Kerala State Electricity Board vs M. Chacko Pillai

T. Kochu Thommen, J.—This appeal arises from the decree of the Subordinate Judge of Irinjalakuda. The defendant, the Kerala State Electricity Board, is the appellant. The plaintiff entered into a contract with the defendant on 23-8-1962 for the construction of the Sholayar Dam at the second stage. The agreement provided that the sand required for construction would be supplied by the defendant to the plaintiff free of cost. The construction commenced on 14-9-1962. For a short period, that is upto 25-10-1962, sand was supplied by the defendant at the work site. Thereafter the defendant stacked sand about 11/2 miles away from the place of work. As a result of the refusal of the defendant to provide sand at the place of construction, the plaintiff was compelled to lift the sand at considerable expense by way of loading, transporting and unloading charges. When the plaintiff''s claim for these charges was rejected by the defendant, the plaintiff made a request for reference of the dispute to arbitration. But that request was turned down by the defendant. Consequently the plaintiff instituted O.S. No. 3/1964 in the Sub Court of Irinjalakuda on 12-2-1964. In that suit the plaintiff claimed charges at Rs. 14.37 per 100 c.ft. for a total quantity of 16 lakhs c.ft. transported till the date of the plaint and for payment at the same rate for charges to be incurred in the future. The reliefs sought by the plaintiff were:

A. Allowing recovery from the defendant the sum of Rs. 2,29,920 as detailed below.

B. Declaring that the plaintiff as entitled to get future conveyance and loading and unloading charges in respect of sand from the place of supply by the defendant to the place of construction at the rate claimed in the plaint.

C. Granting interest at 9% per annum on the amount claimed from the date of suit to the date of realisation.

D. Granting all other reliefs, Which in the circumstances of the case are just and necessary.

E. Awarding the plaintiff the costs of this suit.

(emphasis supplied)

The trial court accepted the plaintiff''s contentions as regards his claim for transport charges both in respect of the past and the future, but allowed the charges only at the rate of Rs. 6/- pet 100 c.ft., that being the sum claimed by him in a letter which he had earlier sent to the Chief Engineer of the defendant on 1-2-1963 (Ext. D29). The plaintiff was accordingly given a decree for a sum of Rs. 96,000/- and future interest thereon at 6% p.a. The plaintiff was also given a decree for the declaration prayed for, that is as regards the conveyance, loading and unloading charges incurred in the ''future,'' i.e., during the currency of the suit. The plaintiff was also awarded his proportionate costs. The decree of the trial court is dated 14-6-1968. The defendant challenged that decree in appeal (A. S. No. 93/1969). One of the specific grounds of appeal urged by the defendant was:

The court below should have found that the plaintiff was not entitled to the declaration prayed for, viz., that he is entitled to the conveyance charges for sand that might have to be incurred by him in future.

(emphasis supplied)

The plaintiff also filed a cross-appeal concerning the rate of charges. This Court rejected both the appeal and the cross-appeal by judgment dated 23-11-1973 as a result of which the decree of the trial court became final. The plaintiff could not execute the declaratory portion of the decree as his application for the same (E.P. 23/1974) was dismissed on the ground that it could not be executed. Accordingly the plaintiff instituted the present suit (O.S. No. 133/1974) on 18-9-1974 for recovery of a sum of Rs. 1, 44, 755.82 being the charges claimed at the rate of Rs. 6/- per 100 c.ft. on a total quantity of 15, 12, 600 c.ft. of sand transported by the plaintiff after the institution of the earlier suit (O.S. No. 3/1964) till 9-10-1964 and interest thereon at 6% p.a. from 9-10-1964. The principal amount claimed is Rs. 90,756/-. In its written statement the defendant contended among other things that the suit was barred by limitation. The defendant however did not specifically question the plaintiff''s averment that the suit was a suit on judgment. It was specifically pleaded in para 18 of the plaint:

This suit therefore is suit on Judgment in A.S. No. 93 of 1969 under Article 101 of the limitation Act; the cause of action for the suit arising on the date of judgment and therefore there is no bar of limitation for the suit.

(emphasis supplied)

The defendant''s answer to this is what is contained in para. 9 of the written statement dated 25-2-1975. This is what is stated:

The suit is barred by limitation. The grounds alleged for saving the limitation are neither true nor sufficient.

