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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.10763 of 2011

ARISING OUT OF

SPECIAL LEAVE PETITION (CIVIL) NO. 1352 OF 2011

M/S. DISHA CONSTRUCTIONS & ORS.           Appellants

                VERSUS

STATE OF GOA & ANR.                       Respondent(s)

JUDGMENT

GANGULY, J.

1. Heard learned counsel for the parties.

2. Leave granted.

3. A suit was filed by the appellants praying for  

payment of money which according to the appellants was  

due to them for undertaking the construction work on  

behalf of the defendants. The suit was dismissed by a  

judgment  and  order  dated  12th November,  2009  by  the  

District Judge, North Goa, Panaji, inter alia, holding  

that the plaint cannot be registered as it was barred  

by limitation as also in view of the fact that there  

was  no  compliance  with  Section  80  of  the  Civil  

Procedure Code insofar as notice on defendant No. 2 is

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concerned.

4. On an appeal before the High Court, the High Court  

was  pleased  to  hold  that  the  suit  is  barred  by  

limitation  but  on  the  question  of  notice,  the  High  

Court  came  to  a  different  finding  and  came  to  the  

conclusion that notice was served. The material facts  

of the case are as follows:

5. The  appellants-plaintiffs  entered  into  an  

agreement with respondent No. 1 for construction of a  

school auditorium for Fr. Agnelo High School under M.P.  

L.A.D.  scheme.  On  completion  of  the  work  on  30th  

September, 2006 defendant No. 2 issued a certificate of  

completion dated 3rd October, 2006. Out of the total  

amount of Rs.24,26,000/- the appellants plaintiffs were  

paid  only  Rs.18,12,000/-  and  therefore,  there  was  a  

balance amount to be paid. The appellants plaintiffs  

prayed for the payment of the balance amount but it was  

denied and the same remained unpaid from 30th September,  

2006 and a suit was filed on 24th October, 2009 for  

recovery of a sum of Rs.9,15,550/- with interest at  

18%.

6. The first question, which was examined by the High  

Court, was whether notice under Section 80, CPC was  

required to be given to defendant No. 2? The High Court  

came to the conclusion that such notice was necessary.  

The High Court observed as follows:

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“Since  the  suit  was  filed  by  the  plaintiffs  against  defendant  No.  2  in  his  official  capacity,  in  my  opinion,  the  defendant No. 2 was certainly required to be  given a notice, as required under Section 80  of the Civil Procedure Code and in absence of  the same, the suit filed against him had to  be necessarily considered as bad in law for  want of notice. However, that cannot be said  to  be  fatal  to  the  entire  case  of  the  plaintiff  because  the  plaintiff's  suit  was  essentially  for  recovery  of  money  and  as  could be seen from the prayer clause (a) it  was filed against defendant No.1. A similar  view was held by the Apex Court in Ram Kumar  Vs. State  of Rajasthan, AIR  2008 (10)  SCC  73.”

7. It is a common ground that High Court correctly  

noted the relevant facts, which are as under:

“...according to the plaintiff, the cause of  action  had  arisen,  as  pleaded  by  the  plaintiff, on 30/09/2006 and being so, the  suit against defendant No. 1 had to be filed  before 30/9/2009 that is to say before the  expiry of three years, that being the period  prescribed, for filing a suit for recovery  of money. There is no dispute that the suit  was in fact filed on 24/10/2009. There is  also no dispute that the plaintiff had sent  notice  to  defendant  No.  1  on  19/02/2009  which  was  received  by  defendant  No.  1  on  27/02/2009. If two months are computed from  27/02/2009, the plaitiffs were required to  file the suit on 27/04/2009.”

8. Upon  setting  out  the  aforesaid  fact,  the  High  

Court has noted that the notice under Section 80 was  

served on Defendant No. 1 on 27th February, 2009 and the  

period of two months had expired on 27th April, 2009.  

According to the High Court, the period of limitation  

expired on 30th September, 2009 and therefore, the suit  

which was filed on 24th October, 2009, was barred by  

limitation.

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9. Assailing the aforesaid finding, learned counsel  

for  the  appellants  has  drawn  our  notice  to  the  

provision of Section 15(2) of the Limitation Act which  

is contained under Part III of the Limitation Act, 1963  

(hereinafter referred to as 'the Act'). Part III is  

under the heading “Computation of period of limitation”  

and Section 15 deals with “Exclusion of time in certain  

other cases”. Sections 12, 13 and 14 also deal with  

exclusion  of  time  in  different  situations  such  as  

“Exclusion of time in legal proceedings”, “Exclusion of  

time in cases where leave to sue or appeal as a pauper  

is applied for” and “Exclusion of time of proceeding  

bona fide in Court without jurisdiction” respectively.

10. Section  15(2)  which  is  relevant  for  our  

consideration  deals  with  exclusion  of  time  which  is  

required to be given for a notice and there is also an  

explanation which is appended to Section 15. The said  

Section 15(2) reads as follows:

15.  Exclusion  of  time  in  certain  other   cases.—

(1) ...

