Bharat Sanchar Nigam Ltd. vs Pawan Kumar Gupta

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(s). 1085 OF 2008

BHARAT SANCHAR NIGAM LTD. ... APPELLANT(S)

VERSUS

PAWAN KUMAR GUPTA ...RESPONDENT(S)

WITH CIVIL APPEAL NO. 3420 OF 2012 and CIVIL APPEAL NO. 2409 OF 2009

J U D G M E N T

V. GOPALA GOWDA, J.

Civil Appeal Nos. 1085/2008 and 2409/2009:

Since the issue involved in both the appeals

is common and facts are identical, we dispose of both

the appeals by this common judgment.

Heard Mr. R.D. Agrawala, learned senior

counsel appearing for the appellant in both the appeals

and Ms. Tatini Basu, learned counsel for the respondent

in Civil Appeal No. 2409/2009. Despite service of

notice on the sole-respondent in Civil Appeal No. Signature Not Verified

1085/2008, he remained unrepresented.

Digitally signed by Vinod Kumar Date: 2015.09.26 11:38:36 IST Reason:

For the sake of convenience, the facts are 2

taken from the leading case i.e. Civil Appeal No.

1085/2008. This appeal arises out of the judgment

and order dated 12.07.2007 passed by the High Court of

Punjab & Haryana dismissing Regular Second Appeal No.

835/2007 by affirming the judgment and decree dated

2.09.2006 passed by the learned District Judge, Bhiwani

in dismissing the original suit filed by the appellant

herein against the respondent on the ground that the

suit claim is barred by limitation. The correctness of

the same is questioned in this appeal(s), urging

various grounds.

Mr. R.D. Agrawala, learned senior counsel

appearing for the appellant, inter alia contends that

the appellant being a Central Government Undertaking, a

Company, which is an instrumentality of the State, has

got vested rights on the execution of the instrument,

Office Memorandum dated 30.09.2000 wherein the

Department of Telecommunication (hereinafter referred

to as the “DoT”), of the Central Government represented

by its Secretary has executed the said Office

Memorandum by transferring the assets and liabilities

in respect of the business currently being carried out

on account of the Government to the appellant-company

on the book value thereof. The book value of the assets

comprising of the business transferred in favour of the

appellant-company has been provisionally assessed at 3

Rs. 63,000/- Crores. Therefore, learned senior counsel

for the appellant submits that it is an actionable

claim as defined under Section 3 of the Transfer of

Property Act, 1882 (hereinafter referred to as the “TP

Act”) which means a claim to any debt which is an asset

under Section 130 of the TP Act. The said actionable

claim, according to the learned senior counsel, has

been transferred in favour of the appellant-company by

the execution of instrument i.e. Office Memorandum,

referred to supra, therefore, all the rights and

remedies of the transferor-DoT vests with the

transferee-company. Hence, the appellant-company is

entitled to recover or enforce such debts or actionable

claim against the respondent-subscriber.

Learned senior counsel for the appellant has

further placed reliance upon the book, titled

“Accounting Standards and Corporate Accounting

Practices” by Dr. T.P. Ghosh in support of the

contention that the current assets include assets (such

as inventories and trade receivables). He placed strong

reliance upon the meaning of the word 'vested' from the

Webster's Dictionary in support of his contention and

submits that by virtue of the execution of the

aforesaid Office Memorandum, the transfer of all the

rights and remedies in relation to the actionable

claim, which is a debt legally recoverable from the 4

subscribers, are vested with the appellant-company, and

therefore, the benefit of Article 112 of the Limitation

Act, 1963 of instituting a suit within thirty years

from the date of the cause of action is available for

the appellant-company or in the alternative three years

from the date of incorporation of the company. He also

placed strong reliance upon Section 3(8) of the General

Clauses Act, 1897 which defines 'Central Government' as

under:

“3(8). 'Central Government' shall,-

(a) in relation to anything done before the commencement of the Constitution, mean the Governor General or the Governor General in Council, as the case may be; and shall include,-

