2025 INSC 440
SUPREME COURT OF INDIA
(HON’BLE
VIKRAM NATH, J. AND HON’BLE PRASANNA B. VARALE, JJ.)
NEW MANGALORE PORT
TRUST
Petitioner
VERSUS
CLIFFORD D SOUZA ETC.
ETC
Respondent
Civil
Appeal Nos. 1796-1828 OF 2024-Decided on 03-04-2025
Civil,
Limitation
Public Premises
(Eviction of Unauthorised Occupants) Act, 1971, Section 7(3) - Limitation Act,
1963, Section 3, 18; Article 52 – Limitation – Acknowledgment - Licence fee demand - 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 -
The respondents have vehemently argued that this point had never been
raised before any of the forum below nor in the pleadings before this Court -
However, the fact remains that the communication dated 04.02.2015 is not
disputed by the respondents - There is no dispute on the contents either of the
said communication - If that be so, under admitted position, and in view
of Clause (a) of explanation to Section 18 of the Limitation Act, the
acknowledgment of the liability stands established - Thus, the limitation would
extend to 03.02.2018.
(Para
12 and 13)
JUDGMENT
Vikram Nath, J. :-
The appellants New Mangalore Port Trust[NMPT]
has assailed the correctness of the judgment and order dated 22.11.2019 passed
by the High Court of Karnataka at Bengaluru dismissing a bunch of writ
petitions preferred by NMPT assailing the correctness of the judgment and order
dated 15.03.2017 passed by the District Judge allowing the appeal of the
respondents and quashing the order of the Estate Officer of NMPT raising demand
against the respondents.
2.
The facts in brief relevant for proper adjudication of these appeals are
summarised hereunder:
2.1. NMPT allotted
land to the respondents (hereinafter referred to as Licensees) for loading and
unloading goods subject to payment of licence fee which is to be revised every
five years with the approval of Tariff Authority for Major Ports (TAMP).
2.2. Allotment to the
respondent for the licensees had been made in the year 2003. By notification
dated 20.06.2005 licence fee was revised w.e.f. February, 2002. Thereafter, the
next revision was notified on 23.07.2010 approving the revision of licence fee
w.e.f. 20.02.2007 again for a period of five years.
2.3. Pursuant to the
said revision, demand was raised for realising the arrears of licence fee for
the period 20.02.2007 till 23.07.2010 i.e. the date of the notification.
Beginning March, 2011, the Assistant Estate Manager/Estate Officer issued
demand notice to all the Licensees. The Licensees challenged the notification
dated 23.07.2010 before the High Court by way of writ petitions filed in
the year 2011-2012 primarily on the ground that it was not permissible to
revise the licence fee retrospectively. The learned Single Judge vide judgment
dated 28.06.2013 dismissed the bunch of writ petitions holding that the licence
fee could be revised retrospectively and upheld the notification dated
23.07.2010.
2.4. Aggrieved by the
same the Licensees preferred writ appeals before the Division Bench of the
Karnataka High Court at Bengaluru. These group of
appeals are still pending however without any interim orders.
2.5. After the
judgment of the Single Judge dated 28.06.2013, the Assistant Estate Manager
issued a demand notice on 15.01.2015, copy whereof is filed as Annexure P-5. It
would also be relevant to mention that there are other notices also issued but
the notice dated 15.01.2015 is specifically mentioned as there is a reply given
to it by the Licensees. The notice dated 15.01.2015 is reproduced
hereunder:-
“FINAL
NOTICE
No.30/44/2015/EBL.1/TAMP
To Date: 15.01.2015
M/s Export Trade Link
Agencies Lal Bagh
MANGALORE – 575 003
Sir,
Sub: Payment of
difference in Licence fee on account of revision of Scale of Rate w.e.f.
20.02.2007
Ref:
1) TAMP ORDER G NO.184
dated 23.07.2010.
2) T.O. letter even
No.dtd/07.11.2014 Please refer to the letter cited above, wherein it was
requested to remit the difference of licence fee/penal licence fee including
Service Tax amounting to Rs.55,32,234/- on account of
revision of SoR w.e.f. 20.02.2007, But you have not remitted the said amount.
Hence you are once
again requested to make necessary arrangement for remittance of difference in
Licence Fee and Service Tax within 15 days from the date of receipt of this
letter failing which penal interest @ 13% shall be payable from the due date
till the payment is received and action for recovery of dues will be initiated
as per law.
