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Civil Law

Union of India v. West Coast Paper Mills Ltd. 127 AIR 2004 SC 1596

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 08-Mar-2024

Introduction

  • This case deals with the point of limitation for filing a suit for the purpose of recovery of the excess amount of freight rates.

Facts

  • The respondents were transporting goods from Alnavar to Dandeli for the appellants using a branch line, with freight charges based on weight.
    • However, the freight rates were revised starting from 1st February 1964.
  • Dissatisfied with the revised rates, the aggrieved party complained to the Railway Rates Tribunal, alleging that the new rates were unjust, unreasonable, and discriminatory.
  • The Tribunal agreed that the new rates were unreasonable.
  • In response, the appellants sought special leave from the Supreme Court, which granted limited interim relief.
    • However, the Special Leave Petition was ultimately dismissed by the SC in 1970.
  • Subsequently, the respondents filed a writ petition which the High Court disposed of in 1973.
  • Following this, two suits were filed by the respondents on 12th December 1973, and 18th April 1974.
  • The appellants argued that the suits were time-barred under Article 58 of the Limitation Act, 1963, claiming that the cause of action arose immediately after the Tribunal's judgment on 18th April 1966, and that the suits should have been filed within three years from that date, despite no stay being granted by the Court against the Special Leave Petition.
  • The Trial Court found that the suits were filed within the prescribed period, a decision upheld by the High Court on appeal.
  • Hence, an appeal was preferred before the Supreme Court.

Issue Involved

  • Whether the suit was barred by the Limitation Act, 1963?

Observation

  • A 3-Judge bench ruled that limitation period starts from the SC's decision date in 1970, not the Tribunal's declaration in 1966.
  • The court found that the period during the writ proceedings should be excluded from the limitation period.
  • The court rejected an argument based on Section 78B of the Limitation Act, 1963, stating that it does not apply to cases of illegal charges, only overcharges.

Conclusion

  • The court concluded that the appeals lacked merit and upheld the Trial Court's decrees.