(i) in relation to functions entrusted under sub-section (1) of Section 124 of the Government of India Act, 1935, to the Government of a Province, the Provincial Government acting within the scope of the authority given to it under that sub-section; and

(ii) in relation to the administration of a Chief Commissioner’s Province, the Chief Commissioner acting within the scope of the authority given to him under sub-section (3) of section 94 of the said Act; and

(b) in relation to anything done or to be done after the commencement of the Constitution, mean the President; and shall include,-

(i) in relation to functions entrusted under clause (1) of article 258 of the Constitution, to the Government of a State, the State Government acting within the scope of the authority given to it under that 5

clause;

(ii) in relation to the administration of a Part C State (before the commencement of the Constitution (Seventh Amendment) Act, 1956, the Chief Commissioner or the Lieutenant -

Governor or the Government of a neighbouring State or other authority acting within the scope of the authority given to him or it under article 239 or article 243 of the Constitution, as the case may be; and

(iii) in relation to the administration of a Union territory, the administrator thereof acting within the scope of the authority given to him under article 239 of the Constitution."

Further, the learned senior counsel by placing

strong reliance upon the definition of the 'Central

Government', which is an inclusive definition, submits

that the Central Government also includes such

authorities as are indicated therein. Since the

appellant-company is incorporated under the Companies

Act and it has acquired the assets and liabilities of

the DoT, as an instrumentality of the Central

Government, the appellant being a company having a

separate and distinct entity from the Central

Government, its functioning is controlled by the

Central Government and, therefore, it is entitled to

avail the benefit under Section 112 of the Limitation

Act. Alternatively, it is contended by the learned

senior counsel for the appellant that the suit claim is

not barred by limitation if its cause of action arose

for the appellant-company either on 30.09.2000 i.e. the 6

date of execution of the Office Memorandum

transferring the assets and liabilities or on

01.10.2010, the date of its incorporation, as the case

may be. Taking either of the said dates into

consideration, the suit claim is within three years and

maintainable and, therefore, the courts below were not

right in dismissing the suit claim made in the original

suit proceedings before the various courts, which is

contrary to law. He, therefore, requested this Court to

set aside the impugned judgments and decrees passed by

the trial court and affirmed by the High Court in the

second appeal/civil revision petition.

The query that falls for our scrutiny in that,

though, in respect of the claim against the

respondent-subscriber, the amount due from the

installation of the telephone connection i.e.

29.01.1992 till its disconnection on 16.03.1998 is

Rs.25,296/-, the DoT of the Central Government is

entitled to file a suit within thirty years under the

period of limitation provided under Article 112 of the

Limitation Act, whether this benefit will accrue in

favour of the appellant-company either from the date of

the execution of the Office Memorandum, referred to

supra, transferring the assets and liabilities and

remedies, or the date of its incorporation. This aspect

of the matter is examined by us very carefully in the 7

light of the provisions of Section 3 and Section 130 of

the TP Act and in the backdrop of the Office Memorandum

vis-a-vis the Office Memorandum dated 30.09.2000

executed in favour of the appellant-company

transferring its assets and liabilities and also

remedies available for the transferor in favour of the

appellant-company, the legal contention urged is that

by virtue of the said transfer an actionable claim,

i.e. a claim to any debt from the subscriber should be

recoverable debt from the subscriber by the company.

Reliance is placed upon the Accounting Standards and

Corporate Accounting, referred to supra, and the

clarification given in the said extracts, to contend

that the actionable claim/ current assets includes the

inventories and trade receivables and the said

principle is applicable to the appellant-company, being

a registered company under the provisions of the

Companies Act. Section 133 of the Companies Act, 2013

which provides that the Central Government would

prescribe accounting standards and Section 3(8) of the

General Clauses Act, which relevant provision is

extracted hereinabove, have been relied upon to

substantiate the contention that the appellant-company

is an agency or instrumentality of the Central

Government as it is being financed and controlled by

the Central Government, and therefore, the benefit 8

accrued in favour of the DoT of the Central Government

under Article 112 of the Limitation Act would stand

extended to the appellant-company, it being an

instrumentality of the Central Government for the

reason that 100% share capital of the company is owned

in the name of the President of India, and therefore,

it partakes the character of Central Government. It is

urged that this aspect of the matter has not been

properly examined and considered by the courts below

while rendering the impugned judgments and decrees.

