2008 (12) TMI 721 - SC - Indian Laws

Whether the period spent on pursuing a writ petition should be excluded for the purpose of computing the period of limitation in filing a suit in terms of Section 14 of the Limitation Act, 1963?

Issues Involved:
1. Whether the period spent on pursuing a writ petition should be excluded for computing the period of limitation in filing a suit under Section 14 of the Limitation Act, 1963.
2. Whether the appellant was entitled to the benefit of the escalation clause in the agreement for the supply of black pipes.

Issue-wise Detailed Analysis:

1. Exclusion of Time Spent on Writ Petition for Computing Limitation Period:
The primary issue was whether the time spent pursuing a writ petition should be excluded when computing the limitation period for filing a suit under Section 14 of the Limitation Act, 1963. The appellant filed a writ petition on 10.01.1994, which was disposed of on 14.09.1995, and subsequently filed a suit on 25.06.1996. The High Court initially rejected the writ petition for the escalated price claim but allowed the appellant to pursue other remedies. The appellant argued that the period spent on the writ petition should be excluded under Section 14 of the Limitation Act, contending that the writ petition was pursued in good faith and related to the same matter in issue.

2. Entitlement to Escalation Clause Benefit:
The appellant, a contractor, entered into a contract with the State for the supply of black pipes, which included a price escalation clause. The appellant claimed that the escalation granted by the Department was incorrect and insufficient, leading to a financial shortfall. The appellant sought the correct escalated price based on the increased steel prices, which was initially fixed at Rs. 190.48 per meter instead of the claimed Rs. 199.04 per meter. The trial court decreed the suit in favor of the appellant, but the High Court reversed this decision, holding that the suit was barred by limitation and the appellant was not entitled to exclude the period of the writ petition under Section 14 of the Limitation Act.

Detailed Judgment Analysis:

Exclusion of Time Spent on Writ Petition:
The Supreme Court held that the period spent on the writ petition should be excluded for computing the limitation period. The Court emphasized that Section 14 of the Limitation Act should be construed liberally and that the appellant pursued the writ remedy bona fide and in good faith. The Court noted that the writ petition was not dismissed at the threshold and a part of it was admitted for hearing, indicating its maintainability. The Court cited precedents, including Rameshwarlal v. Municipal Council, Tonk, and Union of India v. West Coast Paper Mills Ltd., to support the liberal interpretation of Section 14, which covers defects beyond jurisdictional issues. The Court concluded that the appellant was entitled to exclude the time spent on the writ petition, thus making the suit filed on 25.06.1996 within the limitation period.

Entitlement to Escalation Clause Benefit:
The Supreme Court found that the appellant was entitled to the escalated price as per the agreement. The Court noted that the appellant's claim in the writ petition and the suit revolved around the same issue of arbitrary refusal to pay the correct escalated price. The Court acknowledged that the appellant provided sufficient evidence, including invoices from SAIL, to support the claimed escalated price of Rs. 199.04 per meter. The trial court's findings were upheld, confirming the appellant's entitlement to the escalated price.

Conclusion:
The Supreme Court set aside the High Court's judgment, holding that the appellant was entitled to exclude the period spent on the writ petition under Section 14 of the Limitation Act. Consequently, the suit was filed within the limitation period, and the appellant was entitled to the correct escalated price of Rs. 199.04 per meter. The appeal was allowed with costs assessed at Rs. 50,000.

← Previous Next →