# V.M. SALGAOCAR AND BROS v. BOARD OF TRUSTEES OF PORT OF MORMUGAO AND ANR

- **Citation:** [2005] 3 S.C.R. 27
- **Court:** Supreme Court of India
- **Decided:** 2005-03-31
- **Bench:** Ashok Bhan, A.K. Mathur
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/v-m-salgaocar-and-bros-v-board-of-trustees-of-port-of-mormugao-and-anr-20573
- **Pages:** 27

## Headnote

B
Major Port Trusts Act, 1963-Section 120:
Notice-Non giving of-Held: Giving of notice is a mandatory
requirement for filing suit-Suit filed without giving notice is thus not, C
maintainable-Further, Suit filed on expiry of six months of accrual of cause
of action is also barred by time.
There are two requirements in the Section and both the requirements
have to be read conjunctively and not alternatively-The suit has to be filed D
within six months of accrual of cause of action and to be preceded by one
month's notice-The word 'or' occurs between two clauses if read alternatively
would defeat the very object and intention and lead to absurdity.
Shorter period of limitation provided for filing suit-Constitutionality
of-Held: Siatute is founded on public policy that an unlimited and perpetual E
threat of litigation leads to disorder and confusion and creates insecurity and
uncertainty-Therefore legislature has sought to balance the public interest in
providing limitation on the one hand and at the same time not to unreasonably
restrict the right of a party to initiate proceedings on the other-Once a suit
is filed the object of limitation as a statute repose is satisfied in as much as
the opponent party knows what he has to defend
F
Interpretation of statutes-Provisions of special Act to prevail over the
general Act.
limitation prescribed for filing suit against Port authorities-No
I
limitation prescribed for suit by Port authorities-Reasonableness of '0
classification-Challenge to-Held: legislative in its wisdom can make separate
provision within which a suit must be filed by the individual from that within
which a suit can be filed by a statutory body.
27
H
28
SUPREME COURT REPORTS
(2005] 3 S.C.R.
A
Shorter period provided under, for suits against Board of Trustees
whereas suits against Government can be filed within normal period of
limitation-Held: Section I 20 not violative .of Article 14 on that ground as
there is rational basis for such differentiation.
Limitation-A statute ~ot dealing with the limitation in general and
B which prescribes period of limitation different from the one in the Indian
Limitation Act, 1963 cannot be said to be violative of Articles 14 and 19(J)(j)
of Constitution of India, 1950.
Limitation Act, 1963-Section 3-Waiver of limitation-Held: If a suit
is ex-facie barred by the Law of Limitation, a Court has no choice but to
C dismiss the same even if the defendant intentionally has not raised the plea of
limitation.
Code of Civil Procedure, 1908 :
Order I 2, ·Rule 6-Decree of admissions-Respondent disputing the claim
D as time barred but admitting part of claim-Trial court passing decree on
admission-Correctness of-Held: Suit having been par.tly decreed on
admission could not be subsequently dismissed on the ground of limitation for
the remaining amount.
E
Waiver-Plea not raised before trial court-Question of waiver taken
· for the first time at the argument stage before the High Court-Permissibility
of -Held: Question of waiver is not a pure question of law hence could not
be permitted to be raised at any stage of proceedings.
Respondent Board had provided a Mechanised Ore Handling Plant
F (MOPH) for facility of iron ore exporters at Goa Port and fixed certain
rates for proper utilization. It was also levying surcharge and granting
rebates. The respondent by its letter dated 6.4.1984 informed the appellant
that they had become eligible to receive the rebate of Rs.7,09,835@ Re.I
per tonne for having turned over the plot allotted to it 6.39 times. The
appellant by their let.ter 12.4.1984 set out various arguments to justify the
G ground for full rebate and requested for the refund of th~ entire sum of
Rs.62,46,584.10. ID reply thereto, the respondent Board by its letter dated
16.06.1984 declined the request of the appellant contained in its, letter dated
12.04.1984.
H
The appellant filed suit on 11.6.86. Respo~dents admitted part of the
..
V.M. SALGAOCAR v. BOARD OF TRUSTEES OF PORT OF MORMUGAO
29
cla

## Text

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-
V.M. SALGAOCAR AND BROS.
A
v.
BOARD OF TRUSTEES OF PORT OF MORMUGAO AND ANR
MARCH 31, 2005
[ASHOK BHAN AND A.K. MATHUR, JJ.]
B
Major Port Trusts Act, 1963-Section 120:
Notice-Non giving of-Held: Giving of notice is a mandatory
requirement for filing suit-Suit filed without giving notice is thus not, C
maintainable-Further, Suit filed on expiry of six months of accrual of cause
of action is also barred by time.
There are two requirements in the Section and both the requirements
have to be read conjunctively and not alternatively-The suit has to be filed D
within six months of accrual of cause of action and to be preceded by one
month's notice-The word 'or' occurs between two clauses if read alternatively
would defeat the very object and intention and lead to absurdity.