These contentions cannot be accepted by this

Court for the following reasons:

No doubt, the assets and liabilities are

transferred by the erstwhile DoT in favour of the

appellant-company, including the debts due from the

subscribers, the respondents herein, an asset which is

registered with the company pursuant to the transfer of

assets and liabilities as provided under Section 130 of

the TP Act upon which reliance is placed by the learned

senior counsel. What requires to be carefully examined

is that the actionable claim, a claim to any debt from

a subscriber-debtor after the assets and liabilities

are transferred by an instrument, the Office

Memorandum, referred to supra, in favour of the

appellant-company, is a legally recoverable debt to 9

avail the remedy which is transferred in favour of the

appellant-company. It could be seen from the undisputed

facts, which are adverted to in the impugned judgment

that undisputedly the suit claims against the

debtors/subscribers are beyond the period of three

years of limitation which is available. Therefore,

contention of the learned senior counsel on behalf of

the appellant-company that the benefit accrued in

favour of the Central Government under Article 112 of

the Limitation Act is attracted to the fact situation,

has a far reaching consequences for the reason that,

though the Company is a statutory authority, it is not

synonymous with the Central Government. The expression

'Central Government' under the General Clauses Act is

clearly defined, which relevant provision is extracted

in the aforestated portion of this judgment. By a

reading of the aforestated definition, at no stretch of

imagination it can be construed that the

appellant-company which is registered under the

Companies Act, though share capital of the company

owned in the name of the President is 100 per cent, it

cannot be construed as the Central Government for the

reason that the appellant-company by registration under

the Companies Act, no doubt it is under the control of

the Central Government as it is financed and its

administration is under the absolute control of the 10

Central Government, nonetheless, it shall not be

construed as the Central Government for the reason that

the appellant-company is a separate legal entity. It

also cannot claim that it is entitled to the benefit

under Article 112 of the Limitation Act on the ground

that a debt recoverable from the subscriber is an

actionable claim in terms of Section 3 of the TP Act,

even if the same has been transferred under Section 130

of the TP Act by execution of the Office Memorandum,

referred to supra, thereby vesting in it the rights and

the remedies vis-a-vis the same. No doubt, by execution

of the said instrument it has got the actionable claim

transferred, the assets that must be recoverable debts

from the debtors and subscribers. As could be seen from

the claim, the undisputed facts of these appeals are

that on the date of the transfer, some of the claims

were time barred, therefore, the company cannot

construe that the time barred debts are also an

actionable claim by way of transfer in its favour,

which entitles it to avail the benefit of Section 112

of the Limitation Act i.e. the period of thirty years

to institute suits for recovery of the same. Such an

interpretation is contrary to Article 112 of the

Limitation Act, 1963. A careful reading of Article 112

of the Limitation Act clearly reveals that in any suit

(except a suit before the Supreme Court in the exercise 11

of its original jurisdiction) by or on behalf of the

Central Government or any State Government, including

the Government of the State of Jammu and Kashmir, the

period of limitation would be thirty years. The period

of limitation time from which the period begins to run

is mentioned under Column 3 of the above Article of the

Limitation in the Schedule, which reads as follows.

“When the period of limitation would begin to run under

this Act against a like suit by a private person.”

By a careful reading of the aforesaid Article,

it makes abundantly clear, that a suit can be

instituted by or on behalf of the Central Government.

It is not the case of the appellant herein that it has

filed the suit on behalf of the Central Government.

