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Govinda Sabat Vs. State of Orissa - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtOrissa High Court
Decided On
Case NumberSecond Appeal No. 167 of 1962
Judge
Reported inAIR1964Ori189
ActsLimitation Act, 1908 - Schedule - Articles 74, 110 and 115
AppellantGovinda Sabat
RespondentState of Orissa
Appellant AdvocateH.G. Panda, Adv.
Respondent AdvocateAdv. General
DispositionAppeal dismissed
Excerpt:
.....and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - 13,125/- for his toll collection work for the entire period of the official year 1955-56 ending on march 31, 1956. under the agreement he can exercise his right to collect toll until march 31, 1956. the question of his failure to pay the agreement dues in full will only arise after the expiry of the agreement period, namely after march 31, 1956. the suit having been filed on march 4, 1959 was filed within time. it is only after the defendant's ultimate failure to pay the entire contract dues after the expiry of the period during which the defendant was to work for collection of toll from the market, that is to say after march 31, 1956 thatthe breach of the contract occurred. i agree with the learned lower..........learned lower appellate court found that as the defendant was admittedly in possession for the toll period in question, and had the benefit of the agreement, the defendant was bound to pay the plaintiffs dues claimed as compensation for use and occupation. the other findings of the trial court were not challenged before the lower appellate court.5. the main point for consideration in this appeal is limitation. the arguments urged on behalf of the defendant appellant overlooked the very nature of the contract between the parties. necessarily the various decisions cited on behalf of the defendant appellant were not to the point. it is therefore not necessary to deal with them in this judgment. the nature of the contract between the parties in substance is that the defendant was to.....
Judgment:

S. Barman, J.

1. Defendant is the appellant. The District Board, Ganjam, was the original plaintiff. After the passing of the Orissa Zilla Parishad Act, District Boards were abolished and their properties vested in the State of Orissa. The suit out of which, this appeal arises was a money suit filed by the plaintiff against the defendant for a decree for Rs. 4383.39 nP. for balance of dues from the defendant as lessee of weekly market tolls.

2. The facts stated are these: A Hat sits at village Hinjili once a week. Ganjam : District Board used to collect toll from all dealers in goods in the market. A particular tariff is prescribed under the Madras Local Boards Act applicable in the area The right to collect toll is leased out to the highest bidder. There are some sheds at Hinjili Hat owned by Dist. Board. Any shopkeeper who uses these huts has to pay rent. On January 21, 1955 the District Board publicly auctioned the right to collect the Hinjili market tolls for official year 1955-56 (April 1, 1955 to March 31, 1956). The defendant was the highest bidder at the public auction. The bid amount was Rs. 13,125/-. The defendant deposited 1/4 of the amount, namely, Rs. 3281/4 to the credit of the Dt. Board. The terms and conditions of the agreement between the defendant and the District Board are contained in two Muchlikas (Exts. 2 and 3) executed by the defendant In. favour of the plaintiff. Under the said terms the balance of the bid amount was to be paid in three equal instalments, namely 1st instalment by June 1, 1955; 2nd instalment by August 1, 1955; and 3rd instalment by October 1, 1955. It was also agreed that in default of payment, 12 per cent interest would be charged. Purusuant to the said agreement the defendant had paid a total sum of Rs. 10,363/4 including interests. On March 4, 1959 the plaintiff filed the suit for the balance dues of Rs. 4383.39 nP. including interest.

3. The defenca so far as material for the purpose of deciding this appeal is that the plaintiff's claim is barred by limitation in that the money fell due at the end of each instalmant period; the suit having been filed beyond three years from the due date of each instalment period) the suit is barred by limitation. It was also pleaded in defence that the said agreement between the defendant and the plaintiff contained in the said Muchlikas (Exts. 2 and 3) which according to the defendant was in substance a lease was invalid by reason of non-registration.

