UNION OF INDIA AND ORS. versus WEST COAST PAPER MILLS LTD. AND ANR.

Citation: [2004] 2 S.C.R. 145 · Decided: 05-02-2004 · Supreme Court of India · Bench: V.N. KHARE

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

UNION Of INDIA AND ORS. 
A 
v. 
WEST COAST PAPER MILLS LTD. AND ANR. 
FEBRUARY 5, 2004 
[V.N. KHARE, CJ., S.B. SINHA AND S.H. KAPADIA, JJ.] 
B 
limitation Act, 1963-Sections 14 & 15-Articles 58 & 113 to the 
Schedule-Increase in freight rates by Railways-Declaration by the Railway 
Tribunal holding the increase unreasonable-Special Leave Petition by the C 
appellants dismissed by Supreme Court-Respondents thereafter filing a suit 
before Trial Court for refund of excess freight charges collected with interest-
Appellant contending that the suit is barred by limitation-Held, the declaration 
of the Tribunal is in jeopardy when the Supreme Court has admitted the 
appeal-Cause of action for the suit arose when the appeal was dismissed by 
the Supreme Court-Hence, the suit is not barred by limitation by application D 
of doctrine of merger. 
The respondents filed a complaint petition before the Railway Rates 
Tribunal challenging the revision of freight rates at the inflated distance 
of transportation of goods as unjust, unreasonable and discriminatory. The 
Tribunal declared that the amount of freight charged by the appellants E 
as unreasonable. The appellants filed a Special Leave Petition challenging 
the declaration of the Tribunal with a petition for stay before this Court. 
An interim order was passed by this Court directing the appellants to 
charge from the respondents the usual rates without inflation of the 
distance from the respondents subject to furnishing of a bank guarantee F 
and dismissed the stay petition. The special leave petition of the appellants 
was finally dismissed by this Court. 
The respondents filed Writ Petitions before High Court for refund 
of excess freight charges with interest collected by the appellants duriP-g 
the pendency of the litigation before the Tribunal. High Court directed G 
the respondents to file a suit before trial court for the relief. The 
respondents accordingly filed suits before trial court for refund of excess 
freight charges with interest collected by the appellants. · 
The appellants countering the suits contended before the trial court 
145 
H 
Doubting the correctness of P.K. Kutty's case, the Division Bench 
referred the matter to a three-judge Bench. 
Answering the question referred to it and directing that the matters 
G be placed before an appropriate Bench for disposal on merits, the Court. 
HELD: 1.1. Under Section 46A oflndian Railways Act, the judgment 
of the Tribunal is final. Article 136 of the Constitution of India confers a 
special power upon this Court in terms whereof an appeal shall lie against 
any order passed by a Court or Tribunal. Once a Special Leave is granted 
H and the appeal is admitted, the correctness or otherwise of the judgment 
U.0.1. v. WEST COAST PAPER MILLS LTD. 
147 
of the Tribunal becomes wide open. In such an appeal, this Court is entitled A 
to go into both questions of fact as well as law. In such an event the 
correctness of the judgment is in jeopardy. ( 151-E, F) 
1.2. In relation to a civil _dispute, an appeal is considered to be a 
continuation of the suit and a decree becomes executable only when the 
same is finally disposed of by the Court of Appeal. The starting point of B 
limitation for filing a suit for the purpose of recovery of the excess amount 
of freight illegally realised begin from the date of the order passed by this 
Court. The respondents are also entitled to get the period during which 
the writ petition was pending before the High Court, excluded for 
computing the period .of limitation. The civil suit was filed within the C 
prescribed period of limitation. The Trial Court and the High Court have 
correctly recorded a concurrent opinion that the respondents arc entitled 
to the benefits of Sections 14 and 15 of the Limitation Act, 1963. It is 
beyond any cavil that in the event, the respondent was held to have been 
prosecuting its remedy bona fide before an appropriate forum, it would 
be entitled to get the period in question excluded from computation of the D 
period of limitation. (151-F, G, H; 152-A, Bl 
1.3. The suit for recovery of money was based on the declaration 
made by the Tribunal to the effect that the amount of freight charged by 
the appellant was unreasonable. The respondent filed a suit for refund and 
a cause of action therefore arose only when its right was finally determined E 
by this Court and not prior thereto. This Court not only granted special 
leave but also conside

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