This is for the reason that the appellant-company has

instituted the suit on the basis of the instrument of

Office Memorandum wherein the DoT has transferred its

assets and actionable claims. It cannot be said that it

has filed the suit on behalf of the Central Government

because the appellant/plaintiff is a company, a

distinctly independent and separate entity. Therefore,

the reliance placed upon the aforesaid Article 112 of

the Limitation Act to claim that there would be thirty

years of limitation period as the asset transferred is

an actionable claim due to the DoT is wholly

misconceived in law. The other argument advanced by the 12

learned senior counsel on behalf of the

appellant-company that it is an agency or

instrumentality under the Central Government which

falls within the inclusive definition as defined under

Section 3(8) of the General Clauses Act is wholly

misconceived for the reason that Article 112 of the

Limitation Act speaks of the Central Government or the

State Government. Its agencies or instrumentalities are

not incorporated under Article 112 of the Limitation

Act. Such an argument is contrary to the Constitution

Bench judgment of this Court in the case of Padma

Sundara Rao (Dead) and Ors. vs. State of T.N. and Ors.

reported in (2002) 3 SCC 533. In paragraph 14 of the

said judgment it is categorically stated that the

legislative casus omissus cannot be supplied by

judicial interpretative process and the Court cannot do

the legislative functions. Para 14 of the said judgment

reads thus:

“14. While interpreting a provision the Court only interprets the law and cannot legislate it. If a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary. (See Rishabh Agro Industries Ltd. v. P.N.B. Capital Services Ltd., (2000) 5 SCC 515. The legislative casus omissus cannot be supplied by judicial interpretative process. Language of Section 6(1) is plain and unambiguous. There is no scope for reading something into it, as was done in Narasimhaiah's case, (1996) 3 SCC 13

88. In Nanjudaiah's case, (1996) 10 SCC 619, the period was further stretched to have the time period run from date of service of High Court's order. Such a view cannot be reconciled with the language of Section 6(1). If the view is accepted it would mean that a case can be covered by not only clauses (i) and/or (ii) of the proviso to Section 6(1), but also by a non-prescribed period. Same can never be the legislative intent.”

(Emphasis supplied by this Court)

In the connected matter i.e. Civil Appeal No.

2409/2009, learned counsel appearing for the respondent

has placed reliance on two judgments of this Court in

the cases of A.K. Bindal & Anr. vs. U.O.I. & Ors.,

(2003) 5 SCC 163 paras 5, 14 and 17 and Food

Corporation of India vs. Municipal Committee,

Jalalabad & Anr., (1999) 6 SCC 74, in support of the

contention that the expressions 'Central Government' or

'State Government' in terms of Section 3(8) and Section

3(60) of the General Clauses Act do not include in

their purview or definition their agencies or

instrumentalities.

In view of the aforesaid judgments of this

Court, the legal contention urged by the learned senior

counsel appearing on behalf of the appellant that the

appellant being the agency or instrumentality of the

Central Government is entitled to maintain the suit

claims within thirty years as provided under Article 14

112 of the Schedule in the Limitation Act or

alternatively, whatever the limitation period which was

available for the Central Government, within three

years from the date of execution of the agreement are

wholly unsustainable in law.

For the aforegoing reasons, in the instant

cases, even a question of law does not arise, not to

speak of a substantial question of law. The appeals

must fail. Accordingly, the appeals are dismissed. No

costs.

Since the appellant had deposited a sum of

Rs. 25,000/- in terms of this Court's Order dated

28.01.2008 towards the costs of litigation of

respondent, as he remained absent despite service of

notice upon him, the appellant is permitted to withdraw

the said money along with interest, if any.

Civil Appeal No. 3420/2012:

[B.S.N.L. & Anr. vs. Tata Communications Ltd.:

This statutory appeal is arising out of the

judgment and order dated 16.11.2011 passed by the

Telecom Disputes Settlement and Appellate Tribunal, New

Delhi, hereinafter referred to as 'the Tribunal',

Petition No. 423 of 2010 filed by the respondent,

wherein it has sought for setting aside of the demand 15

notices dated 28.10.2010 and 12.11.2010 relating to a

demand of Rs.1,36,74,762/- containing an amount of

Rs.1,29,89,326/, Rs.3,11,950/- and Rs.3,73,486/- of the

Appellant No.1 herein, which was allowed by the

Tribunal by adverting to certain relevant clauses of

the interconnect agreement between the parties.

