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Laxmichand Kalyanji v. Municipal Corporation Of Greater Bombay .
Factual and Procedural Background
These two appeals arise from two identical judgments and decrees of the learned Judge, City Civil Court, Mumbai, in L.C. Suit Nos. 638 and 639 of 2001, whereby the respective suits were dismissed as barred by limitation. The suits challenged two show-cause notices, both dated 23 May 1994, issued under Section 351 of the Bombay Municipal Corporation Act (BMC Act) to the appellants, calling upon them to show cause why unauthorised extensions to their shops should not be removed or demolished. After replies and hearings, the Deputy Municipal Commissioner of Greater Bombay passed orders on 2 September 1994 directing the appellants to remove the illegal structures forthwith and, failing that, directed the Ward Officer, H-West Ward to demolish them at the risk and cost of the plaintiffs. The trial court dismissed both suits as time-barred. The appellants challenged that dismissal by filing these appeals.
Legal Issues Presented
- Whether the cause of action for challenging the municipal action (show-cause notices and subsequent orders) accrues from the date of the notices/orders (here, 2 September 1994) or only upon implementation/execution (e.g., actual demolition), for the purpose of computing limitation under Section 527(1)(b) of the BMC Act.
- Whether the judicial authorities and precedents relied upon by the appellants (notably Virendra Singh v. Municipal Corporation) were applicable to these facts and could support postponing the commencement of the limitation period until execution of the orders.
Arguments of the Parties
Appellants' Arguments
- The suits were within the period of limitation; the trial court's finding that they were time-barred was palpably erroneous and illegal.
- So long as the notices and/or orders directing demolitions were not implemented (i.e., no demolition had occurred), the cause of action for filing suit continued — the limitation period should not begin from the date of the notices or orders.
- Relied on the judgment of the Gujarat High Court in Virendra Singh v. Municipal Corporation of City of Assam (AIR 1990 Guj 40) to support the proposition that the life or effect of notices and the timing of implementation can affect accrual of cause of action.
Respondent/Corporation's Arguments
- The respondent-corporation opposed the appellants' submissions that limitation had not begun to run from the date of the impugned orders.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Virendra Singh v. Municipal Corporation of City of Assam, AIR 1990 Guj 40 (Gujarat High Court) | Held (as relied upon by appellants) on matters concerning challenge to notices and the life/effect of notices — suggesting limitation may not run from the date of a notice alone. | The court held this precedent was not applicable to the present appeals because in Virendra Singh the notice alone was the subject of challenge, whereas in the present cases the notices culminated in definitive orders dated 2 September 1994; consequently, the challenge was in substance to those orders rather than to the notices themselves. |
| Mst. Rukhmabai v. Lala Laxminarayan, AIR 1960 SC 335 (Supreme Court) | Explains when a threat gives rise to a compulsory cause of action: only when the threat effectively invades or jeopardizes the right (a clear and unequivocal threat), not every ineffective or innocuous threat. | The court applied this principle to conclude that the orders of 2 September 1994 were clear, effective, and unequivocal threats (directions to remove forthwith and to demolish at risk/cost), so the cause of action accrued on that date. |
| Chief Justice of Andhra Pradesh v. L.V.A. Dikshitulla, AIR 1979 SC 193 | Where two constructions are possible, choose the one that ensures smooth, harmonious working of the statute and avoids uncertainty, friction or conflict. | The court used this principle to interpret Section 527(1)(b) of the BMC Act strictly, holding that limitation must commence immediately after accrual of cause of action to avoid uncertainty. |
| National Sports Club v. Nandlal, 1998 (1) Mh LJ 134 (Single Judge of Bombay High Court) | Held that a litigant can sue only when there is an effective infringement of his legal right; whether an infringement is effective depends on the facts, quality, mode, manner and effectiveness of the threat. | The court found that National Sports Club was not of assistance to the appellants because, on these facts, the 2 September 1994 orders constituted an effective, clear and unequivocal threat giving rise to cause of action on that date. |
