1. 7 leases in favour of the Plaintiffs for 7 contiguous lands executed on 7 different dates have all expired on 10th December, 1978. The Plaintiffs desire the leases to be renewed for a further period of 99 years as envisaged in the renewal clauses. The Defendants contend that the suit is barred by the law of limitation as also on principles of Res-judicata aside from a denial of the requirement of renewal of the leases on merits.
ISSUES
1. Whether the suit is barred by the law of limitation.
2. Whether the suit is barred by principles of res judicata or principle analogous to res judicata.
3. Whether the Plaintiffs are entitled to renewal of the 7 leases in favour of the Plaintiff.
4. Whether the Defendant No.1 accepted and acquiesced in the renewal of the leases in favour of the Plaintiffs.
5. What relief, if any, are the Plaintiffs entitled to?
2. Issue Nos. 1 and 2 would be require to be tried as preliminary issues under the provisions of Order 14 Rule 2 of the CPC. These issues are agreed to be tried as preliminary issues upon questions of law and admitted facts by arguments on behalf of both the parties.
3. Issue No.3 is also agreed to be tried on arguments of counsel upon the interpretation of the renewal clause and the applicable law without the need for leading any further oral evidence. If the issues of limitation and Res judicata are answered in favour of the Plaintiffs, they would be allowed to proceed to have the suit heard on merits. The decision of the issue in favour of the Plaintiffs would not require issue No.4 to be tried and answered. Consequently that issue would be decided under the provisions of Order 15 Rule 3 of the CPC. It was argued that if that issue is answered against the Plaintiff then the Issue No.4 would become material to be tried on oral and documentary evidence with regard to the disputed facts for determination of the ultimate reliefs in issue No.5, the Plaintiffs having claimed the relief of declaration that the leases stands renewed and an order for execution of 7 indentures of lease which is in essence specific performance of contracts of leases.
4. Under the aforesaid circumstances, counsel on behalf of both the parties have argued the questions of limitation and res judicata in the suit itself.
ISSUE NO.1
Re : Law of Limitation :
5. The renewal clauses in the 7 leases provided that on the expiration of the term of the lease when required and requested by the lessees and at the cost of the lessees, their successors or assignees the lessor, his successor or assigns would grant a new and renewed lease of the demised portion to the lessees, their successors and assigns for a term of 99 years at the same rent and subject to the same conditions and provisions contained in the leases including the covenant for its renewal.
6. Since prior to the expedition of the leases the Plaintiffs have corresponded with Defendant No.1. The first letter in that behalf has been sent by the Plaintiffs on 16th December, 1977 through their attorneys. The letter shows that the Plaintiffs were making the applications for renewal well in advance of the termination of the leases as required by Defendant No.1 in whom each of the leasehold premises had vested. The Plaintiffs called upon Defendant No.1 to confirm that they would renew all the 7 leases upon which they would send the copy of the draft of the leases for the approval of Defendant No.1 at the cost of the Plaintiffs.
7. The Plaintiffs, therefore, knew their right to have the leases renewed. They exercised their option and requested Defendant No.1 to do so. They offered to draft the lease deeds. That would be upon the confirmation of Defendant No.1 and at their cost. This the Plaintiffs would be required to do within the period of limitation. If the Defendants failed to carry out their act for the option exercised by the Plaintiffs or the request made by the Plaintiffs, the Plaintiffs would require to sue Defendant No.1 within the period of limitation applicable to the parties in this case.
8. On 19th January, 1978 the Plaintiffs' attorneys again requested action with regard to the renewal clause in the leases.
9. In the Plaintiffs' attorneys' further letter dated 6th February, 1978 the Plaintiffs requested one composite lease deed instead of 7 separate leases.
10. The Plaintiffs, therefore, commenced the action in respect of the renewal of the leases opted by them and requested Defendant No.1 even with regard to the procedural aspects.
11. On 17th February, 1978 the Plaintiffs are shown to have received a letter from the legal adviser of Defendant No.1 that the leases would be renewed and that feasibility of the drawing of one lease was under consideration.