While setting aside the impugned demand

notices, the Tribunal inter alia held as under:

“26. In view our finding in Petition No.186 of 2010, the respondent cannot raise the demand for a period more than 3 years as per the Limitation Act. Therefore, we are of the opinion that the demand raised prior to period October 2007 will not be admissible. Further, in view of the rival contentions about the different bills after October 2007, there is a need for reconciliation of account between the petitioner and the respondent for the period November 2007 to October 2009. If any amount is outstanding, the petitioner will be liable to pay the same amount to the respondent and vice versa. Both the parties are directed to reconcile the amount within four weeks.”

It is clear from the aforesaid order of the Tribunal

that it had already answered the issues in Petition No.

186 of 2010 wherein it held that the appellant cannot

raise the demand for a period of more than three years

as per the Limitation Act. Therefore, it opined that

the demand raised by the appellant company prior to

period October, 2007 will not be admissible. Further, 16

the Tribunal having said so, has further stated,

keeping in view the rival contentions about the

different bills after October, 2007, that there is a

need for reconciliation of account between the parties

for the period November, 2007 to October, 2009. It has

further ordered that, if any amount is outstanding, the

respondent would be liable to pay the same amount to

the appellant herein and vice-versa and both the

parties were directed to reconcile the account within

four weeks. It has also awarded interest at the rate

of 12% per month from the date of deposit of

Rs.60,00,000/-, which amount was deposited pursuant to

interim order dated 16.12.2010 passed by the Tribunal

thereby staying the disconnection of electricity to the

respondent. It was made clear, that the said direction

of deposit was subject to payment of interest.

Therefore, by clarificatory order on the same day, the

Tribunal has stated that till the outcome of the

measure of reconciliation, as directed in the impugned

judgment and order by the parties, the amount would

carry with it interest at the rate of 12% per month

from the date of of deposit till the date of refund by

the appellant Company. The correctness of the said

judgment is questioned by the appellant Company by

filing an appeal under Section 18 of the TRAI Act.

Section 18 of the TRAI Act provides a statutory appeal 17

against the judgment and order of the appellate

tribunal to this Court on one or more grounds specified

in Section 100 of the Code of Civil Procedure (for

short 'CPC'). That means, that the statutory appeal

under Section 18 of the TRAI Act would lie only on a

substantial question of law. According to the

appellant-Company, it has framed a number of questions

of law which are, according to the learned counsel,

substantial questions of law. The same are reproduced

hereinbelow:

“a) Whether the Appellant being an instrumentality of the Central Government was entitled to the protection of Article 112 of the Limitation Act and thus the claim of the Appellant was covered by the limitation period of 30 years?

b) Whether the Ld. TDSAT erred in holding that in view of its findings in Petition No.186 of 2010, the Appellant cannot raise the demand for a period more than three years as per the Limitation Act and that the demand raised prior to October 2007 will not be admissible?

c) Whether the grant of interest by Ld. TDSAT from the date of decree was by way of a clerical or arithmetical mistake which could be corrected in exercise of its power under Section 152 of the Code of Civil Procedure?

d) Whether the Ld. TDSAT can grant interest to the Respondent who has not filed either review or an application seeking grant of interest in the main judgment?

e) Whether the notices dated 28.10.2010 and 12.11.2010 were in the nature of fresh demands or mere reminders to make good the short payments from July 2005 to October 18

2009 especially in view of the fact that the bills issued during the said period were never disputed by the Respondent?

f) Whether the stand taken by the Respondent that all billing issues for the period between July 2005 to October 2009 have been settled and closed since there was no claim/dispute raised by the Appellant is contrary to the various documents on record?”

