Madras High Court
City Municipal Corporation Of Chennai vs M/S.Heritage Creations on 24 August, 2012
Author: P.R.Shivakumar
Bench: P.R.Shivakumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 24.08.2012 CORAM THE HONOURABLE MR. JUSTICE P.R.SHIVAKUMAR C.S.No.955 of 2003 City Municipal Corporation of Chennai Represented by its Commissioner 'Ripon Building' Chennai 600 003 ...Plaintiff Vs. M/s.Heritage Creations Represented by its Proprietrix Ms.Bina J. Mehta No.6, College Road Chennai 600 006 ... Defendant Plaint filed under Order IV Rule 1 of O.S.Rules r/w Order VII Rule 1 of CPC a) to direct the defendant to pay a sum of Rs.1,02,90,626/- together with further interest at the rate of 24% p.a compounded monthly; b) to direct the defendant to pay the costs of the suit to the plaintiff and c) to grant such other further or other reliefs in favour of the plaintiff as this Court deems fit in the circumstances of the case. For Plaintiff : Mr.G.T.Subramaniam For Defendant : Mr.S.Thiruvengadam ------- JUDGMENT
The civil suit has been filed under Order IV Rule 1 of O.S.Rules r/w Order VII Rule 1 of CPC for recovery of money, cost of the suit and for other reliefs as this Hon'ble may deem fit and proper in the circumstances of the case. The averments found in the plaint, in brief, are as follows:
For the grant of licence (right) to display advertisement over lamp posts in 10 important roads in the city of Chennai for the years 1996 1999 auction-cum-tender procedure was followed and the defendant emerged as the successful bidder having offered the highest rate for the grant of the said right. The said offer made by the defendant was accepted and placed before the Council which passed a resolution on 03.10.1996 in Resolution No.2386/96 allotting 2462 lamp poles for displaying advertisement boards for a period of three years. The resolution and the award of contract was communicated to the defendant by a letter dated 09.10.1996 and the defendant was asked to remit Rs.75,13,885/- being the entire licence fee for the first year. In the same letter, the defendant was asked to sign an agreement with the plaintiff Corporation. However, by a letter dated 22.10.1996, the defendant raised a doubt about the actual number of poles available in some of the roads and contended that the actual poles available were only 1757 as against 2462 poles as per the notice calling tender. As such, the defendant tentatively paid Rs.52,21,455/- towards the first year licence fee and agreed to make the payment of the balance money after ascertaining the correct number of poles actually available for allotment. As a result of the same, the plaintiff solicited the assistance of Superintending Engineer (Electrical) to furnish the exact number of poles situated on the roads/streets allotted to the defendants. Based on a verification made by both the Revenue and Electrical Departments of the Corporation in the presence of a representative of the defendant, by a letter dated 24.12.1996, the plaintiff informed the defendant that the actual number of poles situated on the roads allotted to the defendant was 2471 and the licence fee payable by the defendant was worked out to Rs.73, 52, 260/-. As such, payment of balance sum of Rs.21,30,805/- was demanded from the defendant within three days from the receipt of the said letter dated 24.12.1996. Despite the fact that verification of the poles were jointly made by the plaintiff and the defendant's representative, the defendant wanted to give up the poles situated on the V.O.C Salai and by a letter dated 09.01.1997 and also contended that less number of poles were available on the other roads/streets. The defendant claimed that a sum of Rs.56,87,300/- alone was payable for the first year of the said contract. The said claim was rejected by the plaintiff and the plaintiff's demand was reiterated by a letter dated 06.02.1996. Subsequently, by a letter dated 03.03.1997, the plaintiff demanded the defendant to enter into a formal agreement and such an agreement was executed between the plaintiff and the defendant on 14.03.1997.
(iii) In accordance with Clause III of the agreement, one month prior to the end of the first year, namely on or before 02.09.1997, payment of the licence fee of Rs.71,49,460/- for the second year of the contract was to be made. The defendant did not pay the second year's licence fee in spite of several demands made by the plaintiff. The same made the plaintiff to make a demand for payment of the said amount together with interest at the rate of 24% per annum for the unpaid amount as per Clause IV(2) of the agreement. Instead of making payment of the amount demanded by the plaintiff, the defendant chose to send a letter to the plaintiff which was received by the plaintiff on 10.11.1998, wherein the defendant had claimed that no advertisement could be made using 124 lamp poles on Lattice Bridge Road due to political intervention and requested for limiting the contract on the Poonamallee High Road from Fort Station to Pachaiyappa's College instead of the entire stretch of Poonamallee High Road. She had also claimed deduction in respect of the poles situated on the Mount Road. In all, the defendant wanted a deduction of 514 poles. The details are as follows:
Deduction claimed in respect of Lattice Bridge Road 124 Deduction claimed in respect of Mount Road - 230 Deduction in respect of Poonamalee High Road - 160
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(iv) Not conceding the request made by the defendant, the plaintiff issued a letter dated 26.11.1998 advising the defendant to make payment of the amount due on the contract for the 2nd and 3rd years with an interest at the rate of 24% for the defaulted period. However, in the same letter defendant was informed that the defendant's request for deduction in the poles was under the plaintiff's consideration. After making due enquiry and consultation with the Superintending Engineer (Electrical), the exact amount for the lamp poles allotted to the defendant was fixed and the same was informed to the defendant by letter dated 26.11.1999. As per the same, the contract amount for the defendant's right to advertisement over the lamp poles was fixed at Rs.58,13,200/- per year and the total amount payable by the defendant for all the three years was Rs.1,74,39,600/-. Since the defendant had paid so far Rs.1,35,19,500/- alone, payment of a sum of Rs.39,20,100/- was demanded by a letter dated 30.06.1999. The defendant was not fully satisfied with the deductions in the number of poles and was again making request for deductions of more number of poles. However, on 12.07.1999, the defendant paid another sum of Rs.1,00,000/- towards the amount due. The request made by the defendant by her letter dated 09.01.1997 stating the number of poles available on the Lattice Bridge Road, Anna Nagar II Avenue and Cathedral Road to be 124, 84 and 68 respectively was declined by the plaintiff.