Thanking you Yours faithfully Sd/- 15.01.2015
Asstt. Estate Manager
(Gr.I)”
2.6. The Licensees
responded to the same vide letter dated 04.02.2015 and objected to the demand
raised on the ground that as the issue is still pending before the Division
Bench of the High Court, no question arises for the payment of the difference
in licence fee for the period 20.02.2007 till 23.07.2010. The same would
prejudice their case. The question whether licence fee could have been revised
with retrospective effect and recovered was still to be decided by the High
Court in the pending writ appeal. It was thus requested that the NMPT may not
demand the difference in licence fee for the period prior to 23.07.2010 till
such time the appeal is not decided. The said communication dated 04.02.2015 is
reproduced hereunder: -
“The Asst. Estate
Manager (Gr.I) New Mangalore Port Trust, Mangalore, Sir, Subject:
Writ Petition No.36972/2011, order dated 28.06.2013 of Hon’ble High Court
of Karnataka Ref:
i) Payment of difference licence fee on
account of revision of scale of rates w.e.f. 20.02.2007, on the basis of Tamp
order No. G184, dated:
23.07.2010.
ii) Your Letter
bearing No.3/44/2015/EBL.1/TAMP, dated 15.01.2015.
With reference to the
above said subject, we would like to inform you that we had challenged the TAMP
order dated: 23.07.2010, before the Hon’ble High Court of Karnataka, Bangalore
by filing the writ petition No.34541 & 34784/211 and the said writ petition
was dismissed on 28.06.2013 by the Hon’ble High Court of Karnataka, Bangalore.
We have challenged the order dated:28.06.2013 passed in the writ petition by
the Hon’ble High Court of Karnataka, Bangalore before the division bench by
filing the writ appeal no.4400 & 4401/2013, the said writ appeal was posted
on 10.11.2014 for preliminary hearing/admission and the Hon’ble Court after
hearing the matter by the council appearing for our company and by the council
appearing for New Mangalore Port Trust the appeal was admitted by the Hon’ble
High Court of Karnataka on 10.11.2014, therefore the above said subject matter
i.e. the notification dated: 23.07.2010 (TAMP) is under challenge before
the Hon’ble High Court and the Court has already admitted the matter the said
subject matter pending before the Hon’ble High Court therefore immediately the
question doesn’t arise for payment of difference license fees to be paid to you
as per your letter, it will prejudice our case since we are not liable to pay
the difference license fees with retrospective effect, whether we are liable to
pay or not that question has to be decided by the court in the pending writ appeal.
Therefore, we are
requesting you to not to demand difference license fees amount with
retrospective effect as per the TAMP order, dated 23.07.2010, during the
pendency of the appeal before the Hon’ble High Court of Karnataka, Bangalore
and the question of remittance of money demanded by you as per you Letter,
dated 15.01.2015 for a sum of Rs.5,73,833/- present
does not arise, since appeal is pending before the Hon’ble High Court of
Karnataka, Bangalore.”
2.7. The Assistant
Estate Manager Grade-1 was also nominated as Estate Officer under Public
Premises (Eviction of Unauthorised Occupants) Act, 1971[The PP Act]. The Estate Officer vide communication dated
12.08.2015 gave a notice under sub-section (3) of section 7 of the PP
Act to the Licensees calling upon them to show cause on or before thirty days
from the date of receipt of the notice why an order requiring to pay the said
arrears of rent together with simple interest should not be made. The Licensees
again came up with their reply on 07.09.2015 taking up the same defence that
their writ appeal was pending before the Division Bench of the Karnataka High
Court at Bengaluru and till such time it is not decided, any demand would
prejudice their case. The question of demanding the difference of license fee
for the period prior to 23.07.2010 was yet to be decided by the Division Bench
in the pending writ appeal.
2.8. Since the
response is the same as given in the earlier reply dated 04.02.2015 we are not
reproducing the same. The Estate Officer again issued a notice dated 15.02.2016
granting them three weeks further time to show cause and it further stated that
the compound interest at the rate of 9% (nine percent) would also be
payable under the statutory provisions. This notice was also replied on 25.02.2016
by the Licensees resisting any demand during the pendency of the writ appeal
citing the same reasons as given earlier.
