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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. 1085/2008, he remained unrepresented.

For  the  sake  of  convenience,  the  facts  are

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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,

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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

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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

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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

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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.  

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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