(v) For the demands made for deduction of number of poles even against the admitted existence of the number of poles, the defendant was informed that such request would not be entertained and the defendant was informed that the licence fee paid after due date in each year would attract an interest of 24% p.a. While so, on 12.08.1999, the defendant again sent a letter raising untenable contentions which were rejected by a letter of the plaintiff dated 06.09.1999 and a demand for payment of the licence fee together with interest and advertisement tax leviable as per Section 129-A and 129-B of Madras City Municipal Corporation Act, 1919 was made. Though the receipt of the letter was acknowledged by the defendant by her letter dated 15.09.1999, she reiterated her claim for deductions which stood already rejected. Thereafter, the matters of collection of advertisement tax and cancellation of licence fee for the second and third year for the lamp posts on the Lattice Bridge Road were placed before the Corporation Council and the defendant was also asked to make payment of the balance licence fee and the interest on the belated payment. Accepting the same, defendant paid a sum of Rs.5,68,095/- on 27.10.1999. Subsequently, the plaintiff made a demand of Rs.28,83,263/- after deducting the above said payment made on 27.10.1999 and in the same letter the defendant was informed that in the event of the Council refusing to cancel the advertisement tax and to reduce the number of poles in respect of the Lattice Bridge Road, the defendant should pay the tax and the licence fee with interest. The defendant, by a letter dated 01.11.1999, attempted to clarify the payment made on 27.10.1999 which was suitably replied by a letter dated 15.11.1999 in which the defendant was informed that the amount of Rs.28,15,168/- claimed by the plaintiff in its letter dated 29.10.1999 was correct. Again on 07.01.2000, defendant was informed of the fact that the total outstanding amount was Rs.50,88,426/-. The demand was again repeated on 28.02.2000. However, the defendant chose to make a payment of Rs.5,00,000/- alone on 12.05.2000. By such payment, the defendant acknowledged her liability to pay the suit amount and also informed the plaintiff by a letter dated 15.05.2001 that the Proprietrix had gone to Mumbai and assured that on her return needful would be done. Subsequently, the Council rejected the claims made by the defendant and the same was intimated to the defendant by a letter of the plaintiff on 01.08.2001 informing the defendant that a balance sum of Rs.48,83,437/- was due. Despite several demands, the defendant did not come forward to make payment. As such, on 11.04.2002, a demand for a sum of Rs.50,99,204 was made finally. The defendant, upto the date of filing of the suit, had defaulted to pay a sum of Rs.33,35,585/- towards balance licence fee amd interest for the belated payment of licence fee and Rs.51,74,955/- towards the tax on advertisement together with interest on the same. The total liability of the defendant towards the plaintiff as on 27.09.2002 was Rs.85,10,540/-. If the subsequent interest up to the date of plaint is also added, the total amount due from the defendant would come to Rs.1,02,90,626/- together with further interest at the rate of 24% p.a compounded on monthly basis. The defendant is also liable to pay cost of the suit to the plaintiff.
2. The suit was resisted by the defendant by filing a written statement containing the following averments:
i) The suit claim is not based on correct particulars besides the claim being barred by limitation. If the claim is considered on the basis of the contract, since the suit has been filed after the expiry of three years from the date of contract, the suit is to be construed as one barred by limitation. No tax is leviable in the case of direct contract with the Corporation and it is leviable only from those who advertise independently. Since the suit claim includes alleged tax also, the suit is liable to be dismissed.
ii) So far as the contractual amount is concerned, entire amount due to the plaintiff Corporation had been paid and no amount is due from the defendant to the plaintiff. No interest can be claimed after the expiry of the contractual period. Even if it is assumed that any amount was due at any point of time, interest cannot be claimed at a rate more than 6% p.a. In pursuance of resolution No.2386 dated 03.10.1996 of the Corporation Council, the contract was awarded to the defendant on 14.10.1996 for 2462 poles in 10 specified roads/streets and the consideration as per the contract was Rs.75 Lakhs. After the contract was awarded in favour of the defendant, she sent a letter enclosing a cheque dated 17.10.1996 drawn for a sum of Rs.25 lakhs and sought three months time to pay the balance. The plaintiff did not accept the same and returned the same to the defendant. Subsequently, on 22.10.1996, defendant wrote a letter to the plaintiff pointing out the discrepancy in the total number of poles specified in the contract and the actual poles available according to the plaintiff was only 1757 as against 2462. Based on the said calculation, a sum of Rs.52,21,455/- was sent under a cheque dated 17.10.1996. A request for joint verification of the number of poles was also made. Since the cheque was accepted, the correctness of the number of poles available was taken as accepted to be correct by the plaintiff and the defendant sent a contract in triplicate on 18.11.1996. But the same was not signed by the plaintiff. However, the plaintiff after accepting the cheque, sent a communication dated 29.11.1996 demanding Rs.75 lakhs and at the same time acknowledging the receipt of the letters of the defendant dated 22.10.1996 and 18.11.1996. Subsequently, on 24.12.1996 the Chennai City Municipal Corporation sent a letter indicating the actual number of poles available to be 2471 and demanded a sum of Rs.73,52,260/- as licence fee for the first year.
iii) On 08.01.1997, the defendant wrote a letter to the plaintiff informing that 160 poles were removed by the Electrical Department from G.S.T Road. On 09.01.1997, the defendant wrote another letter pointing out that the road limit for Mount Road within the contract limit of the defendant was upto Kathipara Junction from Wallajah Bridge and they have permitted ABDU Publicity, a G.S.T.Road Contractor to put up advertisement from Guindy Station to Kathipara Junction, resulting in reduction of poles available to the defendant. On the same day (09.01.1997), another letter was sent by the defendant stating that there was joint verification, according to which, the actual number of poles differed. The defendant gave statement of number of poles opted on various roads and specified the figure Rs.56,87,300/- as the total amount payable under the contract and referring to the earlier payment made on 22.10.1996, the denfendant sent a cheque dated 09.01.1997 for the balance amount of Rs.3,85,845/- on 04.02.1997. In that letter itself, the defendant had informed that out of 972 poles only 924 poles were available since they had changed the jurisdiction and that 14 other poles were occupied by ABDU publicities resulting in availability of only 910 poles. Though the defendant had been paying for 988 poles, defendant did not receive a positive response and the defendant under protest sent a further sum of Rs.14,12,200/- by a cheque dated 10.02.1997 after deducting the amount for VOC Salai, for which the contract was not taken by the defendant. The defendant had also demanded for the refund of the EMD of Rs.80,000/- and requested the plaintiff to send the contract forwarded by the defendant on 18.11.1996 duly signed. Again on 17.03.1997, the defendant submitted a revised contract requesting the plaintiff to fix the date of commencement of contract as 01.04.1997 since considerable time was lost in the correspondence, but nothing fruitful was done by the plaintiff. On 17.06.1997 and on 24.06.1997, Mayor of the Corporation was addressed pointing out the fact that Traffic signs were permitted to be put right at the centre of two poles and thereby loss was caused to the defendant in respect of their sign boards. By a letter dated 26.07.1997, the Assistant Engineer was directed to return the removed poles but the same was not complied with. Again on 28.10.1997, the defendant reported about the nuisance and hindrance caused by Cloth Banner resulting in loss to the defendant. The same was also not taken care of. On the other hand, on 12.11.1997, the plaintiff demanded a sum of Rs.71,49,460/- for 2423 poles claiming interest at the rate of 24% if the amount was not paid. On 20.11.1997, the defendant wrote to the plaintiff stating that the defendant was not allowed to fix the board on the L.B.Road, Adyar by the local councilor. He had also requested for the commencement of the contract from the date of display. On 25.11.1997, the defendant again wrote to the plaintiff informing that the contracts were received only on 06.06.1997, that the defendant was still not able to display his advertisement boards in L.B.Road, for which there was no reply. On the other hand, again a reminder was sent by the plaintiff on 29.11.1997 demanding a payment of a sum of Rs.71,49,460/-. On 05.01.1998, the defendant wrote to the Superintending Engineer about the removal of L & T and Fuji Film poles in front of the Corporation building. He had also complained about the Corporation being careless on repainting of poles thereby causing damage to the commercial displays made by the defendant. Again on 17.02.1998, the defendant was forced to give a complaint to the police for the removal of unauthorized frames. On 19.02.1998, the defendant wrote a letter to the Commissioner of the Corporation about various problems including the one referred to above and demanded compensation for the same.
