IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY THURSDAY, THE 31ST MARCH 2011 / 10TH CHAITHRA 1933 WA.No. 165 of 2011() -------------------- AGAINST THE JUDGEMENT IN WPC.15939/2006 Dated 15/12/2010 .................... APPELLANT/3RD RESPONDENT ---------------------------- THE MANAGING DIRECTOR, M/S. LARSEN & TUBRO, L & T HOUSE, BALLARD ESTATE, P.O.BOX NO.278, MUMBAI-400 001, REP. BY ITS DEPUTY GENERAL MANAGER (LEGAL), B.K.SUBRAMANIAN. BY ADV. SRI.V.CHITAMBARESH, SENIOR ADVOCATE SRI.S.ANANTHAKRISHNAN SRI.N.K.SUBRAMANIAN RESPONDENTS/PETITIONER & RESPONDENTS 1 & 2 --------------------------------------------- 1. G.K.GRANITES, KIZHAKKAMBALAM P.O., ERNAKULAM-683 562, REP. BY ITS MANAGING PARTNER, GEORGE ANTONY. 2. UNION OF INDIA, REP. BY ITS SECRETARY TO GOVT., MINISTRY OF ROAD TRANSPORT AND NATIONAL HIGHWAY, ROOM NO.509, TRANSPORTS BHAVAN, PARLIAMENT STREET, NEW DELHI-110 001. 3. THE CHAIRMAN, NATIONAL HIGHWAY AUTHORITY OF INDIA, G5 & 6, SECTOR-10, NEW DELHI-110 045. SR.ADV. SRI.K.RAMAKUMAR FOR R1 ADV. SRI.SAIBY JOSE KIDANGOOR FOR R1 SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR FOR R2&3 THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 31/03/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.R. C.N.RAMACHANDRAN NAIR & BHABANI PRASAD RAY, JJ. .................................................................... Writ Appeal No.165 of 2011 .................................................................... Dated this the 31st day of March, 2011. JUDGMENT Ramachandran Nair, J. Appellant was the main contractor engaged by the National Highway Authority of India for construction of a road in Karnataka. Pursuant to agreement with the third respondent for construction of a road, the appellant entered into a contract with first respondent for supply of certain quantities of boulders and crushed aggregates at the rates provided in the agreement between parties. Dispute cropped up between appellant and first respondent when the appellant rejected first respondent's claim for huge amount of above Rs.9.68 crores, which claim was not only denied by the appellant, but they even made counter claim against the first respondent. According to the appellant, the claim made for the first time by the first respondent vide Ext.P1 on 1.4.2005 was denied by the appellant vide Ext.R3(a) reply sent on 4.5.2005 and consequently if at all the claim is to be enforced through a W.A. No.165/2011 2 court of law, the first respondent should have filed a suit within three years from the date of denial of liability by the appellant i.e. by May 2008. Admittedly the first respondent neither filed any suit in time nor filed suit even as of now. In between, the first respondent approached the second respondent with a representation to settle the dispute and on their failure, a writ petition was filed before this court and this court issued direction to the second respondent to consider the representation. This was rejected by the second respondent vide Ext.P9 order stating that for settlement of dispute arising out of breach of contract between the appellant and first respondent, it is for them to settle and not by the Government. It is against this order issued by the Government of India that the first respondent filed Writ Petition before this court in 2006. During pendency of the said W.P.(C) the first respondent filed C.M.P. No.143/2008 before the Karnataka High Court under Section 11(5) of the Arbitration and Conciliation Act for appointment of an Arbitrator for settlement of dispute between the parties. However, the Karnataka High Court vide judgment dated 31.7.2009 produced as Ext.R3(c) dismissed the petition filed by the first respondent. W.A. No.165/2011 3 2. The first respondent has not challenged the judgment of the Karnataka High Court dismissing the request for appointment of Arbitrator. While so, W.P.(C) filed in this court by the first respondent in 2006 came up before the learned Single Judge for hearing. Even though the first respondent's main prayer i.e. for direction to the appellant to pay the amount and settle the claim was turned down by the Single Judge, the Single Judge made an observation that having regard to the fact that W.P.(C) was pending in this court from 19.6.2006 onwards, the first respondent "should be given the benefit of exclusion of the period as provided in Section 14 of the Limitation Act." This observation in the judgment of the learned Single Judge entitles the first respondent to file a belated suit against the appellant and it is on this apprehension the appellant has filed this Writ Appeal challenging the above observation of the learned Single Judge declaring and recognising the entitlement of the first respondent for benefit under Section 14 of the Limitation Act. We have heard Senior counsel Sri.Chitambaresh appearing for the appellant and Senior counsel Sri.K.Ramakumar appearing for the first respondent. 