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PETITIONER: NAV RATTANMAL AND OTHERS

       Vs.

RESPONDENT: THE STATE OF RAJASTHAN

DATE OF JUDGMENT: 24/04/1961

BENCH: AYYANGAR, N. RAJAGOPALA BENCH: AYYANGAR, N. RAJAGOPALA GAJENDRAGADKAR, P.B. SARKAR, A.K. WANCHOO, K.N. GUPTA, K.C. DAS

CITATION:  1961 AIR 1704            1962 SCR  (2) 324  CITATOR INFO :  R          1967 SC1581  (19,20)  RF         1974 SC2009  (3,23)  R          1984 SC  95  (13)

ACT: Limitation-Sixty  years for suits by the  Government-Consti- tutionality  of-Indian  Limitation Act, 1908 (IX  of  1908), Art. 149-Constitution of India, Art. 14.

HEADNOTE: The Government filed a suit on the basis of a security  bond executed by a Government Treasurer and certain sureties  who joined  in  the execution of the bond.   The  contention  in defence,  inter  alia,  was  that art.  149  Of  the  Indian Limitation  Act prescribing a 60 years period of  limitation for   suits  by  the  Government  was  unconstitutional   as violative  of  Art. 14 Of the Constitution and as  such  the suit was barred under art. 83. Held, that statutes of limitation are designed for the bene- ficent public purpose of preventing the taking away from one what  he has been permitted to consider his own for  a  long time and on the faith of which he plans his future life. If the suit was by a private individual the suit would  have fallen  under art. 83 and would have been barred by  it  but different considerations arise in the case of the State  and there is a distinction between claims by the Government  and those of private individuals.  Article 149 Of the Limitation Act, 1908, which fixes a period of 60 years for suits by the Government has a reasonable basis of classification  between the Government and private individuals, and the exact period that  should  be allowed to the Government to  file  a  suit would  be  a matter of legislative policy and  as  such  its constitutional  validity cannot be questioned under Art.  14 Of the Constitution. Purushottam  Govindji Halai v. Desai, [1955] 2  S.C.R.  887, Collector  of  Malabar  v. Ebrahim, [1957]  S.C.R.  970  and Mannalal v.    Collector  of Jhalway, [1961] 2  S.C.R.  962, applied.

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JUDGMENT: CIVIL APPELLATE, JURISDICTION: Civil Appeal No. 454 of 1957. Appeal from the judgment and order dated December 16,  1954, of the Court of Judicial Commissioner, Ajmer in Civil Appeal No. 134 of 1952. A.   V. Viswanatha Sastri, S. N. Andley, Rameshwar Nath and P. L. Vohra, for the appellants. G.   C.  Kasliwal, Advocate-General, Rajasthan, S. K.  Kapur and T. M. Sen, for the respondent.                             325 1961.  April 24.  The Judgment of the Court was delivered by AYYANGAR,  J.-This is an appeal on a certificate granted  by the  Judicial Commissioner, Ajmer, and is  directed  against the judgment of that Court dated December 16, 1954 by  which the  decree in favour of the respondent-Union  of  India-was affirmed. Seth  Lal Chand Kothari-the original first appellant in  the appeal before us (he died pending this appeal and his  heirs have  been brought on record as his legal representatives appellants 1 to 6) was appointed by the Commissioner  Ajmer- Merwara as Government Treasurer, Ajmer-Merwara, by an  order dated  February  20, 1940, the treasuries to  be  under  his charge being two-that at Ajmer and a subtreasury at  Beawar. Before accepting office he had, under the rules, to  deposit Government promissory notes to the extent of Rs. 60,000  and also  execute  a Security Bond for a like  amount  with  two sureties  to  cover  any loss to  the  Government  in  these treasuries.  He accordingly made the deposit, and a security bond  was  executed by him on February 27,  1940  with  Seth Phool  Chand-who is now the 7th appellant in the appeal  and one  Seth Kanwarlal Ranka who died even before the suit  and was  not impleaded in it.  Thereupon Lal Chand  Kothari  was directed  to take charge of the office as Treasurer  and  he did so on March 6, 1940. We  are not concerned with the treasury at Ajmer,  but  only with  that at Beawar.  Lal Chand, at the time of his  taking charge, executed a receipt headed " charge-report" and in it is  recited  that  he  had  taken  over  from  the  previous incumbent  (VI.  L. Patni) the amount of cash which  tallied with what had to be in the treasury according to the  books. Nothing  happened between 1940 and 1948 and the business  at the  treasury  appeared  to  be  proceeding  regularly   and according to the rules.  It may be mentioned that there were the usual periodical checks and audits by 42 326 Government  officials  but  no  impropriety  was  discovered during these checks or audits.  On March 31, 1948, the Extra Assistant Commissioner, Ajmer, made a check of the  treasury at Beawar.  The treasury staff who ought to have been  there were  however  absent  in spite of their  having  had  prior intimation  of  his arrival and there-upon he  directed  the treasury  to be sealed.  There were two cash chests at  this sub-treasury-one  secured  with a single lock,  the  key  of which was with the staff of the Treasurer and the other with doublelocks, the keys of which were held, one by the  emplo- yee  of  the  Treasurer  and the  other  by  the  Government Treasury  Officer-the  Tahsildar.   A  verification  of  the balance in the two chests disclosed that a sum of 7 annas, 9 pies  was missing from the single-lock chest and Rs.  84,215 from  the  chest  with  the  double-lock.   The   Government thereupon  took  proceedings to realise the  missing  amount from  the  security  of  Rs. 60,000  which  had  been  under

