JUDGMENT : VAKITI RAMAKRISHNA REDDY, J. 1. This Appeal is filed by the appellant/plaintiff against the Judgment and Decree dated 25.03.2013 (hereinafter will be referred as ‘impugned judgment’) passed in O.S. No. 341 of 2006 on the file of Chief Judge, City Civil Court, Hyderabad (hereinafter will be referred as ‘trial Court’), wherein the suit filed by the appellant/plaintiff for recovery of money was dismissed. 2. For the sake of convenience, the parties herein are referred as per their status before the trial Court. 3. The brief facts of the case as can be seen from the plaint averments are that on the application filed by the plaintiff to the defendant, the plaintiff was permitted to participate in the auction to purchase a Plot at HUDA Heights, Banjara Hills. Accordingly, the plaintiff was declared eligible and allotted a plot admeasuring 823.5 square meters for a sale consideration of Rs.31,78,710/- @ Rs.3,860/- per square meter. In pursuance of confirmation-cum-provisional allotment letter, dated 11.03.1996, the plaintiff paid Rs.7,94,678/-, which was acknowledged by the defendant. Out of the three instalments that were to be paid by the plaintiff towards balance sale consideration, the plaintiff paid only two instalments but did not pay the third instalment as the basic amenities and infrastructural facilities were not completed by the defendant. The plot owners of HUDA Heights formed an association in the name and style of ‘HUDA Heights and Enclave Plot Owners Association’ and made repeated requests to provide amenities and facilities but the defendant did not accede to the same. In the meanwhile, the defendant issued a letter to the plaintiff for payment of third instalment with interest @ 24% per annum or else the allotment would be cancelled. Accordingly, the plaintiff paid Rs.24,00,000/- on 02.01.2002 with interest @ 24% per annum. Subsequently the plaintiff came to know that the Government of Andhra Pradesh through the Principal Secretary to Government, Municipal Administration and Urban Development Department considered the request for charging simple interest @ 13.5% on the balance instalment from the date of providing basic amenities such as electricity, roads, water and sewerage to the lay-out and passed an order dated 04.09.2001 vide letter bearing No.30408/1/98/MA and duly communicated the same to the defendant. It was made clear in the order that the said scheme is applicable for the plot owners who have not paid full amount and interest and that the same is not applicable to the plot owners who have paid full amount and that there shall be no refund. However, the defendant kept the said order in dark without informing about the said letter to the plaintiff and insisted the plaintiff to pay the third instalment with interest at 24% per annum. The plaintiff after understanding the attitude of the defendant caused a legal notice dated 21.05.2003 to the defendant, who issued a reply notice dated 16.07.2003 to the plaintiff stating that the plaintiff is not entitled for any such refund. Subsequently, the plaintiff made a representation on 07.09.2004 for refund of the excess amount of Rs.13,77,846/- collected by the defendant, however, there was no refund from the defendant. Thereafter the plaintiff issued another legal notice dated 01.09.2005 to the defendant, however, there was no reply from the defendant to the second legal notice. Hence, the plaintiff was constrained to file the suit for recovery of Rs.18,73,846/- with interest @12% per annum from 15.07.2003 to 13.07.2006. 4. In reply to the plaint averments, the defendant filed written statement inter-alia contending that the scheme introduced by the government is not applicable to the plot owners who had already paid full amount along with interest and there shall be no refund and since the plaintiff had already paid full amount with interest, he is not entitled for any refund. It is further contended that when the plaintiff was liable to pay Rs.26,36,000/- towards third installment with interest, the plaintiff could pay only Rs.24,00,000/- and the balance of Rs.2,36,000/- was waived and adjusted against the final installment. Hence, prayed to dismiss the suit of the plaintiff. 5. After considering rival pleadings, the trial court framed the following issues: 1. Whether the plaintiff is entitled to recover the suit claim from the defendant? 2. Whether the plaintiff is entitled to the decree, as prayed for? 3. To what relief? 6. On 02.01.2013 at the time of hearing arguments, the trial Court framed the following additional issue: Whether the suit is barred by Law of Limitation? 7. During the course of trial, the plaintiff himself was examined as PW1 and got marked Exs.A1 to A6 on his behalf. 3. To what relief? 6. On 02.01.2013 at the time of hearing arguments, the trial Court framed the following additional issue: Whether the suit is barred by Law of Limitation? 7. During the course of trial, the plaintiff himself was examined as PW1 and got marked Exs.A1 to A6 on his behalf. On behalf of the defendant, one Nagajyothi, who is the Administrative Officer in Estate Management, was examined as DW1 and Exs.B1 to B7 were marked. 8. The trial Court after considering the oral and documentary evidence adduced on behalf of both sides, dismissed the suit of the plaintiff. 9. Aggrieved by the aforesaid Judgment and Decree of the trial Court, the Plaintiff had filed the present Appeal to set aside the impugned judgment and decree. 