Case: Dehri Rohtas Light Railway Company Limted Vs. District Board Bhojpur And Ors

of quashing the said demands in the writ petition filed earlier. The challenge in the suit as stated was only on the basis of the agreement and not on the ground of illegality. The company did not include the demands for the earlier years in the first writ petition. It is therefore, contended for the respondents that the second writ petition filed after a long lapse of the several years had not been rightly dismissed by the High Court. It is also contended that the demands could not be quashed in the civil suit on the ground now urged. The learned counsel for the respondents, therefore, submitted that the these appeals should fail. He also placed reliance on the decision of this Court in Tilokchand Motichand v. H. B. Munshi ( 1969 (1) SCC 110 : 1969 (2) SCR 824 ) in support of the judgment of the High Court that the writ petition cannot be entertained after the inordinate delay. 10. The appellants learned counsel referred to the earlier decision of the High Court wherein the Court observed thus. "...... net profits from the railways must in the context of the Act, be given a restricted meaning and it is the net profit from immovable properties of the railways which is liable to the payment of the local cess. Thus the net profit of the company is referable partly to its ownership of movable properties. It is only that portion of net profit which is derived from the use of the immovable property of the petitioner Company which is liable to cess. If that be the correct view the present demand contained in Annexures 3 to 7 is not sustainable. Of Course, it would be open to the authorities to reassess the cess in the light of the legal position as explained, and after the determining as to what portion of the net income is referable to its ownership of immovable property." * 11. It is accordingly settled that the statutory basis of the chargeability under the Cess Act is the immovable property of the Company. The appellants learned counsel maintained that the jurisdiction of the Cess Authorities is, therefore, confined to levy of cess only on the net profits of the company derived from the immovable properties and any different stand would be hit by Article 265 of the Constitution of India. 12. The question thus for consideration is whether the appellant should be deprived of the relief on account of the laches and delay. It is true that the appellant could have even when instituting the suit agitated the question of legality of the demands and claimed relief in respect of the earlier years while challenging the demand for the subsequent years in the writ petition. But the failure to do so by itself in the circumstances of the case, in our opinion, does not disentitle the appellant from the remedies open the under the law. The demand is per se not based on the net profits of the immovable property, but on the income of the business and is, therefore, without authority. The appellant has offered explanation for not raising the question of legality in the earlier proceedings. It appears that the authorities proceeded under a mistake of law as to the nature of the claim. The appellant did not include the earlier demand in the writ petition because the suit to enforce the agreement limiting the liability was pending in appeal, but the appellant did attempt to raise the question in the appeal itself. However, the Court declined to entertain the additional ground as it was beyond the scope of the suit. Thereafter, the present writ petition was filed explaining all the circumstances. The High Court considered the delay as inordinate. In our view, the High Court failed to appreciate all material facts particularly the fact that the demand is illegal as already declared by it in the earlier case. 13. The rule which says that the Court may not enquire into belated and stale claim is not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how delay arose. The principle on which the relief of the party on the grounds of laches or delay is denied is that the eights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in the such cases is that the petitioner should come to the writ court before a parallel right is created and that the lapse of time is not attributable to the any laches or negligence. The test is not to physical running of time. Where the circumstances justifying the conduct exists, the illegality which a manifest cannot be sustained on the sole ground of laches. The decision in Tilokchand case ( 1969 (1) SCC 110 : 1969 (2) SCR 824 ) relied on is distinguishable on the facts of the present case. The levy if based on the net profits of the railway undertaking was beyond the authority and the illegal nature of the same has been questioned though belatedly in the pending proceedings after the pronouncement of the High Court in the matter relating to the subsequent years. That the being the case, the claim of the appellant cannot the turned down on the sole ground of delay. We are of the opinion that the High Court was wrong in dismissing the writ petition in limine and refusing to grant the relief sought for. We however agree that the suit has been rightly dismissed. 14. Since the entire matter is before us, we do not consider that it is necessary to remit back the case to the High Court for fresh disposal.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]11. It is accordingly settled that the statutory basis of the chargeability under the Cess Act is the immovable property of the Company. The appellants learned counsel maintained that the jurisdiction of the Cess Authorities is, therefore, confined to levy of cess only on the net profits of the company derived from the immovable properties and any different stand would be hit by Article 265 of the Constitution of IndiaIt is true that the appellant could have even when instituting the suit agitated the question of legality of the demands and claimed relief in respect of the earlier years while challenging the demand for the subsequent years in the writ petition. But the failure to do so by itself in the circumstances of the case, in our opinion, does not disentitle the appellant from the remedies open the under the law. The demand is per se not based on the net profits of the immovable property, but on the income of the business and is, therefore, without authority. The appellant has offered explanation for not raising the question of legality in the earlier proceedings. It appears that the authorities proceeded under a mistake of law as to the nature of the claim. The appellant did not include the earlier demand in the writ petition because the suit to enforce the agreement limiting the liability was pending in appeal, but the appellant did attempt to raise the question in the appeal itself. However, the Court declined to entertain the additional ground as it was beyond the scope of the suit. Thereafter, the present writ petition was filed explaining all the circumstances. The High Court considered the delay as inordinate. In our view, the High Court failed to appreciate all material facts particularly the fact that the demand is illegal as already declared by it in the earlier case13. The rule which says that the Court may not enquire into belated and stale claim is not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how delay arose. The principle on which the relief of the party on the grounds of laches or delay is denied is that the eights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in the such cases is that the petitioner should come to the writ court before a parallel right is created and that the lapse of time is not attributable to the any laches or negligence. The test is not to physical running of time. Where the circumstances justifying the conduct exists, the illegality which a manifest cannot be sustained on the sole ground of laches. The decision in Tilokchand case ( 1969 (1) SCC 110  : 1969 (2) SCR 824 ) relied on is distinguishable on the facts of the present case. The levy if based on the net profits of the railway undertaking was beyond the authority and the illegal nature of the same has been questioned though belatedly in the pending proceedings after the pronouncement of the High Court in the matter relating to the subsequent years. That the being the case, the claim of the appellant cannot the turned down on the sole ground of delay. We are of the opinion that the High Court was wrong in dismissing the writ petition in limine and refusing to grant the relief sought for. We however agree that the suit has been rightly dismissed14. Since the entire matter is before us, we do not consider that it is necessary to remit back the case to the High Court for fresh disposal.