100. In several cases, various High Courts have held that an acknowledgment of liability in the balance sheet by a Company registered under the Companies Act, 1956 extends the period of limitation though it is not addressed to the creditor specifically. (Zest Systems Pvt. Ltd., Vs. Center for Vocational and Entrepreneurship Studies and Another15, Bhajan Singh Samra Vs. Wimpy International Ltd.16, Vijay Kumar Machinery and 14 (1971) 1 SCC 67 15 MANU/DE/4093/2018 16 MANU/DE/6446/2012 MSR,J & KL,J ::35:: wp_1135_2016 Electrical Stores Vs. Alaparthi Lakshmi Kanthamma17 and Bengal Silk Mills Company, Rajah of Vizianagaram Vs. Official Liquidator, Vizianagaram Mining Company Limited18).
101. Therefore it is not necessary that the acknowledgment of liability must be contained in a document addressed to the creditor i.e. the petitioners in the instant case.
102. In our view, the file notings obtained under the Right to Information Act, 2005 which contain statements about obligation of the then State of Andhra Pradesh to pay the dues of the petitioners are 'acknowledgements of liability' under Section 18 of the Limitation Act, 1963, and that they relate to a present subsisting liability and indicate the existence of jural relationship between the parties, i.e, that of a debtor and a creditor and the intention to admit such jural relationship, and extend the period of limitation. RE: claim of petitioner under the first contract dt.4.7.2007
103. The first contract was made on 04-07-2007 for Cloud Seeding Operations.
104. According to the petitioners, Rs.22,16,05,956/- was payable to 1st petitioner for 2007 , that they received only Rs.21,46,92,000/- vide G.O.Ms.No.2 dt.24-03-2008 , leaving a balance of Rs.69,13,956/-. This payment having been made before the expiry of the period of 17 (1969) 74 ITR 224 (AP) 18 AIR 1952 Madras 1361 MSR,J & KL,J ::36:: wp_1135_2016 limitation by the State , a fresh period of limitation would start from the said date as per Section 19 of the Limitation Act, 1963.
105. Thus the period of limitation would stand extended by 3 years upto 23-03-2011.
106. Even according to the 1st respondent, the amount for 2007 Cloud Seeding operations became payable by 1.4.2008, so if the 3 year period is computed from that date, the limitation for filing a suit ends on 31.3.2011.
107. On 20.6.2011, the 3rd respondent which was the party with whom the 1st petitioner had entered into the contract for Cloud Seeding operations for 2007, wrote to the Secretary, Rain Shadow Areas Development Department that Rs.69,13,956/- is owed to the 1st petitioner.
108. File noting at page 27 in C.No.7980/364/A2/EAC/2011 Finance (EAC Department) on 22-08-2011 (page 131 of papers filed by the petitioners) states :
"The Rain Shadow Area Development Department have stated that the amount have to be paid to M/s.Agni Aviation Consultants for Cloud Seeding operation from the year 2007-08 to 2009-10, as follows:
Cloud Seeding 2007-08 Rs.69,13,956/-
Cloud Seeding 2008-09 Rs.20,64,38,907/-
Cloud Seeding 2009-10 Rs.18,94,94,517/-
------------------------
Total Rs.40,28,47,380/-
------------------------
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109. In the File Noting at page 44 in File C.No.327/RS-II/09 made on 29-08-2011(pg.205 of the Material papers filed by the petitioners), it is acknowledged that Rs.69,13,956/- is payable to the petitioners for Cloud Seeding operations 2007. It states:
" Thus an amount of Rs.69,13,956/- is pending to be paid to M/s Agni Aviation Consultants for Cloud Seeding operations for 2007-08"
110. In our opinion, though these acknowledgments by the 3rd respondent and the then state of A.P. are made after expiry of the period of limitation of 3 years from the date of the agreement for the Cloud Seeding operation of 2007, they would fall under Section 25(3) of the Contract Act, 1872 and would extend the period of limitation from 22.08.2011 to 21.08.2014.
111. Sec.25 (3) of the Contract Act in so far it is relevant states:
"an agreement made without consideration is void unless it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law of limitation of suits."
