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Synopsis

The Supreme Court on November 4, 2024, said that if a suitor alleges that the suit could not be instituted by him within the prescribed period of limitation because of some mistake, that came to be discovered beyond the period prescribed for institution of a suit, it is open to such suitor to claim exemption from limitation in terms of Order VII Rule 6 of the Code of Civil Procedure, 1908 and such exemption can be granted in an appropriate case. 

A bench of Justices Dipankar Datta and Rajesh Bindal said, however, if a suitor alleges to have discovered a mistake later but it is proved on evidence being led that exercise of reasonable diligence could have resulted in the mistake being discovered on an earlier date, limitation would begin to count from that earlier date; and, in case, the count from the said earlier date takes the date of institution of the suit beyond the prescribed period of limitation, the bar of limitation would get attracted. 

"Mistake is, thus, not a circumstance which can be used as a shield to to save negligence in all cases. Absence of due diligence or lack of bona fides would not clothe a suitor to take undue advantage of a beneficent provision like Section 17; it is for the relevant court to separate the grain from the chaff," the bench said. 

Dealing with an appeal filed by the Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Limited and others, the bench said although section 24 of the 1910 Indian Electricity Act prescribes no period of limitation, it does allow the licensee to discontinue supply of energy upon a consumer neglecting to pay charges that are demanded by raising a bill, irrespective of the fact that a suit for recovery of unpaid charges would be barred if not instituted within three years of the liability accruing. 

"There appears to be no limitation as regards the period within which notice under section 24(1) has to be issued, evincing the intention of the licensee to disconnect supply for nonpayment of claimed dues. However, if in case, despite the consumer not paying the charges demanded and the notice thereunder is not issued within a reasonable period or at any time within which a suit for recovery could be instituted, whether the right of the licensee to claim the unpaid charges would lapse will have to be decided by the court before whom the lis is brought upon consideration of the defence that is raised and the explanation for the delay. We only say that it must depend on the facts of each particular case whether the demand by reason of mere delay should be interdicted or not," the bench said.

The bench also emphasised there cannot be any doubt that once an interim order is passed in a suit or a proceeding, the interim relief granted to the party seeking interim relief could either be confirmed or vacated at the time of final disposal of the suit or proceedings, as the case may be. 

If the disposal is by way of an order of dismissal, interim relief which is granted as an aid of or ancillary to the final relief cannot continue beyond the termination of such suit or proceedings, the court added.

However, if in a particular suit or proceeding, interim relief is sought in respect of a development subsequent to institution of the suit/proceedings, as in the present case (where the first show cause notice came into existence after the first writ petition was filed), and the challenge to such subsequent development is spurned, the party who has approached the court cannot be heard to say that the effect of spurning of the challenge would come to an end with the disposal of the suit/proceedings. The effect of the challenge being spurned would continue till such time it is reversed in appeal or reviewed in a manner known to law, the bench pointed out.

"The situation in such a case, adversely affecting the party whose challenge has been spurned, cannot be sought to be overcome by contending that the suit or proceedings has/have not been dismissed on merits but was/were merely withdrawn. By seeking a withdrawal, the Court before whom the lis was brought is requested not to decide the lis and if the Cour while granting the prayer for withdrawal does not grant leave for institution of a fresh suit on the same cause of action, or even if leave is granted and a fresh suit/proceeding is instituted, that would not have the effect of negating the order spurning challenge passed in the earlier suit/ proceedings. The same would remain operative till set aside or varied," the bench pointed out.

The court noted that it was incumbent upon the first respondent in the present matter to challenge the order of February 14, 2001; and having failed to do so, it was not of any merit for the first respondent to contend that until the disconnection notice had been issued on March 18, 2009, the liability had not crystallised so as to render the first respondent liable to pay the same. 

The challenge to the first show cause notice having failed, the principle of issue estoppel operated as a bar for the first respondent to raise a challenge to the second show cause notice, which had been issued for precisely the same due amount of Rs 70,50,478, the court added.

"The crux of the matter is that the issue of liability accruing to the first respondent for non-payment of minimum guarantee charges had been decided previously and such decision, not being subjected to any appeal, had attained finality in the eyes of law estopping the first respondent from reagitating the issue. In our considered opinion, the second writ petition at the instance of the first respondent was not maintainable and, accordingly, ought not to have been entertained at all," the bench said.

In the case, the bench noted that since the appellants accepted the Single Judge's order from July 16, 2009, issued a fresh demand for a reduced amount, and recovered it by encashing the bank guarantee, it would not issue any directions to alter the position resulting from that order.

The bench finally concluded that on a conjoint reading of all the judicial orders in connection with the first writ petition together with the conduct of the first respondent, the orders of May 4, 2000 and February 14, 2001, so to say, judicially crystallised the liability of the first respondent to pay the minimum guarantee charges and such orders having attained finality, bound the first respondent.

"No amount of argument by the first respondent, either on the point of delay in raising the demand or a merit-based review of the action of the appellants, in the second writ petition was open to persuade the High Court hold in its (first respondent) favour by allowing the intra-court appeal," the bench said.

The court allowed the civil appeals holding the High Court's orders of October 13, 2011 on intra court appeal as unsustainable in law.

Case Title: The Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Limited & Ors Vs Bapuna Alcobrew Private Limited & Anr