TaxTMI 
TaxTMI 
2020 (4) TMI 884
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.... 4. After studies by two expert committees constituted by it vide G.O.Ms. No. 1 dt. 10-1-2006 and G.O.Ms. No. 1 dt. 9-1-2007, the then State of Andhra Pradesh came to the conclusion that Cloud Seeding technology was not only scientific, but is also a proven technology and an effective weapon to fight recurring droughts, and that results showed that it enhances the rainfall to the tune of 15% on an average, in public interest, decided to adopt the same to augment the rainfall in these areas. It proposed to conduct Cloud Seeding operations for 120 days each year from 2007. 5. The Centre for Atmospheric Sciences and Weather Modification (Cloud Seeding) Technologies, the Jawaharlal Technological University, Hyderabad (3rd respondent) was roped in by the State as a nodal agency to carry out these operations. 6. It is not in dispute that directives were issued by the then Government of Andhra Pradesh pursuant to which the 3rd respondent's governing authority elected to pursue the Cloud Seeding program, with the primary objective of increasing rainfall over a target area in a safe and efficient manner and also to conduct research studies for scientific studies of the cloud physi....
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.... 11.08.2008 and dt. 11.08.2008. 16. According to petitioners, even mobilization advance was not released for 2008 for which it addressed letters dt. 11.08.2008, 23.08.2008, 28.08.2008, 04.09.2008, 19.09.2008, 13.10.2008, 16.10.2008, 20.10.2008 and 23.10.2008. 17. Ultimately, the E.M.D. of Rs. 30 lakhs paid by the petitioner was returned on 16.12.2008. However, the balance payment for Cloud Seeding operations for 2007 and full payment for such operations in 2008 were not released even though petitioners addressed letters dt. 29.12.2008, 02.02.2009 and 19.09.2009. 18. Much later the 3rd respondent issued letter dt. 11.06.2009 certifying that the 1st petitioner is due Rs. 22,67,88,907/-. But, notwithstanding the same, no payments were released. The 3rd contract dt. 20.7.2009 19. Thereafter, in 2009 also a short tender notice for Cloud Seeding operations was issued by the then State of Andhra Pradesh on 14.06.2009. 20. Again, the 1st petitioner submitted its bid and a contract was awarded to it by the 3rd respondent on 20.07.2009 for taking up said operations in the above 12 districts costing Rs. 25,40,57,800/-. The 1st petitioner successfully carried out the said ope....
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.... Finance Department (Annexure XXII). 30. The 1st petitioner issued another legal notice on 11.04.2014 (Annexure XXXII) to which a reply dt. 02.05.2014 was issued by the 2nd respondent that the issue of payment of amounts to the 1st petitioner is under consideration and that they were awaiting certain clarifications from the Vice-Chancellor of the 3rd respondent-University. After bifurcation of the composite State of Andhra Pradesh 31. Subsequently, the composite State of Andhra Pradesh was bifurcated into the new State of Telangana (1st respondent) and the residuary State of Andhra Pradesh (2nd respondent) w.e.f. 02.06.2014. 32. The petitioners contend that they sent reminders dt. 12.09.2014 to the Chief Ministers, Chief Secretaries and Secretaries of G.A.D. Department of both States (Annexures XXIII to XXVIII) seeking Rs. 40,28,47,380/- though it is entitled to Rs. 49.26 crores. 33. Petitioners contend that there were disputes between the 2nd petitioner and the other partner Sri Arvind Sharma which were adjudicated by a sole arbitrator on 19.10.2013 by consent memo permitting the 2nd petitioner alone to collect payment and to issue valid receipt to the agencies for ....
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....019 opposing grant of relief to petitioners. No counter affidavit is filed by 3rd respondent. 45. It is very important to note that along with the counter affidavits filed by respondents 1 and 2, not a single document is filed wherein the respondents had denied the claim of the petitioners prior to the filing of the instant Writ petition. 46. Arguments were heard on 2-1-2020 and 7-1-2020 and orders were reserved. 47. To avoid repetition of the contentions they are discussed under various headings mentioned below and dealt with by us. (a) Whether the existence of alternative remedy by way of a Civil Suit is a bar to entertaining the Writ Petition? 48. It is the contention of the respondents that there are disputed questions of facts arising for consideration in the Writ Petition and that the petitioners should therefore approach the Civil Court for appropriate relief and the Writ Petition ought to be dismissed as not maintainable. 49. This contention is without any merit because the Supreme Court in ABL International Ltd. and another Vs. Export Credit Guarantee Corporation of India Ltd. and others (2004) 3 SCC 553 has held that merely because one of the parties to ....