112. In Bombay Dyeing & Mfg. Co. Ltd. v. State of Bombay19, the Supreme Court had held:
"Under Section 25(3) of the Contract Act, a barred debt is good consideration for a fresh promise to pay the amount."19
AIR 1958 SC 328 MSR,J & KL,J ::38:: wp_1135_2016
113. At page 69 para no.256 in File C.No.327/RS.II/2009 (Page 230 of the papers filed by the petitioners) there is an endorsement:
'in view of the above, the file may be circulated to Hon'ble C.M. through Principal Secretary Fin (R&E) / Chief Secretary / Minister (RSAD) / Minister (Finance) for sanction of an amount of Rs.40,28,47,380 towards pending payment to M/s. Agni Aviation Consultants for conducting Cloud Seeding Operations during the years 2007, 2008 and 2009 and for placing the matter before the Cabinet'. (emphasis supplied) Thereafter, at page 72 at para no.266 (on page 233 of the papers filed by the petitioners) it is endorsed:
'The report of Sri K. Narasimha Murthy Consultant may be seen in the statement at flag A. There is no dispute regarding the figure of Rs.40.28 crores given by him. The amount is towards dues pending payment of Messrs Agni Aviation for the years 2007, 2008 and 2009. The advice of the Advocate General at pp.117- 121 C.F. may be perused, especially 'X' at page 120 C.F'. (emphasis supplied) There are signatures of the then Minister (RSAD) (on 07.09.2012), Minister (Finance) ( on 11.09.2012) and the then Hon'ble Chief Minister Kiran Kumar Reddy (on 09.01.2013) below this endorsement.
114. This indicates that at the highest level there was approval to make payment of Rs.40.28 crores to the petitioners on 9.1.2013.
115. This is an acknowledgement of liability falling under Sec.25(3) of the Contract Act,1872 which extends the limitation upto 8-1-2016. But before the said date, on 7-1-2016, the instant Writ petition had been filed.
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116. Even otherwise, in the letter No.96/RS.II/2012 dt.28.03.2012, the Special Chief Secretary of the Rain-Shadow Areas Development (RS.II) Department wrote to the counsel for petitioners in response to the legal notice dt.21.03.2012 got issued by the petitioners stating that "the proposal for balance of pending payment to M/s. Agni Aviation Consultants in regard to Cloud Seeding operations in Andhra Pradesh is under consideration in consultation with the Finance Department of the Government of Andhra Pradesh". The other letter No.164/RS.II/2012 dt.02.05.2014 of the Secretary to Government, Rain-Shadow Area Development Department to the counsel for the petitioners in reply to the Legal Notice dt.11.04.2014 issued by the petitioners stated that "the matter of balance payment to M/s. Agni Aviation Consultants for conducting Cloud Seeding operations for 2007, 2008 and 2009 is under consideration and awaiting for certain clarifications from the Vice-Chancellor, JNTU, Hyderabad ".
117. We have already referred to the decision in J.C. Budhraja ( 13 supra) wherein the Supreme Court explained that if a defendant writes to the plaintiff requesting him to send his claim for verification and payment, it amounts to an acknowledgment of liability.
118. The contents of the letter dt.28.03.2012 and letter dt.11.04.2014 of the Secretary to Government, Rain-Shadow Area Development Department addressed to the 1st petitioner would fall in this category and, in our opinion, extend the period of limitation for filing the Writ MSR,J & KL,J ::40:: wp_1135_2016 Petition upto 11.4.2017 ( 3 years from 11.4.2014 letter) in regard to the claim for the first contract of 2007-08 to the extent of Rs.69,13,956/- which was due and payable to the petitioners.
119. So we hold that the claim of the petitioners for Rs. 69,13,956/- for the 2007 first contract for Cloud Seeding is well within time since the instant Writ Petition was filed on 7-1-2016. RE: claim of petitioner under the second contract dt.25.07.2008
120. In respect of this claim for payment under the 2nd Cloud Seeding contract for 2008, in the letter No.JNTUH/CAS&WMT/162 dt.11.06.2009 addressed by the 3rd respondent to the Principal Secretary, Rain-Shadow Areas Development Department, Government of A.P., it is stated that a sum of Rs.22,67,88,907/- is payable to the petitioners.
121. This extends the limitation period upto 10.6.2012.
122. In the documents issued under the Right to Information Act,2005 there is a File C.No.327/RS.II/09 on which a noting was made on 10.08.2009 referring to the above letter and stating that the above amount is to be paid to the petitioners according to the 3rd respondent; that the 3rd respondent had requested the Government to release this amount; and the petitioners are also pressing for payment of the same. (Pg.162-163 of the material papers filed by the petitioners)
123. Thereafter, on the pretext that the petitioners did not shift the aircraft from Bangalore to Tirupathi inspite of being asked to do so MSR,J & KL,J ::41:: wp_1135_2016 through a letter dt.04.11.2008, it was proposed that a sum of Rs.2,03,50,000/- be deducted leaving Rs.20,64,38,907/- as the due payable to the petitioners (See File C.No.327/RS.II/2009 dt.06.11.2009) (Pg.173 of the material papers filed by the petitioners).