iv) On 09.09.1998, the defendant wrote a letter to the Chairman of the Standing Committee for Taxation and Finance stating that the contract papers were submitted only on 17.03.1997 and it had not been executed till 06.06.1997 and praying that the contract should be held to have been commenced only on 01.07.1997. On 11.09.1998, the plaintiff demanded Rs.26,49,460/- as the balance amount due. On 09.10.1998, again a demand was made for payment of Rs.97,98,920/- within 7 days informing that in case it was not paid within 7 days, interest at the rate of 24% p.a would be collected.
v) On 11.11.1998, the defendant addressed a letter to the Assistant Revenue Officer to sort out the issues and also enclosed 2 cheques of Rs.5 lakhs each and thus, made payment of a sum of Rs.10 lakhs under protest towards second year licence fee. Without complying with the demands made by the defendant, the plaintiff was making demand for the payment of 2nd and 3rd year. Subsequently, by a letter dated 30.06.1999, the plaintiff referred to 1904 poles in 9 roads as the poles available after inspection and specified a sum of Rs.58,13,200/- as the licence fee and calculated the licence fee for three years at Rs.1,74,39,600/-. A total sum of Rs.1,30,19,500/- had been paid and a further sum of Rs.5,00,000/- was paid on 06.05.1999. After deducting the same, a demand was made for a sum of Rs.39,20,100/- as the balance amount due, informing the defendant that the said amount should be paid within 7 days, failing which it would attract interest at the rate of 24% p.a. A threat was also made to remove the boards in case of default.
vi) Questioning the correctness of the calculations and pointing out that an EMD of Rs.1,25,000/- paid by the defendant had to be adjusted, the defendant sent two cheques for Rs.5 lakhs each. A reply was received from the plaintiff on 21.07.1999 stating that the defendant's contentions in the letter dated 12.07.1999 was not correct and demanding payment of the balance amount as per their earlier demand. Again on 12.08.1999, the defendant replied questioning the correctness of calculation of poles and demanding adjustment towards non-existing and non-displayed poles. However, on 06.09.1999, to the shock and surprise of the defendant, the plaintiff sent a letter demanding the balance amount of licence fee and interest on the amount due calculating it as Rs.35,59,172/-. Again, the plaintiff calculated a sum of Rs.23,30,496/- at the rate of Rs.3/- per pole for total number of 1904 poles as advertisement tax and clubbing it with the alleged amount due under the contract, the defendant was demanded to pay a sum of Rs.58,89,668/- by a letter dated 06.09.1999. Defendant wrote a reply on 15.09.1999 requesting for the redressal of the grievance of the defendant regarding the defects in the number of poles in L.B.Road and that the balance would be paid only after the problems were sorted out by the plaintiff. Plaintiff sent a reply dated 26.10.1999 stating that the collection of advertisement tax in respect of boards displayed on lamp posts during the contract period, in addition to the licence fee, was to be placed before the council for decision along with the defendants' plea for cancellation of licence fee for lamp posts in L.B Road for 2nd and 3rd years.
vii) On 27.10.1999, the defendant wrote a letter to the plaintiff stating that the plaintiff owed a duty to sort out the problems and extend all helps to the defendant to put up the advertisement boards without hindrance. The same was informed by the defendant by a letter dated 15.09.1999. However, the plaintiff sent a reply on 26.10.1999 stating that the collection of advertisement tax in respect of boards displayed on lamp posts during the contract period in addition to the licence fee, was to be placed before the council for decision along with the defendants' plea for cancellation of licence fee for lamp posts in L.B. Road for 2nd and 3rd years. On 27.10.1999, the defendant wrote a letter expressing willingness to pay the balance licence fee after deducting proportionate amount for the L.B.Road and stating that the alleged advertisement tax could not be demanded. However, the defendant requested for not charging any interest and paid a sum of Rs.5,68,095/- under a cheque dated 27.10.1999 towards the payment of balance of licence fee. The tender document contains no reference to advertisement tax, nor interest on belated payments. The actual contract was brought up only on 06.06.1997, the date on which the contract was signed and the same lapsed 8 months prior to the expiry of three years from 06.06.1997. Stating all these facts, the defendant sent a detailed worksheet and pointed out that the actual amount due was only Rs.5,68,095/- if deductions for the L.B.Road, Cathedral Road and Anna Nagar and EMD of Rs.80,000/- were made. On 10.01.2000, the plaintiff sent a statement to the effect that a sum of Rs.8,22,005/- was due as licence fee and a sum of Rs.23,26,683/- was due as advertisement tax and a sum of Rs.19,39,738/- was due towards interest and thus, the total amount due was shown to be Rs.50,88,426/- as on 28.02.2000. The defendant, by a letter dated 17.10.2000, referring to the actual number of poles used for advertising, informed the plaintiff that a sum of Rs.14,20,100/- was paid in excess of the amount actually due. In spite of the said explanations, the plaintiff sent a letter on 03.05.2001 contending that the total amount due including advertisement tax was Rs.47,20,165/-. Since the defendant was away from Chennai, the clerk wrote a letter informing the absence of the defendant and stating that the defendant would do the needful after her return. The same will not amount to acknowledgment of debt. It was merely an information about the absence of the defendant and not an assurance that the demand would be met on her return. Again on 01.08.2001, the plaintiff wrote a letter to the defendant informing that the Corporation Council did not accept waiver of interest and demanded payment of Rs.48,83,437/- towards interest and advertisement tax. Under the contract licence fee alone is payable and there is no contract regarding payment of interest. Even assuming that any interest would be claimed for belated payments, it cannot be claimed more than 6% p.a. Eache year's licence fee fall due on different dates. Therefore, all the three years licence fee could not be clubbed in one suit. The claim in respect of earlier years would have barred by limitation. Furthermore, no tax is due and even assuming that any tax is due, the same is a separate claim and the same cannot be made along with the claim of licence fee with interest as it is not part of the contract. Even the demand regarding the payment of tax is barred by limitation, since the suit has been laid more than 3 years after the payment of tax for the periods fallen due. The actual poles admitted by the plaintiff in the correspondence at the end of the contract period was only 1767 and not 2462 as alleged by the plaintiff. Defendant suffered a loss due to the plaintiff's inability to provide the actual number of poles as per the contract. The claim made by the plaintiff for Rs.21,30,805/- as balance of licence fee is wrong and unsustainable.