| Mt. Bolo v. Mt. Koklan, AIR 1930 Privy Council 270 | There is "no right to sue" unless there is an accrual of the right asserted in the suit and its infringement or at least a clear and unequivocal threat to infringe that right. | The opinion cited this principle to support the general rule that only clear and effective threats give rise to a cause of action; applied in context to find the orders here were sufficiently clear to trigger accrual on 2 September 1994. |
| Kandasami Pillai v. Munisami Mudaliar, AIR 1932 Mad 589 | Followed the Privy Council principle that a threat or overt act is necessary before a cause of action accrues; mere knowledge of a potentially adverse instrument does not itself create a cause of action absent a threat or enforcement action. | Used to underpin the Court's view that accrual depends on overt acts or effective threats; applied to find accrual on the date of the impugned orders rather than earlier events. |
| Pothukutchi Appa Rao v. Secretary of State, AIR 1938 Mad 193 | Summary principle: a bare repudiation of title, without an overt act, does not make it incumbent to bring a declaratory suit; overt acts are required. | Cited to reinforce that mere denial or repudiation is not enough; the court found the present orders involved overt and effective threats amounting to accrual. |
| Mohd. Yunus v. Syed Unnissa, AIR 1961 SC 808 | Holds that a mere denial of a right does not furnish a cause of action; the right to sue accrues when the right is denied or challenged by overt act. | The court relied upon this to state that the notices were followed by an overt and effective order (dated 2 September 1994) and therefore the cause of action accrued on that date. |
Court's Reasoning and Analysis
The court undertook a factual and legal analysis focusing on the chronology and the nature of the acts complained of:
- Fact-findings: The appellants received show-cause notices under Section 351 of the BMC Act dated 23 May 1994, filed replies, and were heard. The Deputy Municipal Commissioner then passed orders dated 2 September 1994 directing immediate removal of the unauthorised extensions and authorising demolition by the Ward Officer if the appellants did not comply.
- Nature of threat: The court examined whether the notices/orders constituted an effective, clear and unequivocal threat that would trigger a compulsory cause of action. Relying on Mst. Rukhmabai and other authorities, it reiterated the legal test that not every threat gives rise to a cause of action — only those that effectively invade or jeopardize the right.
- Application of the test: The orders of 2 September 1994 were found to be neither innocuous nor ineffective; they were direct, immediate ("forthwith") and backed by a directive to the Ward Officer to demolish at risk and cost. These attributes rendered the threat clear and effective, thereby causing accrual of the cause of action on that date.
- Statutory limitation: Section 527(1)(b) of the BMC Act prescribes that no suit against municipal authorities shall be instituted unless commenced within six months next after accrual of the cause of action. The court interpreted this provision strictly and held that the limitation period begins to run immediately after accrual of cause of action; there is no statutory basis to postpone commencement of limitation until execution of an order.
- Choice of precedent and avoidance of uncertainty: The court rejected the applicability of the Virendra Singh decision because, on its facts, Virendra Singh concerned challenge to a notice alone and to the life/effect of a notice; in contrast, the present cases involved final orders which superseded the notices. The court invoked the principle (from Dikshitulla and Lord Shaw) that interpretative choices must avoid introducing uncertainty or friction into the statutory scheme. Accepting the appellants' stance would produce uncertainty as to when limitation begins to run.
- Conclusion from analysis: Because the cause of action accrued on 2 September 1994 when unequivocal orders were passed, the suits should have been filed within six months thereafter; the trial court was therefore correct in holding the suits barred by limitation.
Holding and Implications
Holding: The appeals are dismissed. The trial court's judgments and decrees dismissing the suits as barred by limitation were upheld.
Implications:
- The direct effect on the parties: The trial court's dismissal of the suits for being time-barred stands; the appellants' challenges to the orders dated 2 September 1994 were held to be barred by limitation and the appeals have been dismissed in limine with no order as to costs.
