Summary
The Supreme Court held that where a port licensee, in reply to a demand for arrears of revised licence fee made within three years, objected only that payment should await the outcome of its pending intra-court appeal, that reply was an acknowledgment of liability under Section 18 of the Limitation Act (Explanation (a)) which extended limitation, so recovery proceedings under Section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 were not time-barred; the port's writ petitions were restored to be decided after the pending appeals on retrospective revision of the tariff.
Issues
- Whether the Supreme Court could consider the Port Trust's plea under Section 18 of the Limitation Act, raised for the first time in oral argument, and the licensees' plea of limitation, raised for the first time in the appeal under Section 9 of the PP Act.
- Whether, once the Limitation Act applies to proceedings under Section 7 of the PP Act (as held in NDMC v. Kalu Ram), Section 18 of that Act also applies to extend the three-year period under Article 52 of the Schedule.
- Whether the licensees' replies objecting to the demand only on the ground that their intra-court appeals against the retrospective tariff revision were pending amounted to an acknowledgment of liability in writing.
- Whether the High Court ought to have decided the Port Trust's writ petitions while the licensees' intra-court appeals on the retrospective applicability of the tariff notification were pending.
Provisions considered
- Section 18 (with Explanation (a)), Limitation Act, 1963A written, signed acknowledgment of liability made before the prescribed period expires gives a fresh period of limitation, and under Explanation (a) an acknowledgment is sufficient even if it avers that the time for payment has not yet come or is accompanied by a refusal to pay. The licensees' undisputed reply dated 04.02.2015, which resisted the demand solely because their appeals were pending, fell squarely within Explanation (a); limitation was therefore extended to 03.02.2018 and the show cause notice of 12.08.2015 was within time. (¶¶ 4, 10, 11, 12, 13, 14)
- Section 3 and Article 52 of the Schedule, Limitation Act, 1963The District Judge and High Court had applied the three-year period for arrears of rent under Article 52, computing it from the tariff notification of 23.07.2010 and, after excluding the period of the interim order, treating limitation as expiring on 11.05.2015. The Court held that the licensees could not confine the Act's application to Section 3 and Article 52 while excluding Section 18: once the Limitation Act applies, all its provisions apply. (¶¶ 8, 10)
- Sections 7(1), 7(3) and 9, Public Premises (Eviction of Unauthorised Occupants) Act, 1971The Estate Officer issued a show cause notice under Section 7(3) on 12.08.2015 and then an order under Section 7(1) for recovery of arrears with interest; the licensees appealed under Section 9 to the District Judge. The Court noted that Section 7 prescribes no limitation (only Section 9 does for appeals), but that Kalu Ram makes the Limitation Act applicable to PP Act proceedings, a position both sides accepted; the suggestion that Kalu Ram needs reconsideration was only a passing reference and was not examined. (¶¶ 2.7, 2.9, 2.10, 8, 10)
Held
- Since the facts and the correspondence between the parties were undisputed, the Court rejected both sides' objections that the other had raised its plea too late (the licensees' limitation plea first in the Section 9 appeal, and the Port Trust's Section 18 plea only in oral argument before the Supreme Court) and dealt with the limitation question on the merits. (¶¶ 7, 10)
- Both parties accepted, following NDMC v. Kalu Ram, that the Limitation Act applies to recovery proceedings under Section 7 of the PP Act. The licensees could not contend that only Section 3 read with Article 52 applies and not Section 18: once the Limitation Act applies, all of its provisions apply to such proceedings. (¶¶ 8, 10)
- Under Section 18 of the Limitation Act a fresh period runs from a written acknowledgment of liability, and Explanation (a) makes an acknowledgment sufficient even where it says the time for payment has not yet come. The licensees' reply of 04.02.2015, given within three years of the cause of action in response to the lessor's demand, objected only that payment should await their pending appeals; it was an acknowledgment within Explanation (a), and limitation stood extended to 03.02.2018. (¶¶ 12, 13)
- The licensees' argument that they had denied liability failed: they did not dispute the revised tariff itself, only its retrospective application, and having lost before the Single Judge with no interim order in their pending intra-court appeals, they were bound by the notification until set aside. Their objection was not a denial of the amount but a plea of pendency, taken only to delay payment, and they could not benefit from a technical limitation objection. (¶¶ 14, 17)
- Because the outcome of the licensees' pending intra-court appeals on retrospective application of the tariff would directly bear on the Port Trust's writ petitions, the High Court ought not to have proceeded to decide those petitions but should have awaited and decided them subject to the result of the appeals, particularly given the licensees' consistent stand that the demands be deferred pending the appeals. (¶¶ 15, 16)
- Without entering into the other arguments, the writ petitions were restored to be heard after the intra-court appeals: if the appeals succeed, there can be no retrospective recovery and the demands must be withdrawn; if they fail, the licensees must pay the demand with interest admissible under law. (¶¶ 18, 19)
Result
Appeals allowed; High Court order dated 22.11.2019 set aside; the Port Trust's writ petitions restored to the High Court to be heard after disposal of the licensees' pending intra-court appeals, with the demands to be withdrawn if those appeals are allowed and to be paid with admissible interest if they are dismissed.