(2) In computign the period of limitation  for any suit of which notice has been given,  or  for  which  the  previous  consent  or  sanction  of  the  Government  or  any  other  authority  is  required,  in  accordance  with  the  requirements  of  any  law  for  the  time  being in force, the period of such notice  or, as the case may be, the time required  for obtaining such consent or sanction shall  be excluded.

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Explanation.—In excluding the time required  for obtaining the consent or sanction of the  Government or any other authority, the date  on  which  the  application  was  made  for  obtaining the consent or sanction and the  date  of  receipt  of  the  order  of  the  Government or other authority shall both be  counted.

11. It may be noted that the present Section 15(2) is  

a little more comprehensive than the previous Section  

15(2)  of  the  Limitation  Act,  1908  which  reads  as  

follows:

15.Exclusion of time during which proceedings  are suspended.-

(1) ...

(2)  In  computing  the  period  of  limitation  prescribed for any suit of which notice has  been  given  in  accordance  with  the  requirements of any enactment for the time  being in force, the period of such notice  shall be excluded.  

12. We  are  of  the  view  that  in  the  facts  and  

circumstances of this case, the notice under Section  

80 was admittedly given on 19th February, 2009 which is  

within  the  period  of  limitation  and  the  same  was  

received on 27th February, 2009 and two months from the  

date of receipt expired on 27th April, 2009.

13. The High Court has held, in our view erroneously,  

that since the suit was filed on 24th October, 2009,  

which is beyond 30th September, 2009, the plaintiffs  

appellants  are  not  entitled  to  the  benefit  of  

exclusion statutorily provided under Section 15(2) of  

the Act and the suit is barred by limitation.

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14. The  said  interpretation  of  the  High  Court  is  

erroneous in view of the fact that if the notice under  

Section  80  had  been  given,  say,  on  29th September,  

2009, in that case the appellants according to High  

Court's  interpretation,  would  have  been  given  the  

benefit  of  exclusion  of  time  after  30th September,  

2009.  Just because the appellants gave the notice  

before the expiry of the period of limitation, the  

benefit which is given under Section 15(2) of the Act  

cannot be taken away. We are of the view that the said  

period of two months must be computed and benefit of  

exclusion of the said two months must be given to the  

appellants  even  if  they  had  given  the  said  notice  

within the period of limitation. If the appellants had  

given  the  notice  after  the  expiry  of  period  of  

limitation,  say,  after  30th September,  2009,  then  

possibly they could not have been given the benefit.  

In this connection, we may refer to the decision of  

this Court in  Union of India & Ors. Vs. West Coast  

Paper Mills Ltd. & Anr. (2004) 3 SCC 458, where in a  

somewhat  similar  situation,  this  Court  has  held  as  

follows:

“Any  circumstance,  legal  or  factual,  which  inhibits  entertainment  or  consideration by the Court of the dispute on  the  merits  comes  within  the  scope  of  the  Section and a liberal touch must inform the  interpretation of the Limitation Act which  deprives the remedy of one who has a right”.

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15. We are in respectful agreement with the aforesaid  

principles  laid  down  by  this  Court  though  in  the  

context  of  considering  Section  14  of  the  Limitation  

Act. We are of the view that the same principles should  

be applied while considering the provision of Section  

15(2) of the Limitation Act. The statutory provision in  

this connection is very clear and in the definition  

clause also it has been made clear in Section 2(j) of  

the Act. Under Section 2(j) of the Act, the “period of  

limitation” means the period prescribed for any suit,  

or other proceeding by the Schedule and the “prescribed  

period”  means  the  period  of  limitation  computed  in  

accordance with the provisions of the Act. If we follow  

the aforesaid principles, as we must, we find that the  

erroneous interpretation which has been given by the  

High  Court  will  have  the  effect  of  denying  the  

appellants the benefit of Section 15(2) which is not  

permissible in the eye of law.

16. In our view, proper interpretation of Section 15(2)  

of the Act would be that in computing the period of  

limitation, the period of notice, provided notice is  

given  within  the  limitation  period,  would  be  

mandatorily excluded. That would mean a suit, for which  

period of limitation is three years, would be within  

limitation even if it is filed within two months after  

three years, provided notice has been given within the

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limitation period. In such a case, the period of notice  

cannot  be  counted  concurrently  with  the  period  of  

limitation. If it is done, then period of notice is not  

excluded. Any other interpretation would be contrary to  

the express mandate of Section 15(2) of the Act.

17. We, therefore, set aside the order of the High  

Court and we hold that the suit is within the period of  

limitation.  Since,  on  the  question  of  notice,  the  

finding of the trial Court has been overruled by the  

High Court and the High Court has held that the notice  

has been served on defendant No. 1 and against such  

finding there is no cross objection, we are of the view  

that the notice in this case has been served.

18. Therefore, we direct that the suit may be heard  

out  now  on  merits  by  the  trial  Court  as  early  as  

possible. We, however, do not make any observation on  

the merits of the controversy between the parties.

19. The appeal is accordingly allowed. No costs.

.............................J. (ASOK KUMAR GANGULY)            

.............................J.   (JAGDISH SINGH KHEHAR)          

NEW DELHI, 09-12-2011