2.9. The Estate
Officer not satisfied with the reply and noting the fact that there was no stay
granted in the pending writ appeals proceeded to pass an under section
7(1) of the PP Act granting a month’s time to make the payment failing
which it would be recovered as land revenue.
2.10. The Licensees
preferred a miscellaneous appeal under section 9 of the PP Act before
the District Judge at Mangalore. The District Judge clubbed all the appeals and
decided the same vide judgment dated 15.03.2017, allowing all the appeals
holding that the proceedings under section 7(1) was barred by time
and accordingly, set aside the demand. Aggrieved by the aforesaid judgment of
the District Judge, the NMPT filed writ petitions before the High Court
which have since been dismissed by the impugned judgment giving rise to the
present appeals.
3.
We have heard Mr. Yatindra Singh, learned senior counsel appearing for the
appellant and on behalf of the respondents Shri Vikas Singh and Ms. Haripriya
Padmanabhan, learned senior counsels, and have perused the material on record.
4.
The arguments advanced on behalf of the appellant are briefly summarised hereunder:
a) The licensees did
not raise the plea of limitation in their reply to the show cause notice
under Section 7(3) of the PP Act. For the first time they raised it
in the appeal. Under the PP Act no limitation is prescribed for
passing an order under Section 7(1).
b) The judgment in the
case of NDMC vs. Kalu Ram, [(1976) 3
SCC 407] although wrongly decided holding that there would be
limitation of three years applicable to recovery proceedings under the
PP Act, but without going into that question in view of the facts of the
present case, the proceedings for recovery under the PP Act were
within the limitation period of three years. This submission is based
upon Section 18 of the Limitation Act. It is submitted that the respondent,
in writing, had acknowledged the debt vide their reply dated 04.02.2015 to the
demand notice dated 15.01.2015 and therefore the limitation would stand
extended up to 03.02.2018.
c) Admitted facts and
admitted documents can be relied upon to argue a question of law before this
Court even if not raised before the Courts below. The submission is that though
the benefit of Section 18 of the Limitation Act was not claimed
specifically before the Court below, but in view of the admitted facts based on
admitted documents, this Court may consider extending the benefit
of Section 18 of the Limitation Act. Once this benefit is extended,
the limitation for recovery of arears of rent would extend up to 03.02.2018 and
even beyond in view of further acknowledgement of the debt in response to
the show cause notice and reply given by the respondents on 07.09.2015 and
25.02.2016 for a further period of three years.
d) The Division Bench
and the High Court held the recovery proceedings to be barred by limitation
taking the date of notification of the revised tariff i.e. 23.07.2010 as the
cause of action for the recovery of arrears. After excluding the period during
which interim order was operating i.e. 1 year and 293 days, the limitation
would extend up to 11.05.2015 but as the show cause notice was issued on
21.08.2015, it was beyond the prescribed period of limitation.
e) The respondents
challenged the notification of revised tariff dated 23.07.2010 by way of several
petitions before the learned Single Judge of the Karnataka High Court, in which
interim order was also passed. The said bunch of petitions was dismissed on
28.062013. Aggrieved by the same, respondent preferred
intra-court appeals which were admitted and are still pending before the
Division Bench of the High Court of Karnataka. Throughout in their
correspondence to the various demands and the show cause notices, the only
defence taken by the respondents was that the demand should not be pressed at
this stage as it would prejudice their case pending in the appeal before the
Division Bench of the Karnataka High Court. The tenor of the defence is clear.
Then subject to the outcome of the appeals, the demand could be raised if the
respondents failed.
f) It is further
submitted that in view of the specific stand taken in their replies, the
respondents cannot now urge that the recovery proceedings were barred by
limitation.
g) In view of the
admitted position that the intra- court appeals are pending before the Division
Bench of the High Court, this Court may consider setting aside the quashing of
the recovery proceedings on the ground of limitation and may remand the
proceedings before the High Court to be clubbed with the pending appeals
and both the matters may be decided simultaneously. If the intra-court appeals
of the respondents are allowed and the revision of tariff retrospectively is
set aside, that is the notification dated 23.07.2010, to the extent that its retrospective application is set aside, automatically
the writs filed by the appellant before the High Court would stand dismissed.
However, if the respondents’ appeals are dismissed by the Division Bench, then
the writ petition filed by the appellant before the High Court,
deserves to be allowed and the respondents would be liable to pay the arears of
rent along with admissible interest.
h) Lastly, it was
submitted that the respondents were well aware of the revision of the tariff
and thus would have realised the enhanced tariff. If they succeed on this
technical ground, they would be guilty of unjust enrichment.
i) On the above
submissions, learned senior counsel prayed that the appeals be allowed after
setting aside the impugned order of the High Court.