Shorter period of limitation provided for filing suit-Constitutionality
of-Held: Siatute is founded on public policy that an unlimited and perpetual E
threat of litigation leads to disorder and confusion and creates insecurity and
uncertainty-Therefore legislature has sought to balance the public interest in
providing limitation on the one hand and at the same time not to unreasonably
restrict the right of a party to initiate proceedings on the other-Once a suit
is filed the object of limitation as a statute repose is satisfied in as much as
the opponent party knows what he has to defend
F
Interpretation of statutes-Provisions of special Act to prevail over the
general Act.
limitation prescribed for filing suit against Port authorities-No
I
limitation prescribed for suit by Port authorities-Reasonableness of '0
classification-Challenge to-Held: legislative in its wisdom can make separate
provision within which a suit must be filed by the individual from that within
which a suit can be filed by a statutory body.
27
H
28
SUPREME COURT REPORTS
(2005] 3 S.C.R.
A
Shorter period provided under, for suits against Board of Trustees
whereas suits against Government can be filed within normal period of
limitation-Held: Section I 20 not violative .of Article 14 on that ground as
there is rational basis for such differentiation.
Limitation-A statute ~ot dealing with the limitation in general and
B which prescribes period of limitation different from the one in the Indian
Limitation Act, 1963 cannot be said to be violative of Articles 14 and 19(J)(j)
of Constitution of India, 1950.
Limitation Act, 1963-Section 3-Waiver of limitation-Held: If a suit
is ex-facie barred by the Law of Limitation, a Court has no choice but to
C dismiss the same even if the defendant intentionally has not raised the plea of
limitation.
Code of Civil Procedure, 1908 :
Order I 2, ·Rule 6-Decree of admissions-Respondent disputing the claim
D as time barred but admitting part of claim-Trial court passing decree on
admission-Correctness of-Held: Suit having been par.tly decreed on
admission could not be subsequently dismissed on the ground of limitation for
the remaining amount.
E
Waiver-Plea not raised before trial court-Question of waiver taken
· for the first time at the argument stage before the High Court-Permissibility
of -Held: Question of waiver is not a pure question of law hence could not
be permitted to be raised at any stage of proceedings.
Respondent Board had provided a Mechanised Ore Handling Plant
F (MOPH) for facility of iron ore exporters at Goa Port and fixed certain
rates for proper utilization. It was also levying surcharge and granting
rebates. The respondent by its letter dated 6.4.1984 informed the appellant
that they had become eligible to receive the rebate of Rs.7,09,835@ Re.I
per tonne for having turned over the plot allotted to it 6.39 times. The
appellant by their let.ter 12.4.1984 set out various arguments to justify the
G ground for full rebate and requested for the refund of th~ entire sum of
Rs.62,46,584.10. ID reply thereto, the respondent Board by its letter dated
16.06.1984 declined the request of the appellant contained in its, letter dated
12.04.1984.
H
The appellant filed suit on 11.6.86. Respo~dents admitted part of the
..
V.M. SALGAOCAR v. BOARD OF TRUSTEES OF PORT OF MORMUGAO
29
claim. However, it contended that suit was barred by time under Section A
t 20 of Major Port Trust Act, 1963 which prescribes a period of six months
from the date of arising of cause of action. Appellant claimed that when
normal period of limitation under Limitation Act is 3 years, prescribing
shorter period under Ports Act is unconstitutional. It also asked for decree
under Order 12, Rule 6 CPC of the admitted claim. The Trial Court passed
a decree on admission with regard to the sum of Rs. 7,09,835. The main
suit was dismissed by the District Judge as being barred by time and not
maintainable for want of notice. High Court upheld the order of trial
court Hence the present appeal.
Dismissing the appeal, the Court
HELD : 1. The mandate of Section 3 of Limitation Act is that it is
the duty of the Court to dismiss any suit instituted after the prescribed
period of limitation irrespective of the fact that limitation has not been
set up as a defence. If a suit is ex-facie barred by the Law of Limitation,
c
a Court has no choice but to dismiss the same even if the defendant D
intentionally has not raised the plea of limitation. [41-E)
Manindra Land and Building Corporation Ltd v. Bhutnath Banerjee and
Ors., AIR (1964) SC 1336 and Motilal Padampat Sugar Mills Co. Ltd v.
State of Uttar Pradesh and Ors., (1979) 2 SCC 409, referred to.
E
2. The lis between the parties is, the refusal of rebate of
corresponding levy of surcharge to the extent or Rs.7.80 per metric tonne
aggregating to Rs. 55,36,710.10 paise for the year April, 1983 to March,
1984. By agreeing to pay Rs. 7,09,835 which the respondent Board was
always ready a~d willing to pay, would not affect the Board's legal F
contention regarding the claim of Rs. 55,36, 710.10 paise being not
maintainable in the absence of a notice under Section 120 of the Major
Port Trust Act, 1963. Order 12 Rule 6 empowers the Court where an
admission of fact is made either in the pleadings or otherwise, whether
orally or in writing, to make such order or such judgment as it thinks fit
either .on the application of a party or on its own motion and without G
;
waiting for the determination of any other questions between the parties:
Therefore, by passing a decree on admission under Order 12 Rule 6 it
cannot be said that there was any determination of the question of
limitation or maintainability of the suit. Simply because the Board had
agreed tQ, pa, the sum of Rs. 7,09,835 would not mean that they had given H
30
SUPREME COURT REPORTS
(2005] 3 S.C.R.
