Kerala High Court
Food Corporation Of India vs C.Mohammed Kunhi on 6 October, 2008
Equivalent citations: AIR 2009 (NOC) 2939 (KER.)
Author: K.T.Sankaran
Bench: Kurian Joseph, K.T.Sankaran
IN THE HIGH COURT OF KERALA AT ERNAKULAM
AS.No. 299 of 1995()
1. FOOD CORPORATION OF INDIA
... Petitioner
Vs
1. C.MOHAMMED KUNHI
... Respondent
For Petitioner :SRI.P.JACOB VARGHESE
For Respondent :SRI.M.GOPIKRISHNAN NAMBIAR
The Hon'ble MR. Justice KURIAN JOSEPH
The Hon'ble MR. Justice K.T.SANKARAN
Dated :06/10/2008
O R D E R
KURIAN JOSEPH & K.T.SANKARAN, JJ.
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A.S. NOS. 299 & 343 OF 1995
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Dated this the 6th October, 2008
JUDGMENT
K.T.Sankaran, J.
These appeals are filed by the Food Corporation of India and its officers against the judgment and decree dated 6th March 1995 in O.S.Nos.102 of 1991 and 51 of 1992 respectively, on the file of the Court of the Subordinate Judge of Hosdurg. O.S.No.102 of 1991 was filed by the Food Corporation of India (hereinafter referred to as the 'Corporation') against the respondent for realisation of Rs.3,53,871.43 as demurrage charges. O.S.No.51 of 1992 was filed by the respondent against the Corporation and its officers for realisation of Rs.1,50,000/-, the amount being the security amount deposited by the plaintiff with the Corporation in respect of three contracts. The trial court dismissed O.S.No.102 of 1991 filed by the Corporation on the ground of limitation, and decreed O.S.No.51 of 1992 filed by the respondent.
2. The case of the Corporation is that the contract for handling and transport at Food Storage Depot, Nileshwar was given to the respondent for two years from 7.6.1982 to 6.6.1984. A sum of Rs.50,000/- was deposited by the respondent as security. During that period, an amount of Rs.8,31,585.20 was claimed by the Railways towards demurrage charges and after waiver of some amount, a sum of A.S. NOS.299 AND 343 OF 1995 :: 2 ::
Rs.5,30,695.25 was paid by the Corporation to the Railways. It was found by the Senior Regional Manager of the Corporation that the demurrage charges of Rs.4,65,718.15 was incurred due to the bad performance and negligence of the respondent. A sum of Rs.1,27,488.72 was recovered from the handling and transport bills of the respondent. The balance amount of Rs.3,38,229.43 was due from the respondent. There were subsequent contracts between the appellant and the respondent. When attempt was made to deduct the demurrage charges from the current bills payable to the respondent, he filed an Original Petition before the High Court, which was dismissed by the High Court. Though the respondent filed a Writ Appeal, that was also dismissed. The Special Leave Petition filed by the respondent challenging the judgment in the Writ Appeal was also dismissed by the Honourable Supreme Court. After the dismissal of the Original Petition, the Corporation appropriated the security deposit of Rs.1,50,000/- lying with the Corporation. The balance amount of Rs.1,88,229.43 was claimed by the Corporation from the respondent by filing O.S.No.102 of 1991.
3. The respondent herein instituted O.S.No.51 of 1992 for realisation of the security amount of Rs.1,50,000/- from the Corporation. The sum of Rs.1,50,000/- is in respect of the three contracts at the rate of Rs.50,000/- each.
A.S. NOS.299 AND 343 OF 1995 :: 3 ::
4. The court below by the judgment and decree dated 6.3.1995, dismissed O.S.No.102 of 1991 filed by the Corporation and decreed O.S.No.51 of 1992 filed by the respondent.
5. Learned counsel appearing on either side submitted that the only point to be considered in these appeals is whether the claim put forward by the Corporation is barred by limitation. Issue No.3 raised in O.S.No.102 of 1991 in this regard was decided by the trial court against the Corporation. At present, the challenge in these appeals is regarding the correctness or otherwise of the decision of the trial court on issue No.3 in O.S.No.102 of 1991. As regards the decree granted in O.S.No.51 of 1992 filed by the respondent, the court below held that the suit is not barred by limitation. That is also under challenge in A.S.No.299 of 1995 filed by the Corporation.