4. The learned trial Court dismissed the plaintiffs suit as barred by limitation in that the case, as based on bond payable by instalments, is governed by Article 74 of the Limitation Act, and further that the alleged acknowledgment by the defendant of the dues contained in an application by the defendant to the District Board dated January 5, 1956 Ext. 5 did not save limitation. The learned trial Court did not give any finding on the alleged invalidity of the said Muchilikas. He, however, found that the Hat sheds were delivered to the defendant for use. In appeal the learned lower appellate court reversed the decision of the trial court, and decreed the suit in favour of the plaintiff on the finding that this case is governed by Art. 115 of the Limitation Act and that the period of limitation for the suit would be computed from the last date of the toll term period (referred to lease period) that is March 31 1956 and hence the suit having been filed on March 4, 1959 was within time. On the alleged affect of non-registration of the Muchalikas,the learned lower appellate Court found that as the defendant was admittedly in possession for the toll period in question, and had the benefit of the agreement, the defendant was bound to pay the plaintiffs dues claimed as compensation for use and occupation. The other findings of the trial court were not challenged before the lower appellate Court.

5. The main point for consideration in this appeal is limitation. The arguments urged on behalf of the defendant appellant overlooked the very nature of the contract between the parties. Necessarily the various decisions cited on behalf of the defendant appellant were not to the point. It is therefore not necessary to deal with them in this judgment. The nature of the contract between the parties in substance is that the defendant was to collect toll from the market for the official year 1955-56 commencing from April 1, 1955 and landing on March 31, 1956. For this the defendant contracted to pay Rs. 13,125 - out of which he paid in advance 1/4 of the said amount and the balance was to be paid in 3 equal instalments. It is not the agreement that if the defendant fails to pay any one instalment, his right to collect toll will get automatically terminated. Instead what the agreement provides is that the defendant will continue to collect tolls in terms of the agreement until the expiry of the official year. For default in payment of any instalment within due date the defendant has to pay interest. Having regard to the real nature of the agreement for collection of the tolls for the entire official year ending on March 31, 1956 it is not a bond payable by instalments, in the sense in which it is to be understood and therefore this case does fall under Article 74 of the Limitation Act nor does it come under Article 110 because the money due under the agreement is not rent

6. So, in the ultimate analysis, this case is governed by the residuary article, namely Article 115 which provides that for a suit for compensation for breach of any contract, express or implied not in writing registered and not specially provided for, the period of limitation is three years from the time 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. The question here is When the contract broken? Under the agreement the defendant was to pay a totol sum of Rs. 13,125/- for his toll collection work for the entire period of the official year 1955-56 ending on March 31, 1956. Under the agreement he can exercise his right to collect toll until March 31, 1956. The question of his failure to pay the agreement dues in full will only arise after the expiry of the agreement period, namely after March 31, 1956. The suit having been filed on March 4, 1959 was filed within time.

7. Much was harped on behalf of the' defendant appellant on the instalment periods. The defendant's contentions overlooked the position that in the present case the instalments only lay down the manner of payment of the entire agreement amount of Rs. 13,125/- that is to say, 1/4th of the amount was to be paid in advance and the balance in three equal instalments as aforesaid. It is only after the defendant's ultimate failure to pay the entire contract dues after the expiry of the period during which the defendant was to work for collection of toll from the market, that is to say after March 31, 1956 thatthe breach of the contract occurred. The agreement to collect toll runs for the whole official year. Thus keeping in view the essential nature of the contract the learned lower appellate Court took the view that the dates of instalments fixed under the agreement are meant simply to facilitate payment by the defendant. He rightly decided that the claim is governed by Art. 115 of the Limitation Act and that the period of limitation for the suit is to be computed from the last date of the contract period, namely March 31, 1956; that the suit having been filed on March 4, 1959 was filed within time.

8. On the question of the alleged effect of the alleged invalidity of the Muchalikas Exts. 2 and 3 by reason of non-registration, the learned lower appellate Court rightly rejected the defendant's contention. I agree with the learned lower appellate court's decision that the defendant having admittedly remained in possession of the market for the contract period and having enjoyed the benefit of the contract during that period, an implied contract will tie presumed to have existed between the parties that the defendant who occupied the market is liable for pay compensation for use and occupation.

9. In this view of the case, the decision of the learned lower appellate Court is upheld. The appeal is dismissed with costs.


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