A up the determination of the question of limitation or the maintainability
of the suit for want of statutory notice. [42-A-EJ
3. The appellant had at no stage of proceedings had pleaded waiver
of the plea of limitation or of the giving of the notice under Section 120 of
the Major Port Trust Act, 1963. The point regarding waiver was not
B argued before the Trial Court at any stage and even in the memo of appeal
filed before the High Court ground of waiver was not taken. The question
of waiver was taken up for the first time at arguments stage before the
High Court. Question of waiver is not a pure question of law which could
be permitted to be raised by the appellant at any stage of the proceedings.
C The High Court was right in observing that the plea of limitation put up
by the Board has to be examined on its own merit. Therefore, there is no
merit in contention that the suit having been partly decreed on admission,
could not subsequently be dismissed on the ground of limitation (or the
remaining amount. [42-E, G; 43-H; 44-A-B)
D
4.1. The Major Port Trusts Act, 1963 is a special Act and Section
120 of the said Act provides limitation of proceedings in respect to the
things done under the Act. The suit has to be filed within six months of
the accrual of the cause of action and it has to be preceded by one month
notice. Both these requirements have to be read conjunctively and not ·
E alternatively. The word 'or' occurs between giving of the notice in writing
and the filing of the suit after six months of the accrual of the cause of
action. The word 'or' employed between the two clauses if read
alternatively would defeat the very object and intention of the said
provision and would lead to absurdity. (44-E, F-G; 45-A]
F
Shipping Corporation of India Ltd v. Union of India and Anr., (1976)
A.P.261, approved.
4.2. Admittedly, formal notice under Section 120 had not been issued.
The cause of action arose to the appellant for the first time on 16.06.1984
G and, therefore, the letter dated 12.04.1984 cannot be said to be a notice
under Section 120 of the Act, which requires the cause of action to be set ·
out in the said statutory notice. In the plaint there is no averment to the
~
effect that the appellant had given the notice under Section 120. Appellant
has taken the stand that he was not prevented by Sections 120 and 121 of
the Act froin filing the suit. If that be the case, then the letter dated
H 12.04.1984 cannot be treated as a notice under Section 120 of the Act. The
--
V.M. SALGAOCARv. BOARD OF TRUSTEES OF PORT OF MORMUGAO
3 J
cause of action arose to the appellant on 16.06.1984 and the present suit A
was filed on 11.09.1986 which is much beyond the period of six months
provided for filing the suit. The suit is thus held to be not maintainable in
the present form as well as barred by limitation. [45-B, D-F)
Municipal Corporation of Greater Mumbai v. Hasham Ismail Mamsa,
AIR (1972) Born. 350 and Trustees of the Port of Bombay v. Premier B
Automobiles Ltd and Anr., [1974] 4 SCC 710, referred to.
5.1. A statute not dealing with the limitation in general prescribing
period of limitation is different from the one in the Indian Limitation Act,
1963. It does not follow that the provisions prescribing the said period of C
limitation violates Article 14 or 19(l)(f) of the Constitution of India.
(47-E-F)
5.2. The Major Port Trusts Act, 1963 charges the port authorities
with well thought out duties and functions in respect of providing port
facilities and equipment and providing services for receiving, landing and D
shipping of goods or passengers from and upon sea going vessels. As a
result of these multifarious functions, major ports and their officers are
faced and burdened with an explosive amount of litigation. The object of
Section 120 is two fold, i.e. provision of giving one month's notice setting
out the cause of action is to give the port authorities an opportunity to
consider the merits of the case of the aggrieved .party and make amends E
when possible to save litigation. To ensure that legal action against port
authorities and its officers is initiated expeditiously when evidence is fresh
and does not obliterate the probative material for honest defence.
[49-D-F)
6. The classification has a reasonable nexus to the object it seeks to F
achieve. The submission made on behalf of the appellant that though a
suit may be filed within six months, the trial of the suit could take place
long after this and that the evidence would never be fresh at that stage is
fallacious in as much as once the suit is filed against a party, the party is
put on notice and will, therefore, gather the relevant documentary evidence G
;.
when fresh and preserve such evidence for the trial whenever the same
-
would take place. [49-G-H)
7.1. The appellant's contention that in Indian Limitation Act, 1963
no provision for condonation of delay for institution of suit has been made
because a relatively longer period of limitation has been provided as H
32
SUPREME COURT REPORT$
(2005) 3 S.C.R.
A compared to limitation provided in appeals and other applications and
therefore providing relatively shorter period of six mo~ths for filing the
suit under the provisions of Section 120 of Major Port Trusts Act without
a provision for condonation of delay would make the section arbitrary,
excessive, disproportionate and unreasonable restriction on the appellant's
right under Article 14 and 19(1)(g) of the Constitution cannot be accepted.