6. The period of the contract in respect of which the suit was filed by the Corporation was from 7.6.1982 to 6.6.1984. The suit was filed on 24.10.1991. The period of limitation is three years from the date on which the cause of action arose. According to the Corporation, the suit is not barred by limitation, since O.P.No.3066 of 1985, W.A.No.909 of 1990 and S.L.P.No.4565 of 1991 filed by the respondent were pending. The A.S. NOS.299 AND 343 OF 1995 :: 4 ::
SLP was disposed of on 21.1.1991. The contention of the Corporation is that if the period of pendency of the Original Petition, Writ Appeal and SLP is excluded, the suit would not be barred by limitation. The Corporation contended that Sections 14 and 15 of the Limitation Act would apply in the case.
7. As regards the availability of Section 15 of the Limitation Act in favour of the Corporation, the court below held that there was no stay or injunction against the institution of any suit and, therefore, the Corporation is not entitled to get the period stated above excluded by invoking Section 15 of the Limitation Act. Section 15 (1) of the Limitation Act provides that in computing the period of limitation of any suit or application for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of the continuance of the injunction or order, the day on which it was issued or made, and the day on which it was withdrawn, shall be excluded. In the Original Petition filed by the respondent, Exts.A3, A4 and A5 stay orders were issued. The stay was against the action on the part of the Corporation to deduct the demurrage charges for the period 1982-84 from out of the current bills payable to the respondent. There was no stay or injunction against the institution of the suit. The stay granted against collection of demurrage charges from the current bills payable to the respondent in respect of the A.S. NOS.299 AND 343 OF 1995 :: 5 ::
subsequent contracts cannot be termed as a stay or injunction against the institution of any suit. There was no bar for the Corporation to institute a suit against the respondent for realisation of demurrage charges. To attract Section 15 (1) of the Limitation Act and to claim exclusion of any period thereunder, there should be an injunction or order staying the institution of the suit. The object of sub section (1) of Section 15 is to safeguard the interests of the person who was precluded from exercising his civil right to institute a suit, by an order or injunction passed by the court. In Siraj-ul-Haq Khan and others V. The Sunni Central Board of Waqf U.P. and others: A.I.R. 1959 S.C. 198, it was held thus:
"It is plain that, for excluding the time under this section, it must be shown that the institution of the suit in question had been stayed by an injunction or order; in other words, the section requires an order or an injunction which stays the institution of the suit. And so in cases falling under S. 15, the party instituting the suit would by such institution be in contempt of court. If an express order or injunction is produced by a party that clearly meets the requirements of S. 15. Whether the requirements of S.15 would be satisfied by the production of an order or injunction which by necessary implication stays the institution of the suit is open to argument. We are, however, prepared to assume in the present case that S.15 would apply even to cases where the institution of a suit is stayed by necessary implication of the order passed or injunction issued in the previous litigation. But, in our opinion, there would no justification for extending the application of S.15 on the ground the institution of the subsequent suit would be inconsistent with the spirit or substance of the order passed in the previous litigation. It is true that rules of limitation are to some extent arbitrary and may frequently lead to hardship; but there can be no doubt that, in construing provisions of limitation, equitable A.S. NOS.299 AND 343 OF 1995 :: 6 ::
considerations are immaterial and irrelevant, and in applying them effect must be given to the strict grammatical meaning of the words used by them: Nagendra Nath Dey V. Suresh Chandra Dey: 34 Bomb LR 1065; (AIR s1932 PC 165)."
In the present case, the right, if any, of the Corporation to adjust/deduct the demurrage charges from the current bills alone was affected by the stay order in the Writ Petition. The right to institute a suit claiming demurrage charges was not affected by the stay order. In the facts and circumstances of the case, we hold that the Corporation is not entitled to the benefit of Section 15 (1) of the Limitation Act.
8. We shall now consider the question whether the appellant is entitled to get the benefit of Section 14 of the Limitation Act. The High Court dismissed the Original Petition filed by the respondent holding that the dispute between the parties as to the rights and liabilities arising out the terms of the contract could not be adjudicated upon in the Original Petition and the remedy of the respondent was to institute a regular suit.
