Important point
Section 120 of the Major Port Trust Act provides limitation of proceedings in respect to the things done under the Act. There are two requirements of filing of suit within six months of the accrual of the cause of action and it has to be preceded by one month notice.

Headnote:Major Port Trust Act, 1963—Section 120—Mechanised Ore Handling Plan—Levy of surcharge challenged—Respondent port trust commissioned a Mechanised Ore Handling Plan (MOPH) and prescribed rates for handling ore at MOPH—Board of Trustees issued a notification increasing the rates levying surcharge and prescribing a rebate on basis of achieving a particular turnover—Appellant engaged in exporting iron ore were allotted one plot—By a notification dated 26.10.1983, the Board increased the handling rate to Rs. 28.22 per tonne and fixed minimum rental surcharge of Rs. 8.80 per tonne—Appellant challenged levy of surcharge of Rs. 8.80 per tonne being illegal, without jurisdiction, null and void alleging that it was not co-related to any service rendered by the Board and that the levy was falling outside the purview of Section 48 of the Act—Appellant also raised dispute relating to the extent of alleged storage plot and the turnover required to be achieved by appellant during the year to be eligible for full rebate under the notification—Whether the suit is not maintainable for want of notice under Section 120 of the Act—(Yes)—Whether the suit is barred by the provisions of Section 120 of the Act—(Yes)—Limitation Act, 1963—Sections 3 and 5.
       Held : The respondent port trust commissioned a Mechanised Ore Handling Plan (hereinafter referred to as “MOPH”) at berth No.9 at Mormugao and prescribed rates for handling ore at MOPH. On 28.10.1983 the Board issued a notification increasing the rates levying surcharge and prescribing a rebate on the basis of achieving a particular turnover. It is during this period that the issue arose as to the actual plot capacity handed over to the appellant and whether a particular turnover on the plot was achieved. According to the appellant, considering plot capacity of 1,08,274 tonnes, the turnover of 8,66,192 metric tonnes would entitle the appellant to full rebate at the rate of Rs. 8.80 per tonne, which would come to Rs. 62,46,548.10 paise, instead of Rs. 7,09,835/- which the respondent Board had agreed to give. The respondent Board informed the appellant that they had turned around the plot only 6.25 times on the basis of the plot capacity of 1.5 lakh tonnes and were therefore entitled to rebate of Rs. 7,09,835/- only. On 12.04.1984 the appellant represented to the port trust and demanded full rebate @ Rs. 8.80 per tonne. Port trust by its letter dated 16.06.1984 refused to grant the full rebate as claimed by the appellant. On 11.09.1986 the appellant filed Civil Suit No.55/1986 for various reliefs referred to in the earlier part of the judgment. Port trust on 14.02.1997 filed its written statement raising the plea of limitation and failure to give statutory notice as per Section 120 and also denying the claim on merits. The appellant made an application under Order 12 Rule 6 for the decree on admission in view of the port trust’s letter dated 16.06.1984 referred to above. The appellant had claimed interest @ 18 on the amount due from the date the amount became payable till its actual payment. The port trust in reply to the application under Order 12 Rule 6 admitted the claim of Rs.7,09,835/- but denied its liability to pay any interest on the said amount. The Trial Court on 12.08.1987 passed a decree on admission with regard to the sum of Rs.7,09,835/- leaving the question of interest on the aforesaid amount open which was to be decided at the time of the adjudication of the main suit. The main suit was dismissed by the District Judge as being barred by time and not maintainable for want of notice. (Paras 15 and 16)
       The appellant had at no stage of proceedings had pleaded waiver of the plea of limitation or of the giving of the notice under Section 120 of the Act. The plaint was filed on 01.09.1986, Board had filed its written statement raising objections of limitations and maintainability of the plaint for want of notice on 18.02,1987. Application for decree on admission was filed on 12.04.1987 and reply to the said application was filed by the Board on 18.07.1987. The decree on admission was passed by the Trial Court for the sum of Rs. 7,09,835/- on 12.08.1987. After the framing of issues and after an application was made to try issues No.12 and 13 as preliminary issues on 22.12.1989, an application was filed by the appellant to amend the plaint. On 06.01.1990, a further application was filed by the appellant for further amendment of the plaint. Even though, the plaint was exhaustively amended after the decree on admission, plea of waiver was not taken in the plaint. The point regarding waiver was not argued before the Trial Court at any stage and even in the memo of appeal filed before the High Court ground of waiver was not taken. The question of waiver was taken up for the first time at arguments stage before the High Court. The respondent Board objected to the taking of the said point before the High Court for the first time during the course of arguments. (Para 23)
       The Major Port Trust Act, 1963 is a special Act and Section 120 of the said Act provides limitation of proceedings in respect to the things done under the Act. A perusal of this Section shows there are two requirements in the Section and both the requirements have to be read conjunctively and not alternatively. The suit has to be filed within six months of the accrual of the cause of action and it has to be preceded by one month notice. Admittedly, in the present case formal notice under Section 120 had not been issued. (Para 26)

Judgement Key Points

What is the time limitation and pre-condition notice requirement under Section 120 of the Major Port Trusts Act, 1963 for suits against port authorities?