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....of the composite State of Andhra Pradesh, the 3rd respondent University as well as File notings obtained under the RTI Act, 2005. 54. In his letter dt. 11.06.2009, the Centre for Atmospheric Sciences and Weather Modification (Cloud Seeding) Technologies of the 3rd respondent University informed the Principal Secretary of the Rain Shadow Area Development Department of the composite State of Andhra Pradesh that the 1st petitioner is entitled to payment of Rs. 22,67,88,907/- for the operations done in 2008 and enclosed a certificate of acceptance also. 55. Vide G.O.Rt. No. 499, Finance (EXPR A & C) Department, dt. 10.02.2010, the State of Andhra Pradesh released Rs. 20,64,38,907/- to the petitioners for Cloud Seeding operations in 2008. 56. The Note File C. No. 7980/364/A2/EAC/2011 at page 27 (running page 131 in the paper book filed by the petitioners) of the Finance (EAC) Department contains a statement dt. 22.08.2011 that Rs. 40,28,47,380/- has to be paid to the 1st petitioner for Cloud Seeding operations for 2007-08, 2008-09, 2009-10. 57. The Note File C. No. 327/RS-II/09 (at running page 204 to 211 of the paper book filed by the petitioners) records on 29.08.2011 from....
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....unt is towards dues pending payment of Messrs Agni Aviation for the years 2007, 2008 and 2009. The advice of the Advocate General at pp. 117-121 C.F. may be perused, especially 'X' at page 120 C.F.'. (emphasis supplied) 63. Below this endorsement are are signatures of the then Minister (RSAD) (on 07.09.2012), Minister (Finance) (on 11.09.2012) and the then Hon'ble Chief Minister Kiran Kumar Reddy (on 09.01.2013) below the above endorsement. 64. This indicates that at the highest level there was approval to make payment of Rs. 40.28 crores to the petitioners and that the said liability was thus expressly admitted by the then State of Andhra Pradesh. 65. As pointed out above, not a single material paper is filed by respondents 1 and 2 showing that at any point of time they had denied the claim of the petitioners for the amount of Rs. 40.28 Crores for Cloud Seeding operations done by the petitioners in 2007,2008 and 2009. 66. On 02.05.2014, vide letter No. 164/RS.II/2014, the Secretary to the Government of Rain Shadow Area Development Department of the composite State of Andhra Pradesh replied to the legal notice issued by the petitioners through M....
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....hile dealing with any matter pertaining to any person is essentially an internal matter of the Government and carries with it no legal sanctity; and that, once the decision on such issue is taken and approved by the competent authority empowered by the Government in that behalf, it is required to be communicated to the person concerned by the State Government. The Court explained that so long as the decision based on such internal deliberation is not approved and communicated by the competent authority as per the procedure prescribed in that behalf to the person concerned, such noting does not create any right in favour of the person concerned nor would it partake the nature of any legal order so as to enable the person concerned to claim any benefit of any such internal deliberation; and that such noting(s) or/and deliberation(s) are always capable of being changed or/and amended or/and withdrawn by the competent authority. 71. The Pimpri Chinchwad New Township Development Authority (2018) 8 SCC 215, at page 225 (Supra) related to withdrawal of a Notification issued under the Land Acquisition Act, 1894 after possession of the land acquired was taken by the State and it consider....