B The statute of limitation is founded on public policy that an unlimited and
perpetual threat of litigation leads to disorder and confusion and creates
insecurity and uncertainty. Therefore legislature has sought to balance the
public interest in providing limitation on the one hand and at the same
time not to unreasonably restrict the right of a party to initiate proceedings
C on the other. Once a suit is filed the object of limitation as a statute repose
is satisfied in as much as the opponent party knows what he has to defend.
The Major Port Trusts Act is a special Act. It is settled legal proposition
thatthe provisions of the Special Act shall prevail over with the general
Act. [50-A-D]
D
7.2. It is well settl.ed that although limitation being intended for
quieting title and in that sense looks at the problems from the point of
view of the defendant with a view to provide him security against the stale
claims, addresses itself at the same time also to the position of the plaintiff.
The legislature in its wisdom can make separate provision within which a
E suit must be filed by the individual from that within which a suit can be
filed by a statutory body. [51-C-D]
·
Nav Ratamnmal v. State of Rajasthan, AIR (1961) SC.1704, referred
to.
F
7.3. The Government cannot be equated with statutory body like the
Major Port Trusts Act. The Government is a vast organisation having
compara~ively larger manpower and in the litigation against the
Government subject matter of disputes is under several Acts such as Excise
Act, Customs Act, Income Tax Act, Railways Act, Land Acquisition Act
etc. Many of these Acts also contain provisions similar to if not identical
G with the provisions of Section 120. (52-C-D]
8. A provision of the Act providing for a shorter period of limitation
cannot be declared to be unconstitutional simply because in some of the
statutes a longer period of limitation has been prescribed for the redressal
of the litigants' grievances. The legislation enacted for the achievement
H of a particular object or purpose need not be all embracing. It is for the
--
{,
V.M. SALGAOCAR v. BOARD OF TRUSTEES OF PORT OF MORMUGAO [BHAN, J.] 33
legislature to determine what categories it would embrace within the scope A
of legislation and. merely because certain categories which would stand
on the same footing as those covered by the legislature are left out would
not render the legislation of any law being discriminatory and violative
of the fundamental rights guaranteed under Articles 14 and ·19(l)(g) of
the Constitution. (52-D-FJ
CIVIL APELLA TE JURISDICTION : Civil Appeal Nos. 4662-4663 of
1999. High Court at Goa-Panaji in F.A. No. 27/92 and Appeal from Order
No. 69 of 1991.
B
R.F. Nariman, Milind Sathe, Bhavik Palan, Pratap Venugopal for Mis. C
K.J. John & Co. with him for the Appellant.
K.J. Presswala, U.A. Rana, Birju Mattam, Madup Singhal for M/s.
Gagrat & Co. Advs. for the Respondent No. I.
B. Datta Additional Solicitor General, Harish Chandra, Sr. Anuvrat
Sharma and B.K. Prasad for Mrs. Anil Katiyar, with them for the Respondent D
No. 2.
The following Judgment of the Court was delivered :
BHAN, J. These appeals by grant of leave are directed against the
common judgment and order of affinnation passed by the High Court of E
Bombay at Goa in First Appeal No.27 of 1992 and appeal from order No.69
of 1991. The suit filed by the plaintiff-appellant (hereinafter referred to as
'the appellant') was dismissed by the District Judge, South Goa, Monnugao
by judgment dated 30th December, 1991 on the ground that the same was not
maintainable for want of notice under Section 120 of the Major Port Trust p
Act, 1963 (hereinafter referred to as 'the Act') and that the suit was barred
by limitation. This judgment was challenged in First Appeal No.27 of 1992.
Prior to that District Judge vide order dated 30th April, 1991, had come tQ
the conclusion that Section 120 of the Act was applicable to the present case,
Against this order the appellant had filed an appeal from order 69 of 1991.
The two appeals having arisen from the same suit were heard together and G
disposed of by the High Court by a common judgment. We propose to do the
same.
We would referring to the facts necessary to dispose of the appeals as
found by the High Court on which there is no dispute between the counsel H
34
SUPREME COURT REPORTS
[2005) 3 S.C.R.
A for the parties.
Loading operation in relation to iron ore at Mormugao Port was sought
to be regulated by the Mormugao Port (Shipment of Ore and Pellets from
Mechanised Ore Handling Plant at berth no.9 and related matters) Regulations,
1979. Respondent No. I-The Board of the Trustees of Mormugao (hereinafter
B referred to as 'the Board') was empowered to divide the storage area into
plots of a size sufficient to hold approximately the quantity required to be
loaded and to stipulate minimum tonnage turn over for each plot to qualify
for allotment of plot. The appellant who is engaged in exporting iron ore
were also allotted one such plot. Rates were prescribed per tonne of iron ore,
C handled through Mechanised Ore Handling Plan (MOPH) and revised from
time to time. By a notification dated 26th October, 1983, the Board increased
the handling rate to Rs.28:22 per tonne and fixed minimum rental surcharge
of Rs.8.80 per tonne. The Board did this to ensure proper utilisation of berth
and MOPH as it was found that there was under utilisation of the same by
exporters. The justification for imposing the surcharge of Rs.8.80 per tonne
D was that the Board had to pay Rs.260.30 lakhs t~ the contractor~ for dredging
a channel and widening the channel, so ~hat all sea going vessels could use
berth no.9. It is further the Board's case that Rs.7.16 Iakhs towards income
tax and Rs.20.00 Iakhs towards estimated liability arising out of the contract
labour legislation had to be disbursed. As the Board had incurred heavy
E losses on account of level of utilisation of MOPH between Rs.55.00 Iakhs
tonnes to 60.00 tonnes, surcharge was introduced, which surcharge was to be
reduced in proportion fo the tonnage exported by the exporters. This surcharge
was subject to rebate for the plot allottee holding the plot for minimum
period of one year on the following pattern:-
...