12. This, the Plaintiffs claim, is the acceptance and acquiescence of Defendant No.1. This was not a letter written by Defendant No.1 itself i.e. by its Estate Manager who represents Defendant No.1; it was written by the legal adviser who cannot contract on behalf of Defendant No.1.
13. Nevertheless there has been correspondence between the Plaintiffs and the legal adviser. The legal adviser by his letter dated 5th June, 1978 reiterated that position to the Plaintiffs' attorneys with a copy to the Estate Manager of Defendant No.1. The Plaintiffs attorneys replied to the legal adviser on 12th June, 1978 reiterating that the leases would be required to be renewed on the existing terms and conditions including the payment on existing rents and that the Defendant No.1 should prepare a draft lease on 13th December, 1978. The legal adviser informed the Plaintiffs' attorneys that his department would undertake the drafting of lease deeds under the instructions of the Estate Manager of Defendant No.1.
14. Indeed, the Estate Manager was akin to his client. It is the Estate Manager who would have to give instructions. It is Estate Manager who represented Defendant No.1 who is the party with whom the Plaintiffs would contract; not the legal adviser of Defendant No.1.
15. Consequently the Plaintiffs' attorneys wrote to the Estate Manager of Defendant No.1 on 30th December, 1978 requesting the Estate Manager to draft a composite lease for approval of the Plaintiffs. A further letter on 19th January, 1979 made a further request to the Estate Manager.
16. This would be the correspondence between the parties prior to legal action if required. The legal action would be required to be taken within the period of limitation. The correspondence would not go on ad infinitam. If it did, and the period of limitation expired, the legal action would become time barred.
17. There has been no correspondence between the Plaintiffs and Defendant No.1 from 19th January, 1979 until 11th May, 1984. There has been no renewal of the leases either. It would have to be seen whether in the interregnum the Plaintiffs suit became time barred as has been contended by Defendant No.1.
18. On 11th May, 1984 the Plaintiffs' attorneys wrote to Defendant No.1 itself that the 7 leases containing renewal clauses of 99 years had expired and that since their letter dated 16th December, 1977 the Plaintiffs had applied for renewal and later claimed one composite renewal for the contiguous plots in close vicinity of each other which, despite reminders, were not renewed though all the queries and requirements of Defendant No.1 was satisfied. The Plaintiffs gave notice to Defendant No.1 under Section 120 of the Major Port Trusts Act, 1963 (MPT Act) that they would file a suit for specific performance for the renewal of the 7 leases and claim damages suffered by them if the leases were not renewed within one month.
19. This notice U/s.120 of MPT Act has been sent more than five years after the leases expired.
20. It is argued on behalf of Defendant No.1 that the suit which threatened by the Plaintiffs was barred by on the date of the notice itself U/s.120 of the MPT Act. It is also argued that further action taken by the Plaintiffs including the filing of the Writ Petition was after the suit became barred by the law of limitation under the aforesaid section. Section 120 of the MPT Act is, therefore, required to be considered. It runs thus:
â120. Limitation of proceedings in respect of things done under the Act.â
No suit or other proceeding shall be commenced against a Board or any member or employee thereof for anything done, or purporting to have been done, in pursuance of this Act until the expiration of one month after notice in writing has been given to the Board or him stating the case of action, or after six months after the accrual of the cause of action.â
21. It may be mentioned straightway that the Plaintiffs themselves relied upon the aforesaid section and gave notice under the section. The Plaintiffs, therefore, called upon Defendant No.1 to do âthingsâ under the MPT Act. The Plaintiffs called upon the Defendant No.1 to renew the lease. If Defendant No.1 did not do that âthingâ i.e. renew the lease the Plaintiffs would have to sue after giving one month notice (as was actually given under the notice dated 11th May, 1984, Exh. Q to the plaint) setting out the Plaintiffs' cause of action, which was specifically set out in the letter / notice, and within six months of the accrual of the cause of action.