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....the Officers of the Successor States disputing the claim of the petitioners. 77. Only for the first time in the counter affidavits filed in the Writ Petition on 13.12.2019 (2nd respondent) and 16.12.2019 (1st respondent) this issue is being raised. 78. When the 1st petitioner had performed Cloud Seeding Operations between 2007 and 2010 in the erstwhile composite State of Andhra Pradesh, and even the then Chief Minister had admitted the liability and approved payment of the dues of the 1st petitioner, it is not open to the successor States to raise a dispute for the first time in December, 2019 about the genuineness of the claims of the petitioners. 79. As observed in Popatrao Vyankatrao Patil Civil Appeal No. 1600 of 2020 decided on 14.02.2020 by a Three Judge Bench headed by Chief Justice of India, Justice B.R. Gavai and Justice Suryakant (supra) by the Supreme Court, the State should act as a model litigant. It quoted it's decision in Urban Improvement Trust, Bikaner vs. Mohan Lal (2010) 1 SCC 512. 80. In Urban Improvement Trust, Bikaner (2010) 1 SCC 512 (supra) the Supreme Court has criticized the attitude of Government officials in deliberately delaying taking c....
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.... litigation costs and executive time by the State and its agencies is so staggering these days because of the large amount of litigation in which it is involved that a positive and wholesome policy of cutting back on the volume of law suits by the twin methods of not being tempted into forensic showdowns where a reasonable adjustment is feasible and ever offering to extinguish a pending proceeding on just terms, giving the legal mentors of Government some initiative and authority in this behalf. I am not indulging in any judicial homily but only echoing the dynamic national policy on State litigation evolved at a Conference of Law Ministers of India way back in 1957.'" 8. In Madras Port Trust v. Hymanshu International 1979 (4) SCC 176 this Court held: (SCC p. 177, para 2) "2. ... It is high time that Governments and public authorities adopt the practice of not relying upon technical pleas for the purpose of defeating legitimate claims of citizens and do what is fair and just to the citizens. Of course, if a Government or a public authority takes up a technical plea, the Court has to decide it and if the plea is well founded, it has to be upheld by ....
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....Constitution of India, there is a public law element involved in the matter as explained in para 6 and 7 supra, and the instant case falls within the exceptional circumstances warranting exercise of Writ Jurisdiction. Therefore this objection of the respondents cannot therefore be entertained. Plea that in contractual matters, Writ Petitions cannot be entertained 84. Though the respondents cited the decision in Joshi Technologies International INC Vs. Union of India and others (2015) 7 SCC 728 and sought to contend that Writ Petitions on contractual matters were not maintainable, as stated in ABL International (2004) 3 SCC 553 (supra), in an appropriate case, a Writ Petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable. Even in Popatrao Vyankatrao Patil Civil Appeal No. 1600 of 2020 decided on 14.02.2020 by a Three Judge Bench headed by Chief Justice of India, Justice B.R. Gavai and Justice Suryakant (supra), in a contractual dispute the Supreme Court granted relief to a party in a contractual dispute finding fault with the High court which denied it under Art. 226 of Constitution of India. 85. Therefore we rej....
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....hedule mentioned therein on 01.04.2008, 01.04.2009 and 01.04.2010 respectively and the Writ Petition filed by the petitioners on 07.01.2016 is barred by time. 93. The petitioners relied on Section 18 of Limitation Act, 1963 which deals with extension of period of limitation by acknowledgement of liability. 94. Sec. 18 of the Limitation Act, 1963 states: "18. Effect of acknowledgment in writing :- (1) Where, before the expiration of the prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing, signed by the party against whom such property or right is claimed, or by any person through whom he derives is title or liability, a fresh period of limitations hall be computed from the time when the acknowledgment was so signed. (2) .... ..... Explanation :- For the purpose of this section- (a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or averse that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a re....
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.... However, such intention can be inferred by implication from the nature of the admission and need not be expressed in words. A clear statement containing acknowledgement of liability can imply the intention to admit jural relationship of debtor and creditor. ... ... So long as the statement amounts to an admission, acknowledging the jural relationship and existence of liability, it is immaterial that the admission is accompanied by an assertion that nothing would be found due from the person making the admission or that on an account being taken something may be found due and payable to the person making the acknowledgement by the person to whom the statement is made." (emphasis supplied) 97. In J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd. and another (2008) 2 S.C.C. 444 also the Supreme Court further explained that if a defendant writes to the plaintiff requesting him to send his claim for verification and payment, it amounts to an acknowledgment of liability. In that case the respondent before the Supreme Court wrote a letter dt. 28-10-1978 to the appellant as under: "Re.: Settlement of pending claims. You had called on C....