10. Heard learned Counsel for the Plaintiff and Defendant, and perused the record. 11. Now the point for determination is: Whether the impugned Judgment and Decree dated 25.03.2013 passed in O.S. No. 341 of 2006 on the file of Chief Judge, City Civil Court, Hyderabad is liable to be set aside? 12. POINT : There is no dispute that the plaintiff was allotted Plot No. 26 in HUDA Heights, Banjara Hills, Hyderabad, for Rs.31,78,710/- under allotment letter dated 11.03.1996 by the defendant. It is the specific contention of the learned counsel for the plaintiff that despite pending demands by the plot owners’ association for promised basic amenities, the defendant demanded the final installment with 24% interest on threat of cancellation. On contrary the learned Counsel for the defendant submits that the plaintiff, though a successful bidder for Plot No. 26 at HUDA Heights defaulted on the third installment of Rs.8,34,411/- after paying the first two installments on time and as per terms of the brochure, annual interest at 24% was payable on the due amount. 13. The learned counsel for the plaintiff submits that on 21.01.2002 under threat of cancellation of allotment, the plaintiff paid Rs. 24,00,000/- along with interest towards third installment. 13. The learned counsel for the plaintiff submits that on 21.01.2002 under threat of cancellation of allotment, the plaintiff paid Rs. 24,00,000/- along with interest towards third installment. The learned counsel for the Plaintiff further submits that the Plaintiff later discovered that the then Government of Andhra Pradesh, by order dated 04.09.2001, had directed the Defendant to charge the interest only at 13.5% p.a. instead of 24% p.a. and despite the said order the defendant collected the interest at the rate of 24% p.a. On the contrary, the learned counsel for the defendant submits that a show cause notice dated 27.06.1998 was issued to the plaintiff, followed by a cancellation notice dated 12.07.2000 warning the forfeiture of the initial deposit and interest. Condition No. 11 of the brochure, categorically states that interest at the rate of 24% per annum was payable on the due amount to the Defendant. 14. The learned Counsel for the Plaintiff submits that by the date of paying the final instalment, the order dated 04.09.2001 passed by the Government of Andhra Pradesh, was subsisting, despite the same, the defendant authority highhandedly demanded the amount with interest at the rate of 24% per annum. On contrary, the learned counsel for the defendant submits that the plaintiff paid the third instalment with interest i.e., Rs.24,00,000/- on 02.01.2002. Subsequently, Government vide letter dated 16.04.2002 fixed simple interest at 13.5% per annum from April 2000 to 02.08.2001, but reiterated that no refund would be made to plot owners, who paid the full amount. 15. It is to be seen that as per the version of the defendant the policy decision of the Government in reducing the rate of interest from 24% p.a. to 13.5% p.a. under Exs.A5 and A6 was made applicable for the plot owners who have not paid full amount and interest. However, the plaintiff was asked to pay the third installment along with interest at the rate of 24% per annum denying the benefit under policy decision of the Government on the ground that he has already paid the entire amount. Since the plaintiff has paid the entire amount to the defendant honestly, the plaintiff also stands in the same position with that of the remaining plot owners of the Association. Since the plaintiff has paid the entire amount to the defendant honestly, the plaintiff also stands in the same position with that of the remaining plot owners of the Association. There is no reasonable explanation either in Ex.A5 or Ex.A6 as to why such a benefit shall not be applicable to the persons, who have already paid the entire amount. In these circumstances, the defendant ought to extended such benefit to the plaintiff also. Even the trial Court failed to consider the said aspect with reference to doctrine of equality as enshrined under Article 14 of the Constitution of India. 16. In Shrilekha Vidyarthi (Kumari) v. State of Uttar Pradesh, (1991) 1 SCC 212 the Honourable Supreme Court observed as under: “29. It can no longer be doubted at this point of time that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional. [See Ramana Dayaram Shetty v. International Airport Authority of India , (1979) 3 SCC 489 : (1979) 3 SCR 1014 and Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir, (1980) 4 SCC 1 : (1980) 3 SCR 1338 ]. In Col. A.S. Sangwan v. Union of India, 1980 Supp SCC 559 : 1981 SCC (L&S) 378, while the discretion to change the policy in exercise of the executive power, when not trammelled by the statute or rule, was held to be wide, it was emphasised as imperative and implicit in Article 14 of the Constitution that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone, irrespective of the field of activity of the State, has long been settled. Later decisions of this Court have reinforced the foundation of this tenet and it would be sufficient to refer only to two recent decisions of this Court for this purpose. 17. In Common Cause, A Registered Society (Petrol pumps matter) v. Union of India , (1996) 6 SCC 530 the Apex Court observed as under: “22. Later decisions of this Court have reinforced the foundation of this tenet and it would be sufficient to refer only to two recent decisions of this Court for this purpose. 