22. The notice itself shows the accrual of the cause of action in December, 1978 as it specifically mentioned that âon around December, 1978 7 leases expiredâ but as all the 7 leases contained covenants for renewal â¦. âthe Plaintiffs applied for and request the renewalâ. There was no cause of action other than the expiry of the leases for which the Plaintiffs applied and requested and exercised their option. There has been none stated in the notice either. The Plaintiffs averments in the plaint are much the same.
23. Section 120 of the MPT Act requires action within six months of the accrual of the cause of action. Section 120 also requires notice of one month to be given to the board for any âthingâ to be done under the Act.
24. It is argued on behalf of the Plaintiffs that the renewal of the lease is a contractual obligation. It is contained in the leases by way of covenants. The renewal is governed by law relating to leases being the Transfer of Property Act, 1882. The Plaintiffs' contract would be required to be renewed within the limitation period allowed for such contracts under Article 58 of Schedule I to the Limitation Act, 1963 for a declaration to be obtained which would be within three years when the right to sue first accrues. Even by those parameters the right to sue have first accrued on the date of expiration of the leases being 10th December, 1978. The suit under the general law of limitation would have to be filed before 10th December, 1981. After the Plaintiffs' attorneys letter dated 19th January, 1979 there has been no request or demand by the Plaintiffs until the notice dated 11th May, 1984 is issued U/s.120 of the MPT Act.
25. Section 120 of the MPT Act lays down a period of limitation other than the one under the general law. Consequently U/s.29(2) of the Limitation Act, 1963 the period of limitation prescribed under the special law being the Major Port Trust Act or the MPT Act would govern the parties as has been rightly understood, accepted and acted upon by the Plaintiffs under their notice dated 11th May, 1984.
26. It would be essential to incorporate the relevant para of section 29(2) of the Limitation Act which would exclude the applicability of the Limitation Act and apply the MPT Act to the case of the parties.
Section 29(2) runs thus:
29. Savings. â (1) â¦.
(2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only insofar as, and to the extent to which, they are not expressly excluded by such special or local law.
27. For the filing of this suit, therefore, Section 120 of MPT Act would apply to determine the period of limitation.
28. It is argued by Mr. Andhyarujina on behalf of the Plaintiffs that the MPT Act is an Act for constitution of authorities for the administration, control and management of Major Ports of India. The suit land as many other lands belonging to Defendant No.1 are not port lands. They are lands further inland in the city of Mumbai. They are only owned by Defendant No.1. Consequently Defendant No.1 has to be treated only as the owner of the land and as lessor of the Plaintiffs and hence would be governed under the general law relating to leases under the MPT Act since the renewal of the leases is not a part of the administration, control or management of the ports for which the MPT Act was enacted.
29. What is missed in this otherwise attractive argument is the object of the act not only to administer, control or manage the ports by the authorities constituted therefor but also for âmatters connected therewithâ mentioned in the preamble to the MPT Act which runs thus:
An Act to make provision for the constitution of port authorities for certain major ports in India and to vest the administration, control and management of such ports in such authorities and for matters connected therewith.
30. Mr. Andhyarujina argued that for the special law of limitation under 120 of MPT Act to apply the acts of Defendant No.1 or the things to be done by it must be âin pursuance to the actâ. He argued that renewal of the lease is not in pursuance of the Act. If the Act makes a provision with regard to leases, things to be done under any contract of lease would be in pursuance of the act as it would be a matter âconnectedâ with the constitution of port authorities for vesting the administration, control and management of the ports in them under the preamble.
31. Mr. Makhija on behalf of Defendant No.1 drew the Court's attention to Section 33 and the second proviso of Section 34 of the MPT Act relating to execution of contracts by and on behalf of the board. Section 33 provides that the board is competent to enter into any contract for the performance of its functions under the act. Section 34 provides how the contracts would have to be entered into. The second proviso to Section 34 lays down the mandatory requirement of obtaining the previous approval of the Central Government for contracts exceeding a certain period of time or value of a lease of any property. The relevant part of Sections 33 and 34 runs thus:
â33. Contracts by Board. â
Subject to the provisions of section 34, a Board shall be competent to enter into and perform any contract necessary for the performance of its functions under this Act.