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....the jural relationship of contractor and employer and an intention to settle the pending claims after being satisfied about them. Therefore, the letter dated 28-10-1978 was clearly an acknowledgment in writing insofar as the "pending claims" of the contractor. What were the pending claims is made clear in the letter dated 16-11-1978 written by the contractor enclosing a statement showing that in all, a sum of Rs. 50,15,820 was due. The committee constituted by OMC examined these claims and admitted the claims only to an extent of Rs. 3,52,916 as per its final report dated 7-12-1979. OMC paid Rs. 3,50,000 on 4-3-1980. 23. In view of the acknowledgment in writing on 28-10-1978 and payment of Rs. 3,50,000 on 4-3-1980, it can be said that in regard to the pending claims of the contractor, the limitation stood extended by three years from 4-3-1980 and at all events by three years from 28-10-1978." 98. In Prabhakaran and others vs. M. Azhagiri Pillai (dead) by LRs. And others (2006) 4 S.C.C. 484 the Court held that to amount to an acknowledgement, it need not be in a document addressed to the petitioner/plaintiff. It summed up the principles in the following terms: ....
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....ce, that of a debtor and a creditor and the intention to admit such jural relationship. Such an intention need not be in express terms and can be inferred by implication from the nature of the admission and the surrounding circumstances. Generally speaking, a liberal construction of the statement in question should be given. ..." (emphasis supplied) 100. In several cases, various High Courts have held that an acknowledgment of liability in the balance sheet by a Company registered under the Companies Act, 1956 extends the period of limitation though it is not addressed to the creditor specifically. (Zest Systems Pvt. Ltd., Vs. Center for Vocational and Entrepreneurship Studies and Another, Bhajan Singh Samra Vs. Wimpy International Ltd., Vijay Kumar Machinery and Electrical Stores Vs. Alaparthi Lakshmi Kanthamma (1969) 74 ITR 224 (AP) and Bengal Silk Mills Company, Rajah of Vizianagaram Vs. Official Liquidator, Vizianagaram Mining Company Limited AIR 1952 Madras 1361). 101. Therefore it is not necessary that the acknowledgment of liability must be contained in a document addressed to the creditor i.e. the petitioners in the instant case. 102. In our view, the file....
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....ners for Cloud Seeding operations 2007. It states: "Thus an amount of Rs. 69,13,956/- is pending to be paid to M/s. Agni Aviation Consultants for Cloud Seeding operations for 2007-08" 110. In our opinion, though these acknowledgments by the 3rd respondent and the then state of A.P. are made after expiry of the period of limitation of 3 years from the date of the agreement for the Cloud Seeding operation of 2007, they would fall under Section 25(3) of the Contract Act, 1872 and would extend the period of limitation from 22.08.2011 to 21.08.2014. 111. Sec. 25(3) of the Contract Act in so far it is relevant states: "an agreement made without consideration is void unless 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 of limitation of suits." 112. In Bombay Dyeing & Mfg. Co. Ltd. v. State of Bombay AIR 1958 SC 328, the Supreme Court had held: "Under Section 25(3) of the Contract Act, a barred debt is good consideration for a fresh promis....
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....egal Notice dt. 11.04.2014 issued by the petitioners stated that "the matter of balance payment to M/s. Agni Aviation Consultants for conducting Cloud Seeding operations for 2007, 2008 and 2009 is under consideration and awaiting for certain clarifications from the Vice-Chancellor, JNTU, Hyderabad ". 117. We have already referred to the decision in J.C. Budhraja (2006) 4 S.C.C. 484 (supra) wherein the Supreme Court explained that if a defendant writes to the plaintiff requesting him to send his claim for verification and payment, it amounts to an acknowledgment of liability. 118. The contents of the letter dt. 28.03.2012 and letter dt. 11.04.2014 of the Secretary to Government, Rain-Shadow Area Development Department addressed to the 1st petitioner would fall in this category and, in our opinion, extend the period of limitation for filing the Writ Petition upto 11.4.2017 (3 years from 11.4.2014 letter) in regard to the claim for the first contract of 2007-08 to the extent of Rs. 69,13,956/- which was due and payable to the petitioners. 119. So we hold that the claim of the petitioners for Rs. 69,13,956/- for the 2007 first contract for Cloud Seeding is well within time sin....