The appellant Corporation relies on clause (b) of the Explanation to Section 14 to claim exclusion of the period during which the Original Petition and the Appeals therefrom were pending. Section 14 (1) and Explanation (b) are extracted below for easy reference:
"14. Exclusion of time of proceeding bona fide in court without jurisdiction: In computing the period of limitation for A.S. NOS.299 AND 343 OF 1995 :: 7 ::
any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.
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Explanation: - For the purpose of this section,-
(a) -------
(b) a plaintiff or an applicant resisting an appeal shall
be deemed to be prosecuting a proceeding;
(c) -----"
9. The purpose of Section 14 of the Limitation Act is to afford protection to a litigant against the bar of limitation when a civil proceeding prosecuted by him could not be decided on the merits because of the defect of jurisdiction or other cause of a like nature. Section 14 is founded on the principles of justice, equity and good conscience. Section 14 shall be interpreted liberally, however, with due regard to the express words in the Section. To invoke Section 14, it is not necessary that the plaintiff was prosecuting the previous proceeding as a plaintiff. A defendant in the previous proceeding is also entitled to exclusion of the period, provided the other ingredients of the Section are satisfied. In order to invoke Section 14 (1), the earlier proceeding and the later proceeding must relate to the same matter in issue. The interpretation of the expression "matter in issue" occurring in Sections 10 and 11 of the Code of Civil Procedure A.S. NOS.299 AND 343 OF 1995 :: 8 ::
can be adopted while interpreting the expression "same matter in issue" in Section 14 of the Limitation Act. Whether the cause of action in the earlier proceeding and the subsequent proceeding is the same, would be an aid in deciding whether Section 14 can be applied in a particular case. The reliefs claimed in the two proceedings may not always be decisive while considering the applicability of Section 14 of the Limitation Act.
10. The expressions "other cause of a like nature" and "unable to entertain it" occurring in Section 14 of the Limitation Act were interpreted in Zafar Khan V. Board of Revenue, U.P.:AIR 1985 S.C. 39 and Thankamma V. Bharathi Pillai: 1993 (2) KLT 467. The Supreme Court in Zafar Khan's case held thus:
"It is true that where the expression as a whole reads `from defect of jurisdiction or other cause of a like nature is unable to entertain it', the expression `cause of a like nature' will have to be read ejusdem generis with the expression `defect of jurisdiction'. So construed the expression `other cause of a like nature' must be so interpreted as to convey something analogous to the preceding words `from defect of jurisdiction.' The defect of jurisdiction goes to the root of the matter as the Court is incompetent to entertain the proceeding. The proceeding may as well fail for some other defect. Not all such defects can be said to be analogous to defect of jurisdiction. Therefore the expression `other cause of a like nature' on which some light is shed by Explanation
(c) to Sec. 14 which provides "misjoinder of parties or causes of action shall be deemed to be a cause of like nature with defect of jurisdiction", must take its colour and content from the just preceding expression, `defect of jurisdiction'. Prima facie it appears that there must be some preliminary objection which if it succeeds, the Court would A.S. NOS.299 AND 343 OF 1995 :: 9 ::
be incompetent to entertain the proceeding on merits, such defect could be said to be of the like nature as defect of jurisdiction. Conversely if the party seeking benefit of the provision of Sec. 14 failed to get the relief in earlier proceeding not with regard to anything connected with the jurisdiction of the Court or some other defect of a like nature, it would not be entitled to the benefit of Sec. 14. Where, therefore, the party failed in the earlier proceeding on merits and not on defect of jurisdiction or other cause of a like nature, it would not be entitled to the benefit of Sec. 14 of the Limitation Act. See India Electric Works Ltd. V. James Mantosh(1971) 2 SCR 397: (AIR 1971 S.C. 2313)."