The trial court by its judgment dated 16-7-1976 decreed the suit as prayed for with costs. The court held that Art. 101 of the Limitation Act applied to the facts of this case and that limitation began to run only from the date on which the matter was finally disposed of by the judgment of this Court in A.S. No. 93/1969 on 23-11-1973. The present suit which was instituted in September 1974 was found to be within time.

The principal contention which is now urged before us by the appellant-defendant''s Counsel, Shri Sivasankara Panicker, is as regards limitation. The appellant has also a dispute regarding the quantity of sand transported during the relevant period. However, the character of the suit as a suit on judgment is not disputed by the appellant''s counsel. According to him the learned trial Judge wrongly held that the period of limitation began to run only from the date of the judgment of this Court in A.S. No. 93/1969, that is as from 23-11-1973. He says that the period should have been reckoned from the date of the decree of the trial court in OS. No. 3/1964, that is 14-6-1968. Counsel further contends that, in addition to the fact that the present suit is barred, if limitation is so reckoned from 14-6-1968, the plaintiff''s cause of action which arose on 9-10-1964, which was the last date of transport of sand had already become barred on the date of the decree in O.S. No. 3/1964, viz., on 14-6-1968.

We shall first deal with the question of limitation. For the purpose; of Art. 101 of the First Schedule of the Limitation Act, 1963, the period prescribed is three years from the date of the judgment. The judgment for the purpose of Art. 101 means the final decree in that suit. Baijnath v. Vallabhdas -A.I.R. 1933 Madras 511. A judgment under appeal, or for which the appeal time has not expired, is not final, but only a provisional judgment, and does not operate as res judicata. As stated by the Privy Council in 5. P. A. Annamalay Chetty v. B. A. Thornhill (A.I.R. 1931 P.C. 263, at 264):

....where an appeal lie''s the finality of the decree on such appeal being taken, is qualified by the appeal and the decree is not final in the sense that it "will formers adjudicate as between the same parties." (per Lord Thankerton).

When the appeal was taken from the decree of the trial Court the finality of that decree was destroyed. The decree of the appellate court superseded the decree of the trial court. The only decree from which limitation can be reckoned is the decree that remains which is the appellate decree. As stated by Lord Macna as early as 1897 in Sheosagar singh v. Sitarama Singh - (1897) ILR 24 Calcutta 616 - 24 LA. 50:

To support a plea of res-judicatat it is not enough that the parties are the same and that the same matter is in issue! The matter must have been ''heard and finally decided.'' If there has been no appeal in the first suit the decision of the Subordinate Judge would no doubt have given rise to the plea. But the appeal destroyed the finality of the decision. The judgment of the lower Court was superseded by the judgment of the Court of Appeal.

(emphasis supplied)

The judgment which can be executed or sued upon is not the judgment the finality of which has been destroyed by the appeal and which has been superseded by the judgment of the appellate court. What remains is the final judgment of the appellate court and it is that judgment which has to be executed or sued upon. It is from the date of that judgment that time runs for the purpose of limitation. As stated by Garth, C. J.,

Although an order of Her Majesty in Council may confirm the decree of the Court below, the order is undoubtedly the paramount decision in the suit and any application to enforce it is in point of law, an application to execute the order, and not the decree which it confirmed:........ (Luchmun Parasad Singh v. Kishun

Persad Singh - ILR 8 Calcutta 218, 223 (FB). See also Noor Ali Choudhury v. Keni Mesh - ILR 13 Calcutta 13, 16).

The trial court decree being not res judicate, but only provisional pending appeal, the execution of such a decree would likewise have been provisional and qualified by the appeal, and subject to restitution in terms of Sec. 144 C.P.C. Any action on such a provisional decree would have been liable to be stayed by reason of res sub judice. It is the judment in appeal that became final for the purpose of Sec. 11 C.P.C. and in that judgment merged the decree of the trial court which has thus lost its identity. In The State of Gujarat and Another Vs. Shri Ambica Mills Ltd., Ahmedabad and Another, , quoting with approval the decision in Gajadhar Singh v. Kishan Jiwan Lal ( AIR 1917 Ahd 163), Chandrachud J. (as he then was) stated:

The juristic justification of the doctrine of merger may be sought in the principle that there cannot be, at one and the same time, more than one operative order governing the same subject-matter. Therefore the judgment of an inferior Court, it subjected to an examination by the superior Court, ceases to have existence in the eye of law and is treated as being superceded by the judgment of the superior Count. In other words, the judgment of the inferior Court loses its identity by its merger with the judgment of the superior Court.