34. Mode of executing contracts on behalf of Board. â
(1) .....
Provided further that no contract for the acquisition or sale of immovable property or for the lease of any such property for a term exceeding thirty years, and no other contract whereof the value or amount exceeds such value or amount as the Central Government may from time to time fix in this behalf, shall be made unless it has been previously approved by the Central Government.â
32. The board of Defendant No.1 would require acquiescence, sale or lease of immoveable properties. They may be made for the administration of ports themselves or for matters connected therewith. The properties owned by the board would generate income for the administration of the ports. The board would hold the properties in trust for the ports. It is an authority constituted for the purpose of such administration or matters connected therewith. The execution of sale or leases would be matters connected with the administration of the boards for the immoveable properties held and owned by the board. For execution of the lease of such properties the board must conform with the mandatory requirement of second proviso to Section 34. The execution of the lease would be in pursuance of the Act. The trustees of the board as the authority under the Act would execute the lease. They would require to execute a lease only with the Central Government sanction if the period of lease exceeded the 30 years. In this case the renewal of the lease was required, applied for and requested for 99 years. The renewal of the lease would be a âthing doneâ under second proviso of Section 34 of the Act. It would, therefore, be in pursuance of the MPT Act. For causing such renewal to be made a suit would have to be filed within six months of the accrual of the cause of action and notice would have to be given of one month for filing such suit U/s.120 of the MPT Act which expressly has been done by the Plaintiffs by their attorneys' notice dated 11th May, 1984, Exh.Q to the plaint. The only aspect that is seen is that the notice itself is given after the period of limitation expired. It has been given more than five years after the accrual of the cause of action, the cause of action having accrued to the Plaintiffs on the date of the expiration of the lease â 10th December, 1978.
33. Though not required, the Estate Manager of Defendant No.1 replied to the Plaintiffs' attorneys notice dated 11th May, 1984 by his letter dated 22nd May, 1984 informing the Plaintiffs that the Defendant No.1 had decided not to renew the leases and that the existence of the renewal clause did not cast any obligation upon it to renew.
34. The Plaintiffs contend that the cause of action accrued when the Defendant No.1 refused to renew the leases. Hence it is argued that the cause of action accrued on 22nd May, 1984.
35. It may be mentioned that refusal gives a cause of action only in a case of relief of specific performance of a contract under article 54 of the limitation act 1963. Refusal by the Defendant for any other purpose or act does not give a cause of action for any other relief. The Plaintiffs suit is for declaration that the 7 leases stood renewed and for an order to execute 7 indentures of lease. It is argued on behalf of the Plaintiffs that the mandatory order required under prayer 'b' of the plaint to execute 7 indentures of lease tantamounts to applying for specific performance as specified in the notice dated 11th May, 1984 itself. It is further argued that the refusal to renew the lease would, therefore, grant the cause of action to the Plaintiffs for the order of execution of 7 leases under prayer 'b' of the plaint.
36. This argument would be wholly inapplicable to the Plaintiffs initial prayer for declaration that the leases stood renewed under prayer 'a' of the plaint. Unless the Plaintiffs obtained that declaration, no order can be passed for execution of the leases. For obtaining the declaration that the leases stood renewed the refusal by the Defendant would not constitute the cause of action. The termination of the lease alone would give the cause of action. Hence for the declaration under prayer 'a' the period of limitation would be governed under Article 58 of the Limitation Act granting the Plaintiffs three years from when the right to sue accrued, unless of course, the Plaintiffs suit is not excluded from the Limitation Act under Section 29(2) of the Limitation Act as stated hereinabove.
