Research › Search › Judgment

Himachal Pradesh High Court · body

2000 DIGILAW 19 (HP)

KUMAR AND COMPANY v. STATE OF HIMACHAL PRADESH

2000-01-23

R.L.KHURANA

body2000
JUDGMENT R.L. Khurana, J.: The plaintiff is a registered partnership firm. The work of exploitation of forest and extraction of timber in respect of lot No. 2/82-86 of Pangi Forest Division was allotted to the plaintiff in an open auction for Rs.75,01,000/-. The necessary agreement (Ex.PW 2/A) came to be executed between the parties on 28.2.1982. The period allowed for the exploitation of the forest and extraction of timber was upto 31.3.1986. As per the terms contained in clause 10 of the conditions of sale Ex.PW 3/1, a sum of Rs. 7, 50,100/- representing 10% of the total bid amount of Rs.75, 01,000/- was deposited by the plaintiff with the defendants as security. The lot was duly worked out by the plaintiff within the stipulated period and it became entitled to the refund of the amount of security alongwith interest. However, inspite of repeated demands the defendants failed to repay the amount. The plaintiff has filed the present suit for recovery of Rs. 16,90,920/- as detailed in paragraph 6 of the plaint, as under:- (i) Loss of interest of Rs. 3.75,000 for one year when the amount was not deposited in the Post Office Rs. 15,000 plus interest on it from 1.4.83 to 31.3.87 which works out to Rs. 2500/plus interest from 1.4.87 to 31.3.90 amounts to Rs.9.450/- in all Rs. 26,950/- Rs.26,950.00 (ii) Security amount of Rs. 7,50,100 with interest accrued upto 31.3.87 works out to Rs. 10,33,000 plus interest from 1.4.87 to 31.3.90 @ 18% per annum Rs. 5,57,820 - in all Rs. 15,90,820/- Rs. 15,90,820.00 (iii) Wrongly recovered interest by the Government on Royalty and Sales Tax from the date of launching instead of 30th day of November, every year as per the terms of the A.D. and the provision of Sales Tax Act comes to Rs.47, 500/-, plus interest which was lost on the sum of Rs.47, 500/- wrongly recovered @ 18% p.a. from 1, 4.87 to 31.3.90 amounting to Rs.25, 650, inallRs.73, 150/-. Rs.73,150.00 Total Rs. 16,90,920.00 2. The defendants, while resisting the suit, have admitted that lot No.2/82-86 was allotted to the plaintiff being the highest bidder for Rs.75, 01,000/-. Execution of the agreement Ex.PW 2/A was also admitted. They further admitted that a sum of Rs.7, 50,100/- was deposited by the plaintiff as security amount. Rs.73,150.00 Total Rs. 16,90,920.00 2. The defendants, while resisting the suit, have admitted that lot No.2/82-86 was allotted to the plaintiff being the highest bidder for Rs.75, 01,000/-. Execution of the agreement Ex.PW 2/A was also admitted. They further admitted that a sum of Rs.7, 50,100/- was deposited by the plaintiff as security amount. It was pleaded that during the working of the forest, on 17.8.1982 and 20.9.1982, fire had broken out in one of the forests of the lot due to the negligence of the labour of the plaintiff, due to which 20 Hects of area was effected causing serious loss to about 1285 standing trees of various species. Such loss has been assessed at Rs.5, 10,834/- in terms of the proviso to clause 13 (b) of the agreement Ex.PW 2/A, which is recoverable from the plaintiff. It has further been pleaded that in addition to the damage caused to the standing trees, there has been damage to young re-generation and other forest flora. The site and soil conditions have got deteriorated resulting in the loss of fertility of the site which has adversely affected the future growth and increment of the surviving trees. Therefore, the whole of the security amount is liable to be forfeited for which a notice would be issued to the plaintiff and an opportunity of being heard would be afforded. An objection was further raised to the effect that claim Nos. (1) and (iii) as detailed in para 6 of the plaint are time barred. 