Mr. S. S. Bora, Advocate for v. S. Badakh, AGP for

Legal Reasoning

(1) sa-482-1995.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABADSECOND APPEAL NO.482 OF 1995M/s. D. V. Save,A Registered partnership firmhaving Head Office at Parbhani byBranch Office at Aurangabadby its partner Shri Moreshwar Dinanath SaveAged 67 years, R/o. Khadkeshwar, Aurangabad..Appellant (Orig. Plaintiff)VersusThe State of Maharashtra throughthe Collector, Parbhani..Respondent (Orig. Defendant) …Mr. S. S. Bora, Advocate for Appellant.Mr. V. S. Badakh, AGP for Respondent-State.… CORAM : S. G. CHAPALGAONKAR, J.Reserved On: 08th MAY, 2025.Pronounced On: 17th JULY, 2025.JUDGMENT :- 1.The appellant (original plaintiff) impugns judgment anddecree dated 24.04.1995 passed by Additional District Judge,Parbhani in Regular Civil Appeal No.10/1985, thereby dismissingplaintiff’s suit by reversing judgment and decree dated 12.01.1984passed by Civil Judge Senior Division, Parbhani, in Regular CivilSuit No.27/1975, by which plaintiff’s suit for recovery of amount ofRs.33,650/- was decreed against State of Maharashtra. (2) sa-482-1995.odt2.In nutshell plaintiff contends that he was allotted tender forEarth-Work and Lining in Mile Nos.26 and 27 by ExecutiveEngineer, I & P Department, Purna Project, Camp Basmath. Thework of Lining in Mile No.26 was to be completed within 12 monthsfrom the date of work order dated 16.12.1964. During execution ofwork, defendant imposed penalty under various communicationsduring period from 1966 to 1967 and finally took action underClause 3(a) of Contract, thereby forfeiting security deposit andwithdrawal of work. On 12.04.1967, plaintiff was called for finalmeasurement, which was closed on 26.04.1967. On 27.04.1967security deposit is forfeited. On 28.07.1967, Executive Engineerinformed plaintiff that final bill for Mile Nos.26 and 27 is receivedin his office and asked plaintiff to attend office on or before31.07.1967. Again by communication dated 09.09.1967, plaintiffwas called upon to attend office of defendant within period of tendays. However, plaintiff could not attend office, since he wassuffering from Typhoid. On 18.06.1975 plaintiff served legal noticeto defendant for recovery of forfeited security deposit, penalty andcost of work done as shown in final bill, which was not complied.Hence, he instituted suit for declaration and recovery of amount on29.08.1975.3.The defendant refuted plaintiff’s claim contending that asgeneral progress of work was unsatisfactory and plaintiff failed to (3) sa-482-1995.odtcomply his obligation within stipulated period, hence action underClause 3(a) and (b) of Contract was taken and work was withdrawnfrom plaintiff under Clause No.15 of agreement with a view to getwork done by other agency. It is stated that time provided forcompletion of work was two years from 16.12.1964 till 15.12.1966.The penalty was imposed from 16.12.1965 in view of terms ofagreement. The plaintiff expressed his inability to execute workvide his communication dated 11.03.1967. The defendant wasconstrained to levy penalty to the tune of Rs.500/- per day and alsoforfeit security deposit of Rs.18,868/- and fine of Rs.7210.25/-. It isfurther stated that suit instituted on 29.08.1975 is clearly barredby limitation as cause of action to file suit arose in the year 1967.4.The Trial Court framed as many as 14 issues based onpleadings of parties, including issue of limitation and concludedthat plaintiff is entitled for recovery of amount of Rs.33,650/-alongwith interest @ 6% per annum from the date of institution ofsuit alongwith notice charges of Rs.125/-. The Trial Court observedthat suit is governed by Article 113 of Indian Limitation Act andsince plaintiff was not provided with final bill and copies ofmeasurement books, limitation would start from 17.05.1975 i.e.date of issuance of suit notice (Exhibit-100). Thus, suit institutedon 29.08.1975 is well within limitation. (4) sa-482-1995.odt5.Aggrieved defendant filed Regular Civil Appeal No.10/1985before District Judge at Parbhani. The learned District Judgeallowed Appeal holding that suit is barred by limitation, sincedefendant’s office had invoked provision of Clause No.2 ofagreement vide communications dated 17.03.1966, 16.01.1966 and11.04.1967 and imposed penalty upon plaintiff and further byinvoking Clause 3(a) of contract action was taken. The plaintiffhad raised grievance