viii) Defendant suffered a loss and damage to the tune of Rs.30 lakhs because of the agony and tension caused by the wrong claims by the plaintiff, besides the fact that she was made to pay various amounts in excess of the amount due to the plaintiff. Without resolving the dispute, the plaintiff merely sent a letter on 09.10.1998 followed by a letter dated 28.11.1998 claiming alleged arrears of licence fee for the second year of the contract and the amount due as licence fee for the third year contract. Plaintiff did not give credit to the excess amount paid by the defendant. Only at the end of the contract period correct number of poles were identified and calculations were made. As there was a dispute with regard to the number of poles and the amount payable and the same remained unresolved till the end of the contract period, there could not be any demand for interest. The demands made by the defendant which were reasonable were unreasonably rejected by the plaintiff. Only after a lapse of three years, for the first time the plaintiff started demanding advertisement tax. Claiming advertisement tax after the expiry of three years from the end of each half year is not valid and the same is barred by limitation. The payment of Rs.5,68,095/- was made towards the final dues payable towards the licence fee. The same cannot be construed as an admission that any balance amount was due. The payment of Rs.5 lakhs made on 12.05.2000 under protest, in view of the persistent demands made by the plaintiff, cannot be cited as an acknowledgment of liability. Similarly, the letter written by the clerk, informing the plaintiff the absence of the defendant and that needful would be done by her on her return from Mumbai, would not amount to acknowledgment of debt. Only in order to show that the claim is not time barred, such a wrong statement was made by the plaintiff. The contract came to an end according to the plaintiff on 27.10.1999. The last payment under protest was made on 12.05.2000. The suit was filed after expiry of three years thereafter. The suit filed after the expiry of three years is barred by limitation. Cause of action alleged in the plaint is not correct. The licence fee cannot be clubbed with advertisement tax and interest cannot be claimed on the clubbed amount. For all the reasons stated above, the suit filed by the plaintiff should be viewed as a speculative one and the same should be dismissed with costs.
3.Based on the averments, following issues were framed:
1.Whether the plaintiff is entitled to a decree for Rs.1,02,90,626/- with compound interest at the rate of 24% p.a as prayed for?
2.Whether the suit is barred by limitation?
3.Whether the defendant has repaid Rs.10 lakhs under protest on 11.11.1998?
4.Whether the interest claimed is usurious?
5.Whether the defendant had paid Rs.14,20,100/- in excess to the amount due from him in respect of the purchase of 1957 poles?
6) Whether the defendant has repaid Rs.5,00,000/- under protest on 12.05.2000 as alleged in the written statement?
7)To what relief the plaintiff is entitled?
4. One witness was examined as PW-1 and 39 documents were marked as Exs.P1 to P39 on the side of the plaintiff. Only one witness was examined as DW-1 and no document was marked on the side of the defendant.
Issue No.2
5. The City Municipal Corporation of Chennai (formerly Corporation of Madras) has filed the present suit for recovery of money due to it under a contract by which the defendant was permitted to display advertisement boards on the lamp posts in the roads and streets regarding which award of contract was granted. For the grant of contract for the display of advertisement boards on the lamp posts situated in ten important roads in Chennai city for three years i.e. between 1996-1999, tender-cum-auction was conducted by the plaintiff, in which the defendant emerged as the highest bidder to get the grant of such contract. On 03.10.1996, a resolution was passed in the City Municipal Corporation Council as Resolution No.2386/96 for allotting 2462 lamp posts situated in ten important roads/streets to the defendant for displaying advertisement boards for a period of three years. The award of such contract came to be communicated to the defendant by the Assistant Commissioner (G.A. & P), Corporation of Chennai (formerly Corporation of Madras) by a letter dated 09.10.1996, an office copy of which has been marked as Ex.P1. By the said letter, the defendant was asked to pay the entire amount of licence fee for the first year in full within seven days from the date of receipt of the said letter. The letter also contained a request to the defendant to enter into an agreement with the Commissioner, Corporation of Madras for due performance of the contract. For the said letter, the defendant sent Ex.P2-reply dated 22.10.1996 enclosing a cheque for Rs.52,51,455/- as against the payment of Rs.75,13,885/- demanded under Ex.P1. In Ex.P1, existence of 2462 lamp posts were mentioned and the rates applicable to the lamp posts at various places had also been mentioned. The defendant chose to make payment of a lesser amount on the premise that the number of posts mentioned in Ex.P1 was not correct and that the defendant would make balance payment after a joint inspection and ascertainment of the correct number of posts available for advertisement. Calculation of figures arrived at by the defendant has been annexed to the said letter, which has been marked as Ex.P2.
6. It seems a note was put up by the Revenue Officer before the Superintending Engineer (Electrical), Corporation of Madras on 07.11.1996 admitting the fact that out of the ten roads allotted to the defendant, number of lamp posts available in 1) V.O.C.Salai, 2) Anna Nagar II Avenue, 3) Dr.Radhakrishnan Salai, 4) E.V.R.Salai, 5) Anna Salai and 6) Kamaraj Salai do not tally with the number of lamp posts furnished by the Corporation of Madras and that due to the difference in the number of lamp posts on the above said six roads, the defendant had withheld a sum of Rs.22,92,430/- from the contract amount. In the note, Revenue Officer had requested the Superintending Engineer (Electrical) to furnish the actual number of lamp posts available on the above said six roads, since the Corporation was charging the advertisement fee calculated for each lamp post per year. The said office note is Ex.P3. Based on the said office note, the Superintending Engineer (Electrical), along with the representative of the defendant, made a verification and submitted a note to the Revenue Officer mentioning the number of lamp posts available on five roads excepting Dr.Radhakrishnan Salai. The said office note is Ex.P4. The Commissioner, Corporation of Chennai (formerly Corporation of Madras) sent a communication to the defendant on 24.12.1996 giving a comparative table containing the number of lamp posts available for advertisement in those five roads, namely V.O.C.Salai, Anna Nagar II Avenue, E.V.R.Salai, Anna Salai and Kamaraj Salai. The original figure furnished by the Corporation was 2016, whereas the defendant had furnished a figure of 1319. However, the said letter marked as Ex.P5 stated that the number of posts found to be available on joint verification was more than the number of posts mentioned in the original acceptance letter. It was fixed at 2,025 as against 2,016, the original figure. However, revised demand was made fixing the total amount of the contract at Rs.73,52,260/-. Deducting the amount already paid demand for payment of Rs.21,30,805/- was made under Ex.P5. For the said demand, the defendant chose to issue a reply on 09.01.1997 giving the details of number of poles verified in the joint inspection and opting to take only a less number of poles for advertisement in E.V.R. Salai and Anna Salai. As against 545 lamp posts verified in the joint inspection in E.V.R.Salai, the defendant seems to have opted only for 160 poles on the premise that for the contractor for the previous period of three years, they had been displaying advertisement boards from Nurses' quarters signal/MMC grounds up to Pachiappa's college on the E.V.R. Salai and that the poles beyond Pachiappa's college had no advertisement value. Defendant declined to accept the contract for the poles on the E.V.R. Salai between Pachiappa's college and Koyambedu market. Similarly, as against 972 lamp poles verified in the joint inspection in Anna Salai, the defendant chose to opt only 822 poles stating that the side poles were also counted; that even out of the side poles, 170 were obstructed by compound walls, bus stops, trees and traffic signals and that those poles were totally unusable. So far as V.O.C. Salai is concerned, even though 171 poles were verified in the joint inspection, defendant declined to opt any one of the lamp poles on the said road. As per the option, the defendant came forward to pay a total sum of Rs.56,87,300/- as the contract amount for the first year. The said letter has been marked as Ex.P6.