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deposit.   The  Government  securities were  sold  and  they realized about rupees 58 thousands and odd leaving a sum  of Rs.  25,786-13-9 ,still due.  The Union of  India  thereupon filed  a  suitCivil Suit 125 of 1951  before  the  Sub-Judge First Class, Beawar on the security bond dated February  27, 1940  against  Lal Chand Kothari and Seth  Phool  Chand  for recovery  of this sum.  Several defences were raised by  the defendants  but  they  were  all  rejected  by  the  learned Subordinate  Judge who granted the respondents a  decree  in terms  prayed  for  in the suit.  The  defendants  filed  an appeal  to the Judicial Commissioner who dismissed  it,  but having  regard to the fact that some of the defences  turned on  the interpretation of the security bond  dated  February 27,  1940,  granted a certificate under Art. 133(1)  of  the Constitution and that is how the appeal is now before US. Neither  the  factum  of the loss by  embezzlement  nor  its amount  is  in  question, and the  only  points  raised  for consideration are: (1) whether on the terms of the bond  the decree  in favour of the appellants could be sustained;  (2) whether the claim in the suit was not barred by  limitation. The argument on this second                             327 point  was  that  if art. 83 of the  Indian  Limitation  Act governed  the  claim  it  would  be  barred,  and  that  the provision contained in art. 149 prescribing a 60-year period of   limitation  for  suits  by  the  Government   was   Si, unconstitutional  as  violative of Art. 14  of  the  Consti- tution.   It  is this last plea that has led to  the  appeal being heard by this larger Bench. As  regards  the  first point that the suit  claim  was  not comprehended within the terms of the security bond,  learned Counsel  made three submissions: (1) In order to render  the defendants liable, the loss sustained by the Government must be proved to have occured on or after March 6, 1940 on which date  alone Lal Chand Kothari took charge of  the  treasury. Though loss to the extent set out in the plaint did occur at the  treasury in Beawar, learned Counsel urged,  the  plain. tiff-respondent had not proved that it occurred after  March 6, 1940.  In other words, the argument was that there was no physical  checking  on March 6, 1940 when he took  over  and because  of this one could not be certain whether it  was  a loss  which had occurred during the period of  the  previous incumbent in office or could with certainty be attributed to the  period subsequent to March 6, 1940.  This argument  was rejected by the courts below and, in our opinion, correctly. In the face of the receipt executed by Lal Chand Kothari  it would not be open to him to contend that the recitals in  it were  not correct, and in any event it would be for  him  to show  that  it was incorrect and, of course,  there  was  no possibility of his establishing this. (2)  It was next urged that on the terms of the Bond read in the  context  of  the surrounding  circumstances  Lal  Chand Kothari would be liable only for the deficiency in the chest with the single-lock and not for the loss or embezzlement or deficiency  in  the other chest with the  double-lock.   The whole  basis of this argument was that the security  deposit of  Rs.  60,000 and the security bond for  the  like  amount executed by the Treasurer was an indication that it was with reference  to the amount which was the maximum in the  chest under the single-lock and from this feature it was 328 urged  that  it was the intention of the  parties  that  Lal Chand Kothari would not be responsible for any embezzlement, loss  or deficiency in the other chest.  This submission  is without any foundation, because the liability under the Bond