5.
Mr. Vikas Singh and Ms. Haripriya Padmanabhan, learned senior counsels
appearing for the respondents, vehemently submitted that the appeals are liable
to be dismissed. None of the arguments advanced by the appellant are tenable in
law. Their arguments are summarised hereunder:
a) The appellant,
having failed to raise the plea of acknowledgment and extension of limitation
under Section 18 of the Limitation Act either
before the Estate Officer, the District Judge or the High Court and not
even in the pleadings before this Court, cannot raise this plea during the
course of oral arguments. The submission relating to applicability
of Section 18 of the Limitation Act deserves to be rejected outright.
b) The question of
limitation would be a mixed question of law and fact and, as such, a party seeking
benefit of an extension provision should specifically plead and lead evidence
in support of their submissions. In the absence of any such pleading before any
of the forum, no benefit can be extended to the appellants seeking
applicability of Section 18 of the Limitation Act.
c) The communication dated 04.02.2015 never
admitted the liability/debt. In fact, it clearly denied the liability/demand on
the ground that there could be no retrospective revision of tariff.
It is, thus, wrong on
the part of the appellant to argue that the communication dated 04.02.2015
acknowledged the liability/debt.
d) The demands raised
prior to 12.08.2015 were not under any statutory provision. These demands were
being raised by the lessor to the lessee. The statutory authority
under the PP Act for the first time, issued show cause notice on
12.08.2015, which admittedly was beyond a period of three years if the benefit
of section 18 of the Limitation Act is not extended. Had there
been a notice under Section 7(3) of the PP Act prior to 11.05.2015 to
which a reply had been given by the respondents may be for deferment of the
demand in view of the pending appeal before the Division Bench, it could be
urged on behalf of the appellant that they were entitled to the benefit of Section
18 of the Limitation Act. There being no such show cause notice prior
to 11.05.2015, any proceedings for recovery would be barred by law. Both
the notices under Section 7(3) dated 12.08.2015 and the order passed
under Section 7(1) on 21.07.2016 were beyond the prescribed period of
limitation and, thus, proceedings have been rightly quashed by the District
Judge as confirmed by the High Court.
e) It may be true that
the Assistant Estate Manager also happened to be the Estate Officer under
the PP Act, it cannot be presumed that rather no benefit can be extended
to the appellant that the previous notices issued by the Assistant Estate
Manager could be treated to be notice under the provisions of the PP Act.
f) For all the reasons
recorded above, the submission is that the appeals deserve to be dismissed.
6.
Having considered the submissions and having perused the material on record, we
now proceed to deal with the respective arguments.
7.
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. On behalf of the
appellant, it was submitted that in reply to the show cause notice
under section 7(3) of the PP Act, no objection regarding the plea of
limitation had been taken. However, in the appeal, ground for limitation was
taken for the first time. Similarly on behalf of the respondents, it was
submitted that the plea of section 18 of Limitation Act was not
raised right up to the stage of filing the appeal before this Court, but it was
taken only during the course of arguments. As the facts and the material on
record, i.e. the correspondences between the parties, are not in dispute, we
are rejecting the said submission of both the sides and thus would be dealing
with the plea of limitation also.
8.
The District Judge had allowed the appeal of the respondents and quashed the
demand notice on the finding that it was barred by limitation. Taking the date
of cause of action to be 23.07.2010, and after excluding the period during
which there was an interim order operating in the writ petition pending
before the Single Judge
filed by the respondents, the limitation of 3 years would expire on 11.05.2015.
The said limitation of 3 years is provided under Article 52 to
the Schedule of the Limitation Act. The High Court also took the same view
and accordingly held that the proceedings under the PP Act having
been initiated by issuance of notice for the first time on 12.08.2015 the same
would be barred by limitation. It also placed reliance on the judgement of this
Court in the case of New Delhi Municipal Committee vs. Kalu Ram[AIR 1976 SC 1637]. In the absence
of Kalu Ram (supra), the Limitation Act would not apply
because the PP Act does not explicitly incorporate it.
