Delhi Development Authority v. Aadhar Stumbh

1. The present regular first appeal under Section 96 of the Code of Civil Procedure (hereinafter, CPC) seeks to assail the judgment and decree dated 19.10.2019 passed by the Ld. ADJ-02, Saket Courts, New Delhi in CS DJ No. 1863/2017. Vide the impugned judgment, the learned Trial Court has dismissed the suit for recovery filed by the appellants/Delhi Development Authority(DDA) by holding that the same was barred by limitation.

2. Before dealing with the submissions of the learned counsel for the appellant, it would be appropriate to note the brief factual matrix.

3. The appellant/plaintiff entered into an agreement with the respondent/defendant on 04.01.2002 for construction of 272 MIG Houses at Sector-12, Pkt.8, Dwarka, Phase-I with a stipulation that the project would commence from 08.01.2002 and would be completed 2022:DHC:3203 on or before 07.01.2004. As the project was completed in time by the respondent, the appellant released the entire due amount as per the 17th Running account bill in it’s favour in March, 2006 itself. It is the appellant’s case that the said payment was made subject to the respondent carrying out the requisite rectifications, which it failed to do despite repeated requests of the appellant.

4. On 28.05.2015, the appellant instituted a suit against the respondent alleging therein that even though the construction carried out by the respondent was found to be substandard, it failed to rectify the defects and was therefore, liable to refund a sum of Rs.42,75,578.85/- along with interest @ 18%. per annum.

5. The suit was defended by the respondent by filing a written statement wherein a preliminary objection regarding the suit being barred by limitation was raised.

6. Based on the pleadings exchanged by the parties, a preliminary issue regarding limitation was framed by the learned Trial Court, which came to be decided against the appellant vide the impugned judgment. The Trial Court, while dismissing the suit preferred by the appellant, rejected its plea that it’s claim was covered by Article 112 of Schedule I of Limitation Act and not by Article 55 of the said Act. The learned Trial Court also rejected the appellant’s plea that limitation would commence from the date of the last letter written by the appellant demanding the amount from the respondent. The relevant extracts of the impugned judgment read as under:- “ In the considered opinion of this court, the limitation period shall not start from the date when the plaintiffs wrote its last letter i.e. on 05.06.2012 explaining the entire manner in which the amount was due and recoverable from the defendant were finalized. If such a plea is accepted by this court, then there shall be no end for the start of limitation period as required under the law. Admittedly in the present case the date of completion of contract was 31.10.2003 and the date of making last payment by the plaintiffs to the defendant was 31.03.2006. In view of the aforesaid, it is clear that the limitation for filing the present suit left with the plaintiff's / DDA was till 30.03.2009 and the present case filed by the plaintiffs / DDA on 28.05.2015 is baired by law of limitation as it has been filed beyond the period of three years. Even otherwise as per the admitted case of the plaintiff's/ DDA (as mentioned in the para no. 12 of the plaint), the entire accounts of the defendants were meticulously scrutinized and it was found that as on 25.04.2012 a sum of Rs. 38.76,357/- stood recoverable from the defendants. Even, if we assume the aforesaid date as last date of final occurrence of cause of action in terms of the agreement between the parties as alleged by the plaintiffs / DDA, the present suit filed by the plaintiffs/DDA on 28.05.2015 is also beyond the period of limitation being filed after three years. Also, if limitation period has to be counted from the date of Issuance of final letter of the plaintiffs, then as stated earlier there shall be no start of limitation period and the plaintiffs shall always have their choice to fix the date of starting of limitation by addressing letters after finalization of their deviation bills. As far as the contention of the plaintiffs/DDA that their suit is covered under Article 112 of the Limitation Act is concerned, I am fortified with the law laid down by Hon'ble Supreme court and Hon'ble Delhi High Court in Bharat Sanchar Nigam Ltd. v. Pawan Kumar Gupta, 2015 (10) SCALE 337 and Delhi Development Authority v. M/s Manohar Singh Sahny & Ors RFA 1014/2016 I decided on 22.12.2016 respectively wherein it was held that Article 112 of Limitation Act does not incorporate agency or instrumentality of government and DDA cannot claim to be Central Government under Article 112 of Schedule I of Limitation Act. In the present case, the plaintiffs / DDA had instituted a suit for recovery against the defendant / contractor for recovery of deviation amount as alleged in this plaint. The period of limitation available for seeking such recoveries have to be computed under Article 55 of Schedule I of the Limitation Act which speaks of three years period. In the light of the law laid down by Hon'ble Apex court, the arguments of the plaintiffs/DDA that their case is covered under Article 112 of Limitation Act becomes forceless. Hence, the suit of the plaintiff is dismissed being filed beyond the period of limitation. No order's as to cost. Decree sheet be prepared accordingly and thereafter, file be consigned to Record's after due compliance.