F On achieving a level of turnover
Rebate (Rs. Per tonne)
6.25 times of nqminal plot capacity
l.00
6.50 times of nominal plot capacity
2.00
G 6.75 times of nominal plot capacity
3.00
7.00 tim~s of nominal plot .. capacity
4.00
7.25 times of nominal plot capacity
5.20
H 7.50 times of nominal plot capacity
6.40
I
I
\
V.M. SALGAOCAR v. BOARD OF TRUSTEES OF PORT OF MORMUGAO [BHAN, J.] 35
7.75 times of nominal plot capacity
7.60
A
8.00 times of nominal plot capacity
8.80
Appellant had challenged the levy of surcharge of Rs.8.80 per tonne
being illegal, without jurisdiction null and void as it was not co-related to any
service rendered by the Board and that the levy was falling outside the B
purview of Section 48 of the Act. The High Court rejected the said challenge
relying upon a judgment of this Court in Mis. V.S. Dempo & Co. Pvt. Ltd
v. Board of Trustees and Anr., [1994] Suppl. 2 SCC 349. An exporter had
earlier challenged the levy of surcharge with graded system of rebates in a
writ petition· before the High Court. The writ petition was dismissed and the C
order of the High Court was upheld in appeal filed by the writ petitioner. In
view of the fact that the power to levy surcharge had' already been upheld by
this Court the counsel for the appellant did not argue this point before us.
Appellant's case further is that in the event the validity of levy of
surcharge is upheld, the action of the Board for refusing full rebate to the D
appellant and in collecting surcharge of Rs.7.80 is illegal, arbitrary,
unreasonable, contrary to the Act and Rules and Regulations as well as Article
14 of the Constitution on the ground that the surcharge of Rs. 7 .80 per tonne
has been levied without taking into consideration lapses on the part of the
Board as well as non-consideration of shortfall in' export of the appellant's
due to the factors beyond their control. The appellant had also raised dispute E
relating to the extent of alleged storage plot and the turnover required to be
achieved by the appellant during the year to be eligible for full rebate under
Notification dated 26th October, 1983. According to the appellant it was
entitled to the full rebate on 8,66, 192 metric tonnes. The lapses pointed out
on th~ part of the Board were stated to be failure of its obligation by providing F
barge unloaders to the appellant, commensurate with the appellant's export
commitments, insufficient barge allocation, break-down of reclaimer no.2,
port and dock workers strike etc. According to the appellant, considering the
plot capacity of 1,08,274 tonnes, the turnover of 8,66,192 metric tonnes
,....,
would entitle the appellant a full rebate at the rate of Rs.8.80 per tonne which
comes to Rs.62,46,548.10 paise, instead of Rs.7,09,835/-, which the Board G
had agreed to pay. As per appellant, it had in fact exported through berth
no.9, 10,52,910 tonnes and even if nominal capacity of the plot was taken as
1,50,000 tonnes, the appellant would be entitled for full rebate at the rate of
Rs.8.80 per tonne, having turned over its plot of 1,50,000 tonnes. This
calculation was based upon the appellant's plea that they must be deemed to H
36.
SUPREME COURT REPORTS
[2005] 3 S.C.R.
A have exported through berth no.9, 3, 14,000 tonnes, which the appellant was
prevented from loading through berth no.9 due to insufficient barge allocations,
break~down of reclaimer no.2 and port and dock workers strike, which
amounted to 90,000 tonnes, 70,000 tonnes and 1,54,000 tonnes respectively,
thus totalling 3,14,000 tonnes. Alternatively, the appellant claim that the
Board had committed breach of statutory duty by failing to provide adequate
B barrage unloading timings as prescribed by the regulations and by refusing
to permit them to load its vessels by trans shippers when the reclaimer of the
Board was broken down.
