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First Appeal No. 71 of 1958, decided on 19th May 1961.
S. 5.‑-Delay in filing appeal ---Copies of judgment and decree sent by Solicitor not reaching----Additional Advocate General‑‑Subsequent application for copies of judgment and decree filed within time‑Delay condoned in circumstances of case.
S. 19‑Acknowledgement though accompanied by refusal to pay‑Sufficient for purpose of S. 19.
Bindeshwari Prasad v. Board of Saran through Special Officer A I R 1961 Patna; 34: Govind Narayan Kakade v. Rangnath Gopal Bajopadhye A I R 1930 Bom. 572; Bharat National Bank Ltd. v. Bishan Lal and another A I R 1932 Lah. 212; Sreenath Roy and others v. Peary Mohan Mookerjee A I R 1917 Cal. 154 and Sita Ram. v. Mst. Mahmudi Begum and another A I R 1934 Lah. 475 ref.
M. A. I. Lakhani for A. A. G. for Appellant.
Zaffar Hussain Mirza for Respondent.
Date of hearing: 2nd May 1961.
--This is a defendant's appeal in a suit for recovery of Rs. 8,350 being the costs of construction of 427 huts at the rate of Rs. 50 per but after deducting the payment of Rs. 13,000 made by the defendant towards the same. The learned First Class Sub‑Judge, Hyderabad decreed the suit of the plaintiff with costs. The learned Advocate for the appellant contended before us that the suit of the plaintiff for recovery of the cost of construction was beyond time. The fact necessary for the disposal of the contention of the learned Advocate for the appellant briefly put, as disclosed in the plaint, are these:
The Mukhtiarkar and Assistant Rehabilitation Commissioner in December 1948, on behalf of the defendant gave a contract to the plaintiff‑respondent for construction of 500 huts near the Hala Railway Station at Rs. 50 per hut. The huts were meant for the use of refugees. Though the plaintiff engaged labour and collected material for the entire 500 huts the defendant had only 427 huts constructed. The plaintiff was put to a great loss because of this act of the defendant. It may, however, be pointed out at the very outset that the plaintiff has not claimed any damages as compensation for the loss that he may have suffered because of the defendant's failure to have the rest of the huts constructed.
2. The plaintiff after the construction of 427 huts submitted a bill for Rs, 21,350 before Mr. Channa, the then Additional District Magistrate for the payment. The plaintiff admitted to have received Rs. 13,000 as part payment of the construction. He therefore claimed Rs. 8,350 as balance due to him. The Additional Collector, however, ordered that the plaintiff should be paid at the rate of Rs 20 per hut. The Additional Collector passed this order on the 21st December 1948.
3. The plaintiff on the 2nd February 1949, sent a petition to the Chief Secretary to the Government for the payment of Rs. 8,350. Thereafter the plaintiff wrote a letter on the 26th January 1950, to the Minister, Refugees and Rehabilitation Depart ment, Sind requesting for the payment of Rs. 8,350. A reply to this letter was sent by the Under Secretary to Government of Sind by a letter dated the 25th July 1950, informing the plaintiff that the Government was not willing to allow any higher rate than Rs. 20 per hut.
4. The plaintiff sent a notice under section 80 of the Civil Procedure Code to the Government on the 11th October 1950. The plaintiff received no reply to his notice. The defendant however took measures to recover a sum of Rs. 4,460 which the defendant claimed to have over paid for the construction of 427 huts at the rate of Rs. 20. The plaintiff claimed in para. 7 of the plaint that the suit was within time because the defendants ack nowledged their liability within the meaning of section 19 of the Limitation Act, 1908 by their letter dated the 25th July 1950. The suit was filed on the 14th of April 1952.
Before we dispose of the contention of the learned Advocate for the appellant it is necessary to dispose of the application of the appellant under section 5 of the Limitation Act, for condoning the delay in filing the appeal. The facts necessary for the disposal of this application are these:
The suit was decreed on the 19th September 1957 and the decree was signed on the 10th October 1957. The time for filing the appeal expired on 10th January 1958 but the appeal was filed on the 24th January 1958. These facts are admitted by the learned Advocate for the respondent.
5. From the facts disclosed in the application it would appear that the copy of the judgment and decree was not received by the office of the Additional Advocate in time. The Solicitor to the Government had sent a copy of the judgment and the decree along with the covering letter dated the 28th December 1957, but the same was not received by the office of the Additional Advocate‑General. The office of the Additional Advocate. General wrote to the Solicitor that the copy of the judgment and the decree had not been received by this office. An application for certified copies of the judgment and decree was made on the 8th January 1958, within time for filing the appeal.
There is no reason to disbelieve the office of the Additional Advocate‑General that though the Solicitor to the Government sent the copy of the judgment and decree in time it was not received by the office of the Additional Advocate‑General, There is no counter‑affidavit contesting these facts. In these circum stances we would condone the delay in filing the appeal.