7. The Revenue Officer, Corporation of Chennai (formerly Corporation of Madras) sent a reply on 06.02.1996 making a demand for payment of a sum of Rs.15,42,160/- as balance licence fee after deducting Rs.56,07,300/-, the admitted amount paid by the defendant. It has been stated in the said letter that the defendant had not paid the contract amount for 171 poles in V.O.C.Salai, 350 poles in E.V.R. Salai and 121 poles in Anna salai. The said letter has been marked as Ex.P7. A further communication was sent by the Revenue Officer, Corporation of Chennai (formerly Corporation of Madras) on 03.03.1997, marked as Ex.P8, to the defendant informing that the agreement form contains V.O.C. Salai, the offer regarding which was declined by the defendant. The defendant also contended that there was discrepancy in the number of lamp posts in other roads allotted to the defendant. In the same communication, the defendant was asked to mention the correct amount and correct tabulation regarding the number of poles and the amounts payable for them. Thereafter, ultimately the agreement came to be executed under Ex.P9 on 14.03.1997. It contains the names of the roads and the number of poles available on each road for advertisement and the total number of poles available for advertisement. As per the agreement, the following were the particulars of the poles claimed to be available for advertisement:
S.No. Name of the Road No. of Poles
1. Thyagaraya Road 91
2. II Avenue Anna Nagar 84
3. III Avenue Anna Nagar 63
4. Dr.Radhakrishnan Salai 100
5. Cathedral Road 68
6. E.V.R.Salai (Poonamalle High Road) 510
7. Anna Salai 924
8. L.B.Road 124
9. Kamaraj Salai (Beach Road) 288
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2,252
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Different rates were fixed for the poles situated in different roads and as such a sum of Rs.70,19,500/- was agreed as the amount payable for the first year. It was also agreed that the amount payable for the second and third years should be paid one month prior to the closure of the concerned previous years. The agreement also contains a clause for payment of interest at the rate of 24% per annum for belated payment. As per clause 1 in paragraph 4 of the agreement, the contract commenced from 28.10.1996 and the period of contract has been fixed as three years. It seems the contract period would have expired on 27.10.1999. However, on 02.09.1997, a demand notice was sent under Ex.P10 requiring the defendant to pay a sum of Rs.71,49,460/- within three days from the date of receipt of the said letter, towards the payment of the contract amount for the second year. Similar demand notices, namely Ex.P11 dated 08.10.1997, Ex.P12 dated 12.11.1997 and Ex.P13 dated 28.11.1997, demanding the defendant to pay the said amount with 24% interest per annum from the date of expiry of the first year of the contract were sent. Under Ex.P14-demand notice dated 27.10.1998, the defendant was called upon to make payment of the unpaid amount for the second year of the contract and also the amount for the third year of the contract with 24% interest from the date of default. The defendant issued a reply under Ex.P15, requesting for reduction of the number of poles for which the advertisement charge was to be paid by the defendant and the same was received in the office of the Corporation on 11.11.1998. In the letter dated nil marked as Ex.P16 received in the office of the Corporation of Chennai (formerly Corporation of Madras) on 11.11.1998, the defendant claimed reduction in the number of poles on Lattice Bridge Road on the premise that the defendant was not able to put up advertisement boards due to political intervention. Thereafter, the Additional Revenue Officer, Corporation of Madras sent a letter Ex.P17 to the defendant on 26.11.1998 demanding payment of the contract amount for the second and third years with interest. An assurance was also given that the defects pointed out by the defendant regarding certain lamp posts would be considered. It seems on 26.06.1999, the Commissioner of Corporation of Chennai (formerly Corporation of Madras), issued a fresh communication fixing the total number of posts available for the defendant to advertise and the roads for the same as given below:
Sl.No. Name of the Road No. of lamp posts after inspection Rate per lamp post Amount (Rs.) 1 Thyagaraya Nagar 91 960 87360 2 Anna Nagar II Avenue 84 2575 216300 3 Anna Nagar III Avenue 63 1910 120330 4 Dr.Radhakrishnan Salai 100 2160 216000 5 Cathedral Road 68 2160 146880 6 E.V.R. Road 350 2575 901250 7 Anna Salai 736 4225 3109600 8 Lattice Bridge Road 124 850 105400 9 Kamaraj Salai 288 3160 910080 Total 1904 5813200 As per the said communication, the total amount fixed for an year is Rs.58,13,200/-. For three years, the total amount comes to Rs.1,74,39,600/-. The amount paid up to that date was Rs.1,30,19,500/- and balance amount payable was Rs.44,20,100/-. Out of the same, defendant made payment of Rs.5,00,000/- on 06.05.1999. Deducting the said amount, a claim was made for payment of a sum of Rs.39,20,100/- directing the defendant to pay the said amount within 7 days from the date of demand for payment of the said amount with interest @ 24% per annum in case payment would be delayed beyond 7 days. Ex.P18 is the copy of the letter dated 30.06.2009. Ex.P19 is another copy of Ex.P18 which contains the signature of the defendant in token of having received the same. On receipt of the said demand notice, the defendant sent a letter under Ex.P20 enclosing two cheques each to the value of Rs.5,00,000/- (total Rs.10,00,000/-) and reiterating the earlier claims. It was also stated therein that the earnest money deposit worth Rs.1,25,000/- should be adjusted. The same was replied under Ex.P21 dated 21.07.1999 informing that the defendant had paid only Rs.80,000/- as earnest money deposit and that the said amount would be adjusted at the time of last payment and that no change in the number of posts or rates in the middle of the contract as claimed by the defendant could be made. Again the defendant sent a letter under Ex.P22 on 12.08.1999 making similar request for reduction of the number of poles. Again on 06.09.1999 an attempt was made on behalf of the plaintiff for payment of a sum of Rs.19,20,100/- as licence fee with interest for the said amount from the date of contract making a total amount of Rs.35,59,172/-. A sum of Rs.23,30,496/- was also claimed as advertisement tax calculated at the rate of Rs.3/- per sq.ft. for the boards displayed. The said communication has been marked as Ex.P23. Exs.P24 to P32 are similar communications by exchange of letters between the plaintiff and the defendant. Ex.P32 dated 12.05.2000 received in the office of the plaintiff on the same day is the last of the communications sent by the defendant. Under the said letter also a payment of Rs.5,00,000/- by way of cheque was made. Thereafter, there had been several demand notices sent by the plaintiff to the defendant, copies of which have been marked as Exs.P33 and P35 to P38. Apart from the reply of an employee of the defendant by a letter dated 15.05.2001 marked as Ex.P34, there is no other document to show any acknowledgment of liability on the part of the defendant subsequent to the payment made on 12.05.2000 under Ex.P32. The contract period as per Ex.P9 agreement was for three years from 28.10.1996, which would have expired by 27.10.1999. There are evidence to the effect that the defendant did not deny the jural relationship between the plaintiff and the defendant by virtue of Ex.P9-agreement. She was also claiming reduction of the licence fee on some pretext. The said request was not heeded to by the plaintiff corporation. As such, besides making repeated requests for reduction of licence fee and for adjustment of the earnest money deposit towards the licence fee, the defendant was making ad hoc payments till 12.05.2000 without making any reference to the period for which the amount was paid as licence fee. Hence all the payments made by the defendant could be taken as payments towards totality of the licence fee under Ex.P9-agreement. Admittedly, last payment made by the defendant was by way of cheque dated 12.05.2000 for a sum of Rs.5,00,000/- as evidenced by Ex.P32.
