2025 (4) TMI 239 - SC - Indian Laws

Port Trust's recovery proceedings within limitation as respondents acknowledged liability while claiming payment time hadn't arrived due to pending appeals

NEW MANGALORE PORT TRUST & ANR. Versus CLIFFORD D SOUZA ETC. ETC.

SC held that Limitation Act provisions apply comprehensively to proceedings under PP Act, including section 18 regarding acknowledgment of liability. Port ... Time limitation for initiating proceedings for recovery of arrears of license fees initiated by the New Mangalore Port Trust (NMPT) - Common argument raised on behalf of both sides is to the effect that objections had not been taken at the right time and at the initial stage - HELD THAT:- Both sides agree that the Limitation Act will apply to the proceedings under the PP Act. The respondents cannot argue that only section 3 of the Limitation Act along with the limitation provided under Article 52 of the Schedule of the Limitation Act will apply and not section 18 of the same Act. Once the Limitation Act applies, all its provisions will be applicable to the proceedings under the PP Act. It is true that the plea of benefit of section 18 of the Limitation Act was not raised before the High Court and therefore not considered but nevertheless, as the objection of the respondents that the arguments relating to the benefits of section 18 of Limitation Act may not be considered by this Court is already rejected, the same is dealt and it is analyzed as to whether the benefit could or could not be extended to the appellant as claimed. Section 18 of the Limitation Act is very clear that where liability is acknowledged in respect of any property or right, a fresh limitation may be computed from the time when the acknowledgment was so signed. Clause (a) of the explanation to Section 18 declares that an acknowledgment would be sufficient for various reasons to be stated therein, which includes the time for payment has not yet come as one of the reasons. In the present case this reason squarely applies. The respondents were throughout alleging that the time had not been come as the appeals were pending before the Division Bench. This acknowledgement was given in response to the demand by the lessor (appellant) made well within the limitation of 3 years. The lessor as such would be entitled to the benefit of extension of limitation taking benefit of Section 18 of the Limitation Act. Once the issue relating to retrospective applicability of revised tariff has been upheld by the learned Single Judge and the writ petitions filed by the respondents were dismissed, against which intra-court appeals at the instance of the respondents were pending, the High Court ought not to have proceeded with the hearing of the writ petition - The respondents were well aware that they had lost from the Single Judge as their petitions had been dismissed but still, they had been resisting the demand only on the basis of the pendency of the appeals before the Division Bench. This objection was taken only to delay the payment of the dues of the revised tariff. The respondents therefore ought not to have benefitted out of the technical objection raised by them regarding the limitations when they were themselves bound by the decision of the learned Single Judge and had no other objection or denial to the demand except that of the pending appeals before the Division Bench. Conclusion - The limitation period for recovery proceedings extended due to the acknowledgment of liability by the respondents, allowing the proceedings to continue. The impugned order of the High Court set aside - the writ petitions restored before the High Court to be heard after disposal of the pending intra-court appeals filed by the respondents. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment include:1. Whether the proceedings for recovery of arrears of license fees initiated by the New Mangalore Port Trust (NMPT) were barred by limitation under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (PP Act).2. Whether the acknowledgment of liability by the licensees extended the limitation period under Section 18 of the Limitation Act, 1963.3. Whether the retrospective application of the revised tariff notification dated 23.07.2010 was valid and enforceable.4. Whether the High Court erred in proceeding with the hearing of the writ petition without awaiting the outcome of the intra-court appeals concerning the retrospective application of the tariff notification.ISSUE-WISE DETAILED ANALYSIS1. Limitation Period for Recovery ProceedingsRelevant Legal Framework and Precedents: The PP Act does not explicitly incorporate the Limitation Act. However, the Supreme Court's decision in New Delhi Municipal Committee vs. Kalu Ram established that the Limitation Act applies to proceedings under the PP Act, setting a three-year limitation period for recovery actions.Court's Interpretation and Reasoning: The Court held that the limitation period began on 23.07.2010, the date of the revised tariff notification. Excluding the period during which an interim order was in effect, the limitation expired on 11.05.2015. The show cause notice issued on 12.08.2015 was beyond this period, making the proceedings time-barred.Key Evidence and Findings: The Court found that no statutory notice was issued under the PP Act before 11.05.2015, affirming the District Judge's decision that the proceedings were barred by limitation.Application of Law to Facts: The Court applied Article 52 of the Limitation Act and the precedent set by Kalu Ram to determine the limitation period.Treatment of Competing Arguments: The appellant argued for the application of Section 18 of the Limitation Act, citing acknowledgment of debt by the respondents. The respondents contested this, stating the acknowledgment was not an admission of liability.Conclusions: The Court concluded that the proceedings were initially barred by limitation but considered the applicability of Section 18 of the Limitation Act.2. Acknowledgment of Liability and Extension of LimitationRelevant Legal Framework and Precedents: Section 18 of the Limitation Act allows for the extension of the limitation period if there is a written acknowledgment of liability.Court's Interpretation and Reasoning: The Court found that the respondents' communication dated 04.02.2015 constituted an acknowledgment of liability, thus extending the limitation period to 03.02.2018.Key Evidence and Findings: The communication from the respondents did not dispute the revised tariff but objected to its retrospective application, which the Court interpreted as an acknowledgment of liability.Application of Law to Facts: The Court applied Section 18 of the Limitation Act, considering the respondents' acknowledgment as extending the limitation period.Treatment of Competing Arguments: The respondents argued that the acknowledgment was not an admission of liability. The Court rejected this, citing the explanation to Section 18.Conclusions: The Court concluded that the limitation period was extended due to the acknowledgment of liability.3. Retrospective Application of Tariff NotificationRelevant Legal Framework and Precedents: The retrospective application of tariff revisions is a contentious issue, often requiring judicial interpretation.Court's Interpretation and Reasoning: The Court noted that the Single Judge had upheld the retrospective application, and the intra-court appeals were pending without interim orders.Key Evidence and Findings: The respondents' challenge to the retrospective application was based on ongoing appeals, not on the validity of the tariff itself.Application of Law to Facts: The Court deferred the issue, noting that the outcome of the intra-court appeals would directly impact the enforceability of the retrospective tariff.Treatment of Competing Arguments: The appellants argued for the validity of the retrospective application, while the respondents contested it based on pending appeals.Conclusions: The Court deferred the decision on this issue pending the outcome of the intra-court appeals.4. High Court's Decision to Proceed with HearingRelevant Legal Framework and Precedents: Judicial prudence often requires deferring decisions when related appeals are pending.Court's Interpretation and Reasoning: The Court found that the High Court should have awaited the outcome of the intra-court appeals, as their decision would directly impact the writ petition.Key Evidence and Findings: The intra-court appeals were pending, and their outcome would affect the enforceability of the tariff notification.Application of Law to Facts: The Court emphasized the need for judicial prudence in deferring decisions pending related appeals.Treatment of Competing Arguments: The appellants argued for immediate enforcement, while the respondents sought deferment pending appeals.Conclusions: The Court concluded that the High Court should have deferred its decision until the intra-court appeals were resolved.SIGNIFICANT HOLDINGSThe Court held that the limitation period for recovery proceedings was extended due to the acknowledgment of liability by the respondents, allowing the proceedings to continue.The Court emphasized the need for judicial prudence in deferring decisions pending related appeals, remanding the case to the High Court for reconsideration after the intra-court appeals are resolved.The Court restored the writ petition to be heard after the decision in the intra-court appeals, ensuring that the outcome of these appeals would determine the enforceability of the retrospective tariff application.