3. During hearing counsel for the appellant even challenged W.A. No.165/2011 4 territorial jurisdiction of this court to make an observation with regard to entitlement of the first respondent under Section 14 of the Limitation Act for the reason that if at all a suit is to be filed, it is to be done in Karnataka and so much so, Section 14 benefit if any to be claimed by the first respondent should be with reference to Ext.R3(c) judgment of the Karnataka High Court in CMP No.143/08 dated 31.7.2009 issued in the petition filed by the first respondent for appointment of Arbitrator under Section 11(5) of the Act. The further contention raised by the counsel for the appellant is that all questions on limitation including benefit under Section 14 should be pleaded and proved before the trial court before which application for condonation of delay is filed because limitation is a matter to be pleaded and proved in terms of Order VII Rule 6 of C.P.C. Senior counsel appearing for the first respondent on the other hand contended that the Kerala High Court has jurisdiction in the matter because direction to dispose of the representation filed by them which lead to Ext.P9 order itself was issued by this court in a writ petition filed by the first respondent. Further, according to him, the writ petition filed in 2006 that led to the impugned judgment itself was entertained by this court and was W.A. No.165/2011 5 pending for the last 4 years and, therefore, this court is absolutely within it's authority under Article 226 of the Constitution to grant relief under Section 14 of the Limitation Act. Even though we do not find any specific declaration by the learned Single Judge on the entitlement of relief to the first respondent under Section 14 of the Limitation Act, we feel even an observation by this court has high persuasive value before the trial court before which suit is to be filed and so much so, the legality, propriety and correctness of the observation is to be considered in Writ Appeal to avoid unnecessary confusion in the mind of the trial court, if at all first respondent proceeds to file a suit. For this purpose we have to necessarily consider Section 14 of the Limitation Act and for easy reference, the said Section is extracted hereunder: "S.14. Exclusion of time of proceeding bona fide in Court without jurisdiction:- (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a Court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (2) In computing the period of limitation for any W.A. No.165/2011 6 application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a Court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a Court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it. (3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908, the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the Court under rule 1 of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the Court or other cause of a like nature." 4. What is clear from sub-sections (1) and (2) of Section 14 is that the plaintiff claiming the benefit of Section 14 should plead and prove the following: (a) The exemption claimed should be for the period the plaintiff has been prosecuting a civil proceeding in a court of first instance or of appeal or revision against the defendant. (b) such proceedings prosecuted should have been done with due diligence and in good faith. (c) the rejection of the claim by such court before which it is prosecuted should be on account of defect in jurisdiction or other cause of a like nature which disentitles such court to entertain it. Further, what is clear from sub-section (3) of Section 14 is that the relief under Section 14 should be claimed in a subsequent suit after the W.A. No.165/2011 7 first "civil proceeding" is turned down defective. Order VII Rule 6 of the C.P.C. states as follows:- "6. Grounds of exemption from limitation law:- Where the suit is instituted after the expiration of the period prescribed by the law of limitation, the plaint shall show the ground upon which exemption from such law is claimed: Provided that the Court may permit the plaintiff to claim exemption from the law of limitation on any ground not set out in the plaint, if such ground is not inconsistent with the grounds set out in the plaint." What is mandated in the above Rule is that the plaint shall show the ground upon which an exemption from law of limitation is claimed. Obviously when C.P.C. itself gives authority to the court trying the suit to decide justification or otherwise of the claim of exemption from limitation claimed by the plaintiff, it necessarily follows that the exemption from limitation is a matter to be pleaded and proved before the trial court where the suit is filed. 