In our considered view, the questions a, d, e and f

framed by the appellant Company in the Memorandum of

Appeal would not arise as substantial questions of law in

terms of Section 100 of CPC for the consideration of this

Court, in its statutory appeal having regard to the

undisputed fact that the Tribunal has recorded the

finding of fact on the basis of the relevant clauses of

the interconnect agreement between the parties and also

with reference to the legal contentions urged on behalf

of the appellant that it, being an instrumentality of the

Central Government, is entitled to the protection under

Article 112 of the Limitation Act and, therefore, it was

covered by the limitation period of 30 years. The said

contention is not tenable in law for the reasons already

enumerated in the earlier part of this judgment.

Therefore, the finding of fact recorded rejecting the

aforesaid contention by the Tribunal is perfectly legal

and valid. The same cannot be re-agitated by the

appellant Company by framing the substantial questions of 19

law namely a, d, e and f. The said finding is based on

proper interpretation of undisputed facts and the

relevant clauses of the interconnect agreement and

relevant clauses of the Schedule in the Limitation Act.

Insofar as the substantial questions framed at b & c in

the memorandum of appeal filed are concerned, they also

cannot be termed as substantial question of law as it is

a question of finding of fact recorded by the Tribunal

particularly having regard to the undisputed fact that

the Tribunal on the same day of pronouncement of

judgment, has awarded interest on the amount of

Rs.60,00,000/- payable after the reconciliation of the

account that is required to be done by the parties. The

said amount was deposited by virtue of an interim order

granted by the Tribunal not to disconnect the connection

of the respondent, as the disconnection notice issued by

the appellant Company was stayed by the Tribunal and such

direction was subject to payment of interest etc. on the

amount of deposit repayable by the appellant Company

after reconciliation and adjustment of the amount legally

due to the respondent. That means, the claim of the

appellant is not within the period of limitation and

therefore, the same do not constitute and cannot be

termed as substantial questions of law for consideration

of this Court and answer thereof.

20

For the reasons stated supra, there is no substantial

questions of law, which would arise for consideration of

this Court and the appeal must fail, which we order.

Accordingly, the appeal is dismissed.

Since we have dismissed the appeal, the question of

passing an order on the other application to give

direction on the application does not arise in these

proceedings. If the appellant is required to pay any

amount due to the respondent it is open for the

respondent to pursue the same in the manner known to law.

With this liberty I.A. No.2 is also disposed of.

...........................J. (V. GOPALA GOWDA)

..........................J. (AMITAVA ROY) NEW DELHI, SEPTEMBER 16, 2015 21

ITEM NO.101(PH) COURT NO.11 SECTION IV

S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS

Civil Appeal No(s). 1085/2008

BHARAT SANCHAR NIGAM LTD. Appellant(s) VERSUS PAWAN KUMAR GUPTA Respondent(s)

(With appln. (s) for permission to place addl. documents on record) WITH C.A. No. 3420/2012 (With appln.(s) for directions and Office Report)

C.A. No. 2409/2009 (With Office Report)

Date : 16/09/2015 These appeals were called on for hearing today.

CORAM : HON'BLE MR. JUSTICE V. GOPALA GOWDA HON'BLE MR. JUSTICE AMITAVA ROY

For Appellant(s) Mr. R.D. Agrawala, Sr. Adv.

Mr Pavan Kumar,Adv.

Ms. Maneesha Dhir, Adv.

Mr. Gagan Gupta,Adv.

Mr. Abhishek Kumar, Adv.

Mr. K. Vijay Kumar, Adv.

For Respondent(s) Mr. Upamanyu Hazarika, Sr. Adv.

Ms. Dharitry Phookan,Adv.

Mr. Paul Roy P., Adv.

Ms. Tatini Basu, Adv.

Mr. Suyodhan B., Adv.

Mr. G. Ramakrishna Prasad,Adv.

UPON hearing the counsel the Court made the following O R D E R

The appeals are dismissed in terms of the signed reportable judgment. No costs.

(VINOD KR.JHA) (S. K. RAKHEJA) (MALA KUMARI SHARMA) COURT MASTER COURT MASTER COURT MASTER

(Signed Reportable Judgment is placed on the file)