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Union of India Vs. Tubes and Malleables Ltd. Madras and anr. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petns. Nos. 3510 to 3525 of 1976, 1393 of 1977 and 1686 of 1978
Judge
Reported inAIR1979Mad215; (1979)1MLJ313
ActsLimitation Act, 1963 - Sections 18 and 19
AppellantUnion of India
RespondentTubes and Malleables Ltd. Madras and anr.
Cases ReferredUnion of India v. J. J. Patel and Co
Excerpt:
limitation act (xxxvi of 1963), sections 18 and 19--when payment made is said to be in full and final settlement of the claim even if received under protest will not give rise to a fresh cause of action. ; the respondent-plaintiff purchased iron pipes from a third party and it booked the same through the railway belonging to the petitioner, union of india. but there was short delivery of the goods aff eighted. so, the railway authorities issued a cheque for a certain sum, but stating expressly, that it was in full and final settlement of the claim and that regarding the remaining pipes, the matter would be dealt with shortly. the plaintiffs after receiving the same filed a suit for the recovery of the balance amount. the trial court decreed the suits on the ground that the claim could be..........authorities issued a cheque for a certain sum, but stating expressly that it was in full and final settlement of the claim for refund made by the plaintiff.3. the court below, while dealing with the claim, thought that the payment made by cheque on 8-2-1972, in one case, and on 10-5-1971 and 5-3-1971, in the other, was sufficient to decree the suit instituted by the plaintiff within 3 years and 2 months from those dates respectively, it further thought that such payment, though represented to be in full and final settlement of the claim raised by the plaintiff, could be viewed as payment towards a debt within the meaning of s. 19 of the limitation act, 1963 and that therefore the suits instituted within 3 years and two months from those dates were within time. i am not.....
Judgment:
1. In these civil revision petitions the question which arises for consideration is a very simple one. Iron pipes were purchased by the plaintiff-respondent from a third party and it booked the same through the railway belonging to the petitioner-Union of India, at Tatanagar, the station of destination being Bangalore and other places. It is common ground in all these cases that there was short delivery certificate was issued to the consignor in all these cases. Except in one case where the Insurance Company has subrogated itself, in the place of the consignor, the plaintiff-respondent is the same in all the petitions. I shall deal with the relevant facts in two sets of cases, as similar points arise in them. CRP 3510 of 1976 is against the judgment of the New Trial Bench of the Court of Small Causes, Madras in connection with the despatch of iron pipes from Tatanagar to Bangalore. The goods arrived at Bangalore in or about Nov. 1970, and open delivery certificate was issued on 17-11-1970. After protracted correspondence, which is not unusual with the railways and Government departments. the railway wrote under Ex. P. 5 as follows:--

"I have ordered the Railway's Financial Adviser and Chief Accounts Officer, to remit to you a sum of Rs. 10,439 in full settlement for short delivery of 177 pipes in the above consignment. As regards the remaining 8 pipes you will hear in the matter shortly".

Thereafter the plaintiff respondent received a sum of Rs. 10,439 pursuant to the representations made earlier by the petitioner that it was in full settlement of the claim raised by the plaintiff.

2. In the other set of cases also (C.R.P. 3517 and 3520 of 1976) open delivery was sought and open delivery certificate was issued by the railway consequent upon discovery of shortage in the goods, at this station of destination, and this certificate was issued on 18-9-1970. Again, after protracted correspondence, the railway authorities issued a cheque for a certain sum, but stating expressly that it was in full and final settlement of the claim for refund made by the plaintiff.

3. The court below, while dealing with the claim, thought that the payment made by cheque on 8-2-1972, in one case, and on 10-5-1971 and 5-3-1971, in the other, was sufficient to decree the suit instituted by the plaintiff within 3 years and 2 months from those dates respectively, it further thought that such payment, though represented to be in full and final settlement of the claim raised by the plaintiff, could be viewed as payment towards a debt within the meaning of S. 19 of the Limitation Act, 1963 and that therefore the suits instituted within 3 years and two months from those dates were within time. I am not recapitulating the facts in each case, as they are more or less similar, except for the difference in dates when open delivery certificate was issued and payment by cheque was made by the railway to the plaintiff. But the facts are slightly different in the above two sets of civil revision petitions which are therefore separately dealt with.

4. Learned counsel for the railway contends that the payment made by cheque on 8-2-1972 in CRP No. 3510 of 1976 and on 10-5-1971 in C.R.P. No. 3517 of 1976 and on 5-3-1971 in CRP 3520 of 1976 was in full and final settlement of the claim raised by the plaintiff and that therefore there was no outstanding, according to them, which was ever payable as a debt or which could be deemed to have been impliedly acknowledged as a liability or obligation on the part of the railway thereafter to be satisfied. On the other hand, learned counsel for this respondent-plaintiff would say that, as the plaintiff had received such payments under protest, there was no automatic acceptance of the same in full and final settlement, that in fact if was an indicia to show that the plaintiff was still harping upon its earlier demand against the petitioner, that such protests and the later demands raised after receipt of the cheques were sufficient to show that the cause of action was kept alive and that the date on which the cheques were tendered to the plaintiff would give rise to a fresh cause of action. It is conceded by both sides that, if the date of the cause of action for the suit is reckoned as the date on which open delivery of the goods was given at the place of destination, then the suits have been filed beyond three years and two months from those dates. The only question therefore is whether the receipt of the cheque tendered by the railway, but said to be in full and final settlement of the claim raised by the plaintiff, who received it under protest, would give rise to a fresh cause of action within the meaning of one or the other of the provisions of the Limitation Act.