17. In Common Cause, A Registered Society (Petrol pumps matter) v. Union of India , (1996) 6 SCC 530 the Apex Court observed as under: “22. The Government today — in a welfare State — provides large number of benefits to the citizens. It distributes wealth in the form of allotment of plots, houses, petrol pumps, gas agencies, mineral leases, contracts, quotas and licences etc. Government distributes largesses in various forms. A Minister who is the executive head of the department concerned distributes these benefits and largesses. He is elected by the people and is elevated to a position where he holds a trust on behalf of the people. He has to deal with the people's property in a fair and just manner. He cannot commit breach of the trust reposed in him by the people.” 18. In Ramana Dayaram Shetty v. International Airport Authority of India , (1979) 3 SCC 489 , the Apex Court observed as under: “20. Now, obviously where a corporation is an instrumentality or agency of Government, it would, in the exercise of its power or discretion, be subject to the same constitutional or public law limitations as Government. The rule inhibiting arbitrary action by Government which we have discussed above must apply equally where such corporation is dealing with the public, whether by way of giving jobs or entering into contracts or otherwise, and it cannot act arbitrarily and enter into relationship with any person it likes at its sweet will, but its action must be in conformity with some principle which meets the test of reason and relevance. 21. This rule also flows directly from the doctrine of equality embodied in Article 14. It is now well-settled as a result of the decisions of this Court in E.P. Royappa v. State of Tamil Nadu, (1974) 4 SCC 3 : (1974) 2 SCR 348 and Maneka Gandhi v. Union of India, (1978) 1 SCC 248 that Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. It is now well-settled as a result of the decisions of this Court in E.P. Royappa v. State of Tamil Nadu, (1974) 4 SCC 3 : (1974) 2 SCR 348 and Maneka Gandhi v. Union of India, (1978) 1 SCC 248 that Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. It requires that State action must not be arbitrary but must be based on some rational and relevant principle which is non-discriminatory: it must not be guided by any extraneous or irrelevant considerations, because that would be denial of equality. The principle of reasonableness and rationality which is legally as well as philosophically an essential element of equality or non-arbitrariness is projected by Article 14 and it must characterise every State action, whether it be under authority of law or in exercise of executive power without making of law. The State cannot, therefore, act arbitrarily in entering into relationship, contractual or otherwise with a third party, but its action must conform to some standard or norm which is rational and non-discriminatory. This principle was recognised and applied by a Bench of this Court presided over by Ray, C.J., in Erusian Equipment and Chemicals Ltd. v. State of West Bengal where the learned Chief Justice pointed out that “the State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting .... A citizen has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling .... A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting .... A citizen has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling .... It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods”. It must, therefore follow as a necessary corollary from the principle of equality enshrined in Article 14 that though the State is entitled to refuse to enter into relationship with any one, yet if it does so, it cannot arbitrarily choose any person it likes for entering into such relationship and discriminate between persons similarly circumstanced, but it must act in conformity with some standard or principle which meets the test of reasonableness and non-discrimination and any departure from such standard or principle would be invalid unless it can be supported or justified on some rational and non discriminatory ground.” 19. In Erusian Equipment and Chemicals Ltd. v. State of West Bengal , (1975) 1 SCC 70 the Honourable Supreme Court observed as under: “12. Under Article 298 of the Constitution the executive power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality. 17. The Government is a Government of laws and not of men. It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods. This privilege arises because it is the Government which is trading with the public and the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. Hohfeld treats privileges as a form of liberty as opposed to a duty. The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone but if it does so, it must do so fairly without discrimination and without unfair procedure. Reputation is a part of a person's character and personality. Blacklisting tarnishes one's reputation.” 20. The rigors of Article 14 of the Constitution cannot be interpreted in a narrow or pedantic manner. The principle of equality and reasonableness is an essential element of equality or non-arbitrariness. In view of the principle laid down in the above said decisions, it can be held that discrimination and arbitrariness was shown by the defendant against the plaintiff though he was honest and diligent in making the entire payment to the defendant. 