6. The learned First Class Sub‑Judge held that Article 115 of the Limitation Act applied and therefore the suit filed in April 195 2, was within time as the breach of the contract took place in July 1950, by refusal to pay at the rate of Rs. 50 per hut. In this connection it would be useful to reproduce the finding of the learned Sub‑Judge on the question of limitation.
"The work is completed in the month of September 1948 and payment of Rs. 13,000 was made during the curse of work before completion. It is contended that Article 50 of the Limitation Act is applicable and this amount of Rs. 8,350 is recoverable within 3 years of the date of completion of the work. Therefore the last date for claim should be September 1951. The plaintiff on the other hand according to para. 7 of the plaint bases him claim under section 19 of the Limitation Act on the ground that the defendant acknowledges his liability for payment on 25-7‑1950 for the construction of 427 huts but refused to pay. The contention of the defendant's Advocate is that the time begins to run from September 1948 when the work was completed and the amount became due. Therefore he contends that plaintiff should have filed the suit by the end of September 1951. Mr. Tilokchand on the other hand relies on the "explanation" clause in section 19 of the Limitation Act. According to him the cause of action arises from the date of breach on 25‑7‑1950 as shown in the letter dated 25‑7‑1950 Exhibit 78. He argues that even if the defendant refuses to pay him at the rate of Rs. 50 this would not take away the liability for payment for 427 huts at the cost that the plaintiffs has built, so that the date of breach being in July 1950, when the defendant notified him finally as a result of appeal. That instead of Rs. 50 claimed by him he would be paid at the rate of Rs. 20 and this amounted to refusal to make payment though the liability for the construc tion of 427 hut was admitted and contract was admitted. Mr. Tilockchand refers to Article 115 of the Limitation Act and argues that the breach of contract is committed in July 1950, when defendant refused to make payment at the rate of Rs. 50 per but; and the period of limitation will start from July 1950 for three years. Agreeing with the plaintiff's Advocate's arguments that the Article 115 of the Limitation Act would apply, the suit filed in April 1952, is within time."
It would appear from the above finding of the learned First Class Sub‑Judge that he did not give his finding on application of Article 56 of the Limitation Act. The learned Judge held that Article 1 15 of the Limitation Act applies.
7. There are two questions before its. The first question is which of the two Articles namely 56 and 115 of the Limitation Act applies to the facts of the present case. It would be useful to reproduce Articles 56 and 115 of the Limitation Act. They run as under:
| 56: | ||
| For the price or work done by the plaintiff for the defendant at his request, where no time has been fixed for payment. | Three years. | When the work is done. |
| 115: | ||
| For compensation for the breach of any contract, express or implied, not in writing registered and not herein specially provided for. | Three years. | When the contract is broken, or (where there are successive breaches) when the breach in respect of which the suit is instituted occurs, or (where the breach is continuing) when it ceases. |
In order to apply Article 115 of the Limitation Act, what is essential is that the "suit should be for compensation for the breach of any contract". This is, on the face of it, not a suit for compensation. This is a suit for the price of the huts con structed. In this connection para. 4 of the plaint may be referred to. It runs as under:
"That the defendant paid by way of part payment on account of the 427 Jhoopries the construction whereof the plaintiff completed as agreed, the defendant made the payment of Rs. 13000 (Thirteen thousand only) to the plaintiff and there still remained the balance of Rs. 8,350 (Eight thousand three hundred and fifty) due from the defendant to the plaintiff
The plaintiff claimed the sum of Rs. 8,350 not as compen sation but as costs of construction payable to him. The contract, whatever it was, has been completed, and the plaintiff claimed only the cost of the construction. Article 115 of the Limitation Act clearly does not apply to the circumstances of the present case. At any rate one fails to see how the breach of the contract took place in July 1950. The huts were constructed in September 1948. The bill was submitted in December 1948 and payment at the rate of Rs. 50 per but was refused in December 1948. The mere fact that the plaintiff approached different authorities for payment ii the rate he wanted will not extend time or the refusal of the authorities mean successive breach of the contract. The Article applicable is Article 56 of the Limitation Act. The period of three years will start running when the work is done. In this case admittedly the work was completed sometime in September 1948. Even if it be taken that the work was completed in December 1948 when the plaintiff submitted his bill for the payment of the cost of construction of 427 huts at the rate of Rs. 50 the suit having been filed in April 1952 would be beyond three years unless the limitation is saved by an acknowledgement of the defendant under section 19 of the Limitation Act. Mr. Zafar Hussain, the learned Advocate for the plaintiff‑respondent strenuously contended that the limitation was saved by the acknowledgment of the defendant in July 1950: For the con sideration of the contention of the learned Advocate for the respondent it is necessary to reproduce sub‑clause (1) of section 19 and Explanation I to the same section.