Referring to the principle that time runs from the date of the appellate Court, the Privy Council in AIR 1932 165 (Privy Council) stated:

It is at least an intelligible rule that so long as there is any question sub judice between any of the parties those affected shall not be compelled to pursue the so often thorny path of execution which, if the final result is against them, may lead to as advantage. Nor in such a case as this is the judgment-dabtor prejudiced. He may indeed obtain the boon of delay, which is so clear to debtors, and if he is virtuously inclined there is nothing to prevent his paying what he owes into Court.

Although this principle was stated in the context of execution, it is in our view, equally apposite to an action on judgment. It is a rule of convenience to avoid the inconvenience of enforcement in the period of uncertainty. As stated by Kania J. (as he then was) in Jaiaukhlal Harishankar Giuara v. Mohdmed Hussian Dawoodbhai Karwa (A.I.R. 1939 Bombay 522):

The words used in Art. 117, Limitation Act, are ''the date of the judgment.'' It does not say ''the judgment of the trial Court.

This, in our view, suggests that the judgment which is relevant for the purpose of Art. 101 is the judgment that is final and conclusive and that is the judgment of the appellate Court. See Balkishan v. Kishan Lall (1889) ILR XI Allahabad 148; Chengalvala Gurraju Vs. Madapathy Venkateswara Row Pantulu Garu, ; Baijnath v. Vallabhdas, AIR 1933 Madras 511, 514; Abdulla Ashgar Ali Khan v. Ganesh Dass, (1917) ILR XLV Calcutta 442 (P.C): Mst. Annapurnabai widow of Deolal and Another Vs. Mst. Pyaribai, widow of Debi Prasad, ; Bhavani Amma v. Narayana Acharya, AIR 1963 Mysore 120; Shanker Ramachandra v. Kri-shnaji Oatthatraya AIR 1970 S.C. I Jowad Hussian Saivid v. Genden Singh AIR 1926 P.C. 93. See also Black on Judgment, 2nd Edn., (1902), Vol. 2; Spencer - Bower and Turner; The Doctrine of Res Judicata, 2nd Edn. (1969).

Shri Panicker however contended that the principle of merger has no application where the appeal from the decree of the trial court was dismissed as in the present case. In such a situation, counsel contends, there was no merger or supersession, and limitation must therefore run from the decree of the trial court. In support of this contention Counsel refers to State of U.P. v. Mohammed Nooh (A.I.R. 1958 S.C. 86) in which a certain observation of S.R. Das C.J. seems to indicate support for Shri Panicker''s proposition. This was precisely the argument that was considered by the Supreme Court in Gojer Bros. (Pvt.) Ltd. Vs. Shri Ratan Lal Singh, where a number of decisions on the point rendered by the Supreme Court and other Courts were considered and the principle was categorically laid down to the effect that the merger and the supersession of the trial court decree took place irrespective of whether it was reversed or modified or confirmed in appeal. The observation suggesting to the contrary in State of U.P. v. Mohammed Nooh ( AIR 1958 S.C. 86) in respect of affirmative appellate decree was stated to be confirmed to the particular facts of that case. That this has always been the recognised position in law is clear from the various authorities cited on the point by Beasley C. J. in Baijnath v. Vallabhadas (A.I.R. 1933 Madras 511). As early as 1870 Scotland C.J. of the Madras High Court in Arunachallathudayan v. Velayudhan (5 M.R.C.R. 215) stated:

Whether that decree be in affirmance or reversal or modification of the decree appealed from, it becomes the final decree in the suit, and therefore the decree aforce-able by execution.