- On legal principle: The court confirmed that where a municipal authority issues an order directing immediate removal/demolition (a clear, effective and unequivocal threat), the cause of action accrues on the date of that order and the six-month statutory limitation under Section 527(1)(b) of the BMC Act begins to run from that date. The court expressly rejected the relevance of decisions which postpone accrual until execution where, on the facts, the challenge is to a subsisting, final order rather than to a notice.
- No broader declaratory change in law was announced beyond application of established principles to the facts of these cases; the decision affirms the trial court's limitation-based dismissal in these specific matters.
Appeals dismissed. Both appeals are dismissed in limine with no order as to costs.
1. Heard parties.
Perused record and proceedings. These two appeals are directed against the two identical judgments and decrees passed by the learned Judge, City Civil Court, Mumbai in two different suits bearing L.C Suit Nos. 638 and 639 of 2001, whereby the suits have been dismissed.
2. The facts, in nut shell, are:
The parties are different but the issue are identical, so a single judgment will dispose of both appeals. In the suits, challenge was to two show-cause notices both, dated 23rd May 1994 issued under S. 351 of the Bombay Municipal Corporation Act (“BMC Act” for short) by the respondent/corporation to the respective appellants calling upon them to show cause as to why unauthorised extensions made by them to their existing shops should not be removed or demolished. The said two show cause notices after hearing the respective notices culminated in two separate orders, both dated 2nd September 1994, passed by the Deputy Municipal Commissioner of Greater Bombay, who was pleased to hold that the appellants being in possession and occupation of the unauthorised and illegal structures were bound to remove the same forthwith failing which Ward Officer, H-West Ward was directed to demolish the same at the risk and cost of the plaintiffs.
3. Both suits filed by the respective appellants were dismissed by the trial Court holding them to be barred by limitation. Being aggrieved by the dismissal of suits, the appellants have preferred these two appeals.
THE ARGUMENTS
4. The contention sought to be canvassed by the appellants was that the suits were well within limitation. The findings recorded by the trial Court being palpably erroneous and illegal needed to be set aside. The submission is that so long as the notices and/or orders directing demolitions are not implemented, and/or action pursuant thereto is not taken, the cause of action for filing suit continues. The period of limitation cannot be treated to have started running from the date of notices or orders under challenge. The reliance is sought to be placed on the judgment of the Gujarat High Court in the case of Virendra Singh v. Municipal Corporation of City of Assam reported in AIR 1990 Guj 40. The respondent-corporation opposed above submissions canvassed by the appellants.
ANALYSIS OF SUBMISSION
5. In order to analyse the above contention, one has to take into account the facts involved in the appeals in hand. The facts would clearly show that in pursuance of the show cause notices issued under s. 351 of the bmc act both these appellants had shown cause by filing their respective replies. They were heard by the Deputy Municipal Commissioner of Greater Bombay, who, after hearing them was pleased to pass orders on 2nd September 1994 directing both of them to remove their respective illegal structures forthwith. Thus notices issues under s. 351 of the bmc act were culminated in the orders directing removal of illegal structures forthwith. Thus the threats to demolish or remove illegal structures through the orders in question were clear and unequivocal. No further action or warning under the BMC Act is contemplated. The next action contemplated is the execution of the said orders passed under the provisions of the Act.
6. In the light of the above facts, if one turns to the judgment of the Supreme Court in the case of Mst. Rukhmabai v. Lala Laxminarayan reported in AIR 1960 SC 335, it would be clear that the Supreme Court had an occasion to consider the question as to what type of threat to the plaintiffs gives rise to a compulsory cause of action. As ruled by the Supreme Court, it all depends upon the question whether that threat effectively invades or jeopardizes the said right. Following observations are very relevant and applicable to the facts of the present appeals (at page 349):
“Every threat by a party to such a right, however, ineffective and innocuous it may be, cannot be considered to be a clear and unequivocal threat so as to compel him to file a suit. Whether a particular threat gives rise to a compulsory cause of action depends upon the question whether that threat effectively invades or jeopardizes the said right. “Para 33 of the reported judgment).