11. In Thankamma V. Bharathi Pillai: 1993 (2) KLT 467, it was held:
"The phrase "other cause of a like nature", though to be construed liberally has to be read ejusdem generis with "defect of jurisdiction". The phrase "unable to entertain"
occurring in this clause has also been the subject of consideration and it has been held that it signifies inability of the court to give trial at all either for defect of jurisdiction or for some other equally valid reason....................... What is required for the purpose of S. 14 (1) is a defect of jurisdiction or other similar cause which renders the court unable to entertain the suit and to proceed to trial. A mere inability to grant the relief claimed in a particular suit because it is not grantable, or because a suit of that nature is not maintainable, though the suit is within the jurisdiction of the court is not a case which falls under S. 14 (1)."
12. The question whether the time during which a person was prosecuting a Writ Petition under Article 226 of the Constitution of India could be excluded under Section 14 of the Limitation Act was considered by the Division Bench in Nachimuthu Gounder V. State of Kerala: 1980 K.L.T. Short Note 21 Case No. 53 and it was held thus:
A.S. NOS.299 AND 343 OF 1995 :: 10 ::
"It is true that there are decisions which say that in appropriate cases a suitor is entitled under Section 14 of the Limitation Act to exclusion of the period when he pursued unsuccessfully the remedy under Art. 226 of the Constitution."
In P.Sarathy V. State Bank of India: (2000) 5 SCC 355, the Supreme Court held thus:
"It will be noticed that Section 14 of the Limitation Act does not speak of a "civil court" but speaks only of a "court".
It is not necessary that the court spoken of in Section 14 should be a "civil court". Any authority or tribunal having the trappings of a court would be a "court" within the meaning of this section."
13. The contention raised by the respondent in the Writ Petition was that the Corporation was not entitled to deduct the demurrage charges from the current bills. That is not the issue involved in the suit filed by the Corporation. The issue involved in the suit is whether the Corporation is entitled to any demurrage charges from the respondent. The matter in issue in the suit is different from that involved in the Writ Petition. Even if the Writ Petition was allowed, that would not have affected the right of the Corporation to institute a suit and claim demurrage charges. In spite of the pendency of the Writ Petition, the Corporation could have instituted the suit. It cannot also be held that the Writ Petition was dismissed on account of any defect of jurisdiction or any other cause of a like nature. We are of the view that in computing the A.S. NOS.299 AND 343 OF 1995 :: 11 ::
period of limitation for the present suit, the Corporation is not entitled to get exclusion of the period during which the Original Petition, Writ Appeal and the Special Leave Petition were pending. The finding of the court below that the suit filed by the Corporation is barred by limitation, in our view, is correct.
14. The Corporation has raised a contention that the suit filed by the respondent as O.S.No.51 of 1992 is barred by limitation. The suit was filed for realisation of the security deposit of Rs.50,000/- each in respect of the three contracts for the period from 7.6.1982 to 6.6.1984, 1.8.1984 to 31.7.1986 and 1.8.1986 to 31.8.1988. The court below held that the claim of the respondent is not barred since the Corporation issued notice on 5.6.1991 seeking to set off the security deposit of Rs.1,50,000/- against the amount payable to the respondent. The court below also referred to clause XXII (A) which provides for the securities as continuing securities for the payment of any sum of money arising out of or under any other contract between the contractor and the Corporation. Invoking this clause, the Corporation had issued notice on 5.6.1991 for setting off the entire security deposit of Rs.1,50,000/- against the amounts due to the respondent. It was also found that, according to the terms and conditions of the contract, the Corporation is entitled to retain the security deposit for setting off against any claim of the Corporation for payment of any sum of A.S. NOS.299 AND 343 OF 1995 :: 12 ::
money arising out of or under any other contract made by the contractors with the Corporation. The court below held that the cause of action in O.S.No.51 of 1992 therefore should be taken to have arisen on 5.6.1991, the date on which the Corporation issued notice. It was held that the suit having been filed within three years from that date, it was not barred by limitation. After having heard the learned counsel for the appellant at length, we hence find that the court below has not committed any error in holding that the suit filed by the respondent is not barred by limitation.
For the aforesaid reasons, the appeals are liable to be dismissed and we do so. However, there will be no order as to costs.
(KURIAN JOSEPH) Judge (K.T.SANKARAN) Judge ahz/ KURIAN JOSEPH & K.T.SANKARAN, JJ.
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