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1991 Supreme(MP) 64

1991 (0) MPLJ 933
S.K. Dubey, J.
Buddiprakash Sharma
vs
Nagar Palika
Decided On : 8 February, 1991

A notice under Section 319 of the M. P. Municipalities Act, 1961, is not necessary for a suit against the Municipal Council for the cost of construction of a drain, etc., based on a contract. The special limitation prescribed by Section 319 does not apply to claims for recovery of money due on a contract. A payment made by the Municipal Council by cheque is an acknowledgment of a debt under Section 19 of the Limitation Act, 1963.

Headnote:

MUNICIPALITIES - CONTRACT - NOTICE - LIMITATION - DEBT - ACKNOWLEDGMENT - SECTION 319 OF THE M. P. MUNICIPALITIES ACT, 1961 - SECTION 19 OF THE LIMITATION ACT, 1963 - WHETHER NOTICE UNDER SECTION 319 IS NECESSARY FOR SUIT AGAINST MUNICIPAL COUNCIL FOR COST OF CONSTRUCTION - WHETHER SUIT IS BARRED BY LIMITATION - WHETHER PAYMENT BY CHEQUE ACKNOWLEDGES DEBT UNDER SECTION 19 OF THE LIMITATION ACT.

Fact of the Case:

Plaintiff contracted with the Municipal Council to execute certain construction work. After completion of the work, the plaintiff was not paid the full amount due. The plaintiff issued notices to the Municipal Council, and a final payment cheque was issued by the Municipal Council. The plaintiff filed a suit for recovery of the outstanding amount, including compound interest. The trial court dismissed the suit, holding that a notice under Section 319 of the M. P. Municipalities Act, 1961, was not served on the Municipal Council and that the suit was barred by limitation.

Finding of the Court:

The High Court held that a notice under Section 319 of the M. P. Municipalities Act, 1961, was not necessary for a suit against the Municipal Council for the cost of construction of a drain, etc., based on a contract. The Court also held that the special limitation prescribed by Section 319 did not apply to claims for recovery of money due on a contract. The Court further held that the payment made by the Municipal Council by cheque was an acknowledgment of a debt under Section 19 of the Limitation Act, 1963, and that the suit was, therefore, within time.

Issues: 1. Whether a notice under Section 319 of the M. P. Municipalities Act, 1961, is necessary for a suit against the Municipal Council for the cost of construction of a drain, etc., based on a contract? 2. Whether the special limitation prescribed by Section 319 applies to claims for recovery of money due on a contract? 3. Whether the payment made by the Municipal Council by cheque was an acknowledgment of a debt under Section 19 of the Limitation Act, 1963?

Ratio Decidendi: 1. The language of Section 319 of the M. P. Municipalities Act, 1961, is 'pari materia' to that of Section 48 of the C. P. and Berar Municipalities Act, 1922, which has been held by a Division Bench of this Court in Bhaiyalal v. Municipal Committee, Murwara, 1958 MPLJ 251, not to require a notice before suing the Municipal Council for the cost of construction of a drain, etc., based on a contract. 2. A Division Bench of this Court in N. K. Gupta v. Mungaturam Bhagwandas (Firm), 1969 JLJ Note 59, has held that the special limitation prescribed by Section 401 of the M. P. Municipal Corporation Act, 1956, which is similar to Section 319 of the M. P. Municipalities Act, 1961, does not apply to claims for recovery of money due on a contract. 3. A debt is an obligation to pay a liquidated or certain sum of money. A payment made by cheque is an acknowledgment of a debt under Section 19 of the Limitation Act, 1963.

Final Decision: The appeal was allowed, the judgment and decree of the trial court were set aside, and the case was sent back to the trial court for its disposal afresh in accordance with law.

ORDER

S.K. Dubey, J.

1. This first appeal is by the plaintiff aggrieved of the judgment and decree of the trial Court (Court of Third Additional Judge to the Court of District Judge, Morena), whereby the suit of the plaintiff for recovery of Rs. 22,900/- was dismissed.

2. The plaintiffs case, in short, is that defendant/Municipal Council, Jaura, by accepting two tenders dated 1-2-1974, and then by order of the Chief Municipal Officer, Jaura, contracted with the plaintiff to execute certain construction work. The agreement was entered into in respect of the two tenders but no agreement was entered into in relation to construction of seven roads, which was given to the plaintiff on 15-1-1975 for 6 roads, and on 22-1-1975 for one road. Part payments were made from running bills, but when after completion of works, the full payments were not made, the plaintiff after correspondence issued notices, the last of which is dated 14-11-1977. After receipt of the notice a cheque of final payment was issued by the defendant on 26-12-1977. According to the plaintiff Rs. 8912.65 p. remained still due; hence, he instituted a suit on 19-12-1980 for recovery of the suit amount which included compound interest of Rs. 13988/- claimed at the rate of 1.5% per month on the amount due. The suit was resisted on various grounds. The trial Court dismissed the suit holding that as a notice Under Section 319 of the M. P. Municipalities Act, 1961 (for short, the 'Act') was not served on the defendant/Municipal Council, the suit was not maintainable. The trial Court also held that the constructions were completed in the year 1975 and suit instituted in 1980 was barred by time. It is against this judgment and decree that the plaintiff has preferred this appeal.

3. Shri J. R. Sharma with Shri Jai Prakash Sharma, learned counsel for the appellant, and Shri R. S. Vajpai, learned counsel for the respondent, were heard.

4. The contention of the counsel for the appellant, placing reliance on a Division Bench decision of this Court in Bhaiyalal v. Municipal Committee, Murwara, 1958 MPLJ 251, wherein while dealing with a case Under Section 48 of the C. P. and Berar Municipalities Act, 1922 (for short, the 'Act' of 1922), it was held that notice by a plaintiff before suing the Municipal Council for cost of construction of drain, etc., based on contract was not necessary nor the bar of limitation Under Section 48 of the Act of 1922 arises in such matters, has got a force. The language of Section 48 of the Act of 1922 is 'pari materia' to that of Section 319 of the Act, which are quoted juxtaposition as under : -

Section 48. Section 319.

"(1) No suit shall be "(1) No suit shall be instituted againt any instituted against any committee or any member, Council or any Councillor, officer or servant thereof officer or servant thereof or any person acting under or any person acting the direction of any under the direction such committee, of any such Council, member, officer or Councillor, officer servant for anything or servant for anything purporting to be done done or purporting to be under this Act, until done under this Act, the expiration of until the expiration two months next after of two months next after notice in writing a notice, in writing, stating the cause of stating the cause of action, the name and action, the name place of abode of the and place of abode intending plaintiff of the intending and the relief which plaintiff and the he claims, has been, relief which he in the case of a claims, has been, committee, delivered in the case of a or left at its office, Council delivered and, in the case of or left at its any such member, officer, office; and, in servant or person the case of any such as aforesaid delivered member, officer, to him or left at his servant or person office or usual place of as aforesaid, delivered abode, and the plaint to him or usual lace of shall contain a abode; and the statement that such plaint shall contain notice has been so a statement















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