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UNION OF INDIA V. WEST COAST PAPER MILLS LTD. AIR 2004 SC 1596 (CJI, S.B. SINHA , S.H. KAPADIA & S.B. SINHA, JJ)

UNION OF INDIA V. WEST COAST PAPER MILLS LTD. AIR 2004 SC 1596 (CJI, S.B. SINHA , S.H. KAPADIA & S.B. SINHA, JJ)

 

FACTS

  • Respondents transported goods for the appellant at a certain price which was revised by the appellant w.e.f. 1964. Aggrieved, the respondent filed a complaint before the tribunal challenging such revision as unjust, unreasonable and discriminatory.
  • The tribunal declared the revision unreasonable in 1966. The appellant filed an SLP, granting which the SC passed a limited interim order that the appellant may charge the regular without the inflated distance and that the respondent will give a bank guarantee.
  • Later on, the SLP was dismissed in 1970.
  • Respondent filed a writ petition in 1972 which the High Court disposed stating that all the matters cannot be properly adjudicated in a writ petition.
  • Thereafter, the respondent filed 2 suits in 1973 & 1974 for refund of the excess rate that was already charged. However, the appellant contended that the suit was time-barred as the cause of action to file the said suits arose as soon as the tribunal passed the judgment in 1966 and hence under article 58 of the Limitation Act, 1963 the said suits were required to be filed within 3 years, i.e., 1969. Also, no stay was granted by the SC in the SLP, hence the period during which the matter was pending in the SC will not be excluded in computing the limitation period. The respondents argued that Article 113 applies and not 58.
  • The trial court and as also the High Court held that the suit had been filed well within the limitation period.
  • Hence, the appellant preferred this appeal. The 2-judge bench doubted the law laid down another 2-judge bench in PK Putty v State of Kerala (1996) 2 SCC 496 and hence it was referred to the instant bench of the 3-judge bench.

 

ISSUE

  • Whether the suits filed by the respondent were within the limitation period.
  • Whether Article 58 or Article 113 of the Limitation Act would apply in the instant case.

 

HELD

The Kutty case was overruled and the matter was directed to be placed before an appropriate bench for disposal.

  • The judgment of the tribunal might be final as per Section 46A of the Indian Railways Act, but that cannot affect the jurisdiction of the SC under Article 136. Once a Special Leave is granted and appeal is admitted the correctness or otherwise of the judgment of the tribunal is in jeopardy.
  • An appeal in a civil dispute is considered to be a continuation of the suit and a decree becomes executable only when the same is finally disposed of by the Court of Appeal.
  • The starting point of limitation would begin from the date of the order passed by this court. The respondents also filed a writ petition which was disposed of and hence they were entitled to get the period during which the writ petition was pending to be excluded from computing the limitation period. The civil suit was filed within the limitation period.
  • The SC found no reason to differ from the concurrent view of the courts below that the respondent was entitled to the benefit of Sections 14 & 15 of the Limitation Act.
  • There is a distinction between Articles 58 & 113 of the Limitation Act. Under Article 58 the period of limitation would be reckoned from the date on which the cause of action arose first whereas, under Article 113 the period of limitation would be differently computed depending upon the last day when the cause of action therefore arose.
  • In Kunhayammed v State of Kerala (2000) 6 SCC 359 the court held that the logic underlying the “doctrine of merger” is that there cannot be more than one decree or orders governing the same subject-matter at a given point of time. When a decree or order passed by an inferior forum was subjected to a remedy available under the law before a superior forum then, though the decree or order under challenge continues to be effective and binding, nevertheless its finality is put in jeopardy. Once the superior court has disposed of the lis before it either way - whether setting aside or modifying or confirming, it is the decree or order of the superior forum which is the final, binding and operative decree or order in which merges the decree or order passed by the inferior forum. However, the doctrine is not of universal or unlimited application. The nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or which could have been laid shall have to be kept in view.
  • In PK Kutty case, the Court failed to take into consideration that once an appeal is filed before this Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy. The subject matter of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit.
  • Hence, PK Kutty was overruled as it did not lay the law correctly.