3. On the pleadings of the parties, following issues were framed on 20.11.1991:- 1. Whether plaintiff firm is a registered partnership concern and Inder Kumar is a partner thereof? OPP. 2. Whether lot No. 2/82/86 in Pangi Forest Division, Chamba was sanctioned in favour of the plaintiff and agreement dated 28.2.1982 was entered between the parties, if so, its effect? OPP. 3. Whether the lot was worked by the plaintiff and the security amount of Rs.7,50,100/- deposited by the plaintiff is liable to be paid to him? OPP. 4. Whether the plaintiff is entitled to interest on the security amount from 31.3.1987? OPP. 5. Whether the non-deposit of half of security amount by the defendant in post office resulted in loss to the plaintiff? OPP. 6. To what amount of interest and principal amount and since when the plaintiff is entitled to from the defendant? OPP. 7. OPP. 4. Whether the plaintiff is entitled to interest on the security amount from 31.3.1987? OPP. 5. Whether the non-deposit of half of security amount by the defendant in post office resulted in loss to the plaintiff? OPP. 6. To what amount of interest and principal amount and since when the plaintiff is entitled to from the defendant? OPP. 7. Whether on account of the acts of omission and commission on the part of the plaintiffs or their representatives/agents or workers there was fire in the forest during the period in question, resulting into loss to the defendant, as alleged, if so, to what effect? OPD. 8. Whether claim 1 and 3 as stated in para No. 6 of the plaint is beyond limitation, as alleged? OPD. 9. Relief. 4. I have heard the learned counsel for the parties and have also gone through the record of the case. My findings on the above issues are as under:- Issue No. I. The defendants vide para 1 of their written statement dated 12.3.91 have admitted that the plaintiff-firm is a registered partnership firm and that Shri Inder Kumar is a partner thereof. Ex.PW 10/1 and PW 10/2 are the copies of the registration of the plaintiffs firm. The name of Shri Inder Kumar appears as a partner of such firm. In view of the admission by the defendants as well as Ex.PW 10/1 and PW 10/2, it is held that the plaintiff-firm is a registered partnership firm and that Shri Inder Kumar is a partner thereof. The issue is decided in favour of the plaintiff. Issue No. 2. The defendants vide para 2 of their written statement have admitted that lot No.2/82 in Pangi Forest Division, chamba, was sanctioned in favour of the plaintiff and agreement dated 28.2.1982 was executed between the parties. The effect of the agreement is that the parties are bound by the terms and conditions thereof. The issue is as such decided in favour of the plaintiff. Issue No.8 9. The present suit was filed on 30.3.1990, vide para 6 of the plaint, the following amounts have been claimed:- (i) Loss of interest of Rs.3,75,000 for one year when the amount was not deposited in the Post Office Rs. The issue is as such decided in favour of the plaintiff. Issue No.8 9. The present suit was filed on 30.3.1990, vide para 6 of the plaint, the following amounts have been claimed:- (i) Loss of interest of Rs.3,75,000 for one year when the amount was not deposited in the Post Office Rs. 15,000 plus interest on it from 1.4.83 to 31.3.87 which works out to Rs.2500/- plus interest from 1.4.87 to 31.3.90 amounts to Rs.9,450/- in all Rs.26,950/- ....Rs.26,950.00 (ii) Security amount of Rs.7,50,100 with interest accrued upto 31.3.87 works out to Rs. 10,33,000 plus interest from 1.4.87 to 31.3.90 @ 18% per annum Rs.5,57,820 in all Rs. 15,90,820/- ....Rs. 15,90,820.00 (iii) Wrongly recovered interest by the Government on Royalty and Sales Tax from the date of launching instead of 30th November, every year as per th term day of the A.D/ and the provision of Sales Tax Act comes to Rs.47,500/, plus interest which was lost on the sum of Rs.47,500/- wrongly recovered @ 18% p.a. from 1.4.87 to 31.3.90 amounting to Rs. 25,650/-inallRs.73,150/- ....Rs.73,150.00 Total: Rs. 16,90,920.00 5. The defendants have averred that in so far as claim of amounts as at (i) and (iii) is concerned, the same is barred by time. 6. Claim under (i) above pertains to interest. Admittedly, a sum of Rs. 7,50,100/- was deposited by the plaintiff as security amount in terms of the conditions of the agreement Ex.PW 3/1, representing 10% of the total bid amount of Rs.75,01,000/-.. Such deposit was made sometime prior to the execution of the agreement dated 28.2.1982. 