Bharat Sanchar Nigam Ltd. vs Best Gas Service and Others

Tarlok Singh Chauhan, J.—By medium of this application, the defendant No. 1 has sought rejection of the plaint as according to it the suit is time barred. It is averred that the cause of action disclosed in the plaint relates to the year 2002 or at best in June 2004, while the suit came to be filed only on 8.6.2012 and was therefore, on the face of it barred by time.

Though reply to the application has not been filed to this application, it is contended by the plaintiff as against the ordinary period of limitation of 3 years as applicable to this kind of suit the plaintiff being a government company, is entitled to the benefit of extended period of limitation under Article 112 of Limitation Act.

Undisputedly the plaintiff is a government company as defined under section 617 of the Companies Act, which is essentially means that not less than 51% of paid up share capital is held by the Central Government or by any State Government or Governments or partly by the Central Government and partly by one or more State Government. It is also not disputed that the plaintiff after having been registered under the Companies Act is no longer a part and parcel of the department of telecommunication of the Union of India and is a distinct and legal entity.

Therefore, the moot question which is required to be answered is as to whether the plaintiff is entitled to the benefit of Article 112 of Limitation Act when admittedly it is not "Government" but only a "State" within the meaning of Article 12 of Constitution of India. This question is no longer res integra in view of the judgment delivered by this court in RFA No. 153 of 2012 titled Badri Nath v. H.P. State Forest Corporation Ltd. decided on 18.12.2014, where the respondent like the present plaintiff was a corporation and a "State" within the meaning of Article 12, but was not "State Government". Therein, this court held as follows:--

"3. The question which arises for consideration is as to whether the suit and the counter claim can be held to be within time.

Article 112 of Limitation Act, 1963 which has been relied upon by the learned trial court to decree the suit of the plaintiff-respondent reads as follows:

Therefore, the moot question required to be answered is as to whether recourse to Article 112 of the Limitation Act can be taken by the plaintiff- corporation to claim that the suit is within limitation. It cannot be disputed that a particular period of limitation for filing a suit by a Central government or State government or as the case may be has been provided for under Article 112. The State Government has been provided for in the statute of Limitation for a purpose and object. Prior to Article 112 of 1963 Act, the pari materia provision was Article 149. While noticing the purpose and object of Article 149 of the Limitation Act, the Hon''ble Supreme Court in Nav Rattanmal and Others Vs. The State of Rajasthan, held as follows:--

"10. First and foremost there is this feature that the Limitation Act, though a statute of repose and intended for quieting titles, and in that sense looks at the problem from the point of view of the defendant with a view to provide for him a security against stale claims, addresses itself at the same time also to the position of the plaintiff. Thus, for instance where the plaintiff is under a legal disability to institute a suit by reason of his being a minor or being insane or an idiot, it makes provisions for the extension of the period taking into account that disability. Similarly, public interest in a claim being protected is taken into account by S. 10 of the Act by providing that there shall be no period of limitation in the case of express trusts. It is not necessary to go into the details of these provisions but it is sufficient to state that the approach here is from the point of view of protecting the enforceability of claims which, if the ordinary rules applied, would become barred by limitation. It is in great part on this principle that it is said that subject to statutory provision, while the maxim vigilantibus et non dormientibus jura Subveniunt is a rule for the subject, the maxim nullum tempus occurit regi is in general applicable to the Crown. The reason assigned was, the quote Coke, that the State ought not to suffer for the negligence of its officers or for their fraudulent collusion with the adverse party. It is with this background that the question of the special provision contained in Art. 149 of the Act has to be viewed. First we have the fact that in the case of the Government if a claim becomes barred by limitation, the loss falls on the public, i.e., on the community in general and to the benefit of the private individual who derives advantage by the lapse of time. This itself would appear to indicate a sufficient ground for differentiating between the claims of an individual and the claims of the community at large. Next, it may be mentioned that in the case of governmental machinery, it is a known fact that it does not move as quickly as in the case of individuals. Apart from the delay occurring in the proper officers ascertaining that a cause of action has accrued-Government being an impersonal body, before a claim is launched there has to be inter-departmental correspondence, consultations, sanctions obtained according to the rules. These necessarily take time and it is because of these features which are sometimes characterised as re-tape that there is delay in the functioning of Government officers....." 5. The words "Central Government" or "State Government" have not been defined in Limitation Act, 1963. The "Government" has been defined in section 3(23) of the General Clauses Act, 1897 in the following words:--