(Emphasis supplied).
7. In the present appeals, the threats of demolition given to both appellants, through the impugned orders of Deputy Municipal Commissioner of Greater Bombay dated 2nd September 1994, were not innocuous but they were clear and effective. Directions to remove illegal extensions issued to both appellants were with immediate effect i.e forthwith. In this view of the matter, compulsory cause of action had accrued in favour of the plaintiffs on 2nd September 1994 to file suits and challenge the orders passed by the Deputy Municipal Commissioner of Greater Bombay. Therefore, in my opinion, limitation for filing suit had started running from 2nd September 1994. The suits, thus, ought to have been filed within six months next after the accrual of cause of action. As already found, cause of action for filing suits having been accrued on 2nd September 1994, any suit beyond period of six months can hardly be said to be within a period limitation. Thus the trial Court was perfectly justified in holding that both suits were barred by limitation.
8. Having considered the submissions and examined the judgment of the Gujarat High Court in the case of Virendra Singh (supra), first of all I must make it clear that this judgment is not at all applicable to the facts of the present appeals. In the case of Virendra Singh (supra) the notice alone was a subject-matter of challenge. The effect and operation of the notice coupled with life of notice was under consideration. But in the cases at hand, the notices issued under s. 351 of the bmc act having culminated in the impugned orders passed by the Deputy Municipal Commissioner dated 2nd September 1994, the challenge in substance is to the orders passed by the Corporation authorities and not the notices issued by them though the prayer clauses incorporated in the plaint give that picture. The notices issued under s. 351 of the bmc act have outlived their life. Thus on facts of the present appeals, judgment sought to be relied upon is not at all applicable.
9. The submissions made on behalf of the appellants, if accepted, would lead to uncertainty. The question would remain unanswered as to from which point of time, the limitation to challenge action would start running. It is not possible to fix the starting point of limitation on the text of S. 527(1)(b) of the BMC Act, if the contention canvassed by the appellants is to be accepted. The relevant part of S. 527 reads as under:
“527. Protection of persons acting under this Act against suits.
(1) No suit shall be instituted against the corporation or against the Commissioner, the General Manager or the Director or a Deputy Commissioner or against any municipal Officer or servant, in respect of any act done in pursuance or execution or intended execution of this Act or in respect of any alleged neglect or default in the execution of this Act—
(a) ……………………………………………
(b) unless it is commenced within six months next after the accrual of the cause of action.”
The bear reading of the above section would clearly show that the limitation would start running, immediately, after the accrual of cause of action. Six months will have to be counted from the date of accrual of cause of action. There is no scope to postpone the commencement or starting point of limitation. The statutory provision cannot be interpreted in a manner which will introduce element of uncertainty. This principle has been stated by Lord Shaw in the following words:
“Where words of a statute are clear, they must, of course, be followed but in their Lordships opinion, where alternative constructions are equally open that alternative is to be chosen which will be consistent with the smooth working of the system which the statute purports to be regulating; and that alternative is to be rejected which will introduce uncertainty, friction or confusion into the working of the system.”
The Apex Court in the case of Chief Justice of Andhra Pradesh v. L.V.A Dikshitulla, AIR 1979 SC 193 (205) obverved (at page 205-206):
“Where two alternative constructions are possible, the Court must choose the one which will be in accord with the other parts of the statute and ensure its smooth, harmonious working and eschew the other which leads to absurdity, confusion or friction, contradiction and conflict between its various provisions, or undermines or tends to defeat or destroy the basic scheme and purpose of the enactment.”
In this view of the matter, with respect I am unable to subscribe to the view taken in the case of Virendra Singh (supra) by the learned single Judge of the Gujarat High Court. The effect of judgment would render special provision of limitation provided under municipal law nugatory. I express my respectful inability to concur with the reasoning and the conclusion reached.