Whether Section 120 of the Major Port Trusts Act, 1963 is constitutionally valid and rational in prescribing a shorter six-month limitation period with one-month notice?

How to treat a decree on admission under Order 12 Rule 6 CPC in relation to the subsequent challenge to limitation and notice requirements?

Judgment

Bhan, J.—These appeals by grant of leave are directed against the common judgment and order of affirmation passed by the High Court of Bombay at Goa in First Appeal No. 27 of 1992 and appeal from order No. 69 of 1991. The suit filed by the plaintiff-appellant (hereinafter referred to as ‘the appellant’) was dismissed by the District Judge, South Goa, Mormugao by judgment dated 30th December, 1991 on the ground that the same was not maintainable for want of notice under Section 120 of the Major Port Trust Act, 1963 (hereinafter referred to as ‘the Act’) and that the suit was barred by limitation. This judgment was challenged in First Appeal No. 27 of 1992. Prior to that District Judge vide order dated 30th April, 1991, had come to the conclusion that Section 120 of the Act was applicable to the present case. Against this order the appellant had filed an appeal from order 69 of 1991. The two appeals having arisen from the same suit were heard together and disposed of by the High Court by a common judgment. We propose to do the same.

2. We would referring to the facts necessary to dispose of the appeals as found by the High Court on which there is no dispute between the counsel for the parties.

3. Loading operation in relation to iron ore at Mormugao Port was sought to be regulated by the Mormugao Port( Shipment of Ore and Pellets from Mechanised Ore Handling Plant at berth No. 9 and related matters) Regulations, 1979. Respondent No.1- The Board of the Trustees of Mormugao (hereinafter referred to as ‘the Board’) was empowered to divide the storage area into plots of a size sufficient to hold approximately the quantity required to be loaded and to stipulate minimum tonnage turn over for each plot to qualify for allotment of plot. The appellant who is engaged in exporting iron ore were also allotted one such plot. Rates were prescribed per tonne of iron ore, handled through Mechanised Ore Handling Plan (MOPH) and revised from time to time. By a notification dated 26th October, 1983, the Board increased the handling rate to Rs. 28.22 per tonne and fixed minimum rental surcharge of Rs. 8.80 per tonne. The Board did this to ensure proper utilisation of berth and MOPH as it was found that there was under utilisation of the same by exporters. The justification for imposing the surcharge of Rs. 8.80 per tonne was that the Board had to pay Rs. 260.30 lakhs to the contractors for dredging a channel and widening the channel, so that all sea going vessels could use berth No.9. It is further the Board’s case that Rs. 7.16 lakhs towards income tax and Rs. 20.00 lakhs towards estimated liability arising out of the contract labour legislation had to be disbursed. As the Board had incurred heavy losses on account of level of utilisation of MOPH between Rs. 55.00 lakhs tonnes to 60.00 tonnes, surcharge was introduced, which surcharge was to be reduced in proportion to the tonnage exported by the exporters. This surcharge was subject to rebate for the plot allottee holding the plot for minimum period of one year on the following pattern:-

On achieving a level of Rebate (Rs. turnover Per tonne)

6.25 times of nominal plot capacity 1.00

6.50 times of nominal plot capacity 2.00

6.75 times of nominal plot capacity 3.00

7.00 times of nominal plot capacity 4.00

7.25 times of nominal plot capacity 5.20

7.50 times of nominal plot capacity 6.40

7.75 times of nominal plot capacity 7.60

8.00 times of nominal plot capacity 8.80

4. Appellant had challenged the levy of surcharge of Rs. 8.80 per tonne being illegal, without jurisdiction null and void as it was not co-related to any service rendered by the Board and that the levy was falling outside the purview of Section 48 of the Act. The High Court rejected the said challenge relying upon a judgment of this Court in M/s V.S. Dempo & Co. Pvt. Ltd. Vs. Board of Trustees and Another [1994 Suppl. (2) SCC 349]. An

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2005 Supreme(SC) 535

Important pointSection 120 of the Major Port Trust Act provides limitation of proceedings in respect to the things done under the Act. There are two requirements of filing of suit within six months of the accrual of the cause of action and it has to be preceded by one month notice.­

What is the time limitation and pre-condition notice requirement under Section 120 of the Major Port Trusts Act, 1963 for suits against port authorities?

Whether Section 120 of the Major Port Trusts Act, 1963 is constitutionally valid and rational in prescribing a shorter six-month limitation period with one-month notice?

How to treat a decree on admission under Order 12 Rule 6 CPC in relation to the subsequent challenge to limitation and notice requirements?

Cases Referred (6)

Important point
Section 120 of the Major Port Trust Act provides limitation of proceedings in respect to the things done under the Act. There are two requirements of filing of suit within six months of the accrual of the cause of action and it has to be preceded by one month notice.