124. Admittedly, a G.O.Rt.No.499, FIN(Exp.A&C) Department dt.10.02.2010 being the Budget release order was also issued to release payment of Rs.20,64,38,907/- to the petitioners (Pg.286 of the material papers filed by the petitioners), but the said payment was not released and paid to the petitioners.
125. On 20.6.2011, the 3rd respondent, which was the party with whom the 1st petitioner had entered into the contract for Cloud Seeding operations for 2007, wrote to the Secretary, Rain Shadow Areas Development Department that Rs.22,67,88,907/- is owed to the 1st petitioner.
126. This is an acknowledgment of liability under Section 18 of the Limitation Act, 1963 and it extends the period of limitation to 19.6.2014.
127. File noting at page 27 in C.No.7980/364/A2/EAC/2011 Finance (EAC Department) on 22-08-2011 (page 131 of papers filed by the petitioners) states :
"The Rain Shadow Area Development Department have stated that the amount have to be paid to M/s.Agni Aviation Consultants for Cloud Seeding operation from the year 2007-08 to 2009-10, as follows:
MSR,J & KL,J ::42:: wp_1135_2016 Cloud Seeding 2007-08 Rs.69,13,956/-
Cloud Seeding 2008-09 Rs.20,64,38,907/-
Cloud Seeding 2009-10 Rs.18,94,94,517/-
--------------------
Total Rs.40,28,47,380/-
--------------------
128. In the File Noting at page 44 in File C.No.327/RS-II/09 made on 29-08-2011(pg.205 of the Material papers filed by the petitioners), it is acknowledged that Rs.69,13,956/- is payable to the petitioners for Cloud Seeding operations 2008. It states:
"Thus pending payments for Cloud Seeding Operations 2008 are as under:
Total payments to be made ... Rs.24,42,58,907/-
Advance Paid ... Rs. 1,74,70,000/-
Remaining Balance to be paid ... Rs.22,67,88,907/-"
129. These statements also amount to acknowledgments of liability under Sec.18 of the Limitation Act,1963 and extends the limitation upto 28-8-2014.
130. Before this date, as we have stated above, the Hon'ble Chief Minister at that time Sri Kiran Kumar Reddy on 09.01.2013 had granted approval for the payment of Rs.40.28 crores to the petitioners including the claim of the petitioners for 2008.
131. This also would also extend the period of limitation by three more years, carrying it to 08.01.2016. Before that date, on 07.01.2016, the instant Writ Petition was filed in the High Court as mentioned above.
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132. Even otherwise, the contents of the letter dt.28.03.2012 and
letter dt.11.04.2014 of the Secretary to Government, Rain-Shadow Area Development Department addressed to the 1st petitioner, as explained above as per the principle in J.C.Budhiraja ( 13 Supra), would extend the period of limitation for filing the Writ Petition upto 11.4.2017 ( 3 years from 11.4.2014 letter) in regard to the claim for the second contract of 2008 for Rs. 22,67,88,907/- which was due and payable to the petitioners ; and so even the claim under the second contract for 2008 cannot be said to have been barred by limitation, since the Writ Petition was filed on 07.01.2016 within the extended period of limitation.
RE: claim of petitioner under the third contract dt.20.07.2009
133. According to the petitioners, they are entitled to a sum of Rs.18,94,94,517/- for carrying out Cloud Seeding operations in 2009.
134. On 20.6.2011, the 3rd respondent which was the party with whom the 1st petitioner had entered into the contract for Cloud Seeding operations for 2009, wrote to the Secretary, Rain Shadow Areas Development Department that Rs.25,40,57,800/- is owed to the 1st petitioner.
135. This is an acknowledgment of liability under Section 18 of the Limitation Act, 1963 and it extends the period of limitation to 19.6.2014.
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136. Within this period again, as referred to above, the Hon'ble Chief Minister at that time Sri Kiran Kumar Reddy on 09.01.2013 had granted approval for the payment of Rs.40.28 crores to the petitioners including the claim for 2009.