8. There can be no doubt that the payment made by way of cheque as evidenced by Ex.P32 would amount to an acknowledgment under section 19 of the Limitation Act, 1963 so as to make a fresh start of limitation. The suit being one for recovery of money based on contract and for recovery of statutory dues, namely advertisement tax, the admitted period of limitation is three years from the date of arisal of cause of action or from the date of acknowledgment, whichever is later. Of course, in the absence of any acknowledgment, the limitation would have expired on 27.10.2002 itself. The suit was filed on 23.08.2003. Therefore, in the absence of any acknowledgment, the suit would have been barred by limitation. But, admittedly there is an acknowledgment by the defendant by making part payment by way of a cheque, which is evidenced by Ex.P32. The date of such acknowledgment was 12.05.2000. Therefore, there cannot be any doubt over the position that the said acknowledgment gave a fresh start of limitation and the limitation for the suit started from 12.05.2000. It is the contention of the defendant that the last of the acknowledgments having been made on 12.05.2000, the suit ought to have been filed within three years thereafter and since the suit was filed beyond three years from 12.05.2000, the suit should be dismissed as one barred by law of limitation. The learned counsel for the plaintiff does not dispute the legal proposition that if Ex.P32 is taken to be the last acknowledgment, the suit would have barred by limitation. On the other hand, learned counsel for the plaintiff would submit that apart from the acknowledgment made under Ex.P32 on 12.05.2000, there was a letter dated 15.05.2001 sent by an employee of the defendant, which also would amount to an acknowledgment of liability and that the suit having been filed within three years from the said date cannot be said to be one barred by limitation. The crucial question that arises for consideration is "whether the said letter relied on by the plaintiff, which has been marked as Ex.P34 can be construed as an acknowledgment of liability to give a fresh start of limitation?".
9. The learned counsel for the defendant argued that by the said letter the employee of the defendant simply informed the Revenue Officer of the plaintiff corporation that the defendant, namely the proprietrix of Heritage Creations, had gone to Mumbai to attend the wedding of her sister and she was expected to come back within a fortnight and that soon after she would be back in the city of Chennai, they would do the needful. The learned counsel for the defendant would submit that it was only an intimation to the plaintiff that the defendant was not at station and on her arrival she would consider the demand made by the plaintiff and take a decision as to whether the demand was to be complied with or a suitable reply refuting the demand was to be made. According to the submissions of the learned counsel for the defendant, the said letter, by no stretch of imagination, could be construed to be an acknowledgment of liability to give a fresh start of limitation. In this regard, one Dayalan employed as Section Manager in the revenue department of the plaintiff corporation, while deposing as PW.1, based on the authorisation letter marked as Ex.P39, made certain admissions to the effect that though the licence was granted in October 1996 and the defendant paid only part of the licence fee for the first year, the plaintiff corporation did not take any action through court for the collection of the full licence fee for the first year; that the right to cancel the agreement for default in payment of licence fee was also not exercised by the plaintiff corporation; that the plaintiff corporation did not approach the court for the recovery of the unpaid licence fee for the second year also when default was committed by the defendant; that till 2000 there was no litigation started by the plaintiff for the collection of balance amount of licence fee and advertisement tax; that the earnest money deposit of Rs.80,000/- was adjusted in the last payment in 1999 itself; that the last payment of Rs.5,00,000/- made by the defendant towards old balance was on 12.05.2000 and that there was no payment from the defendant thereafter. It is also his admission that after 12.05.2000, there was no payment from the defendnat and there was no admission also. Therefore, even as per the evidence of PW.1, Ex.P34-letter cannot be construed to be an acknowledgment of liability under section 18 or 19 of the Limitation Act, 1963. The defendant, who appeared as sole witness on her side, has also taken a stand that there was no acknowledgment after 12.05.2000 and therefore the suit is barred by limitation.
10. In State of Kerala vs. T.M.Chacko reported in (2000) 9 Supreme Court Cases 722, the Hon'ble Supreme Court has held as follows:
" 10. It may be noted that for treating a writing signed by the party as an acknowledgement, the person acknowledging must be conscious of his liability and the commitment should be made towards that liability. It need not be specific but if necessary facts which constitute the liability are admitted an acknowledgement may be inferred from such an admission."
If the said ratio is applied to the case on hand and Ex.P34 is considered in the light of the said observation of the Hon'ble Supreme Court, it cannot be said that the said letter was written with consciousness of the defendant's liability to pay the licence fee or advertisement tax. The language used in the letter is such that it is not possible to infer an admission or acknowledgement of liability by virtue of Ex.P34. Suppose the letter was written by the defendant herself stating that she would do the needful after going through the accounts, then it may amount to an acknowledgement. On the other hand, as rightly contended by the learned counsel for the defendant, it is only an intimation sent by an employee of the defendant informing the officer of the plaintiff corporation that the defendant was not at station and as soon as she would be back to Chennai she would do the needful. The same cannot be construed to be an acknowledgement of liability. At the cost of repetition, it is also pointed out that PW.1 himself has admitted that there was no admission after the last acknowledgement made on 12.05.2000 under Ex.P32. A meek attempt was made on behalf of the plaintiff by putting it through the mouth of PW.1 and making him depose to the effect that plaintiff had maintained separate accounts for the defendant and on the basis of the account only the suit has been filed. This court is of the considered view that the plaintiff has miserably failed in the said attempt to show that the suit was filed based on account. Even if the suit is one filed based on account, since the liability arose for the period 1996 to 1999, unless acknowledgement by payment or any other mode has been made, the limitation as in normal suits will apply. In this case, as pointed out supra, the last acknowledgement was made on 12.05.2000. PW.1 was also specifically cross-examined by the counsel for the defendant regarding the said contention that the suit was filed based on the account. During such cross-examination, he admitted that apart from the licence or and licence agreement between the plaintiff and the defendant, there was no other business transaction between them and the plaintiff had filed the suit claiming licence fee and advertisement tax with interest. Viewed from any angle, it can be concluded that by no stretch of imagination, Ex.P34 can be construed to be an acknowledgement of liability to give a fresh start of limitation and that the last acknowledgement having been made on 12.05.2000 under Ex.P32, the suit should have been filed within three years thereafter. The present suit was filed on 11.08.2003, clearly beyond the period of three years from the date of the above said acknowledgment. Therefore, the contention of the defendant that the suit is barred by limitation has got to be countenanced. Issue No.2 is answered accordingly.