7. Clause 10 of Ex.PW 3/1 provides that 50% of this earnest/security money shall be deposited in Post Office Saving Bank/Certificates pledged in the name of Divisional Forest Officer, concerned. According to the plaintiff since the defendants failed to deposit the amount in terms of clause 10, it has suffered loss of interest for one year amounting to Rs. 15,000/- and future interest thereon. Total loss of interest has been calculated at Rs. 26,950/-. This claim on the face of it is barred by time, since the same pertains to a period more than three years preceding the suit. 8. Similarly, the claim as at (iii) above is barred by time. The recovery of interest on Royalty and Sales Tax was admittedly made prior to 31.3.1986. Therefore, such amount could have been recovered only by 31.3.1989. 8. Similarly, the claim as at (iii) above is barred by time. The recovery of interest on Royalty and Sales Tax was admittedly made prior to 31.3.1986. Therefore, such amount could have been recovered only by 31.3.1989. The present suit has been filed on 30.3.1990. 9. Insofar as the claim of amount as at (ii) above is concerned, though no objection was raised by the defendants in their written statement to the effect that the same is also barred by time, a contention was raised on behalf of the defendants during the course of hearing that such claim is also barred by time. 10. Section 3(1) of the Limitation Act, 1963, provides that subject to provisions contained in sections 4 to 24 (inclusive), every suit instituted, appeal preferred and application made after the prescribed period shall be dismissed although limitation has not been set up as a defence. (Emphasis supplied) In view of the above provision even if the defence as to limitation has not been set up in the written statement, the question as to limitation can be raised and gone into at any stage. 11. Admittedly, the lot was leased out to the plaintiff vide Ex.PW2/A for a period of four years from 1.4.1982 to 31.3.1986. Under clause 4 of Ex.PW 2/A, whole of the security amount is to be retained till the end of the lease period for the due performance of the terms and conditions of the lease. Discretion vests in the Conservator of Forests to allow its adjustments towards the final dues. It is further provided in this clause that whole or balance security amount, as the case may be, will be refunded within four months after the expiry of the lease. 12. Relying on the terms contained in clause 4 of Ex.PW 2/A, the learned Assistant Advocate General has contended that since the term of the lease stood expired on 31.3.1986, whole or part of the security amount became refundable within four months thereafter. In other words, the security was refundable by 31.7.1986. The right to recover the amount accrued to the plaintiff on 1.8.1986 and a suit for the recovery of such amount ought to have been filed within three years therefrom. Such period of three years stood expired on 31.7.1989. The present suit having been filed on 30.3.1990 is on the face of it barred by time. The right to recover the amount accrued to the plaintiff on 1.8.1986 and a suit for the recovery of such amount ought to have been filed within three years therefrom. Such period of three years stood expired on 31.7.1989. The present suit having been filed on 30.3.1990 is on the face of it barred by time. The plaintiff in para 3 of its plaint as averred:- "That in terms of the conditions of the sale under clause 10, the plaintiff deposited a sum of Rs.7,50,100/- as security with the defendants. The lot was duly worked by the plaintiff and the plaintiff became entitled to the return of security of Rs.7, 50,100/- alongwith interest accrued thereon on 31.3.1987. However, despite repeated demands and requests, the defendants have not paid the principal amount of security alongwith interest accrued thereon and as such the plaintiff has been compelled to file the present suit." 13. Again in para 8 of the plaint, the plaintiff has averred that the cause of action had accrued to it on 31.3.1987. 14. The case set up by the plaintiff in the plaint shows as if the plaintiff is proceeding on the basis that the lease vide Ex.PW 2/A was granted to it for the term ending 31.3.1987 and not 31.3.1986. This aspect of the case is fully made out in the statement of PW10 Shri Inder Kumar, the partner of the plaintiff firm. He has gone to state that the work of the lot was to be completed by the plaintiff by March, 1987. 15. Even in the notices Ex.PW 10/6 and PW 10/12 issued under Section 80, Code of Civil Procedure, respectively, on 22.9.1987, and 16,12,1989 the case set up by the plaintiff is that the lease period was upto 31.3.1987. 