Another challenge put by the appellant was that, the suit against Central
C Government or the State Government could be filed within 3 years after
giving notice under Section 80 of Code of Civil Procedure. The provision of
shorter period of limitation of 6 months under Section 120 of the Act to the
Board and its officers who are performing duties and functions similar to the
Union and the State Government was irrational, unreasonable and unrelated
to the object sought to be achieved by the Act and as such, Section 120 of
D the Act was unconstitutional and violative of the fundamental rights guaranteed
by Article 14 of the Constitution. It was further pleaded that in case the Court
finds that Section 120 of the Act was valid, letter dated 12th April, 1984
addressed by it to the defendant Board, be treated as notice under Section
120 of the Act. In short, the appellant prayed for a declaration that the
E minimum rental surcharge levied by Notification dated 26th October, 1983
bearing No.3-GA(8)/83 issued by the Board be declared as illegal,
unconstitutional, null and void; to declare the recovery to the tune of
Rs.62,46,548. l 0 paise as illegal being unconstitutional, null and void; and to
pay damages/compensation being equivalent to full rebate aggregating to the
sum of Rs.62,46,548.10 paise and to declare Section 120 of the Act as
F unconstitutional, null and void.
Another fact which needs to be mentioned i~ that the Board had admitted
in their letter dated 6th April, 1984 that the appellant was entitled to receive
rebate of Rs.7,09,835 as the appellant had turned over. the plot for 6.39 times
and were ready and willing to pay over the said amount of Rs. 7,09,835- to
.....,
G ·the appellant. In view of the admission made by the Board, the appellant
sought judgment on admission for the sa!d sum .of Rs. 7,09,835 under Order
12, Rule 6 of C.P.C. The Board in its reply to the application under Order
12, Rule 6 stated that the Board had no objection to the passing of a decree
for Rs,7,09,835 in favour of the appellant but objected to the payment of
H 18% interest on the said amount with effect from 6.4.84. In this view of the
-
-
V.M. SALGAOCAR v. BOARD OF TRUSTEES OF PORT OF MORMUGAO [BHAN, J.] 37
matter, by judgment on admission under Order 12, Rule 6 C.P.C. dated A
12.8.87 the appellant's claim to the tune of Rs.7,09,835 was decreed. The
question of payment of interest and costs was left to be decided at the time
of final disposal of the suit.
The Board in its defence took up the plea that the appellant had achieved
turnover of only 6.25 times the nominal capacity of the plot and was entitled B
to the rebate of only Re.I per tonne and that the surcharge of Rs.7.80 per
tonne was neither illegal nor unconstitutional. The allegations relating to
deemed export claimed by the appellant, was denied. It was pleaded that
since no notice under Section 120 of the Act had been given by the appellant
to the Board the suit was not maintainable. It was further pleaded that the suit C
which had been flied beyond the period of 6 months from the date of accrual
of cause of action, was barred by limitation pem1itted under Section 120 of
the Act.
On the pleadings of the parties numbers of issues were framed. In view
of the finding recorded on issues No.12, 13 and 15 which were answered in D
favour of the Board, the suit was dismissed. Issues Nos.12, 13 and 15 are as
under :-
"12. Whether the suit is not maintainable for want of notice under
Section 120 of the Major Port Trusts Act, 1963?
13. Whether the suit is barred by the provisions of Section 120 of E
the Major Port Trusts Act, 1963?
15. Whether the plaintiff proves that Section 120 of the Major Port
Trusts Act is not applicable, to this case and, if it is applicable,
it is unconstitutional and illegal?"
By order date~ 30th July, 1991, first part of issue No.15 was decided
in the negative and the appellant's contention that Section 120 of the Act is
not attracted, was rejected and it was held that Section 120 was applicable.
F
Against this part of the order, the appellant had filed appeal from order
which was numbered as 69of1991. The second part of issue No.15, 12 and G
13 were decided by the impugned judgment delivered on 30th December,
1991, which was the subject matter of challenge in First Appeal 27 of 1991.
Before the High Court following 3 points were canvassed for
determination :-
H
38
SUPREME COURT REPORTS
(2005) 3 S.C.R.
A
1.
When no objection relating to limitation was raised in relation to
B
2.
the part decree passed on admission under Order 12, Rule 6
C.P.C., whether the defendant Board could raise objection relating
to limitation in respect of the remaining amount claimed by the
appellants and part of the suit could be dismissed on the ground
of limitation?
Whether Section 120 of the said Act is applicable and if the
answer is in the affirmative, whether letter dated 12.4.84 can be
treated as notice under Section 120 of the said Act and further
whether the suit is barred· by limitation thereunder?
C
3.
Whether Section 120 of the said Act is unconstitutional?
The High Court answered all the three questions in favour of the
respondent by holding that the respondent did not waive the plea of limitation
for the remaining amount of Rs.55,36,710.10 paise. That Section 120 was
applicable to the present case. The letter dated 12.04.1984 addressed by the
D appellant to the respondents could not be considered as a notice under Section
120 of the Act and that Section 120 of the Major Port Trust Act, 1963 was
constitutionally valid. The High Court affirmed the judgment of the District
Judge regarding the legality and constitutional validity of Section 120 and
rejected the contention put forth by the appellant's counsel that by prescribing
the limitation of.6 months against the Board and its employees as against the
E period of 3 years in respect of suits against the Government or Government
Officers for an act or order passed in discharge of official capacity was
violative of Article 14 of the Constitution. It was held that the suit was baned
by time having been filed beyond the period of limitation provided under the
Act and the same was also not maintainable for want of service of notice.