Issue Nos.3 and 611. Despite the fact that under Ex.P1, 2462 lamp posts in 10 roads/streets were sought to be allotted for an annual payment of Rs.75,13,885/-, contending that the number of poles mentioned in respect of certain roads were not correct, the defendant insisted upon a joint inspection to identify the poles available for advertisement and made payment of Rs.52,21,455/- towards the first year advance along with a calculation made by the defendant. The said amount was paid tentatively pending identification of the number of poles available for allotment to the defendant for advertisement in all those roads. Ex.P4 is the note put up by the Superintending Engineer (Electrical) to the effect that on a joint inspection made with the representative of the defendant, the number of poles found in five streets/roads were identified to be as follows:
1. V.O.C. Salai (Wall Tax Road) (From Jn of EVR Salai to Basin bridge jn) - 171 Nos
2. II Avenue, Anna Nagar (Chintamani jn to Thirumangalam Rd jn) - 84 Nos
3. E.V.R. Salai (Poonamallee High Road) (From Muthusamy Bridge jn to City limit) - 510 Nos
4. Anna Salai (From Munthusamy bridge jn to Kathipara junction) - 972 Nos
5. Kamaraj Salai (From Nappier Bridge jn to Karaneeswaran Pagoda st jn.) - 288 Nos It is also evident from Ex.P5 that, based on such joint inspection, a total number of 2025 lamp posts were claimed to be identified and a sum of Rs.75,13,885/- was directed to be paid for entering into the agreement. Ex.P6-letter dated 09.01.1997 shows that though the availability of the poles on the five roads/streets, namely V.O.C.Salai, Anna Nagar II Avenue, E.V.R. Salai, Anna Salai and Kamaraj Salai was confirmed by the defendant, she chose to opt only 1356 poles. Since the defendant did not pay as per the calculation of the plaintiff, further payment with corrections in the charge was demanded under Ex.P8-letter dated 03.03.1997. Only thereafter Ex.P9-agreement came to be executed, which quotes the total licence fee for an year to be Rs.70,19,500/-. Admittedly after the floating of tender and acceptance of the tender, there arose some dispute regarding the actual number of lamp posts available on a number of roads/streets allotted to the defendant and there had been exchange of communications between the defendant and the plaintiff, which have been dealt with in the foregoing discussions made in respect of Issue No.2. At last, after identification of the lamp posts in various streets, the agreement came to be executed on 04.05.1997 under Ex.P9 fixing the total amount of licence fee at Rs.70,19,500/-. The agreement also contains clauses to the effect that the entire amount for the first year had to be remitted before the date of agreement and the licence fee for the second and third years should be paid before one month of the closure of the first and second years respectively. It has also been provided in the agreement that in case of belated payment, the plaintiff corporation shall be entitled to get and the defendant shall be liable to pay an interest at the rate of 24% per annum on the amount due from the date the amount becomes due.
12. However, a demand came to be made for a sum of Rs.71,49,460/- under Exs.P10, P11 and P12. In this regard, it seems there was an excess claim of Rs.1,29,960/- per year. Instead of bringing it to the notice of the plaintiff that the amount claimed was in excess of the amount mentioned in the agreement, the defendant chose to send a communication under Ex.P15 opting to give up poles between Pachiappa's college and Koyambedu junction and seeking proportionate reduction of licence fee. Again under Ex.P16, the defendant wanted deduction of Rs.3,16,200/- from the licence fee for the poles in the L.B. Road on the premise that the defendant was not able to put up their advertisement boards due to political intervention. For the said claims, a reply was sent under Ex.P17 informing that the defendant should pay the amount with interest from the date of default and that the defects in the lamp posts pointed out by the defendant would be looked into. However, under Ex.P18 a calculation came to be made by the plaintiff on the basis that the three years licence fee was Rs.1,74,39,600/- calculated at the rate of Rs.58,13,200/- per year. Deducting a sum of Rs.1,30,19,500/- paid by the defendant and a further sum of Rs.5,00,000/- paid on 06.05.1999, payment of a sum of Rs.39,20,100/- was demanded. The same calculation is found in Ex.P19 also.
13. Though the defendant raised a dispute regarding the number of poles suitable for advertisement and consequently the quantum of licence fee, the defendant chose to pay a sum of Rs.10,00,000/- on 12.07.2009 by way of two cheques, each for Rs.5,00,00/-, as evidenced by Ex.P20. In the said letter itself, the defendant wanted extension of the agreement and also adjustment of a sum of Rs.1,25,000/- allegedly lying with the plaintiff as earnest money deposit. A reply was sent declining the request for extension of time and stating that the earnest money deposit paid by the defendant was only Rs.80,000/- and the same was being adjusted towards the dues. Even after the rejection of request for reduction of the number of poles, the defendant addressed the plaintiff under Ex.P22 requesting for reduction and assuring settlement. In the light of the defendant's protracting tactics by repeatedly seeking reduction of the amount stating that only a less number of poles could be opted, the plaintiff chose to issue a demand notice calling upon the defendant to pay Rs.35,59,172/- being the balance licence fee with interest up to 27.08.1999. A sum of Rs.23,39,496/- was also claimed as advertisement tax under Ex.P23 letter dated 06.09.1999. A reply under Ex.P24 was sent for the same requesting the plaintiff to solve the problem and expressing readiness to pay the balance of licence fee as soon as the problems were sorted out. Under Ex.P25 dated 26.10.1999 the defendant sent a letter to the plaintiff requesting reduction of the licence fee, which evoked a reply from the plaintiff under Ex.P26 dated 27.10.1999. Again a demand was made under Ex.P27 on 29.10.1999, which was responded by the defendant under Ex.P29 dated 01.11.1999 enclosing a cheque dated 27.10.1999 for a sum of Rs.5,68,095/-. There also the defendant claimed to have made excess payment of Rs.14,12,200/- and made a claim for extension of the contract by eight months. The same was refuted and declined by the plaintiff under Ex.P29. Again a claim for the balance amount after adjusting the earnest money deposit was made under Ex.P30 dated 07.01.2000. In response to the same only a payment for a sum of Rs.5,00,000/- by way of cheque as evidenced by the letter dated 12.05.2000 was made. In the said letter itself, it has been stated that the said amount was paid towards the defendant's old balance and that further account will be taken after due verification. A consideration of all those documents will go to show that the defendant was making payments without prejudice to the claim of the defendant for reduction of the licence fee and for extension of the contract period. Therefore, it cannot be said that the payment of Rs.10,00,000/- made on 11.11.2008 and Rs.5,00,000/- made on 12.05.2000 were paid without protest. Hence this court holds that the said payments were made without prejudice to the defendant's claim for reduction of licence fee. Issue Nos.3 and 6 are answered accordingly.