on 31.03.1968. Then period of limitation willstart to run from that date. As such, suit is barred by limitation.6.The Appellate Court has further held that in view of Section69 of Indian Partnership Act, suit is barred by limitation asCertificate of Registration of Firm is not placed on record toindicate that person who has presented plaint is a partner in firmand shown in Register of Firm as partner in firm. Eventually,allowed Appeal by setting aside judgment and decree passed byTrial Court. The present Second Appeal is filed taking exception tojudgment and decree of Appellate Court.7.Mr. Bora, learned Advocate appearing for appellant invitesattention of this Court to order of admission of Appeal dated26.02.1996, which reads thus:“This is a group of four second appeals (5) sa-482-1995.odt2.There involves substantial questions of law on the point oflimitation as well as effect of non-registration ofpartnership under Section 69 of the Partnership Act.3.Admit.4.Notice.”He would, therefore, urge that Appeal has been admitted onthe point of limitation as well as effect of non-registration ofpartnership under Section 69 of the Partnership Act.8.Mr. Badakh, learned AGP appearing for respondent-Statesubmits that registration of partnership firm is not in dispute. Theissue as to maintainability of suit was never raised in writtenstatement. The defendant had pressed into service only issue oflimitation, apart from contentions on merit of claim. The AppellateCourt has accepted defence on the point of limitation. Therefore,present Appeal require to be heard only on the point of limitation.9.The learned Advocates appearing for respective parties,therefore, restricted arguments on the issue of limitation only,particularly on ground no.4 as specified in Appeal Memo, whichreads thus:“That, the substantial question of law in the instant case isas to whether the lower Appellate Court was justified inapplying the provisions of Article 113 of the IndianLimitation Act and further holding that the suit is barredby the law of limitation.” (6) sa-482-1995.odt10.The learned Advocates accordingly substantially arguedmatter on aforesaid questions of law that has been framed at thetime of admission of Appeal and elaborately stated as ground no.4in Appeal Memo.11.Mr. Bora, learned Advocate appearing for appellantvehemently submits that Appellate Court miserably failed toappreciate material on record and apply correct principle of lawwhile concluding that suit is barred by limitation. Relying uponjudgments of Supreme Court of India in case of Shakti BhogFood Industries Ltd. Vs. The Central Bank of India andOrs.1, Union of India and Ors. Vs. West Coast Paper MillsLtd. and Anr.2 and judgment of this Court in case ofShyamkumar Lalaramji Jaiswal and Ors. Vs. Dattatrayaand Ors.3 Mr. Bora would submit that plaintiff was never servedwith final bill alongwith measurement books and other relevantpapers. The plaintiff had reason to believe that his bills were stillin process. The plaintiff got cause of action when he issued legalnotice dated 17.06.1975, which was not responded. As such, TrialCourt was justified in holding that suit is within period oflimitation. Mr. Bora would further submit that there is basicdifference between language incorporated in Articles 58 and 113 ofthe Limitation Act. The right under Article 113 accrues when1AIR 2020 SC 2721.2AIR 2004 SC 1596.32023 (1) Mh.L.J. 430. (7) sa-482-1995.odtdefendant has clearly or unequivocally threatened to infringe rightasserted by plaintiff in suit. Unless particular threat gives rise to acompulsory cause of action, thereby effectively invading orjeopardizing right of plaintiff, cause of action would not arise. Hewould, therefore, urge that concept of first cause of action engraftedunder Article 58 would not apply while interpreting Article 113 ofthe Limitation Act. According to Mr. Bora, Appellate Court hascompletely missed to observe aforesaid difference of language andlanded in grave error while rejecting claim of plaintiff being barredby limitation.12.Per contra, Mr. Badakh, learned AGP appearing forrespondent-State would submit that starting point of limitationshall remain unaffected by conduct of parties or by correspondenceexchanged between them and that mere attempt on the part of alitigant to persuade authorities to accede to his claim bydispatching letters may not be a ground for claiming