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would depend upon its terms and in the face of the  language used  in  the  document learned Counsel  realised  that  the submission could not be seriously maintained. (3)  The  last submission under this head was that the  loss having occurred in the chest with the doublelock, this could not have been without the connivance of Government officials and  that  therefore  the liability  of  the  Treasurer  was excluded.   Learned Counsel also drew our attention  to  the fact  that the terms of the bond made Lal Chand liable  even for  embezzlement  by government  officers,  notwithstanding that  he had no control over them.  But if Lal Chand  agreed to those terms-and this is not disputed, the terms must pre- vail.  Apart from the terms of the security bond however, it would  be apparent that if the key of one of the  locks  was with the employee of the Treasurer the defecation could  not have   occurred  without  such  employee’s   connivance   or negligence.   If  so,  the  fixing  of  liability  upon  the employer  could  not be characterised even  as  unreasonable apart from the liability flowing from the terms of the Bond, and  such  a  vicarious  liability  for  the  negligence  or misconduct of his servants, is not lessened by reason of the assistance or negligence of Government officials. These  exhaust  the points urged based on the terms  of  the Bond.  It remains to deal only with the contention that  the claim  is  barred  by  Limitation  under  art.  83  of   the Limitation  Act on the plea that art. 149 of the  Limitation Act  which  fixes  a period of 60 years  for  suits  by  the Government  is unconstitutional as violating Art. 14 of  the Constitution.   It is urged that there is no rational  basis for treating claims by Government differently from those  of private  individuals in the matter of the time within  which they could be enforced by suit. Learned  Counsel  urged  that statutes  of  limitation  were statutes of repose and enacted to ensure that stale                             329 claims were not agitated, so that after a reasonable  length of time people might proceed on the footing that they  would not be held liable for possible claims against them.  Basing himself  on  these principles, the argument of  the  learned Counsel  was  that for the purpose of  agitating  claims  no distinction could be drawn between Government and private  ’ individuals   and  that  on  no  rational  basis   could   a legislation  which permitted a longer period  of  limitation for claims by the State be sustained. It is, no doubt, true that Lord Kenyon described statutes of limitation  as "Statutes of repose" (vide per Dallas, C.  J. in  Tolson  v. Kaye (1)) and Bramwell, B.  as  "Statutes  of peace"  (Hunter v. Oibbons (2)), though  sometimes  contrary opinions  have been expressed.  In re Baker (3), Cotton,  L. J.  observed that pleas of limitation would never be  looked upon  with  any favour since they are used to  defeat  debts clearly  due.  It is however unnecessary to examine  further the  theory  underlying statutes of  limitation.   We  shall proceed  on  the  generally accepted  basis  that  they  are designed to effectuate a beneficent public purpose, Viz.  to prevent  the taking away from one what he has for long  been permitted  to consider his own and on the faith of which  he plans his life,, habits and expenses. This  however  does  not  militate  against  there  being  a rational  basis  for a distinction being drawn  between  the claims of the State and the claims of the individual in  the matter  of a provision of a bar of limitation for  enforcing them.  In considering this matter two points have to be kept separate:  (1)  whether a distinction could be  drawn  or  a classification  supported  between  the  provision  of   any

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variation in the time that should be available for enforcing claims  by private individuals and claims by the State,  (2) whether,  if such a classification were good, the period  of 60  years provided by art. 149 of the Indian Limitation  Act is such a long period of time as to be unreasonable.  We are drawing  attention  to  the distinction  between  these  two points because learned Counsel laid (1)  (1822) 2 Brod. & B. 217, 223: 129 E.R. 1267, 126g. (2) (1856) 26 L.J. Ex. 1, 5. (3) (1890) 44 Ch.  D. 262, 270. 330 much stress on the fact that the period, of limitation fixed by  art. 149 was 60 years and that this was an  unreasonably long  period of time.  If learned Counsel  is right  in  his submission  that  there  is no rational  basis  for  placing private individuals and the Government in different  classes while  framing  a legislation providing for  limitation  for actions  he might succeed; but if he is wrong there and  the correct   view  is  that  there  is  a  rational  basis   of classification,  then the period that should be  allowed  to the  Government  to  file  a  suit  would  be  a  matter  of legislative policy and could not be brought within the scope or  purview  of a challenge under Art. 14 or indeed  of  any other  article  in  the  Constitution.   It  is   sufficient therefore if we confine ourselves to the first point,  viz., whether   there  is  a  rational  basis  for  treating   the Government  differently as regards the period  within  which claims  might be put in suit between the Government  on  the one hand and private individuals on the other. First and foremost there is this feature that the Limitation Act,  though a statute of repose and intended  for  quieting titles,  and  in that sense looks at the  problem  from  the point  of view of the defendant with a view to  provide  for him a security against stale claims, addresses itself at the same time also to the position of the plaintiff.  Thus,  for instance, where the plaintiff is under a legal disability to institute  a  suit by reason of his being a minor  or  being insane  or an idiot, it makes provisions for. the  extension of   the  period  taking  into  account   that   disability. Similarly,  public  interest in a claim being  protected  is taken  into  account by s. 10 of the Act by  providing  that there  shall  be  no period of limitation  in  the  case  of express trusts.  It is not necessary to go into the  details of  these provisions but it is sufficient to state that  the approach  here is from the point of view of  protecting  the enforceability  of  claims  which,  if  the  ordinary  rules applied, would become barred by limitation.  It is in  great part  on  this  principle that it is said  that  subject  to statutory  provision,  while the maxim vigilantibus  et  non dormientibus jura Subveniunt is a rule for the subject,  the maxim nullum tempus occurit regi 331 is in general applicable to the Crown.  The reason  assigned was,  to quote Coke, that the State ought not to suffer  for the  negligence  of  its officers or  for  their  fraudulent collusion   with  the  adverse  party.   It  is  with   this background  that  the  question  of  the  special  provision contained  in art. 149 of the Act has to be viewed.   First, we  have the fact that in the case of the Government,  if  a claim  becomes barred by limitation, the loss falls  on  the public, i.e., on the community in general and to the benefit of the private individual who derives advantage by the lapse of time.  This itself would appear to indicate a  sufficient ground   for  differentiating  between  the  claims  of   an individual and the claims of the community at large.   Next,