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....o be paid to M/s. Agni Aviation Consultants for Cloud Seeding operation from the year 2007-08 to 2009-10, as follows: Cloud Seeding 2007-08 Rs. 69,13,956/- Cloud Seeding 2008-09 Rs. 20,64,38,907/- Cloud Seeding 2009-10 Rs. 18,94,94,517/- Total Rs. 40,28,47,380/- 128. In the File Noting at page 44 in File C. No. 327/RS-II/09 made on 29-08-2011 (pg. 205 of the Material papers filed by the petitioners), it is acknowledged that Rs. 69,13,956/- is payable to the petitioners for Cloud Seeding operations 2008. It states: "Thus pending payments for Cloud Seeding Operations 2008 are as under: Total payments to be made ... Rs. 24,42,58,907/- Advance Paid ... Rs. 1,74,70,000/- Remaining Balance to be paid ... Rs. 22,67,88,907/-" 129. These statements also amount to acknowledgments of liability under Sec. 18 of the Limitation Act, 1963 and extends the limitation upto 28-8-2014. 130. Before this date, as we have stated above, the Hon'ble Chief Minister at that time Sri Kiran Kumar Reddy on 09.01.2013 had granted approval for the payment of Rs. 40.28 crores to the petitioners including the claim of the petiti....
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....rs from 11.4.2014 letter) in regard to the claim for the third contract of 2009 for Rs. 25,40,57,800/- which was due and payable to the petitioners; and so even the claim under the third contract for 2009 cannot be said to have been barred by limitation since the Writ Petition was filed on 07.01.2016 within the extended period of limitation. 139. Thus, the claim for payment due under the third contract dt. 20.07.2009 is also clearly within limitation. FINDING: 140. Therefore, we hold that the plea of the respondents that the claims of the petitioners for performing Cloud Seeding operations for the years 2007, 2008 and 2009 is barred by limitation, is without any merit. Contention regarding the locus of the 2nd petitioner to claim the amounts due to the 1st petitioner - Firm in this Writ Petition: 141. The 1st petitioner is admittedly a partnership Firm in which the 2nd petitioner and one Arvind Sharma were partners. 142. These disputes were referred to a sole arbitrator Justice M.P. Chinnappa, a retired Judge of the High Court of Karnataka. 143. Before the said Arbitrator, both the partners filed a joint memo on 17.10.2013 authorizing the 2nd petitioner to coll....
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....t the firm having been dissolved, the authority of Navrang Lal to give a valid discharge on behalf of the firm ceased with the dissolution of the firm and he could, therefore, no longer, maintain the execution application in his name alone. All the partners of the dissolved firm ought to have been joined in making the execution application so as to given the judgment-debtor an effective and complete discharge. That argument is effectively answered by the provisions of Section 47 of the Indian Partnership Act, 1932, which provides that 'after the dissolution of a firm the authority of each partner to bind the firm, and the other mutual rights and obligations of the partners, continue notwithstanding the dissolution, so far as may be necessary to wind up the affairs of the firm and to complete transactions begun but unfinished at the time of the dissolution, but not otherwise. 4. The execution of the decree in question was surely not any new transaction. It was a decree in favour of the firm and being an asset of the firm it was the duty of the partners to collect it and Navrang Lal being one of the partners of the dissolved firm could surely perform that duty and ....
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....s to the successor States of Telangana and Andhra Pradesh. It states: "60. Contracts : (1) Where, before the appointed day, the existing State of Andhra Pradesh has made any contract in the exercise of its executive power for any purposes of the State, that contract shall: (a) if the purposes of the contract are, on and from the appointed day, exclusive purposes of either of the successor States of Andhra Pradesh and Telangana, then it shall be deemed to have been made in exercise of the executive power of that State and the liability shall be discharged by that State; and (b) in any other case, all rights and liabilities which have accrued or may accrue under any such contract shall be apportioned between the successor States on the basis of population ration or in any other manner as may be agreed to by the successor States. (2) For the purposes of this section, there shall be deemed to be included in the liabilities which have accrued or may accrue under any contract: (a) any liability to satisfy an order or award made by any court or other tribunal in proceedings relating to the contract; and &n....