The main legal point established in the judgment is the interpretation and application of the Limitation Act, 1963, specifically Articles 113, 18, and 55, in determining the period of limitation for filing a suit for recovery of money.

ORDER :

The plaintiff's suit for recovery of money claimed under a contract executed by and between the plaintiff and the defendant was partly decreed by the learned trial Court. In appeal, the suit has been dismissed by the High Court by holding the same to be barred by limitation. Aggrieved, the plaintiff has filed the instant appeal.

2. We have heard the learned counsels for the parties.

3. The High Court, in the order under challenge, firstly dealt with the individual claims made by the plaintiff for payment claimed to be due on account of extra works executed; for escalation of charges, etc. and thereafter went on to hold that the suit was barred by limitation. In holding the same, the High Court took into account the date of payment of the final bill to the plaintiff i.e. 13th January, 1981 to be the relevant date for determining the period of limitation for filing the suit which was so filed on 6th November, 1984. In its order, the High Court took the view that on an application of either Article 18 or 55 or 113 of the Limitation Act, 1963, as may be, as the claim in the suit was not made within a period of three years from the date of final payment i.e. 13th January, 1981 the same would be barred by time.

4. Learned counsel for the appellant - plaintiff has drawn the attention of the Court to certain documents exchanged between the parties subsequent to the date of final payment i.e. 13th January, 1981. The first is the legal notice by the plaintiff dated 16th May, 1981 (Exhibit P-20) wherein the plaintiff made a claim of Rs.32,19,994.99 under different heads including escalation in cost of materials and labour and also for extra items of works undertaken.

5. The defendant on receipt of the aforesaid notice, by communication dated 25th August, 1981 (Exhibit P-22), informed the plaintiff that "the matter is under study and a reply will be sent in due course" (underlining is ours). Thereafter, on 6th November, 1981 (Exhibit P-2) the defendant through its advocate informed the advocate of the plaintiff that the claims raised in the notice dated 16th May, 1981 (Exhibit P-20) stands rejected. Insofar as the claim (5), which pertains to the escalation in cost of materials and labour, the reply of the defendant is in the following terms:

"There is no escalation clause in the contract and as per the accepted conditions the rates shall be firm. As such, the above request of your clients is not acceptable. In fact your client is alone responsible for the delay in execution of the contract and the Board is entitled for damages and to levy penalty against your client."

6. Learned counsel for the appellant has argued that notwithstanding the receipt of final payment on 13th January, 1981 the plaintiff raised a claim for further payments on 16th May, 1981 by means of the legal notice (i.e. Exhibit P-20). The claim of the plaintiff was entertained by the defendant as would be evident from the defendant's letter dated 25th August, 1981 (Exhibit P-22) and the said claim was finally rejected on 6th November, 1981 (Exhibit P-2). According to the learned counsel in the aforesaid facts the communication dated 6th November, 1981 (Exhibit P-2) has to be understood to be the starting point for the computation of the period of limitation inasmuch as the cause of action for the suit arose on rejection of the claims made by the plaintiff by its legal notice dated 16th May, 1981 (Exhibit P-20). So construed, according to the learned counsel, the suit having been filed on 6th November, 1984 is within limitation as provided for under Article 113 of the Limitation Act, 1963.

7. Learned counsel for the appellant has further argued that insofar as the claim for escalation on account of materials and labour is concerned, the same has been rejected on the ground that the plaintiff is responsible for the delay and allowing any such escalation would be contrary to the express term of the agreement which provides that the rates offered by the plaintiff would remai