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2025 Supreme(Bom) 1089

IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD 
S.G. CHAPALGAONKAR, J.
M/s. D. V. Save - Appellant 
Versus
The State of Maharashtra through the Collector, Parbhani - Respondent
Second Appeal No.482 of 1995
Decided on : 17-07-2025

Advocates:
Advocate Appeared:
For the Appellant :Mr. S. S. Bora, Advocate
For the Respondent: Mr. V. S. Badakh, AGP

The court ruled that a plaintiff's right to sue under Article 113 of the Limitation Act accrues when they are aware of the cause for action, making a delay in filing the suit a bar to recovery.

Headnote:(A) Indian Limitation Act, 1963 - Article 113 - Suit barred by limitation - Plaintiff claims recovery of forfeited security deposit and penalty imposed during contract execution - Appellate Court held suit barred due to failure to file within limitation period set by Article 113; previous penalties and forfeiture actions initiated from 1966-67. (Paras 4, 5, 15)

(B) Partnership Act, 1932 - Section 69 - Requirement for registration of partnership firm - Defendant contended suit barred as Partnership firm registration not presented by plaintiff - Suit cannot proceed if partnership registration not evidenced. (Paras 6, 11, 12)

Facts of the case:
Plaintiff awarded contract for earth-work and lining, faced penalties and forfeiture after delays; due to equal incapacity, delay in action led to delays in suit initiation, finally submitting claim in 1975.

Findings of Court:
Suit filed by plaintiff was rightly rejected for being barred by limitation as per the findings of the Appellate Court; cause of action arose in 1967 after penalties were imposed.

Issues: Court addressed the issue regarding the starting point of limitation under Article 113 and the necessity of partnership registration under Section 69.

Ratio Decidendi: Court reaffirmed that the right to sue accrues when the plaintiff is aware of the grievance; delay in initiating suit ground for dismissal.

Result: Second Appeal dismissed.

Table of Content
1. plaintiff's suit initiation and factual context (Para 1 , 2)
2. defendant's arguments on limitation and contract breach (Para 3 , 5 , 6)
3. trial court's findings and limitation principles (Para 4 , 10 , 13)
4. contentions regarding legal notice and cause of action (Para 8 , 11 , 12)
5. court's analysis on cause of action and limitation application (Para 14 , 15 , 16)
6. dismissal of the second appeal (Para 17)

JUDGMENT :

S.G. CHAPALGAONKAR, J.

1. The appellant (original plaintiff) impugns judgment and decree dated 24.04.1995 passed by Additional District Judge, Parbhani in Regular Civil Appeal No.10/1985, thereby dismissing plaintiff’s suit by reversing judgment and decree dated 12.01.1984 passed by Civil Judge Senior Division, Parbhani, in Regular Civil Suit No.27/1975, by which plaintiff’s suit for recovery of amount of Rs.33,650/- was decreed against State of Maharashtra.

2. In nutshell plaintiff contends that he was allotted tender for Earth-Work and Lining in Mile Nos.26 and 27 by Executive Engineer, I & P Department, Purna Project, Camp Basmath. The work of Lining in Mile No.26 was to be completed within 12 months from the date of work order dated 16.12.1964. During execution of work, defendant imposed penalty under various communications during period from 1966 to 1967 and finally took action under Clause 3(a) of Contract, thereby forfeiting security deposit and withdrawal of work. On 12.04.1967, plaintiff was called for final measurement, which was closed on 26.04.1967. On 27.04.1967 security deposit is forfeited. On 28.07.1967, Executive Engineer informed plaintiff that final bill for Mile Nos.26 and 27 is received in his office and asked plaintiff to attend office on or before 31.07.1967. Again by communication dated 09.09.1967, plaintiff was called upon to attend office of defendant within period of ten days. However, plaintiff could not attend office, since he was suffering from Typhoid. On 18.06.1975 plaintiff served legal notice to defendant for recovery of forfeited security deposit, penalty and cost of work done as shown in final bill, which was not complied. Hence, he instituted suit for declaration and recovery of amount on 29.08.1975.

3. The defendant refuted plaintiff’s claim contending that as general progress of work was unsatisfactory and plaintiff failed to comply his obligation within stipulated period, hence action under Clause 3(a) and (b) of Contract was taken and work was withdrawn from plaintiff under Clause No.15 of agreement with a view to get work done by other agency. It is stated that time provided for completion of work was two years from 16.12.1964 till 15.12.1966. The penalty was imposed from 16.12.1965 in view of terms of agreement. The plaintiff expressed his inability to execute work vide his communication dated 11.03.1967. The defendant was constrained to levy penalty to the tune of Rs.500/- per day and also forfeit security deposit of Rs.18,868/- and fine of Rs.7210.25/-. It is further stated that suit instituted on 29.08.1975 is clearly barred by limitation as cause of action to file suit arose in the year 1967.

4. The Trial Court framed as many as 14 issues based on pleadings of parties, including issue of limitation and concluded that plaintiff is entitled for recovery of amount of Rs.33,650/- alongwith interest @ 6% per annum from the date of institution of suit alongwith notice charges of Rs.125/-. The Trial Court observed that suit is governed by Article 113 of Indian LIMITATION ACT and since plaintiff was not provided with final bill and copies of measurement books, limitation would start from 17.05.1975 i.e. date of issuance of suit notice (Exhibit-100). Thus, suit instituted on 29.08.1975 is well within limitation.

5. Aggrieved defendant filed Regular Civil Appeal No.10/1985 before District Judge at Parbhani. The learned District Judge allowed Appeal holding that suit is barred by limitation, since defendant’s office had invoked provision of Clause No.2 of agreement

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