Case: Aries and Aries Vs. Tamil Nadu Electricity Board

2. The High Court, in the order under challenge, firstly dealt with the individual claims made by the Plaintiff for payment claimed to be due on account of extra works executed; for escalation of charges, etc. and thereafter went on to hold that the suit was barred by limitation. In holding the same, the High Court took into account the date of payment of the final bill to the Plaintiff i.e. 13th January, 1981 to be the relevant date for determining the period of limitation for filing the suit which was so filed on 6th November, 1984. In its order, the High Court took the view that on an application of either Article 18 or 55 or 113 of the Limitation Act, 1963, as may be, as the claim in the suit was not made within a period of three years from the date of final payment i.e. 13th January, 1981 the same would be barred by time.

Court's reasoning:
10. In the present case, de hors the correspondences that had been exchanged by and between the parties after the date of final payment i.e. 13th January, 1981, the aforesaid date of final payment would have been crucial for determination of the period of limitation for filing the instant suit. However, in the present case, from the correspondences that had been exchanged after the date of final payment it clearly appears that the Plaintiff after receipt of the payment on 13th January, 1981, reiterated its claim for additional payment on different counts including escalation and for extra works done. The Defendant instead of rejecting the said claim entertained the same and kept the matter pending. Finally on 6th November, 1981 (Exhibit P-2) the said claims were rejected. If the claims raised by the Plaintiff were entertained and rejected finally on 6th November, 1981, it would be reasonable to assume that the cause of action for the suit in respect of the said rejected claims arose on 6th November, 1981 and the suit could have been filed at any point of time prior to the expiry of three years from the said date i.e. 6th November, 1981 in view of Article 113 of the Limitation Act, 1963. The suit having been filed on 6th November, 1984, the same, therefore, will have to be considered to be within the period of limitation. The High Court, therefore, was not justified in holding the contrary12. The High Court in coming to the aforesaid conclusion took the view that the specific clause in the agreement which obliges the Plaintiff to continue to offer his rates for the entire duration of the contract prohibits grant of the said claim. We have also noticed that it is the Defendants own case that it was responsible for the delay to the extent of nineteen and half (19 1/2) months that had occurred in the execution of the contract whereas the Plaintiff was responsible for the delay of the remaining fifteen and half (15 1/2) months. The said specific admission on the part of the Defendant and the finding arrived at by the High Court on the aforesaid basis could not have permitted the High Court to reverse the decree passed by the learned trial Court on the aforesaid count which coincidentally entitled the Plaintiff to only 50% of the escalation charges, as claimed. The aforesaid percentage (50%) roughly corresponds to the percentage of the delay attributable to the Plaintiff out of the total delay of 35 months. The clause in the contract which obliged the Plaintiff to continue to offer the rates initially offered by him would, naturally, be for the duration of the contract and cannot work to his peril for the period of delay for which the Department was admittedly responsible. Such a construction of the clause in the contract would not be reasonable. We, therefore, reverse the aforesaid finding of the High Court and hold that the Plaintiff would be entitled to the 50% of the escalation charges as decreed by the learned trial Court.