Delhi High Court

M/S. Delhi Bhatta Welfare ... vs Union Of India on 25 March, 2010

Author: Rekha Sharma

                                                      UNREPORTABLE


*      IN THE HIGH COURT OF DELHI AT NEW DELHI


                              FAO No.376/1996


                                  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.76,507/- against the respondent, i.e. the Union of India through

General Manager, Northern Railways. The suit was filed on

March 13, 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 June 05, 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 subject to its finding on issue No.4 which issue was as

under:-

"4. Whether the claim is time barred?"

The finding on the aforesaid issue No.4 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

Tughlakabad under Invoices No.18 to 34 (RR Nos.094458 to 094504)

dated April 08, 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.76,507/- 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.76,507/-, but

under protest. The payment was made on April 12, 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.76,507/- had been provisionally sanctioned and

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

furnishing 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 submitted 17 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.76,507/- 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 the respondent reneged from its said

stand and by a letter dated September 11, 1986 conveyed to the

appellant that no refund was admissible and that the freight charges

were correctly recovered. According to the appellant, it is this letter

of September 11, 1986 which gave rise to the cause of action to

file the suit. Accordingly, the same was filed on March 13, 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 June 05, 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 the 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.76,507/- 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.76,507/- had been provisionally sanctioned and the

same would be remitted to it subject to the appellant furnishing

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.76,507/- 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? In my view they

do. It was only on September 11, 1986 that the respondent made a

turn around and it was through this letter that the appellant was

finally told that no refund was admissible. This being the position,

there was no occasion for the appellant to have filed the suit for the

recovery of the amount prior to September 11, 1986. It was the letter

of September 11, 1986 which gave rise to the cause of action and if

the period of limitation is computed from the said date, the suit which

was initially filed in the court of the District Judge on March 13, 1987

was within 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.76,507/- had been

provisionally passed 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 the letter dated January 30, 1986 was

provisional in nature in the sense that the sum of Rs.76,507/- was

passed 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 had been

provisionally passed 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 the correct perspective. As already noticed