extension oflimitation for institution of a suit. According to him, cause ofaction accrued to plaintiff in the year 1966-67. By serving legalnotice in the year 1975, plaintiff cannot claim revival of cause ofaction and seek relief from the Court, which is barred by limitation.13.Having considered submission advanced by learnedAdvocates appearing for respective parties, interpretation of Article113 of the Limitation Act and its application to factual aspect of (8) sa-482-1995.odtmatter are issues posed into service before this Court. Article 113of the Limitation Act reads thus:Description of suitPeriod oflimitationTime from which periodbegins to run113.Any suit for which no period oflimitation is providedelsewherein this Schedule.Three years. When the right to sueaccrues.14.Plain reading of aforesaid provision depicts that limitationperiod shall begin to run when right to sue accrues. It is, therefore,necessary to find out when right to sue accrued to plaintiff in factsof the present case. It is not in dispute that plaintiff was allottedcontract for Earth-Work and Lining in Mile Nos.26 and 27 bydefendant. The work of Mile No.26 was to be completed within ayear from 16.12.1964 and work in Mile No.27 was to be completedwithin 24 months from 16.12.1964. During execution of said work,plaintiff was held responsible for delay and penalty was imposed onhim, which was communicated to him in the year 1966–67.Similarly, by invoking Clause No.3(a), action of forfeiture ofsecurity deposit and withdrawal of work is taken on 18.05.1967.The final bill was prepared and plaintiff was summoned to attendoffice on 31.07.1967 and by subsequent letter on 09.09.1967. Theplaintiff’s evidence, particular Clause No.5 suggests thatDepartment had called plaintiff to sign final bill at Basmath. Heattended office and asked them to look into measurement booksand other necessary papers. However, he was shown final bill (9) sa-482-1995.odtwithout providing other relevant papers. Therefore, he did not signbill. This incident took place on 01.09.1967. Apparently, plaintiffin clear terms admitted that he has seen final bill on 01.09.1967.The final bill was preceded by various correspondence betweenparties by which penalty was imposed and forfeiture of securitydeposit was made and even compensation amount was recovered.It is, therefore, clear that plaintiff was very much aware aboutquantification of his bill and deduction of amount towards penalty,security deposit and other heads. It is pertinent to note here thatplaintiff has never raised any objection in this regard till issuanceof legal notice in the year 1975.15.It is trite that, cause of action would come into existencewhen right is arose in favour of plaintiff and same has beeninfringed or threatened to be infringed. The starting point oflimitation would be decided on the basis of date of cause of action.In facts of present case, when plaintiff seen final bill, he was awareof imposing penalty and forfeiture of security deposit, so alsopayment approved towards execution of work done by him. From1967 onward, plaintiff has not made any correspondence raisinggrievance against imposing of penalty or forfeiture of securitydeposit. Therefore, merely by issuing legal notice in the year 1975,plaintiff cannot assert extension of limitation. The cause of actionto file suit has been rightly taken as preparation of final bill on (10) sa-482-1995.odt31.03.1968. The plaintiff cannot justify his non-action till 1975,particularly when he failed to remain present in office of defendanton 31.07.1967 and 09.08.1967 and further seen final bill on01.09.1967.16.Although it cannot be disputed that there is difference instarting point of limitation period in Article 58 and 113 of theLimitation Act and language is not comparable to each other, evengiving liberal construction to language incorporated in Article 113of Limitation Act, right to sue accrued to plaintiff when he has seenfinal bill or even prior to that action of imposing penalty andforfeiture of security deposit was taken against him andcommunicated to him. In that view of the matter, this Court hasno reason to accede with findings recorded by Trial Court orreverse judgment and decree passed by Appellate Court acceptingcontention of plaintiff on the point of limitation.17.In result, Second Appeal sans merit. Hence, standsdismissed.(S. G. CHAPALGAONKAR)JUDGEDevendra/July-2025