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it  may  be  mentioned  that in  the  case  of  governmental machinery,  it  is  a known fact that it does  not  move  as quickly as in the case of individuals.  Apart from the delay occurring  in the proper officers ascertaining that a  cause of  action has accrued-Government being an impersonal  body, before   a  claim  is  launched  there  has  to  be   inter- departmental   correspondence,   consultations,    sanctions obtained  according  to the rules.  These  necessarily  take time and it is because of these features which are sometimes characterised  as  red-tape  that  there  is  delay  in  the functioning of government offices.  It is precisely for this reason that we have from the earliest Civil Procedure  Codes provisions  which  find  place in the  Code  of  1908,  like O.27,rr.5 and 7 reading:               "0. 27. r. 5. The Court in fixing the day  for               the Government to answer to the plaint,  shall               allow  a  reasonable time  for  the  necessary               communication with the Government through  the               proper   channel,   and  for  the   issue   of               instructions  to  the  Government  Pleader  to               appear and answer on behalf of the  Government               and may extend the time at its discretion.               0.    27.  r. 7(1).  Where the defendant is  a               public officer and, in receiving the  summons,               considers it proper to make a reference to the               Government before answering the plaint, he may               apply to the Court to               332               grant such extension of the time fixed in  the               summons  as may be necessary to enable him  to               make  such  reference and  to  receive  orders               thereon through the proper channel.               (2)   Upon  such application the Court.  shall               extend  the time for so long as appears to  it               to be necessary." These  matters  apart,  the  ratio  underlying  the  special provisions for summary recovery of amounts due to Government without  resort  to suits by a procedure not  available  for enforcing the dues of private individuals, like the "Revenue Recovery  Acts"  and "Public Demands Recovery  Acts"  which, have  been  on the statute book for over a century  is  also similar,  viz.,  the  interest  of the  public  and  of  the community in realising what is due to it expeditiously;  and the  constitutional  validity of such provisions  have  been sustained  by this Court.  In Purshottam Govindji  Halai  v. Desai  (1)  this Court held that s. 13 of  the  Bombay  Land Revenue  Act,  1876, by virtue of which a  person  had  been arrested in pursuance of a warrant issued for recovery of  a demand  certified  under s. 46(2) of the  Indian  Income-tax Act, did not offend Art. 14 of the Constitution.  Similarly, in  Collector  of  Malabar v. Ebrahim (2) the  arrest  of  a defaulter in respect of an income-tax demand under s. 48  of the Madras Revenue Recovery Act was held not to offend  Art. 14  of the Constitution.  Perhaps another decision  of  this Court  of more immediate relevance, in which the  point  now raised  that there is no rational basis  for  distinguishing between  the  claims  of the Government and  the  claims  of private individuals-was considered and negatived, is that in Mannalal  v. Collector, Jahalwar (3) in which  judgment  was delivered  on December 7, 1960.  In this last case  it  was urged before this Court that the summary mode of recovery of amounts  due to the Government for which provision was  made by the Rajasthan Public Recovery Act there impugned a  mode of recovery which was not available to the private  citizen- contravened the equal protection of

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(1) [1955] 2 S.C.R. 887.       (2) [1957] S.C.R. 970. (3) [1961] 2 S.C.R. 962. 333 the  laws  guaranteed  by Art. 14 and  this  contention  was repelled.    The  argument  of  learned  Counsel   for   the appellants  has therefore to be rejected both on the  around of  principle  as  well as on the  ratio  under-  lying  the decisions of this Court. The appeal fails and is dismissed with costs. Appeal dismissed.