5. Whatever was the position prior to the passing of the Limitation Act of 1963, new Ss. 18 and 19 of the Limitation Act 1963, govern the situation. Section 18 deals with the effect of acknowledgment in writing and says that, where, before the expiration of the prescribed period for a suit or application in respect of any property or right an acknowledgment 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......a fresh period of limitation shall be computed from the time when the acknowledgment so signed. Thus the section clearly contemplates that the acknowledgment of liability should be in writing and that it should be signed by the party against whom such right is claimed, when only it would have the effect of acknowledgment within the meaning of S. 18. Section 19, on the other hand, deals with the effect of payments made on account of a debt or interest on a legacy, etc. We are not here concerned with interest on legacy. Section 19 says that, where payment on account of a debt is made before the expiration of the prescribed period by the person liable to pay or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when such payment was made. For the purpose of this section 'debt' does not include money payable under a decree or order of court. The question is whether the claim raised by the plaintiff as damages based on tort or other negligence on the part of the carrier, would amount to a debt as is popularly or legally understood. The dictionary meaning of the term 'debt' is a sum of money payable by one to another, which is other than money payable under a decree or order of court (this being and exception under Section 19 of the Limitation Act). It is a present obligation. Unless therefore a person is obliged to pay an amount to another and unless and amount is paid pursuant to an awakening or recognition of the existence of a present obligation, in the normal sense, it would not be payment of a debt. In fact, in Venkataramiah's Law Lexicon and Legal Maxims, 2nd Edn. at page 605, the term 'debt' is explained thus--

'The term 'debt' is one of very wide connotation and while in ordinary parlance it may be synonymous with any obligation, whether moral or financial, whether legally enforceable or not, in the ordinary legal sense it means a sum of money payable now or which will become payable in future by reason of a present obligation."

This was the definition given as early as in 1883 in Debb v. Stenton, (1883) 11 QBD 518. Viewed in this light, it has to be seen whether the payment made by cheque by the railway, after correspondence with the claimant-plaintiff but saying that it was in full and final settlement, was in recognition of a present obligation on their part, or whether it was a payment made by them without any chance of any further reopening of the subject in future by the payee. No doubt, the payment was accepted under protest, but, so far as the person who made the payment is concerned, he was emphatic that it was in full and final settlement. He did not reserve any obligation to respect any future claim on the part of the payee. A voluntary act on the part of the payee by which he said that he was receiving the cheque under protest, could not revive the obligation which had been extinguished by the overt act on the part of the railway, when they sent the cheque, proclaiming contemporaneously that the payment was made in full and final settlement of the claim made by the plaintiff. In these circumstances, I am unable to agree with leaned counsel for the respondent that such payment accepted by him under protest did revive the cause of action and kept alive his right.

6. Reliance is placed upon the decision of the Patna High Court in Union of India v. J. J. Patel and Co, . That was a

case where the question, which has arisen in the present case, did not squarely came up for consideration. There in answer to a claim for damages, the railway company sent a cheque for a sum less than the amount claimed stating that it was in full and final settlement. The payee retained the cheque and encashed it. The court held that such a conduct on the part of the payee could not be said to be conclusive proof in law that the amount was agreed to be accepted on the conditions offered, and that, if the railway administration was liable and was bound to pay the entire claim of the plaintiffs, then it would be piling unreason upon technicality to hold, in the circumstances, that it was open to the defendant company on the ground of estoppel, to object to the jurisdiction of the court to pass a decree in favour of the plaintiff for the unpaid claim. Apart from the fact that the question of limitation did not arise in that case, the learned Judge was conscious of the fact that, if the railway administration was liable and was bound to pay the entire claim of the plaintiff, then technicalities ought not to prevail. But here in the instant case, by an open declaration in writing, that the cheque which was sent was in full and final settlement of the claim, the railway company made it clear that there was no more obligation on their part and they were not liable to pay any more amount in respect of the claim raised. In these circumstances, it was not open to the plaintiff to rely upon the payment so made by the railway and file the suit within 3 years and two months from that date and then seek to sustain the case that it was not barred by limitation.

7. In CRP No. 3517 of 1976, in which the facts are similar, open delivery certificate was given on 18-9-1970 and payment by cheque was made on 10-5-1971. This was again a case where the railway made it clear that the payment by cheque was in full and final settlement of the claim. The only difference between the former case and this case is that, in the earlier one a letter was written on 28-1-1972 stating that action had been taken to remit a certain sum of money in full settlement without any reservation, and that, regarding the remaining 8 pies, the matter would be dealt with thereafter. This was followed up by remittance. Though there was a communication in that case to keep alive a present obligation to deal with the claim in respect of the remaining 8 pies, yet nothing happened. In the latter case, the communication sent by the railway, enclosing the cheque for payment of the claim, which they sent on 10-3-1971, stated in no uncertain terms that the payment was made in full and final settlement. This was therefore in the nature of a warning to the plaintiff of the stand taken by the railway and he ought to have been diligent in coming to court within three years and two months from the date when he secured open delivery of the goods after discovery of the shortage. This not having been done, this suit also has to be dismissed on the ground that it was filed beyond 3 years and two months from the date of the open delivery, which is the date of cause of action for the suit. There was no acknowledgment in writing as contemplated in Section 18 of the Limitation Act, 1963, nor was there any payment made on account of a debt as contemplated by S. 19 of the Act. Therefore the payment made on 10-5-1971, would not save time.

8. In these circumstances, CRP 3510 and 3517 and 3520 of 1976 are allowed.

9. In the rest of the petitions there was no such representation that the payment was made in full and final settlement of the claim. This would mean that the payment so made kept alive the present obligation on the part of the railway. The lower court was therefore right when it said that the cause of action arose on the date when the payment was made towards the present obligation and the suits having been filed within 3 years and 2 months from that date were in time. Those revision petitions are therefore dismissed. There will be no order as to costs in any of the petitions.

10. Order accordingly.


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