F
During the course .of arguments Shri R.F. Nariman, learned senior
counsel for the appellant had conceded the first part of point no.2 framed by
the High Court to the effect that Section 120 of the Act was applicable to the
present case and made his submissions on point no. I, the second part of point
· no.2 and point no.3 In the written note submitteq on behalf of the appellant,
G the appellant has confined his submissions to point nos. I and 3 only. Since
the second part of point no2 goes to the root of the matter regarding
maintainability of the suit and ·its being barred by limitation we would deal
with the same.
H
V.M. SALGAOCAR v. BOARD OF TRUSTEES OF PORT OF MORMUGAO [BHAN, J.] 39
Point No. I
Although we have already narrated the factual matrix giving rise to the
dispute but it would be necessary to refer to few facts in order to decide point
A
no. I. The respondent port trust commissioned a Mechanised Ore Handling
Plan (hereinafter referred to as "MOPH';) at berth no.9 at Mormugao and
prescribed rates for handling ore at MOPH. On 28.10.1983 the Board issued B
· a notification increasing the rates levying surcharge and p1escribing a rebate
on the basis of achieving a particular turnover. It is during this period that
the issue arose as to the actual piot capacity handed over to the appellant and
whether a particular turnover on the plot was achieved. According to the
appellant, considering plot capacity of 1,08,274 tonnes, the turnover of C
8,66, 192 metric tonnes would entitle the appellant to full rebate at the rate of
Rs.8.80 per tonne, which would come to Rs.62,46,548. l 0 paise, instead of
Rs.7,09,835 which the respondent Board had agreed to give. The respondent
Board informed the appellant that they had turned around the plot only 6.25
times on the basis of the plot capacity of 1.5 lakh tonnes and were therefore
entitled to rebate of Rs.7,09,835 only. On 12.04.1984 the appellant represented D
to the port trust and demanded full rebate @ Rs.8.80 per tonne. Port trust by
its letter dated 16.06.1984 refused to grant the full rebate as claimed by the
appellant.
On 11.09.1986 the appellant filed Civil Suit No.55/1986 for various
reliefs referred to in the earlier part of the judgment. Port trust on 14.02.1997 E
filed its written statement raising the plea of .limitation and failure to give
statutory notice as per Section 120 and also denying the claim on merits. The
appellant made an application under Order 12 Rule 6 for the decree on
admission in view of the port trust's letter dated 16.06.1984 referred to above.
The appellant had claimed interest @ 18% on the amount due from the date p
the amount became payable till its actual payment. The port trust in reply to
the application under Order 12 Rule 6 admitted the claim of Rs.7,09,835 but
denied its liability to pay any interest on the said amount. The Trial Court on
12.08.1987 passed a decree on admission with regard to the sum of Rs.7,09,835
leaving the question of interest on the aforesaid amount open which was to
be decided at the time of the adjudication of the main suit. The main suit was G
dismissed by the District Judge as being barred by time and not maintainable
for want of notice:
Counsel for the appellant has contended that the port trust in its reply
to application under Order 12 Rule 6 while admitting the claim did not raise H
40
SUPREME COURT REPORTS
[2005] 3 S.C.R.
A any objection as to the plea of limitation or statutory notice. That on the
passing of the decree on admission under Order 12 Rule 6 on 12.08.1987, the
respondent Board was estopped from urging the point of limitation or statutory
notice. The said issue would be deemed to have been waived. That statutory
notice under Section 120 and issue of limitation being the rights created in
favour of the Board could be waived by the Board. Since the decree on
B admission under Order 12 Rule 6 of the Code of Civil Procedure was passed
without any reservation being made to the issuance of statutory notice or
limitation, the Board is estopped from raising such a plea at this stage. It is
further submitted that the issue of waiver of limitation and statutory notice
was raised by the appellant before the High Court and the same has been
C adjudicated upon by the High Court, the objection now raised by the counsel
for the respondents that waiver had not pleaded was untenable. It was submitted
that the dismissal of the suit on the ground of being barred by limitation
under Section 120 and for want of statutory notice under Section 120 of the
Act by the High Court was clearly erroneous.
D
Per contra, learned counsel for the respondent Board submitted that the
High Court has taken the correct view in holding that there was no waiver
of limitation by the respondent Board regarding the remaining claim. of the
appellant. The mere fact that the suit was partly decreed would not preclude
the respondent Board from raising the plea of limitation regarding the balance
E claim put forward by the appellant. It was argued that the Board had not
waived the plea of limitation for the remaining claim of Rs.55,36,710.10
paise; that limitation under the Limitation Act can11ot be waived and even if
a limitation is waived by a party, it cannot give the jurisdiction to the Court
to entertain a time barred suit. That the appellant had never pleaded waiver
and therefore, the same cannot be urged by the appellant. Merely because the
F Board had agreed to pay the admitted amount due to the appellant @ Re. I/
- per tonne it would not amount to waiver of the plea of limitation giving
jurisdiction to the Court to try a time barred suit.
Section 3 of the Limitation Act reads :-
G
"Section 3 - Bar of limitation - (I) Subject to the provisions contained
in sections 4 to 24 (inclusive), every suit instituted, appeal preferred,
and application made after the prescribed period shall be dismissed
although limitation has not been set up as a defence.
