DEHRI ROHTAS LIGHT RAILWAY COMPANY LIMITED versus DISTRICT BOARD BHOJPUR AND ORS.

Citation: [1992] 2 S.C.R. 155 · Decided: 12-03-1992 · Supreme Court of India · Bench: M. FATHIMA BEEVI · Disposal: Dismissed

Cited by 5 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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DEHRI ROHTAS LIGHT RAILWAY COMPANY LIMITED 
A 
v. 
DISTRICT BOARD BHOJPUR AND ORS. 
MARCH 12, 1992 
[M. FATHIMA BEEVI AND S.C. AGRAWAL, JJ.] 
B 
Bengal Cess Act, 1880 : 
Sections 5 and 6-Cess-Payment of-Unregistered agreement entered 
int~Demands made ignoring such agreement-Legality of. 
C 
Constitution of India, 1950: 
Article 22fr-Writ-:Remedies claimed-Party otherwise entitled to the 
remedy-Whether disentitled on the sole ground of !aches and delay. 
The appellant was engaged in the business of running a light railway 
and was liable to pay cess under Section 5 of the Bengal Cess Act, 1880. 
By way of an unregistered agreement entered into between the appel-
D 
lant and tlie respondent it was agreed that the appellant would pay a fixed 
sum of Rs.10,000 p.a. towards cess irrespective of the profit or loss made E 
by the appellant-company. Accordingly the appellant was paying cess from 
1953-54 till 1966-67. 
In 1967 the respondent intimated the appellant that the State w:,as 
not bound by the unregistered agreement and raised a demand of 
Rs.9,86,809.33 towards arrears of cess. The appellant instituted a suit F 
before the sub-Judge to enforce the said unregistered agreement and to 
restrain the respondents from making any demand in excess of the agre~d 
sum of Rs.10,000 p.a. On the suit being dismissed, the appellant preferred 
an appeal before the High Court. The appeal was also dismissed. The first 
of the present appeals, is against the abovesaid judgment of the High G 
Court. 
Meanwhile, demand for arrears of cess for the years 1967-68 to 
1971-72 was raised against the appellant. In a Writ Petition filed before 
the High Court the appellant challenged the demand. The High Court 
quashed the demand. Thereupon the appellant filed another Writ Petition H 
155 
156 
SUPREME COURT REPORTS 
[1992] 2 S.C.R. 
A 
for quashing the demand notices for the years 1953-54 to 1966-67. The High 
Court dismissed the Writ Petition, and the other appeal has been flied 
against the said order. 
B 
c 
The appellant contended that the net profits of the company was 
referable partly to its ownership of immovable property and partly to its 
ownership of movable properties, and only that portion of net profit 
derived from the use of the immovable property was liable to cess. 
The respondent contended that since the appellant did not challenge 
the demands raised for the earlier years in the first Writ Petition, but only 
in the subsequent Writ Petition filed after an inordinate delay of several 
years, its claim was rightly rejected. 
Disposing of the appeals, this Court, 
HELD : 1. It is true that the appellant could have, when instituting 
D the suit, agitated the question of l~gality of the demands and claimed relief 
in respect of the earlier years while challenging the demand for the 
subsequent years in the Writ Petition. But the failure to do so by itself in 
the circumstances of the case does not disentitle the appellant from the 
remedies open under the law. The demand is per se not based on the net 
E 
F 
profits of the immovable property, but on the income of the business and 
is, therefore, without authority. The appellant has offered explanation for 
not raising the question of legality in the earlier proceedings. The 
authorities have proceeded under a mistake of law as to the nature of the 
claim. The appellant did not include the earlier demand in the Writ 
Petition because the suit to enforce the agreement limiting the liability was 
pending in appeal, but the appellant did attempt to raise the question in 
the appeal itself. However, the Court declined to entertain the additional 
ground as it was beyond the scope of the suit. Thereafter, the Writ Petition 
was filed explaining all the circumstances. The High Court considered the 
delay as inordinate. The High Court failed to appreciate all material facts 
G particularly the fact that the demand was'illegal as already declared by it 
in the earlier case. [160H; 161A-DJ 
2. The principle on which the relief to the party on the grounds of 
l~ches or delay is denied is that the rights which have a_ccrued to others 
by reason of the delay in filing the petition should not be. allowed to be 
1 
H disturbed unless there is reasonable explanation for the delay. The real 
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DEHRI ROHTAS v. DISTRICT BOARD [FATHIMA BEEVI, J.] 
157 
test to determine delay in such cases is that the petitioner should come to A 
the writ court before a parallel right is created and that 

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