21. The trial court at page No.16 of the impugned judgment observed that the plaintiff ought to have pleaded and established the date of the letter to show that the demand which compelled the plaintiff to pay the excess amount was made after the government’s orders. There is no dispute that the defendant had knowledge about Exs.A5 and A6 prior to receiving payment of third installment from the plaintiff. There is no dispute that the defendant had knowledge about Exs.A5 and A6 prior to receiving payment of third installment from the plaintiff. The defendant also alleged to have addressed a letter to the government on 11.11.2001 i.e., prior to receipt of the third installment amount from the plaintiff to clarify the date and rate of interest to be charged. There is also no dispute that the plaintiff has been urging the defendant as well as government to refund the excess amount received by the defendant. In such circumstances, it is the bounden duty of the defendant to intimate the plaintiff about subsistence of the orders passed by the government under Exs.A5 and A6 to collect simple interest at 13.5% per annum. Even otherwise, Ex.A6 i.e., letter addressed by the Principal Secretary to Government, MA and UD Department to the Vice Chairman, HUDA, dated 22.12.2001 clearly discloses that the computation of simple interest shall be at 13.5% p.a. When the defendant had clear instructions from the government in Ex.A6 with regard to the computation of interest at 13.5% per annum, there is no explanation on the part of defendant as to what is the necessity for the defendant to wait for further decision of the government with regard to the rate of interest till receipt of letter dated 16.04.2002. It draws an adverse inference against the defendant that despite having clear instructions from the government with regard to reduction of penal rate of interest on the defaulters, the defendant did not disclose the same to the plaintiff and rather collected excess amount from the plaintiff than the amount as instructed by the government by suppressing Exs.A5 and A6. 22. In view of the above discussion and since the plaintiff compelled to pay his third installment amount along with interest @ 24% per annum to the defendant despite Government had taken a policy decision to reduce the rate of interest at the rate of 13.5% p.a. towards third installment by addressing the letters under Exs.A5 and A6 to the defendant, the plaintiff is entitled for the refund of the excess amount received by the defendant from the plaintiff. 23. 23. Now coming to the limitation aspect, the learned Counsel for the Plaintiff submits that the Trial Court has erred in holding that the suit is barred by the limitation whereas it is to be seen from the evidence that the Suit was filed within limitation as the cause of action for filing the suit accrued on 16.07.2003 when the defendant authority issued their reply rejecting the claim of the appellant/plaintiff. On the contrary, the learned counsel for the defendant submits that the plaintiff’s right to sue accrued on the date of the first representation dated 14.01.2002. The plaintiff did not institute the suit within three years either from 14.01.2002, i.e., from the date of his first representation or alternately from the date of the first legal notice dated 21.05.2003, hence, the suit is barred by law of limitation. 24. The trial Court while answering additional issue that was framed for determining the aspect of limitation observed at Paragraph No.9(d) that the plaintiff had knowledge of his entitlement to the claim in the suit even by his first representation dated 14.01.2002 that has triggered the cause of action and the right to sue had accrued to the plaintiff even by 14.01.2002. It was further observed in the impugned judgment that there is no provision in the Indian LIMITATION ACT which lays down a proposition that the right to sue does not accrue till the claim made in a notice is rejected by a reply notice. 25. In this connection, the learned counsel for the plaintiff relied upon a decision in Shakti Bhog Food Industries Limited v. Central Bank of India and another , (2020) 17 SCC 260 , wherein the Honourable Supreme Court while elucidating the distinction between Article 58 and Article 113 of the LIMITATION ACT observed that mere exchange of correspondence distinguished from situation where correspondence is carried out to vindicate right or redress grievance by a party, and clear refusal to do so by the opposite party concerned can be considered as the starting point of limitation. It was further observed that in the absence of word ‘first’ in Article 113, it would cover cases falling under Section 22 of the LIMITATION ACT , including continuing breaches or torts. It was further observed that in the absence of word ‘first’ in Article 113, it would cover cases falling under Section 22 of the LIMITATION ACT , including continuing breaches or torts. The distinction between Article 58 and Article 113 is that as the right to sue may accrue to a suitor in a given case at different points of time and, thus, whereas in terms of Article 58 the period of limitation would be reckoned from the date on which the cause of action arose first in terms of Article 113 the period of limitation would be differently computed depending upon the last day when the cause of action arose. In the above said decision the suit was filed for recovery of excess amount charged by the defendant consequent to rendition of accounts with interest. Even in the instant case, the plaintiff filed the suit for recovery of excess amount charged by the defendant for recovery of third installment amount along with interest. So far as the limitation aspect is concerned in the instant case, even though the exchange of correspondence between the plaintiff and defendant had commenced on 20.05.2002, the defendant had issued reply to the plaintiff on 16.07.2003 rejecting the claim of the plaintiff. Hence, the limitation of three years begins from 16.07.2003. 