In a significant ruling, the Supreme Court has held that the Limitation Act applies in its entirety to proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (PP Act). The Court delivered this judgment in New Mangalore Port Trust & Anr. v. Clifford D’Souza & Ors. (Civil Appeal Nos. 1796–1828 of 2024), clarifying that all provisions of the Limitation Act, including Section 18 regarding acknowledgment of liability, are applicable to recovery actions initiated under the PP Act.
Background
The dispute arose when the New Mangalore Port Trust (NMPT) issued retrospective demands for enhanced licence fees from several licensees, following a 2010 tariff revision by the Tariff Authority for Major Ports (TAMP) effective from February 20, 2007. The demands were contested on the ground that retrospective revisions were impermissible and that the recovery proceedings initiated under the PP Act were barred by limitation.
The Estate Officer issued recovery notices under Section 7(3) of the PP Act in August 2015. The licensees challenged these notices, and the District Judge allowed their appeals on the ground that the proceedings were time-barred. The Karnataka High Court upheld this finding. NMPT then approached the Supreme Court.
Parties’ Contentions
The appellants argued that:
- The respondents’ letters, particularly one dated February 4, 2015, acknowledged the debt, thus extending the limitation under Section 18 of the Limitation Act.
- The limitation period should be recalculated from the date of acknowledgment, extending the recovery window up to February 3, 2018.
- The principle laid down in New Delhi Municipal Council v. Kalu Ram (1976) 3 SCC 407, which recognized a three-year limitation period under Article 52 of the Limitation Act, should be followed in conjunction with Section 18.
In response, the respondents contended that:
- The plea of Section 18 was never raised before the lower courts or in the pleadings and should not be entertained at the appellate stage.
- Their communication did not constitute acknowledgment of liability but instead denied liability and requested deferral of payment pending appeal.
- The first statutory notice under the PP Act was issued only on August 12, 2015, beyond the three-year limitation period.
Court’s Analysis and Findings
The bench comprising Justice Vikram Nath and Justice Prasanna B. Varale held that the entire Limitation Act applies to proceedings under the PP Act. The Court stated:
“Once the Limitation Act applies, all its provisions will be applicable to the proceedings under the PP Act.”
The Court rejected the argument that the application of the Limitation Act could be limited to Section 3 alone, without extending the benefit of Section 18.
Referring to the respondents’ letter dated February 4, 2015, the Court observed:
“This acknowledgment was given in response to the demand by the lessor… well within the limitation of 3 years. The lessor as such would be entitled to the benefit of extension of limitation taking benefit of Section 18 of the Limitation Act.”
The Court concluded that the limitation period stood extended to February 3, 2018, thereby validating the Estate Officer’s proceedings initiated in August 2015.
Remand and Directions
The Court noted that the respondents’ intra-court appeals against the retrospective tariff revision are still pending before the Karnataka High Court without any interim relief. It held that the High Court should have awaited the outcome of those appeals before deciding NMPT’s writ petitions.
Accordingly, the Supreme Court:
- Set aside the High Court’s judgment,
- Restored NMPT’s writ petitions, and
- Directed the High Court to hear them after disposal of the pending intra-court appeals.
The Court clarified:
“If the intra-court appeals… are allowed… the demands would be liable to be withdrawn. However, if the respondents fail… they would be liable to pay the demand… along with interest admissible under law.”