To this effect the Calcutta High Court stated in Luchmun persad Singh v. Kishun Persad Singh, (1882) ILR 9 Calcutta 218. See also Noor Ali Choudhury v. Koni Meah, (1886) ILR 13 Calcutta 13. In the circumstances there is no substance in the contention that the period of limitation was wrongly reckoned from the date of the appellate decree.

Shri Panicker further contends that the present suit is barred whether the period is reckoned from the date of the appellate decree or that of the trial court decree. He points out that the cause of action arose on 9-10-1964 which was the last date of transport of sand. That cause of action, according to him, could not be sued upon on the expiry of three years thereafter, whether the period is reckened in terms of Art. 55 or Art. 18 or Art. 113. Consequently, he says, on the date of the suit (O.S. 133/1974), the plaintiff had no cause of action which was enforceable by action, his right of action having been barred by limitation. This argument is in our view, erroneous. One of the reliefs sought in O.S. No. 3/1964 was the declaration as to the future rights and liabilities of the parties. That relief was granted by the learned Judge. He stated:

Though the amount is uncertain the legal right for which the declaration is sought is not indefinite or uncertain, and therefore, the declaration prayed for has to be allowed.

Everytime sand was transported subsequent to the date of institution of O.S. No. 3/1964, a cause of action arose, and every such cause of action was a cause that was sued upon, for that was one of the causes for which a declaration was sought. With the decree of the appellate court affirming the trial court decree, every cause of action under adjudication becomes a right recovered and therefore a matter of record. Such causes of action lost their identity and vitality through their merger in the final decree. It is from the date of the final decree-which means the decree of the appellate court - that time runs, for the purpose of limitation. All causes of action which arose subsequent to the institution of O.S. No. 3/1964 were preserved and protected and remained uneffected by limitation during the currency of that suit and the appeal there from. To say that these causes of action were barred on the date of the institution of the subsequent suit (O.S. No. 133/1974) is to ignore the basic character of a cause of action which was already sued upon by means of the declaration sought.

In our view, the cause of action in O.S. No. 133/1974 was the judgment of the appellate court dated 23-11-1973 in A.S. No. 93/1969 and the suit was therefore instituted within the period limited under Art. 101. As we stated earlier, the applicability of Art. 101 has not been questioned before us. What is questioned is whether an action based on this provision has been brought within the period of limitation prescribed thereunder. Our answer is in the affirmative.

There is a controversy as regards the quantum of sand transported by the plaintiff. According to the plaintiff he carried 15, 12, 600 c.ft. of sand during the relevant period. He had however in the notice (Ext. B1) sent by him to the defendant stated that he transported 9, 37,000 c.ft. of sand. It is because of this statement in Ext. B1 that the appellant''s counsel contents that the trial court wrongly found that the plaintiff was entitled to payment in respect of 15, 12, 600 c.ft. as claimed by him. The trial court accepted the plaintiff''s contention that what was stated by him in Ext. B1 was a mistake. This mistake was caused, according to the plaintiff, on account of a wrong understanding of the terms "dry volume of sand" and "dry sand." The court accepted the relevant evidence on the point. It was admitted by the Assistant Engineer of the Board (D.W. 1) that the plaintiff conveyed to the Dam site the entire quantity of sand supplied by the Trivandrum Transports. The total quantity supplied by the Trivandrum Transports, as seen from Ext. B4 was 31 odd lakhs c.ft. of sand. These facts cannot be disputed. In the earlier suit the plaintiff claimed charges in respect of only 16, 00,000 c. ft. of sand. That was the quantity which had been-carried during the period preceding the date of that suit. The plaintiff having admittedly carried the entire quantity of 31 odd lakhs c.ft. of sand supplied by the Trivandrum Transports, the trial court, in our view, rightly held that the present claim in respect of 15, 12, 600 c.ft. is well founded. We sec no substance in the contention of the appellant to the contrary.

Referring to the refusal of the defendant to issue the certificate mentioned under clause 4(b) of the General conditions of contract and Instructions to tenderers, Shri S. Narayanan Potti, appearing for the plaintiff-respondent, raised an additional point in support of the trial court judgment. However, in the view we have taken on the merits of the appeal, it is unnecessary for us to express any opinion on that point. In the circumstances we confirm the judgment and decree of the trial court, and dismiss the appeal with the plaintiffs'' (respondent''s) costs throughout.