M/S. Delhi Bhatta Welfare ... vs Union Of India
2010 Latest Caselaw 1661 Del

                                                      UNREPORTABLE


*      IN THE HIGH COURT OF DELHI AT NEW DELHI


                          FAO No.387/1996


                                Date of Decision: March 25, 2010


       M/S. DELHI BHATTA WELFARE ASSOCIATION
                                                      ..... Appellant
                          Through Mr. M.L.Bhargava, Advocate


                     versus


       UNION OF INDIA                        ..... Respondent
                     Through Ms. Gyan Mitra, Advocate


       CORAM:
       HON'BLE MISS JUSTICE REKHA SHARMA

1.     Whether the reporters of local papers may be allowed to see the
       judgment? No
2.     To be referred to the reporter or not? No
3.     Whether the judgment should be reported in the „Digest‟? No

REKHA SHARMA, J. (ORAL)

The appellant had filed a suit for the recovery of a sum of

Rs.75,826/- against the respondent, i.e. the Union of India through

General Manager, Northern Railways. The suit was filed on

October 19, 1987 in the Court of the District Judge. It was later

transferred to the Railway Claims Tribunal (hereinafter referred to as

the Tribunal). The Tribunal by order dated August 14, 1996 held that

the recovery made by the respondent was illegal and consequently

further held that the respondent was liable to refund the same to the

appellant. However, the finding of the Tribunal on the issue of

limitation went against the appellant. The Tribunal held the claim of

the appellant to be barred by the law of limitation. The result was

that the appellant even though it succeeded on merits, failed to get

the refund of the amount claimed. Feeling aggrieved by the order so

passed, the present appeal was preferred way-back in the year 1996.

The facts are not in dispute and they are as under:-

The appellant booked coal consignments from Singrauli to

Nangloi under Invoices No.11 to 26 (RR Nos.011477 to 011492) dated

March 12, 1982. As per the relevant rules, the consignments had to

be booked by the Railways via the shortest route at the cheapest rate.

The appellant had booked the consignments via Chopan-Chunar which

was the shortest route and the freight charges were also invoiced

accordingly by the forwarding station. However, on arrival of the

consignments at the destination station, an excess freight of

Rs.75,826/- was demanded from the appellant by the Railways on the

ground that the consignment was booked and carried via a longer

route. The appellant did pay the extra freight of Rs.75,826/-, but

under protest. The payment was made in March, 1982.

It is not disputed that after making the payment, the appellant

was engaged in correspondence with the respondent resulting in a

letter dated January 20, 1986 from the latter informing the former

that the amount of Rs.30,267/- had been provisionally sanctioned and

that the same would be remitted to it subject to the appellant

furnishing the Power of Attorney from the party/person who paid

charges authorizing it to receive payments. In response to the letter

dated January 20, 1986, the appellant vide letter dated

January 24, 1986 submitted 20 Special Power of Attorneys from the

parties/persons who paid the charges, authorizing it to receive the

payments on their behalf. Thereafter, the respondent issued another

letter dated January 30, 1986 informing the appellant that the sum of

Rs.30,267/- had been provisionally passed as refundable and the same

would be remitted to it by the Additional FA & CAO, TA Branch after

necessary verification by that office. However, subsequently it

appears that there was a change of heart from the side of the

respondent, for it did neither refund the amount as promised vide

letters dated January 20, 1986 and January 30, 1986 nor the original

amount paid by the appellant. According to the appellant, the failure

on the part of the respondent to honour what was conveyed through

the letters dated January 20, 1986 and January 30, 1986 gave rise to

the cause of action to file the suit. Accordingly, the same was filed on

October 19, 1987 in the Court of the District Judge which, as noticed

above, was subsequently transferred to the Tribunal. The Tribunal

vide the impugned order dated August 14, 1996 has held that it is

Article 24 of the Limitation Act, 1963 which is applicable to the facts

of the case and that the suit having not been filed within three years

in terms of the said Article, the same was barred by time.

Before I proceed further, let me reproduce Article 24 of the

Limitation Act, 1963. It runs as under:-

Description of suit Period of limitation Time from which period begins to run

For money payable Three years When the money is by the defendant to received.

the plaintiff for money received by the defendant, for the plaintiff‟s use

The learned counsel for the appellant has assailed the order of

the Tribunal on the ground that it is not Article 24 of the Limitation

Act, 1963 which is attracted to the facts of the present case, but

Article 113 of the Act. According to the counsel, the facts of the

present case are such that no other Article of Limitation Act fits the

bill except Article 113 and that what is to be seen is whether the suit

is within limitation in terms of the said Article. Insofar as Article 113

is concerned, it provides that, "in a suit for which no period of

limitation is provided elsewhere in the Schedule, the period of

limitation will be three years from the date when the right to sue

accrues."

