1976 (4) TMI 210 - SC - Indian Laws

Whether section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1958 could not be resorted to for recovery of the sum as the claim was time-barred? Held that - Section 7 only provides a special procedure for the realisation of rent in arrears and does not constitute a source or foundation of a right to claim a debt otherwise time-barred. The word payable in section 7, in the context in which its occurs, means legally recoverable. Admittedly a suit to recover the arrears instituted on the day the order under section 7 was made would have been barred by limitation. The amount in question was therefore irrecoverable. This being the position, the appeal fails and is dismissed with costs.

Summary

Issues:
Recovery of arrears of rent under section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1958 when the claim is time-barred.

Analysis:
The case involved a dispute between the New Delhi Municipal Committee (appellant) and a pavement vendor (respondent) regarding the recovery of arrears of rent for a stall allotted in 1950. The appellant demanded payment of dues in December 1960, leading to legal proceedings culminating in the High Court's decision in favor of the respondent, stating that the claim was time-barred. The main argument raised by the appellant before the Supreme Court was that the High Court erred in holding that the amount could not be recovered under section 7 due to the expiration of the time limit for instituting a suit. The appellant contended that the Limitation Act barred the remedy by way of a suit but did not extinguish the right, making section 7 a valid mode of recovery for rent arrears beyond three years.

The Supreme Court analyzed the provisions of section 7 of the Act, which provides a summary procedure for the recovery of arrears of rent. The appellant argued that since section 7 did not specify a time limit for taking action and the limitation prescribed for a suit did not apply to proceedings under this section, the respondent's objection based on time-bar was unfounded. However, the Court emphasized that while the statute of limitation bars the remedy without affecting the right, the word "payable" in section 7 should be interpreted as "legally recoverable." The Court cited precedent to support the view that a debt barred by limitation is not legally recoverable, and any determination of arrears of rent by the Estate Officer must be in accordance with the law.

Ultimately, the Supreme Court dismissed the appeal, upholding the High Court's decision that the amount in question was irrecoverable due to being time-barred. The Court clarified that section 7 of the Act does not create a right to claim a debt otherwise time-barred, and the Estate Officer cannot insist on payment if the amount is legally unrecoverable. Therefore, the appellant's appeal was rejected, and costs were awarded to the respondent.