7. Being aggrieved, the plaintiff has preferred the present appeal. In support of the appeal, learned counsel for the appellant reiterates the submissions made before the learned Trial Court and contends that the impugned judgment is liable to be set aside as the learned Trial Court has erred in concluding that the suit preferred by the plaintiff would be covered by article 55 of Schedule I of the limitation Act. He submits that since the DDA acts on behalf of the government, it is Article 112 of Schedule I of the Limitation Act providing the limitation period of 30 years, that would be applicable to any suit preferred by the appellant. He, thus, contends that the learned Trial Court erred in applying Article 55 of Schedule I to the appellant by treating the appellant at par with an ordinary litigant instead of appreciating that the appellant is acting on behalf of the government. He, therefore, prays that the appeal be allowed and the impugned judgment be set aside and the matter be remanded back to the learned Trial Court for adjudication on merits.

8. Having considered the submissions of learned counsel for the appellant, I find that the issue regarding the applicability of Article 55 vis-à-vis Article 112 to the DDA is no longer res integra and already stands decided against the appellant by various decisions of this Court. Different Co-ordinate benches of this Court have taken a consistent view that Article 112 of the Schedule I of the Limitation Act is applicable only to the government and not to any of its agencies.

9. Reference in this regard may be made to the observations of a Coordinate bench in Delhi Development Authority v. Manohar Singh Sahny & Ors. [2016 SCC Online Del 6511], wherein the Court, while relying on an earlier decision in Delhi Development Authority v. Madhur Krishna (2016) SCC Online Del 201, held as under:-

13. Learned counsel for the appellant/DDA has very fairly stated before the court that this issue is no longer res integra, having already been decided by a Single Judge in a Regular Second Appeal filed by the DDA. In the case of Delhi Development Authority vs. Madhur Krishna reported as 2016 SCC online Del 201, a similar plea was raised by the DDA to the effect that it is a Statutory Body and equivalent to Central Government. Turning down the said plea as fallacious, the Single Judge had observed as follows:-

13. The contention of the learned counsel for the appellant is that the Government of India (Allocation of Business) Rules which have been drawn in exercise of the powers of Clause (3) of Article 77 of the Constitution of India laid down that the Central Government will function from the various departments and at serial number of the First Schedule there is a department of Urban Development, Shahari Vikas Mantralya mentioned which is functioning through various departments of its own including the DDA which is essentially a statutory body for the purpose of acquisition and distribution of nazul land and creation of Master and Zonal Plan, therefore, it is equivalent to Central Government. I do not agree with said contention of the learned counsel for the appellant. Firstly, the plea that Article112 of Limitation Act, 1963 would be applicable was not taken by DDA in trial Court or the first Appellate Court. Secondly, it was also not pleaded that DDA is suing the respondent on behalf of Central Govt. This view can be fortified by a recent judgment of the Supreme Court in Bharat Sanchar Nigam Ltd. v. Pawan Kumar Gupta, 2015 (10) SCALE 337. In the said case it was held that period of limitation is not 30 years as the appellant Company (BSNL) cannot be equated with Central Govt. since it is a distinctly independent and separate entity. It was further observed that Article 112 of Limitation Act does not incorporate agency or instrumentality of Govt. The facts of the aforesaid squarely fit to the present case.” (emphasis added)

14. In the captioned case, the court had observed that the DDA is a Statutory body created by an enactment, Delhi Development Authority Act, 1957 and being a distinct and independent entity, could not equate itself with Central Government. The only difference in the case in hand is that unlike the captioned case, the appellant/DDA had taken a plea in the suit that it is discharging the functions of the Central Government. However, that would not be of much assistance to the appellant for the reason that it has already been held in the aforecited case that DDA cannot claim to be ‘Central Government’ as Article 112 of the of the Limitation Act does not extend to an agency or an instrumentality of the State.

15. In the present case, the appellant/DDA had instituted a suit for recovery against the respondent/contractor for breach of a contract. The period of limitation available for seeking compensation for breach of contract has therefore to be computed under Article 55 of Schedule I of the Limitation Act, which speaks of three years from the date when the contract is breached.

16. Furthermore, having regard to the fact that vide judgment dated 18.9.2006 in CWP 6700/2005, liberty was granted to the appellant/DDA to seek recovery of amounts allegedly payable by the respondent/contractor in accordance with law, for the appellant/DDA to claim the benefit of Section 14 of the Limitation Act for seeking exclusion of time spent by it in pursuing another proceedings, it ought to have acted with alacrity and filed a suit within a reasonable time from the date of passing of the order dated 18.9.2006. However, that was not done. The appellant/DDA had admittedly instituted a suit for recovery against the respondent/contractor only on 28.1.2011, which was after expiry of four year four months and eleven days and far beyond the period of three years prescribed under Article 55 of The Limitation Act. Thus the benefits of Section 14 of the Limitation Act cannot be extended to the appellant/DDA.

10. Learned counsel for the appellant fairly admits that neither of these decisions have been assailed before the Division Bench or before the Apex Court. Moreover, the appellant, DDA, though a statutory body cannot be said to be the Government; the DDA has it’s own identity different from the government. The learned Trial Court was therefore, correct in holding that the instant suit for recovery preferred by the appellant was not governed by Article 112 but by Article 55 of Schedule I of the Limitation Act, which prescribes the period of limitation as 3 years.