Issue No.4
14. A consideration of the evidence, both oral and documentary adduced on both sides, will make it clear that a tender was floated for the grant of licence to effect advertisements on the lamp posts available in 10 roads/streets and the defendant having come out as successful bidder, was awarded the licence in respect of which, Ex.P9 agreement was entered into. It is also evident that after the acceptance of the tender, there was some misunderstanding regarding the number of poles available in particular roads/streets and on the request of the defendant, a joint inspection was made and the number of lamp poles available in the roads/streets concerned was ascertained and a total amount as licence fee was fixed under Ex.P1. The defendant paid the first year licence fee before the execution of the agreement and there after made a claim that a portion of the E.V.R.Road between Pachiappa's college and Koyambedu market should be omitted from the contract. The defendant also pleaded that lamp poles identified in the L.B. Road should also be omitted and proportionate deduction in the licence fee should be made on the premise that due to political intervention, the defendant was not able to display advertisement boards in the lamp posts available in the said road. The contract being mutual and a concluded one, the said request of the defendant was considered and rejected. Even thereafter the defendant was bent upon making repeated claims for such reduction, which was ultimately rejected by the plaintiff. Even after such rejection and a demand was made for the payment of the arrears of licence fee with interest as per the agreement, the defendant had not chosen to make full payment and only part payments were made under protest. It is abundantly clear that the defendant had not paid the entire amount of the contract and the defendant committed default in payment of the licence fee for the second year and third year of the contract. It is also obvious that the defendant was making a demand for the extension of the contract even without complying with the condition regarding payment of licence fee.
15. Clause IV(2) of the agreement contains a stipulation regarding payment of interest for late payment of licence fee. The agreement contains a stipulation that the second year licence fee should be paid not later than one month prior to the closure of the first year of the contract and the third year licence fee should be paid not later than one month prior to the closure of the second year of the contract. It is an admitted case that those amounts were not paid in time as per the agreement. The contract itself stipulates 24% interest per annum for belated payment. The interest is claimed as per the agreement. Considering the potential market and the benefits that might have been derived by the defendant, the agreed percentage of interest cannot be termed either excessive or usurious. In fact there is absence of evidence to show that such an interest claimed by the plaintiff is usurious. Therefore, the contention of the defendant that the interest claimed by the plaintiff is usurious, has got to be rejected. Issue No.4 is answered accordingly.
Issue Nos.1, 5 and 716. As we have seen earlier the defendant has not paid the licence fee for the second year and third year of the contract in full and the payments made subsequent to the demand were also far below the amount payable under the contract. The defendant's claim for reduction of the licence fee has been promptly rejected. The defendant had opted for getting the licence for advertisement in the lamp post available in the identified roads/streets at a particular rate. At the instance of the defendant, the number of poles were subsequently identified in a joint inspection made by the officials of the plaintiff and the representative of the defendant. Thereafter, the defendant should not have chosen to contend that she would opt only for a particular number of poles and keep the remaining poles out of the contract. Such a unilateral decision communicated to the plaintiff was rejected. If at all the defendant was not prepared to get the licence for the number of poles identified in the joint inspection, she would have very well opted out of the contract and the plaintiff would have proceeded to re-auction holding the defendant liable for the loss caused by the breach of contract. Having not done so, the mere repeated insistance of the defendant for reduction of licence fee will not entitle the defendant to get the licence fee reduced. As such the claim of the defendant that a sum of Rs.14,12,200/- was paid in excess of the amount payable in the contract for the grant of licence, is without any basis and totally unsustainable.
17. So far as the advertisement tax is concerned, the defendant has not denied the power of the local body, namely City Municipal Corporation to levy advertisement tax for the advertisements to be displayed by hoardings. Therefore, there cannot be any valid defence available for the defendant to contend that the defendant is not liable to pay advertisement tax. It has been held supra that the suit so far as claim for recovery of licence fee is concerned is barred by limitation as the last acknowledgment giving a fresh start of the limitation was made only on 12.05.2000; that the letter written by the employee of the defendant under Ex.P34 on 15.05.2001 would not amount to acknowledgement and that hence the suit so far as the prayer for the decree for recovery of licence fee is concerned stands barred by limitation. Advertisement tax becomes payable on a demand being made after assessment. Such demand was made by the plaintiff on behalf of the plaintiff on 06.09.1999 by the notice of demand dated 06.09.1999. Normally, the period of limitation for recovery of money under the Limitation Act, 1963, is three years from the date on which the amount falls due or from the last date of acknowledgment of the debt. It is true that a separate provision has been made in the City Municipal Corporation Act under Section 390-A. The said provision also prescribes the very same period of three years as limitation for filing the suit for recovery of money due to the Corporation. Since the suit has not been filed within three years from the date of demand, the suit in respect of the advertisement tax also stands barred by limitation, as there is no proof of acknowledgment of debt in respect of the advertisement tax subsequently.
18. This court has held that the defendant has not paid the licence fee in full; that the defendant, as per the agreement, was liable to pay interest for the unpaid amount of the licence fee along with the unpaid balance of the licence fee; that the defendant was liable to pay advertisement tax; that the interest claimed by the plaintiff is not usurious and that the amount claimed in the plaint was due from the defendant to the plaintiff. However, this court has held that the claim of the plaintiff is barred by limitation on the ground that the last acknowledgement was made on 12.05.2000 and that the letter of the employee of the defendant marked as Ex.P34 cannot be termed as an acknowledgment of debt and that since the suit has been filed beyond three years after last acknowledgment by part payment, the suit is barred by limitation. In view of the finding regarding limitation, this court has to necessarily come to the conclusion that the plaintiff is not entitled to a decree as prayed for and the suit is liable to be dismissed.
19. The finding that an action in the court of law is barred by limitation, will amount to saying that the court will not extend its active help to such person who was sleeping over his right till the expiry of the period of limitation. It shall be open to the creditor, in this case, the Corporation of Chennai (formerly Corporation of Madras), to take other measures without the intervention of the court to get a fresh promise and enforce the same. It goes without saying that when the claim of the Corporation is defeated on the ground of the claim being barred by limitation, the plaintiff Corporation may be entitled to take other steps like removing the name of the defendant from the competitive bidders for similar type of contracts. This court need not say that the Corporation has got other powers like power of suspending the name of the defendant from the eligible competitive bidders in respect of other contracts, if the rules so provide and thereby make the defendant to give a fresh promise, which can be enforced. What this court wants to say is that the court will not lend its active assistance for the recovery of the amount, which is barred by limitation and in view of the same, the plaintiff is not entitled to a decree for the recovery of the amount claimed in the suit and that hence the suit is liable to be dismissed. Considering the nature of the case, this court is of the view that the parties shall be directed to bear their respective cost. Issue Nos.1, 5 and 7 are answered accordingly.
20. In the result, the Civil Suit is dismissed. The parties are directed to bear their respective cost.
24.08.2012 Index: Yes Internet: Yes gpa/asr P.R.SHIVAKUMAR.J., gpa/asr Pre-Delivery Judgment in C.S.No.955 of 2003 24.08.2012