137. This would again extend the period of limitation by three more years, carrying it to 08.01.2016, but before that date on 07.01.2016, the instant Writ Petition was filed in the High Court as mentioned above.
138. The contents of the letter dt.28.03.2012 and letter dt.11.04.2014 of the Secretary to Government, Rain-Shadow Area Development Department addressed to the 1st petitioner, as explained above, as per the principle in J.C.Budhiraja ( 13 Supra), would also extend the period of limitation for filing the Writ Petition upto 11.4.2017 ( 3 years from 11.4.2014 letter) in regard to the claim for the third contract of 2009 for Rs. 25,40,57,800/- which was due and payable to the petitioners ; and so even the claim under the third contract for 2009 cannot be said to have been barred by limitation since the Writ Petition was filed on 07.01.2016 within the extended period of limitation.
139. Thus, the claim for payment due under the third contract dt.20.07.2009 is also clearly within limitation.
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FINDING:
140. Therefore, we hold that the plea of the respondents that the claims of the petitioners for performing Cloud Seeding operations for the years 2007, 2008 and 2009 is barred by limitation, is without any merit.
Contention regarding the locus of the 2nd petitioner to claim the amounts due to the 1st petitioner - Firm in this Writ Petition :
141. The 1st petitioner is admittedly a partnership Firm in which the 2nd petitioner and one Arvind Sharma were partners.
142. These disputes were referred to a sole arbitrator Justice M.P. Chinnappa, a retired Judge of the High Court of Karnataka.
143. Before the said Arbitrator, both the partners filed a joint memo on 17.10.2013 authorizing the 2nd petitioner to collect payment and to issue a valid receipt to the agencies for the payments received unto and on behalf of the 1st petitioner -Firm subject to honouring the directions given in the order passed on 19.10.2013 by the said Arbitrator.
144. This was also communicated to the respondents, according to the petitioner.
145. In the note file C.No.327/RS.II/09 at page no.21 (page 182 onwards filed by the petitioners), there is a reference to this arbitration MSR,J & KL,J ::46:: wp_1135_2016 and even a legal opinion was obtained from the Advocate-General on the said aspect at pg.194 of the material papers filed by the petitioners.
146. According to the respondents, there would be a risk to the respondents if the payments were all released to the 2nd petitioner on behalf of the 1st petitioner.
147. However, this aspect is covered by Section 47 of the Indian Partnership Act, 1932. The said provision states :
"Continuing authority of partners for purposes of winding up - After the dissolution of a firm the authority of each partner to bind the firm, and the other mutual rights and obligations of the partners, continue not withstanding the dissolution, so far as may be necessary to wind up the affairs of the firm and to complete transactions begun but unfinished at the time of the dissolution, but not otherwise. ..."
148. This issue was considered in Poosarla Visweswararao Bros. and Vuppala Nookayya Setty vs. Vuppala Nookayasetti20. In that case, a partnership firm filed a suit for recovery of money on the basis of a promissory note against a party. The suit was decreed. Subsequently, execution petition was filed for releasing the decretal amount. The execution petition was dismissed by the trial court on the ground it cannot be maintained by an individual partner when the suit was decreed in favour of the firm. Challenging the said order the decree holder partner filed Revision before the Andhra Pradesh High Court. This Court set aside the order of the Court below and held that an execution petition can be maintained by one of the partners of a 20 2004 (1) A.L.D. 818 MSR,J & KL,J ::47:: wp_1135_2016 dissolved firm on the basis of a decree passed in favour of the firm. This Court followed the judgment of the Allahabad High Court in Kedar Nath vs. Firm Rekh Chand Dasu Ram21.
149. In Kedar Nath (15 supra), the Allahabad High Court held:
"3. The question raised, however, was that the firm having been dissolved, the authority of Navrang Lal to give a valid discharge on behalf of the firm ceased with the dissolution of the firm and he could, therefore, no longer, maintain the execution application in his name alone. All the partners of the dissolved firm ought to have been joined in making the execution application so as to given the judgment-debtor an effective and complete discharge. That argument is effectively answered by the provisions of Section 47 of the Indian Partnership Act, 1932, which provides that 'after the dissolution of a firm the authority of each partner to bind the firm, and the other mutual rights and obligations of the partners, continue notwithstanding the dissolution, so far as may be necessary to wind up the affairs of the firm and to complete transactions begun but unfinished at the time of the dissolution, but not otherwise.