"23. "Government" or "the Government" shall include both the Central Government and any State Government." 6. The word "State" has been defined under Article 12 of the Constitution of India to mean:--

"12. Definition.- In this Part, unless the context otherwise requires, "the State" includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India." An analysis of the aforesaid definition of word "State" would show that the same is an inclusive definition which includes the Government, Parliament of India and the Government and Legislature of each States and all local or other authorities within the territory of India or under the control of the Government of India. The definition of word "State" as contained in Part-II of Constitution of India is for the purpose of Part-III and Part-IV of the Constitution of India. Article 12 itself indicates that the words "the State" is a word of wider definition and it encompasses in it other authorities, which may be controlled by Government of India.

No doubt, the plaintiff- corporation may be an authority within the meaning of Article 12 of the Constitution of India, but the question is as to whether the words "Central Government" and "State Government" used in Article 112 of the Limitation Act, 1963 should be read as the word "State".

When the Limitation Act, 1963 was enacted, the Parliament was well aware of the concept of Central Government, State Government and concept of "State". The Limitation Act, 1963 itself indicates that the word "Local Authority" is not included within the meaning of Central Government or State Government, which is apparent from the fact that a separate limitation period has been provided for Local Authority in the limitation Act under Article 111, which reads as follows:--

Therefore, had the Legislature intended to include local authority within the meaning of State Government or Central Government under Article 112 of the Limitation Act, there was no occasion to provide for a separate limitation period for local authority. It is thus clear that the local authority and other authorities which may fall within the definition of "State" under Article 12 of the Constitution of India were never intended to be included in the words "Central Government" or "State Government". Thus any authority/corporation, which may be State within the meaning of Article 12 does not ipso facto become entitled to be treated as Central Government or State Government within the meaning of Article 112 of the Limitation Act. Accordingly, the plaintiff-appellant is not entitled to the extended period of limitation as provided for under Article 112 of the Limitation Act. "

A direct judgment on this issue pertaining to the plaintiff itself has been rendered by the Punjab and Haryana High Court in Bharat Sanchar Nigam Ltd. Vs. Pawan Kumar Gupta, . The plaintiff therein was held not entitled to the benefit of Article 112 of the Limitation Act on the similar reasoning as given by this court in the case of Badri Nath (supra) After extracting the provisions of the Limitation Act and making reference to the "Central Government" as defined under the General Clauses Act, it was held as under:

"6. From the aforesaid definition, the expressions "Central Government" can include only such authorities as are indicated therein. It is admitted case of the appellant that the appellant is a Company incorporated under the Companies Act, though it has acquired the assets and liabilities of a department of the Central Government. The appellant being a Company is a separate and distinct entity from the Central Government. Whether its functioning is controlled by the Central Government as claimed by the appellant or not, is irrelevant. It may be a wholly controlled government company, but insofar as its legal and contractual rights and liabilities are concerned, it cannot acquire the status of "Central Government", by any stretch of imagination. The expression "Central Government", as defined in the General Clauses Act does not include even within its expansive definition a Government owned or controlled Company. Article 112 clearly provides the limitation in respect of a suit by Central Government or by State Government and not by any of its instrumentalities or agency, particularly a Corporation, even if established by the Central Government/State Government. The findings recorded by the courts below on this question cannot be faulted with." 6. Notably this judgment has been constantly followed by the Punjab and Haryana High Court in the case of M/s. Sunder Dass Inder Singh v. Bharat Sanchar Nigam Ltd. (RSA No. 2040 of 2010 decided on 14.10.2011) and Bharat Sanchar Nigam Ltd. v. Satpal Gupta (RSA No. 1374 of 2010).

