2013 (1) TMI 752 - SC - Indian Laws

Supreme Court dismisses suit, upholds lease termination. Importance of timely challenges and judicial declarations stressed.

Board Of Trustees Of Port Of Kandla Versus Hargovind Jasraj & Anr

Board Of Trustees Of Port Of Kandla Versus Hargovind Jasraj & Anr - 2013 (1) SCR 589, 2013 (3) SCC 182, 2013 (2) JT 312, 2013 (1) SCALE 630 Issues Involved:1. Validity of the termination of the lease.2. Possession of the plot after the termination.3. Limitation period for filing the suit challenging the termination.4. Requirement for seeking a declaration of invalidity of the termination.5. Applicability of Section 120 of the Major Ports Act.6. Constructive res judicata and Order II, Rule 2 of the Code of Civil Procedure, 1908.7. Rights of the transferee to challenge the termination without the lessor's permission.Detailed Analysis:Validity of the Termination of the Lease:The appellant-Port Trust issued notices to the respondent-lessee for default in payment of lease rent, leading to the termination of the lease on 8th August, 1977, effective from 13th December, 1978. The trial court and the first appellate court found the termination invalid due to the absence of proper notice under Sections 106 and 111(g) of the Transfer of Property Act, 1882, and lack of authorization of the person who signed the termination notice and took possession.Possession of the Plot After the Termination:The trial court recorded an ambivalent finding regarding the possession of the plot, noting that the plot was open and covered with wild bushes, making it difficult to determine possession. However, the lessee's letter dated 22nd February, 1979, unequivocally admitted that possession had been taken over by the appellant-Port Trust. The Supreme Court held that this admission was conclusive evidence of dispossession.Limitation Period for Filing the Suit Challenging the Termination:The right to sue first accrued on 13th December, 1978, when the lease was terminated. Under Article 58 of the Limitation Act, 1963, a suit for declaration must be filed within three years from the date the right to sue first accrues. The suit filed in 1996 was clearly barred by limitation, as it was instituted nearly eighteen years after the termination.Requirement for Seeking a Declaration of Invalidity of the Termination:The Supreme Court emphasized that any order, even if invalid, must be challenged in court within the prescribed limitation period. The lessee or transferee could not ignore the termination order and seek an injunction without having the termination declared invalid by a competent court. The necessity of recourse to the court for such declarations was reiterated, citing precedents like Smith v. East Elloe Rural District Council and Krishnadevi Malchand Kamathia & Ors. v. Bombay Environmental Action Group and Ors.Applicability of Section 120 of the Major Ports Act:The Supreme Court found it unnecessary to examine whether the suit was barred by Section 120 of the Major Ports Act, which prescribes a six-month limitation period, as the suit was already barred under the general limitation period.Constructive Res Judicata and Order II, Rule 2 of the Code of Civil Procedure, 1908:The court did not delve into whether the suit was barred by constructive res judicata or Order II, Rule 2, as the first suit filed in 1980 for permanent prohibitory injunction did not address the validity of the termination, which had already occurred by then.Rights of the Transferee to Challenge the Termination Without the Lessor's Permission:The addition of the original lessee as a co-plaintiff in 1999 was noted, but the court did not specifically address the rights of the transferee to challenge the termination without the lessor's permission.Conclusion:The Supreme Court allowed the appeal, set aside the judgments and decrees of the lower courts, and dismissed the suit filed by the respondents, holding that the suit was barred by limitation and the lessee had been dispossessed pursuant to the termination of the lease. The court reiterated the necessity of seeking judicial declarations for challenging orders and emphasized adherence to limitation periods.