M/S. Naveen Brick Kiln Owners ... vs Union Of India
2010 Latest Caselaw 1668 Del

                                                      UNREPORTABLE


*      IN THE HIGH COURT OF DELHI AT NEW DELHI


                              FAO No.375/1996


                                  Date of Decision: March 25, 2010


       M/S. NAVEEN BRICK KILN OWNERS 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.76,241/- against the respondent, i.e. the Union of India through

General Manager, Northern Railways. The suit was filed on

August 06, 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.1 which issue was as

under:-

"1. Whether the application is within time?"

The finding on the aforesaid issue No.1 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.36 to 49 (RR Nos.094522 to 094535)

dated April 20, 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.76,241/- 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.76,241/-, but

under protest. The payment was made on April 22, 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.76,241/- had been provisionally

passed/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 vide letter dated

January 24, 1986 submitted fourteen 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.76,241/- 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 not refund the amount as promised vide letters

dated January 20, 1986 and January 30, 1986. 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 August 06, 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.76,241/- 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.76,241/- 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.76,241/- 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. 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 August 06, 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.76,241/- 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 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.76,241/- 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 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 the

correct perspective. As already noticed above, the respondent vide

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

refund of the amount in question 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 fourteen

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. In this view of the matter,

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 is 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.76,241/- 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