37. It is argued that the Plaintiffs have given notice on 19th June, 1984 by their attorneys' letter of that date addressed to the Estate Manager of Defendant No.1, Exh. S to the plaint. That letter refers to the letter of Defendant No.1 dated 22nd May, 1984 informing the Plaintiffs' of their decision not to renew the leases. That letter requests reconsideration of the decision within 7 days failing which Plaintiffs would be free to act as per their previous letter dated 11th May, 1984 addressed to Defendant No.1 U/s.120 of the MPT Act. A reading of the letter, therefore, does not show that it constitutes notice U/s.120 of the Act. It rather clarifies the notice already given dated 11th May, 1984 under which itself the Plaintiffs would act.
38. Whether or not the letter dated 11th May, 1984 or the letter dated 19th June, 1984 constitutes notice U/s.120 of the MPT Act is immaterial. Both the letters / notices have been given well after the period of limitation expired from the accrual of the cause of action in 1978. That argument, therefore, remains academic. However, the argument is made with much thought and labour and deserves to be set out.
39. Mr. Andhyarujina argued that the cause of action accrued to the Plaintiffs on 22nd May, 1984 by the refusal of Defendant No.1. The Plaintiffs gave notice of the filing of the suit U/s.120 of the MPT Act on 19th June, 1984. The Plaintiffs, therefore, could not sue until 19th July, 1984. That would be the period of exclusion U/s.15(2) of the Limitation Act. The Plaintiffs had six months time from 19th July, 1984 to 19th January, 1985 to sue. Though the Plaintiffs never sued in Civil Court, for which the period of limitation is statutorily laid down, the Plaintiffs filed a Writ Petition No.63 of 1985 on 19th December, 1985 within that period of limitation. Mr. Andhyarujina contends that the Plaintiffs accordingly sued in the Court without jurisdiction and the period taken up by the Writ Petition would have to be excluded U/s. 14 of the Limitation Act. The Plaintiffs SLP was ultimately dismissed on 29th August, 1987 requiring the Court to exclude the period between 19th December, 1984 to 29th August, 1987 U/s.14 of the Limitation Act. The Plaintiffs has sued on 1st September, 1997, three days after the SLP was dismissed and accordingly on the last date of the period of limitation between 19th July, 1984 to 19th December, 1984 (5 months and 27 days) and from 30th August, 1997 to 1st September, 1997 (3 days).
40. Mr. Andhyarujina drew my attention to the cases of Union of India and Ors. Vs. West Coast Paper Mills Ltd. and Anr. (III), (2004) 3 Supreme Court Cases 458 and Shakti Tubes Limited, Thru Director Vs. State of Bihar and Ors. (2009) 1 Supreme Court Cases 786 in which it is held that the liberal touch must form the interpretation of limitation act so that the period taken up for grant of the relief in exercise of writ jurisdiction is liable to be excluded for computing the period of limitation U/s.14 (2) of the Limitation Act.
41. This admirable effort would have borne result had the cause of action accrued on 22nd May, 1984 with the refusal of the Defendant. It has not. It has accrued well prior to that time. Notice U/s.120 of the MPT Act was also given well prior to that date of refusal.
42. Consequently there is much force in the simple argument of Mr. Makhija that the Writ Petition itself was filed after the limitation period expired. In fact, there is substance in his contention that the Writ Petition was filed because the period of limitation to file a civil suit had expired. The Writ Petition hopelessly suffered from laches. Observations in that behalf has been made in the order of the learned Single Judge of this Court hearing the Writ Petition on merits dated 10th January, 1991. That of course, is not material to consider for computing period for limitation of this civil suit. It is only material to see that the Plaintiffs knew about their right under the renewal clause of the lease and sought to agitate it since prior to the expedition of the leases themselves. The Plaintiffs commenced correspondence to request Defendant No.1 for renew of the leases but failed to take action upon the inaction of Defendant No.1 within the statutory period of limitation of six months aside from the period of notice of one month contemplated U/s.120 of the MPT Act.
