JUDGMENT :

Ilesh J. Vora, J.

1. This Second Appeal under Section 100 of the Code of Civil Procedure, is at the instance of original defendant, directed against the judgment and decree dated 29.11.2008, passed by the First Appellate Court at Himmatnagar, in Regular Civil Appeal No. 76 of 2005, arising from the judgment and decree passed in RCS No. 13 of 1993, by the learned Principal Senior Civil Judge, Himmatnagar, decreed the suit filed by the respondent plaintiff – District Panchayat, Himmatnagar.

2. Brief facts of the case which emerged from the records are that, the respondent plaintiff had filed a suit for recovery of damages against the appellants defendants. The plaintiff – respondent is District Panchayat i.e. local authority, who had invited the tenders for the construction of M.I. Tank at Bamanbore, Taluka: Bhiloda for the estimated cost of the work valued at Rs.6,98,064=31 ps. In a bid, the appellants accepted the offer and had executed an agreement and accordingly, work order dated 02.05.1980 issued in his favour. The stipulated time was fixed for a period of 18 months. According to case of the respondent – plaintiff, the appellants failed to complete the said work in a stipulated time, as a result of which, the District Panchayat vide its resolution dated 10.07.1984 resolved to invite the tender at the risk and cost of the appellants – defendants. In these background facts, the District Panchayat filed a suit to recover the damages of Rs.4,84,388=65ps, inter-alia, stating that, the appellants were negligent and careless in execution of the contractual work and in violation of the terms and condition of the contract, they did not complete the work, which has caused the financial loss to the District Panchayat. The suit was contested by the appellants raising various issues, including the issue of limitation, inter-alia, stating that, the suit is filed after 7 years from the date of alleged breach of terms and condition of the contract and therefore, as per Article 55 of the LIMITATION ACT , within 3 years, the suit was not filed and it is time barred.

3. The trial Court framed the appropriate issues including issue of limitation and after appreciating the evidence on record, came to the conclusion that, the defendants – appellants contractor did not complete the work in a stipulated time and after giving sufficient opportunity, they failed to complete the work, which has caused the financial loss to the Panchayat local authority. The learned trial Court on the issue of limitation, found that the suit governed by Article 112 of the LIMITATION ACT , 1963, as the Panchayat being an instrumentality of the State Government, can be said to be a State Government and limitation as prescribed is 30 years. The learned trial Court did not accept the contention about the applicability of Article 55 of the LIMITATION ACT and accordingly, the suit was decreed as prayed. The appellants were directed to pay the amount of damages with interest at the rate of 16% p.a. The appellants being aggrieved with the said judgment and decree dated 31.08.1999, preferred an Civil Appeal before the District Court at Himmatnagar being RCA No. 76 of 2005. The first Appellate Court, after hearing the parties, vide its judgment and decree dated 20.11.2008 dismissed the Appeal. The first Appellate Court while confirming the decree passed by the Civil Court, held that the suit is filed within the period of limitation.

4. Being aggrieved with the aforesaid judgment and order of the first Appellate Court, the appellants – original defendants have preferred the present S