16. Though in clause 3 of Ex.PW 2/A there is a provision for the extension in the period of lease, it is nobodys case that the original period of lease upto 31.3.1986 was ever extended. 17. In State of Rajasthan v. Firm Anand Construction Company, Mandi, AIR 1972 Rajasthan 101, Shankarv. 16. Though in clause 3 of Ex.PW 2/A there is a provision for the extension in the period of lease, it is nobodys case that the original period of lease upto 31.3.1986 was ever extended. 17. In State of Rajasthan v. Firm Anand Construction Company, Mandi, AIR 1972 Rajasthan 101, Shankarv. State, AIR 1970 Bom.8 and State of U. P. v. Chandra Gupta & Co., AIR 1977 Allahabad 28, it has been held that to a suit to recover the amount deposited in advance as security for due performance of a contract and refundable on the completion of the work Article 113, Limitation Act, 1963, corresponding to Article 120, Limitation Act, 1908, would apply. 18. Article 113 of the Limitation Act, 1963, prescribes a period of limitation of three years beginning from the date when the right to sue accrues. 19. On the facts and circumstances of the case, it is established that the cause of action to recover the security amount in terms of Ex.PW 2/A accrued to the plaintiff on 1.8.1986. Therefore, the present suit having been filed on 30.3.1990 much after the expiry of the requisite period of three years, is, on the face of it, barred by time. The issue is, therefore, decided against the plaintiff and in favour of the defendants. Issued No.5. 20. Admittedly, the defendants failed to deposit half of the security amount in the Post Office Saving Bank/Certificate in terms of clause 10 of the Ex.PW 3/1. The failure to make such a deposit has resulted into loss to the plaintiff in the form of interest on such amount. However, as held under issue No.8 above, such claim being barred by time, the plaintiff is not entitled to be compensated for such loss. The issue is accordingly decided against the plaintiff. Issue No. 7 21. (i) There is no denying that there was a fire in the jungle during the working of the lot by the defendants. However, no evidence is forthcoming to show that such fire broke out on account of any act of omission and commission on the part of the plaintiff or its representatives, agents or workers. Issue No. 7 21. (i) There is no denying that there was a fire in the jungle during the working of the lot by the defendants. However, no evidence is forthcoming to show that such fire broke out on account of any act of omission and commission on the part of the plaintiff or its representatives, agents or workers. (ii) It is the admitted case of the defendants that one Shri V.P. Mohan, Additional Chief Conservator of Forests was appointed to enquire into the cause of fire Ex.DW 2/1 is the copy of the enquiry report dated 28.9.1985, submitted by the said Shri V.P. Mohan to the Chief Conservator of forests. A perusal of the said report shows that while exonerating the forest staff, the inquiry officer has not held the plaintiff and/or its workers responsible for such fire. The report Ex.DW 2/1, therefore, is of no help to the defendants. (iii) It is in evidence of the defendants that a case with regard to fire was duly registered with the police and that after investigation; such case was closed as "untraced". (iv) Even if it be assumed that due to such fire, loss was caused to the defendants, such loss cannot be attributed to any act of omission or commission of the plaintiff. The issue is, therefore, decided against the defendants. Issue No. 3. 23. Admittedly, the lot was worked out by the plaintiff. However, in view of the findings recorded under issue No.8 above, the plaintiff is not entitled to recover the amount of security. The issue is decided against the plaintiff. Issue No. 4. 24. Since the claim as to refund of security amount itself is time barred, the plaintiff is not entitled to any interest on such amount. The issue is decided against the plaintiff. Issue No. 6. 25. In view of the findings recorded under issues Nos. 3, 4 and 8 above, the plaintiff is not entitled to any amount either towards principal or towards interest. The issue is decided against the plaintiff. Relief 26 As a result, the present suit fails and the same is dismissed, leaving the parties to bear their own costs.