(2) For the purposes of this Act -
H
~-
-
V.M. SALGAOCAR v. BOARD OF TRUSTEES OF PORT OF MORMUGAO [BHAN, J.] 41
(a) a suit is instituted -
A
(i) in an ordinary case, when the plaint is presented to the proper
officer;
(ii) in the case of a pauper, when his application for leave to sue
as a pauper is made; and
B
(iii) in the case of a claim against a company which is being
wound up by the court, when the claimant first sends in his
claim to the official liquidator;
(b) any claim by way of a set off or a counter claim, shall be treated c
as a separate suit and shall be deemed to have been instituted
(i) in the case of a set off, on the same date as the suit in which
the set off is pleaded;
(ii) in the case of a counter claim, on the date on which the D
counter claim is made in court;
(c) an application by notice of motion in a High Court is made when
the application is presented to the proper officer of that court."
The mandate of Section 3 of Limitation Act is that it is the duty of the
Court to dismiss any suit instituted after the prescribed period of limitation .E
irrespective of the fact that limitation has not been set up as a defence. If a
suit is ex-facie barred by the Law of Limitation, a Court has no choice but
to dismiss the same even if the defendant intentionally has not raised the plea
of limitation.
This Court in Manindra Land & Building Corporation Ltd v. Bhutnath F
Banerjee and Ors., reported in AIR (1964) SC 1336 held (para 9) :-
"Section 3 of the Limitation Act enjoins a Court to dismiss any suit
instituted, appeal preferred and application made, after the period of
limitation prescribed therefor by Schedule I irrespective of the fact G
whether the opponent had set up the plea of limitation or not. It is the
duty of the Court not to proceed with the application if it is made
beyond the period of limitation prescribed. The Court had no choice
and if in construing the necessary provision of the Limitation Act or
in determining which provision of the Limitation Act applies, the
subordinate Court comes to an erroneous decision, it is open to the H
42
SUPREME COURT REPORTS
(2005) 3 S.C.R.
A
Court in revision to interfere with that conclusion as that conclusion
led the Court to assume or not to assume the jurisdiction to proceed
with the determination of that matter."
A perusal of paragraph 13 of the plaint shows that the lis between the
parties is, the refusal of.rebate of corresponding levy of surcharge to the
B extent or Rs.7.80 per m~tric tonne aggregating to Rs. 55,36,710.10 paise for
the year April, 1983 to March, 1984. By agreeing to pay Rs.7,09,835/- which
the respondent Board was always ready and willing to pay; would not affect
the Board's legal contention regarding the claim of Rs.55,36,710.10 paise
being not maintainable in the absence of a notice under Section 120 of the
C Act. Order 12 Rule 6 empowers the Court where an admission of fact is made
either in the pleadings or otherwise, whether orally or in writing. to make
such order or such judgment as it thinks fit either on the application of a
party or on its own motion and without waiting for the determination of any
other questions between the parties. Therefore, by passing a decree on
admission under Order 12 Rule 6 it cannot be said that there was any
D determination of the question of limitation or maintainability of the suit.
E
F
Simply because the Board had agreed to pay the sum of Rs.7,09,835 as
committed by them in their letter dated 06.04.1983 would not mean that the
Board had given up the determination of the question of limitation or the
maintainability of the suit for want of statutory notice.
The appellant had at no stage of proceedings had pleaded waiver of the
plea of limitation or of the giving of the notice under Section 120 of the Act.
The plaint was filed on 0 l.09. l 986, Board had filed its written statement
raising objections of limitations and maintainability of the plaint for want of
notice on 18.02.1987. Application for decree on admission was filed on
12.04.1987 and reply to the said application was filed by the Board on
18.07.1987. The decree on admission was passed by the Trial Court for the
sum of Rs.7,09,835/- on 12.08.1987. After the framing of issues and after an
application was made to try issues no.12 and 13 as preliminary issues on
22.12.1989, an application was filed by the appellant to amend the plaint. On
06.01.1990, a further application was filed by the appellant for further
G amendment of the plaint. Even though, the plaint was exhaustively amended
after the decree on admission, plea of waiver was not taken in the plaint. The
point regarding waiver was n~t argued before the Trial Court at any stage and
even in the memo of appeal filed before the High Court ground of waiver
was not taken. The question of ~aiver was ta.ken up for the first time at
H arguments stage before the High Court. The respondent Board objected to the
-
--
V.M. SALGAOCAR v. BOARD OF TRUSTEES OF PORT OF MORMUGAO [BHAN, J.] 43
taking of the said point before the High Court for the first time during the
course of arguments. This Court in Mis. Motilal Padampat Sugar Mills Co.
Ltd. v. State of Uttar Pradesh and Ors., [1979] 2 SCC 409 has held that
waiver is a question of fact and it must be properly pleaded and proved. No
plea of waiver can be allowed to be raised unless it is pleaded. This Court
observed in para 5 as follows :-
"We shall first deal with. the question of waiver since that can be
disposed of in a few words.