43. After a siesta of more than five years the Plaintiffs gave the notice under that statutory provision and merely because the Defendants replied to the notice showing the decision not to renew, which they were not even required to do, that the Plaintiffs have relied upon such correspondence. It is settled that correspondence does not extend the period of limitation much less give the cause of action to sue. If the Defendants accept to renew, it would not constitute an acknowledgment of liability to renew and if the Defendants refused to renew, it would not give the cause of action to sue for declaration of the renewal of the lease.
44. Mr. Andhyarujina relied upon the judgment of the Supreme Court in the case of V.M. Salgaocar and Bros. Vs. Board of Trustees of Port of Mormugao and Anr., (2005) 4 Supreme Court Cases 613 which accepts and upholds the ruling of the Division Bench of the Andhra Pradesh High Court in the case of The Shipping Corporation of India Ltd., Bombay and Anr. Vs. The Union of India and Anr., AIR 1976 Andhra Pradesh 261 that the two phrases in Section 120 of the MPT Act are required to be read conjuctively and not alternatively so that the period of six months after the accrual of the cause of action is added to the period of one month preceding that to give notice to Defendant No.1. That, however, would not be of much consequence in view of the accrual of the cause of action years prior to the date of notice and the filing of the suit.
45. Similarly, the reliance placed by Mr. Andhyarujina on the judgments of Kerala and Madras High Court in the cases of M/s. United India Insurance Co. Ltd. Vs. Cochin Port Trust and Anr., 1994(2) KLJ 882, Cochin Port Trust Vs. Associated Cotton Traders Ltd., and Ors., AIR 1983 Ker 154 and Trustees of the Port of Madras Vs. Simpson and Co. Ltd., Madras and Ors., AIR 1967 Mad 194, following the decisions of the Bombay High Court in the case of ChhaganlalSakerlal Vs. The Municipality of Thana, AIR 1932 Bombay 259 that the period of one month's notice would have to be excluded from six months period of limitation under Section 120 of MPT Act is also of no avail to the Plaintiffs in view of the accrual of the cause of action years prior to the notice itself.
46. In view of the above upon the admitted facts shown from the admitted correspondence between the parties and the contract of the parties themselves contained in the 7 leases which expired on 10th December, 1978 the suit is seen to be barred by the law of limitation. Hence the Issue No.1 is answered in the affirmative.
ISSUE NO.2
47. The plaintiffs have filed a Writ Petition for essentially the same reliefs on 19th December, 1984 claimed in this suit being the issue of the Writ of Mandamus directing Defendant No.1 herein to execute 7 leases for 99 years. The reliefs have been refused to the Plaintiffs throughout until the dismissal of the SLP in the Supreme Court. The Plaintiffs have thereafter sued in this Court.
48. It is argued on behalf of the Defendants that the suit is barred by principles of Res judicata U/s.11 of the CPC. It is argued that the Plaintiffs applied for similar reliefs and failed to obtain them and this Court under its order dated 10th January, 1991 fully considered and decided the Plaintiffs case and dismissed the Writ Petition on merits. The judgment shows indeed that the Writ Petition was filed for enforcement of the renewal clause in the indenture of leases. However, the Court has essentially held that the remedy by way of Writ Petition was not available to the Plaintiffs. Though the Court considered the question of limitation U/s.120 of the MPT Act, the Court held that the contention of the Defendant No.1 raised in the Writ Petition would have to be considered in a suit. A reading of the judgment shows the delay and laches as also the period of limitation having been fully considered but not the aspect of interpretation of the renewal clause of the lease for which the suit would be filed. In this suit, if not barred by limitation, that aspect would have to be considered. That has not been heard and decided in the Writ Petition. Consequently the suit cannot be taken to be barred by principles of res judicata U/s.11 of the CPC.
ISSUE NOS.3 AND 4
49. In view of the above, and since the suit is held to be barred by the Law of Limitation the other issues are not required to be answered in the suit.
ISSUE NO.5
50. The suit is stands dismissed.