26. The plaintiff filed the present suit on 12.07.2006 i.e., within three years from 16.07.2003. In this regard, it is appropriate to have a glance at the paragraph pertaining to limitation in the plaint, wherein it was disclosed that since the defendant issued reply notice dated 16.07.2003 informing the plaintiff that he is not entitled for any amount, the suit is within limitation. It is to be seen that correspondence between the plaintiff and defendant had been continuing from 14.01.2002. Even as per the version of the defendant, the plaintiff addressed a representation to the government vide letter dated 10.02.2003 to direct the defendant to refund the excess amount paid to the defendant, since the defendant had issued a pre-final allotment letter on 18.03.2002 without considering the request of the plaintiff for refund of excess amount as per the Government Lr. No.30408/11/98, dated 22.12.2001. The defendant further stated that the plaintiff has also approached the Honourable Chief Minister on 08.06.2002 requesting to reconsider his request for refund of excess amount. No.30408/11/98, dated 22.12.2001. The defendant further stated that the plaintiff has also approached the Honourable Chief Minister on 08.06.2002 requesting to reconsider his request for refund of excess amount. Even as per the version of defendant and as evident from Ex.B7, the plaintiff along with other plot owners in the name of HUDA Heights and Enclave Plot Owners Welfare Association had filed W.P.No.12716/1997 against the defendant challenging the cancellation of allotment of plots and incomplete infrastructural works vis-a-vis levy of interest/cancellations orders issued and the said writ petition was withdrawn on 24.01.2007. Thus, the above admissions of the defendant manifestly clear that the plaintiff has been pursuing all the remedies available to him diligently from time to time. 27. The LIMITATION ACT prevents the revival of claims that have been dormant for too long ensuring that evidence remains fresh and reliable. Section 22 of the LIMITATION ACT says that a fresh period of limitation begins to run at every moment the breach or tort continues. There is no single instance to say that the plaintiff was not diligent in pursuing his grievance to say that law of limitation cannot be extended in favour of the plaintiff. Even otherwise Section 14 of the LIMITATION ACT deals with the exclusion of time spent in prosecuting a suit or application in a court that lacks jurisdiction or is otherwise unable to entertain it. It essentially allows a party to deduct the time spent in a previous, wrongly filed legal proceeding from the overall limitation period for a subsequent, correctly filed suit or application. On reading Section 14 of the LIMITATION ACT , it makes it clear that the legislature has enacted the said section to exempt a certain period covered by a bona-fide litigious activity. In view of the intention of the legislature we are of the firm opinion that the equity underlying under Section 14 should be applied to its fullest extent and time taken diligently pursuing a remedy, in a different court, should be excluded. Thus, the trial Court erred in holding that the suit of the plaintiff is barred by limitation. 28. On considering the above aspects and also keeping in view of the principle laid down in the above said decision, it can be safely held that the suit of the plaintiff is within the limitation. 29. Thus, the trial Court erred in holding that the suit of the plaintiff is barred by limitation. 28. On considering the above aspects and also keeping in view of the principle laid down in the above said decision, it can be safely held that the suit of the plaintiff is within the limitation. 29. In view of the above facts and circumstances, this Court is of the considered view that plaintiff could establish that the trial Court erred in dismissing the suit of the plaintiff and thereby the impugned judgment and decree is liable to be set aside. 30. Accordingly, this Appeal is allowed by setting aside the Judgment and Decree dated 25.03.2013 passed in O.S. No. 341 of 2006 on the file of Chief Judge, City Civil Court, Hyderabad. Thereby, the suit of the plaintiff in O.S. No. 341 of 2006 is decreed by directing the defendant to refund an amount of Rs.18,73,870/- (which includes principal amount of Rs.13,77,846/- and Rs.4,96,024/- towards interest at the rate of 12% per annum from 15.07.2003 to 13.07.2006) to the plaintiff, however, with interest at the rate of 6% per annum from the date of filing of the suit till realization of the amount. In the circumstances, there shall be no order as to costs. As a sequel, pending miscellaneous applications, if any, in the appeal, shall stand closed.