In view of the aforesaid, the question that arises for

consideration is whether it is Article 24 or Article 113 of the

Limitation Act which is applicable to the facts of the present case.

What is of significance is that after the sum of Rs.75,826/- was

paid by the appellant to the respondent, the parties remained in

correspondence with each other and what is further of significance is

that on January 20, 1986 the respondent informed the appellant that

the amount of Rs.30,267/- had been provisionally sanctioned and the

same would be remitted to it subject to the appellant furnishing the

Power of Attorney from the party/person who paid charges

authorizing it to receive payments. The appellant acted upon the

letter and as noticed above, furnished the Special Power of Attorneys.

The respondent thereafter sent another letter dated January 30, 1986

to the appellant and therein again informed that the sum of

Rs.30,267/- had been provisionally passed as refundable and the same

would be remitted to it by the Additional FA & CAO, TA Branch after

necessary verification by that office. What does one make out from

these two communications? Do they not go to show that the

respondent conceded to the claim of the appellant even though

partly? In my view they do. This being the position, there was no

occasion for the appellant to have filed the suit for the recovery of the

amount prior to January 30, 1986. It was only when no payment was

received inspite of the letters dated January 20, 1986 and

January 30, 1986 that the appellant was forced to take recourse to

court of law and accordingly, the suit was filed in the Court of the

District Judge on October 19, 1987 within three years of the issuance

of the letters dated January 20, 1986 and January 30, 1986. It cannot,

in the circumstances, be said to be barred by limitation. The finding

of the Tribunal that it is Article 24 of the Limitation Act which was

applicable is not warranted in the facts and circumstances of the case.

It was contended before the Tribunal and so also before me that

the letter dated January 30, 1986 whereby the respondent had

informed the appellant that the amount of Rs.30,267/- had been

provisionally sanctioned and the same would be remitted to it,

constituted a promise to pay in view of Section 25(3) of the Indian

Contract Act, 1872 (hereinafter referred to as the Contract Act) and it

tantamounted to be a contract in terms of the said Section.

Before I deal with the submission, let me reproduce the relevant

provision of Section 25(3) of the Contract Act. It runs as under:-

"25. Agreement without consideration, void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law. - An agreement made without consideration is void, unless-

       (1)     x     x    x      x     x
       (2)     x     x    x      x     x

(3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits."

The Tribunal has held that the so-called promise was not

absolute, in as much as letters dated January 20, 1986 and

January 30, 1986 were provisional in nature in the sense that the sum

of Rs.30,267/- was sanctioned subject to necessary verification by the

Additional FA & CAO, TA Branch. It is true that the respondent

through letter dated January 30, 1986 did convey to the appellant that

its claim, though partly, had been provisionally sanctioned as

refundable subject to the verification by the Additional FA & CAO, TA

Branch but the verification referred to in the said letter was not with

regard to the admissibility of its claim. It was only that the payment

was to be made after going through the formality of verification from

the concerned office. The Tribunal has not construed the letter in its

correct perspective. As already noticed above, the respondent vide

earlier letter dated January 20, 1986 informed the appellant that the

refund of the amount Rs.30,267/- could only be arranged subject to its

furnishing power of attorney from the party/person who paid charges,

authorizing it to receive payments and in compliance thereof, the

appellant vide letter dated January 24, 1986 submitted 20 Special

Power of Attorneys. Subsequently, the respondent issued the letter

dated January 30, 1986 confirming/reiterating the contents of its

earlier letter dated January 20, 1986. Hence, the letter dated

January 30, 1986 constituted a contract in terms of Section 25(3) of

the Contract Act and if the period of limitation is computed from that

angle, then also the suit was within limitation.

For what has been noticed above, I set-aside the order of the

Railway Claims Tribunal and hold the appellant entitled to the sum of

Rs.75,826/- along with interest @ 6% per annum from the date of the

filing of the suit till realization. As the claim pertains to the

year 1982, the Railway is directed to make the payment within five

months from today, failing which the amount shall carry interest

@ 9% instead of 6%.

REKHA SHARMA, J.

MARCH 25, 2010 ka