"19. (1) Where, before the expiration of the period prescri bed for a suit or application in respect of any property or right, an acknowledgement 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 some person through whom he derives title or liability, a fresh period of limitation shall be computed from the time when the acknow ledgment was so signed.
Explanation 1:‑ For the purposes of this section an acknow ledgment 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 a set‑off, or is addressed to a person other than, the person entitled to the property or right."
In this connection it is also necessary to reproduce the letter which is said to be an acknowledgment of the liability. This letter is Exhibit 78 at page 35 of the paper‑book. The relevant portion of this letter runs as under:
"With reference to your petition, dated the 26th January 1950, addressed to the Honourable Minister, Refugee and Rehabilitation Department, Sind, on the subject noted above. I am directed to inform you that Government have carefully considered your case, but regret that they cannot allow you any higher rate than Rs. 20 per landhi sanctioned by the Col lector. Your petition has accordingly been rejected."
The construction of documents alleged to contain acknow ledgments of liability is governed by the same principles as those that apply to the construction of other documents. Reading the above letter it is difficult to construe however liberal interpretation may be put to the contents of the letter that the Government acknowledged its liability to pay at the rate of Rs. 50 per Landhi. The section requires a definite acknowledgment of liability. The acknowledgment should be in respect of the right to claim at the rate of Rs. 50 per hut.
8. Mr. Zifar Hussain relying on Explanation 1 to section 19 contended that the letter of July 1950 was a sufficient acknowledgment as the Government thereby only refused to make payment at the rate of Rs, 50. ' Explanation I to section 19 requires that if acknowledgment is accompanied by refusal to pay it would be sufficient for the purposes of section 19 of the Limitation Act.
In other words, there must be in the first place, an acknowledgment of the liability and then refusal to pay.
9. Mr. Lakhani the learned Advocate for the appellant relied on the case of Bindeshwari Prasad v. Board of Saran through Special Officer (A I R 1961 Pat. 134) In that case the plaintiff submitted his bill for a certain amount of money for work done to the defendant. The defendant passed the bill for a lesser amount and disallowed the plaintiff's claim for the rest and expressly denied and repudiated its liability in respect of the remaining amount of the bill. It was held that the mere fact that the defendant passed the bill for a lesser amount and thereby admitted its liability to pay the sum allowed would not amount to an acknowledgment of its liability to the plaintiff to pay also the balance amount of the bill which was expressly disallowed. The circumstances of this case are similar to the facts of the present case. We would hold that the defendant‑appellant did not admit its liability to pay at the rate of Rs. 50 per hut.
The suit therefore is beyond time. The limitation will run from the date the work was done. The work may by taken to have done either in September 1948 or in December 1948 when the plaintiff submitted his bill for the cost of the construc tion at the rate of Rs. 50 per hut. In either case under Article 56 of the Limitation Act, the suit having been filed in April 1952, would be beyond three years. We would hold that the suit was time barred, and would allow the appeal and dismiss the plain tiff's suit.
10. After we had reserved the judgment‑the learned Advocate for the respondent sent us a note relying on certain authorities in support of his contention that Article 115 of the Limitation Act applied. He relied on the case of Govind Narayam Kakade v. Rangnath Gopal Bajopadhye (A I R 1930 Bom. 572), This case has absolutely no application. This case decided points relating to Companies Act, 1913 and Article 120 of the Limitation Act. The next case he relied upon is Bharat' National Bank Ltd v. Bishan Lal and another (A I R 1932 Lah. 212). The observations in that case in fact would support the contention of the appellant that Article 115 of the Limitation Act applies to a suit for compensation. It was held in that case that in the event of a breach of contract embodying promise to pay a time‑barred debt due on accounts, a suit for compensation is the only remedy since the plaintiff cannot fall back on the original account. The third case that the learned Advocate relied upon is Sreenath Roy and others v. Peary Mohan Mookerjee (A I R 1917 Cal. 154). It was held in that case that a suit by a creditor against a surety upon a letter of guarantee payable on demand on a promissory note is governed by Article 115 and not by Article 56. A perusal of that case would show Chat no ground has been given as to how Article 115 is applicable to a case of liability under a simple debt unless it be on the ground of damages as compen sation. The last case relied upon is Sita Ram v. Mst. Mahmoodi Begum and another (A I R 1934 Lah. 475). This case in fact supports the case of the appellant. It was held in that case where a contract was given for construction of a building but later on before the completion of the contract it was given to another the original person could sue for the breach of the contract and the Article applicable would be Article 115 of the Limitation Act.
For the reasons given above we allow the appeal but would make no order as to costs.
K. M. A. Appeal accepted.
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