5. The powers of the High Court under Article 226 are wide enough to render full justie to parties. Therefore, if a writ petition filed and admitted in the High Court was later found to be not the remedy to be pursued by the party, it is always open to the High Court to consider waiver of loss of time for the party to pursue appropriate remedy before W.A. No.165/2011 8 the right forum. However, going by the wording of Section 14 of the Limitation At, we do not think the High Court can grant exemption from limitation under the said Section while dismissing a writ petition as not the appropriate remedy. We have already stated that unless the ingredients of Section 14 are pleaded and proved before the civil court before which the subsequent litigation is filed in terms of Order VII Rule 6 of the C.P.C., the court cannot grant exemption from limitation in terms of the said Section. When the jurisdiction to grant exemption under Section 14 of the Limitation Act is exclusively given to the civil court before which suit is filed, it is not correct or proper for the High Court to consider eligibility for exemption of the petitioner while dismissing a writ petition. We have already observed that any observation in these lines will prejudice the mind of the civil court. So much so, we feel High Court should only leave open the parties to claim exemption from limitation under Section 14 to be raised and proved before the civil court where suit is filed. On the facts of this case we do not find any justification for the Single Judge to grant relief or to express any opinion on the first respondent's eligibility under Section 14 of the Limitation Act for the simple reason that even facts W.A. No.165/2011 9 were not fully made available to the learned Single Judge. The first respondent made an attempt by filing W.P.(C) in this court which is a shortcut method for setting a civil dispute arising out of breach of contract between two private companies, the bonafides of which itself has to be doubted. Later, during pendency of the W.P.(C) in this court, they filed a petition before the Karnataka High Court under Section 11 (5) of the Arbitration and Conciliation Act for appointment of an Arbitrator for settlement of the dispute. The dismissal of the petition filed under the Arbitration and Conciliation Act before the Karnataka High Court in 2009 was not made known to the learned Single Judge when he disposed of the W.P.(C) granting relief claimed by the first respondent under Section 14 of the Limitation Act. What is clear from the provisions of Section 14 above stated is that exemption from period of limitation is not to be reckoned with reference to two parallel proceedings initiated in different courts. Assuming writ petition or petition filed under the Arbitration and Conciliation Act could be treated as a civil proceeding falling under Section 14 of the Limitation Act, still the Section contemplates only one original civil proceeding and not parallel proceedings in different courts. In fact, the time of W.A. No.165/2011 10 exclusion provided from limitation is the time spent in the original court and court of appeal and court of revision and so much so, it is only the beginning of a civil proceeding before one court and it's culmination in appeal and or revision in higher courts that is contemplated under the Section and not parallel litigation before different courts. Since the first respondent pursued two civil remedies before two High Courts, it is for the first respondent to say which is the civil proceeding that was initiated with due diligence and in good faith. It is only on establishing the same they are entitled to the benefit of Section 14 with reference to that proceeding. Obviously these are matters to be claimed through appropriate pleading in plaint and proved with evidence and only if the trial court is satisfied about the proof of ingredients of Section 14 of the Limitation Act, the first respondent is entitled to exemption from limitation. Counsel for the appellant relied on decision of this court in SAJAN VARGHESE VS. KERALA STATE ELECTRICAL DEVELOPMENT CORPORATION reported in 2010(1) KLT 801. Even though counsel for the respondent relied on the observation of the Delhi High Court in the judgment dated 23.7.2008 in W.P.(C) NO.3043/1991, what we notice is that there the W.A. No.165/2011 11 writ petition was first filed against a Government company which later ceased to be a Government of India undertaking affecting the maintainability of the writ petition itself. In that context the court said that time spent during pendency of W.P.(C) should be taken into consideration while considering limitation. We do not think the said decision has any application on the facts of this case. We, therefore, allow the Writ Appeal by vacating the judgment of the learned Single Judge but leaving freedom to the first respondent to claim eligible relief under Section 14 of the Limitation Act by raising appropriate pleading in the plaint and by proving it before the court it files the suit. C.N.RAMACHANDRAN NAIR Judge BHABANI PRASAD RAY Judge pms