4. The execution of the decree in question was surely not any new transaction. It was a decree in favour of the firm and being an asset of the firm it was the duty of the partners to collect it and Navrang Lal being one of the partners of the dissolved firm could surely perform that duty and had the necessary authority to do so under Section 47 of the Indian Partnership Act, 1932. His actions were binding on the firm, that is to say on of the partners of the dissolved firm. ... ..."
150. No decision to the contra was cited by the counsel for respondents.
151. In view of the clear provision in Section 47 of the Indian Partnership Act, 1932 and the decisions referred to above, the 21 A.I.R. 1983 Allahabad 270 MSR,J & KL,J ::48:: wp_1135_2016 payments due to the 1st petitioner-Firm can certainly be made to the 2nd petitioner and such payments would bind the 1st petitioner as well. RE : Distribution of the liability between the new State of Telangana and the residuary State of Andhra Pradesh :
152. A curious contention was raised by the Special Government Pleader for the State of Telangana that most of the Districts in which the contract for Cloud Seeding was entrusted were located in the residuary State of Andhra Pradesh after the bifurcation of the composite State into the new State of Telangana and the residuary State of Andhra Pradesh w.e.f. 02.06.2014, and therefore, the bulk of the liability, if not, the entire liability for making payment to the dues of the petitioners for Cloud Seeding operations for 2007, 2008 and 2009, should be fastened only on the residuary State of Andhra Pradesh.
153. The Special Government Pleader could not place any material before this Court to substantiate his plea that Cloud Seeding done in a particular area will result in rainfall only in that area, that the clouds would not move with the wind, and result in increased rainfall in a different district.
154. We reject this contention because the Cloud Seeding operations would be done in the clouds hovering over the area covered by the Indian subcontinent in the districts falling in the erstwhile composite State of Andhra Pradesh which are mentioned in the contracts MSR,J & KL,J ::49:: wp_1135_2016 awarded to the 1st petitioner, but the cloud movement would depend upon wind direction, and it cannot be said with any certainty that Cloud Seeding operations done over a particular district, which now falls in the residuary State of Andhra Pradesh, did not benefit the new State of Telangana by resulting in rain in the neighbouring districts in the State of Telangana.
155. Section 60 of the A.P. Reorganization Act, 2014 deals with contracts which had been entered into by the composite State of Andhra Pradesh and the liability under such contracts to the successor States of Telangana and Andhra Pradesh. It states :
"60. Contracts : (1) Where, before the appointed day, the existing State of Andhra Pradesh has made any contract in the exercise of its executive power for any purposes of the State, that contract shall :
(a) if the purposes of the contract are, on and from the appointed day, exclusive purposes of either of the successor States of Andhra Pradesh and Telangana, then it shall be deemed to have been made in exercise of the executive power of that State and the liability shall be discharged by that State ; and
(b) in any other case, all rights and liabilities which have accrued or may accrue under any such contract shall be apportioned between the successor States on the basis of population ration or in any other manner as may be agreed to by the successor States.
(2) For the purposes of this section, there shall be deemed to be included in the liabilities which have accrued or may accrue under any contract :
(a) any liability to satisfy an order or award made by any court or other tribunal in proceedings relating to the contract ; and
(b) any liability in respect of expenses incurred in or in connection with any such proceedings.
... ... ..."
MSR,J & KL,J
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156. Thus, according to Clause (b) of sub-section (1) of Section 60, the liability has to be apportioned between the new State of Telangana and the residuary State of Andhra Pradesh in the ratio 41.68 : 58.32, i.e., the liability of the State of Telangana (respondent no.1) would be 41.68 % of the total liability and the liability of the State of Andhra Pradesh (respondent no.2) would be 58.32% of the total liability. Conclusion :
157. In the result, the Writ Petition is allowed with costs of Rs.25,000/- and respondent nos.1 and 2 are directed to pay in three (03) months the arrears of dues under the Cloud Seeding contracts dt.04.07.2007, 25.07.2008 and 20.07.2009 amounting to Rs.40,28,47,380 with interest thereon from the respective due dates of payment till the date of actual payment at the rate of 9% per annum;
and both the liability towards costs and the arrears mentioned supra are apportioned between the respondent nos.1 and 2 in the ratio 41.32 : 58.68 respectively.
158. As a sequel, miscellaneous petitions, pending if any in this Writ Petition shall stand closed.
____________________________ M.S.RAMACHANDRA RAO, J ________________ K.LAKSHMAN, J Date: 21-04-2020 Note: L.R. copies to be marked.
(B/o) Svv/Vsv/Ndr