While Section 9 of the PP Act provides a limitation period for filing
appeals, Section 7 thereof contains no such provision. However, Kalu
Ram clarifies that the Limitation Act does apply to proceedings under
the PP Act. On behalf of the appellants, it was briefly argued
that Kalu Ram (supra) was incorrectly decided and required to be
revisited by a larger Bench, but this was raised merely as a passing reference.
9.
On behalf of the respondents, it has been submitted that in view of the
admitted facts that no notice was issued under the PP Act by the
Estate Officer prior to 11.5.2015, the impugned proceedings under section
7 of the PP Act were rightly held to be barred by law.
10.
In effect, 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 we have already rejected 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,
we proceed to deal with the same and analyze as to whether the benefit could or
could not be extended to the appellant as claimed.
11.
Before proceeding further, it would be appropriate to reproduce section
18 of the Limitation Act:
“
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 his
title or liability, a fresh period of limitation shall be computed from the
time when the acknowledgment was so signed. (2) Where the writing containing
the acknowledgment is undated, oral evidence may be given of the time when it
was signed; but subject to the provisions of the Indian Evidence Act,
1872 (1 of 1872), oral evidence of its contents shall not be received.
Explanation.—For the
purposes of this section,—
(a) an acknowledgment
may be sufficient though it omits to specify the exact nature of the property
or right, or avers that the time for payment, delivery, performance or
enjoyment has not yet come or is accompanied by a refusal to pay, deliver,
perform or permit to enjoy, or is coupled with a claim to set off, or is
addressed to a person other than a person entitled to the property or right,
(b) the
word "signed" means signed either personally or by an agent duly
authorised in this behalf, and
(c) an
application for the execution of a decree or order shall not be deemed to be an
application in respect of any property or right.”
12. 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.
13.
The respondents have vehemently argued that this point had never been raised
before any of the forum below nor in the pleadings before this Court. However,
the fact remains that the communication dated 04.02.2015 is not disputed by the
respondents. There is no dispute on the contents either of the
said communication. If that be so, under admitted position, and in view of
Clause (a) of explanation to Section 18 of the Limitation Act, the
acknowledgment of the liability stands established. Thus, the limitation would
extend to 03.02.2018.
14.
It has also been urged on behalf of the respondents that they never admitted
the liability, rather they had specifically denied it.
This submission is based on the ground that the revised tariff vide
notification dated 23.07.2010 had been challenged before the High Court with
respect to its retrospective application. This submission of the respondents is
of no help to them. The respondents do not dispute the revised tariff under the
notification dated 23.07.2010. Their challenge was only to the retrospective
application of the same. The Single Judge had dismissed the writ petition filed
by the respondents against which an intra-court appeal before the Division
Bench of the Karnataka High Court was filed and is still pending. There are no
interim orders in the said appeal. The respondents had been objecting to the
demand on the ground of pendency of this intra-court appeal. As such there was
no denial to pay nor the amount was disputed. The
respondents were bound by the notification dated 23.07.2010 till such time it
was set aside by any Court of law. Having failed before the Single Judge, the
respondents, were liable to comply with the notification dated 23.07.2010.
15.
At the time of the filing of the writ petition by the appellants before the
High Court, the intra-court appeals preferred by the respondents were already
pending. The learned Single Judge could have considered deferring the hearing
of the writ petition till the disposal of the intra-court appeals as the
outcome of the intra court appeals would have a direct bearing on the writ
petition filed by the appellants.
16.
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. Rather, it should have awaited the
outcome of the pending intra-Court appeals relating to retrospective
application of the notification dated 23.07.2010. Subject to the final
outcome of the said intra-court appeals, the writ petition should have been
decided. This was all the more necessary for the High Court in view of the
consistent stand taken by the respondents that the demands raised by the
appellant vide various notices issued prior to 12.08.2015 or thereafter may be
deferred awaiting the outcome of the appeals.
17.
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.
18.
In the above facts and circumstances, we are not entering into the other
arguments advanced by the parties. We are restoring the writ petition of
the appellants to be heard after the decision in the intra- court appeals. In
case the appeals are allowed by the Division Bench then there would no question
of any recovery retrospectively. The demands would be liable to be withdrawn.
However, if the respondents fail in their appeals, they would be liable to pay
the demand in accordance to law along with interest admissible under law.
19.
We accordingly allow the appeals, set aside the impugned order of the High
Court and restore the writ petitions before the High Court to be heard after
disposal of the pending intra-court appeals filed by the respondents.
------