10. The learned counsel appearing for the appellants have also placed reliance on the judgment of learned single Judge of this Court in the case of National Sports Club v. Nandlal, 1998 (1) Mh LJ 134; wherein the view taken was that the litigant could approach the Court only when there was an effective infringement of his legal right. The effective infringement of legal right would depend upon the facts of each case including the quality mode, manner and effectiveness of the threat administered. The learned single Judge while taking above view relied upon the following judgments of different Courts.
In AIR 1930 Privy Counsel 270, Mt. Bolo v. Mt. Koklan, it is observed as follows (at page 272):—
“There can be “no right to sue” unless there is accrual of the right asserted in the suit and its infringement or at least clear and unequivocal threat to infringe that right by the defendant against whom the suit is instituted.”
In AIR 1932 Mad 589 Kandasami Pillai v. Munisami Mudaliar the above Privy Council decision was followed and the same principle was reiterated. That was a case where the suit was filed for a declaration that a mortgage regarding trust property was unenforceable against the trust property. Though the plaintiffs were aware of the mortgage, there was no threat to infringe the plaintiffs' right till the defendants of that suit filed a suit to enforce the right under the mortgage, then within 6 years from that date suit was filed under old Article 120 of the Limitation Act. It was held that there was a threat to plaintiffs' right only when the mortgage suit was filed and the cause of action arose from that time and not from the date of mortgage deed.
In AIR 1938 Mad 193, Pothukutchi Appa Rao v. Secretary of State, there was an order of the Collector regarding rights of parties. It is pointed out at follows (at page 198):—
“There is nothing in law which says that the moment a person's right is denied, he is bound at his peril to bring a suit for declaration. It would be most unreasonable to hold that a bare repudiation of a person's title, without even as overt act, would make it incumbent on him to bring a declaratory suit.”
11. It is true that on the canvas of the above judicial pronouncements, a mere denial of right does not furnish cause of action. There must be some overt act accompanying the denial as held by Supreme Court in the case of Mohd. Yunus v. Syed Unnissa AIR 1961 SC 808. The right to sue accrues when the right in respect of which the declaration sought is denied or challenged. Accrual of right to sue means accrual of cause of action for the suit.
12. Applying the above principles to the facts involved in the present appeals, the notices issued under S. 351 were followed by order dated 2nd September 1994 passed by the Deputy Municipal Commissioner of Greater Bombay directing removal of illegal extensions forthwith with further overt act i.e threat in the nature of direction to the ward Officer. H-West Ward to demolish the same at the risk of and cost of the notices. The threat given was emphatic, effective, clear and unequivocal. In this view of the matter. I do not think that on the facts of the present appeals, the judgment of single Judge Bench of this Court in the case of National Sports Club would be of any assistance to the appellants.
13. Having said so, I am of the opinion that the cause of action for filing suits was the date of the said order, whereby both of the appellants were directed to remove their respective illegal and unauthorised structures forthwith. The act of execution of the order or step to implement the order cannot furnish cause of action for challenging the said original orders. The challenge to the respective notice in these suits was unwarranted because the notices did not survive in view of the said impugned orders, both dated 2nd September 1994. Therefore, the cause of action for the suits would be the date of the said impugned orders. The starting point of limitation would be the date of the said orders and not the Act of implementation or execution of the said orders. The suits, therefore, ought to have been filed within six months from the date of said orders i.e 2nd September 1994. Having failed to file suits within prescribed period of limitation the same were rightly dismissed on this count.
CONCLUSION
14. I, for the reasons given hereinabove and also for the reasons given by the trial Court, hold that no fault can be found with the impugned judgment and decree passed by the trial Court in the respective suits. No case is made out to upset the findings and the consequent orders dismissing the suits holding it to be barred by limitation.
In the result, both the appeals are dismissed in limine with no order as to costs.
Appeals dismissed.
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