Confronted with this position, Sh. V.S. Chauhan, Advocate has vehemently argued that plaintiff being a government company owned and controlled by the Government of India, wherein the entire shares are held by the government is entitled to the protection of Art. 112 of the Limitation Act and in support of his contention has placed reliance upon the judgment of Hon''ble Supreme Court in R.C. Jall Vs. Union of India (UOI), more particularly the observations contained in paras-4 and 5 of the report, which read thus:--

"4. The first question is whether the suit is barred by limitation. The coal cess should have been collected at the time of the delivery of the three consignments, namely, January 9, 1947, February 8, 1947 and February 18, 1947 respectively. The suit was filed on April 24, 1953, that is, more than six years from the date the amount was payable. It is contended that the suit was, therefore, barred under Art. 120 of the Limitation Act. The High Court held that the suit was within time under Art. 149, read with Art. 50 of the Limitation Act. The said articles read:

The High Court held that the suit was of the character of a suit contemplated by Art. 50 and, therefore, the Central Government could file the suit within 60 years from the date the freight became payable. Mr. Sastri contends that a private person cannot file a suit like the suit filed by the Central Government to recover a statutory cess and, therefore Art. 149 does not avail the Government and that in the circumstances the suit is governed only by Art. 120 of the Limitation Act, which prescribes a period of six years from the date of right to sue accrues.

The argument of the learned counsel appears to be plausible, but, in our view, has no merits. It mixes up the question of maintainability of the suit with that of limitation prescribed under the Act. For a suit described in Art. 149 a period of limitation of 60 years is prescribed and the period would begin to run as it would ''''against a like suit by a private person." The article does not posit that such a suit should have been maintainable at the instance of a private party: it assumes its maintainability and, on that basis, refers to the appropriate article of the Limitation Act for the limited purpose of ascertaining the starting point of limitation. The statute of limitation assumes the existence of a cause of action and does not define it or create one. To state it differently, if a private party had filed a suit for the recovery of a statutory duty, what would be the article of the Limitation Act applicable to such a suit? Article 50 which prescribes the period of limitation for a suit to recover the hire of animals, vehicles, boats or household furniture, cannot obviously apply to a suit for the recovery of a statutory, cess filed at the instance of a private party. There is no other specific article in the Limitation Act applicable to such a suit and, therefore, it would be governed only by the residuary Article 120. Under the said article, time runs from the time when the right to sue accrues. It follows that when such a suit is filed by the Central Government, the period of limitation of 60 years should be computed when the right to sue accrues. The right to sue accrued in the present case when the defendants refused to pay the cess when demanded. The decisions relied upon by the learned counsel in support of his contention, namely, INDERCHAND Vs. SECRETARY OF STATE FOR INDIA IN COUNCIL., , Secretary of State for India v. Guru Proshad Dhur, ILR 20 Cal 51(FB), INDERCHAND Vs. SECRETARY OF STATE FOR INDIA IN COUNCIL., ; (AIR 1942 Pat 87), and Government of India v. Taylor, 1955-27 ITR 356 (foreign) have no bearing on the question raised in the present case, as none of those cases related to a suit filed by Government to recover amounts due to it from defendants therein. We, therefore hold that the suit was clearly well within time and was not barred by limitation."

I have given my best consideration to the arguments canvassed by Mr. V.S. Chauhan and do not find any observation contained in the aforesaid judgment, which may be of any assistance to the case of the plaintiff or for determination of the controversy in hand.

Now, adverting to the facts, if the contents of the plaint are minutely scrutinized, it would be seen that plaintiff itself has made specific averment in paragraph-14 that cause of action has accrued in favour of the plaintiff firstly in the year 2002 when defendant No. 1 entered into an agreement and thereafter when the fraud came in the knowledge of plaintiff and the matter was reported to the police. Admittedly, the fraud was detected in 2004 when matter was reported to the police and FIR No. 155 of 2004 was lodged by the plaintiff on 3.6.2004, but the suit was still not filed up till 8th July 2012 i.e. after a lapse of more than eight years. Though the learned counsel for the plaintiff would argue that cause of action would continue till the defendants are put to charge and ultimately convicted. However, I find no substance in such arguments, as framing of the charge or acquittal/conviction of the defendants cannot be said to be a fact constituting a cause of action so as to enlarge the period of limitation.

The learned counsel for the plaintiff would then contend that this court should not return a finding unless the defendant has led his evidence. I am afraid that even this plea is not available to the plaintiff, since it is settled law that the evidence which is led beyond the pleadings is liable to be ignored.

For all the reasons stated above, I find merit in this application and the same is accordingly allowed. Resultantly, the plaint is ordered to be rejected under the provisions of Order 7 Rule 11 CPC. The plaintiff shall be entitled to refund of court fee, if any, in accordance with the rules. Decree sheet be drawn accordingly.