Bar Under Section 108 (2) M.P. Panchayat Raj Adhiniyam Will Not Apply Against Suit For Recovery Of Amount Legally Due From Local Body: High Court

Section 108(2) of the Adhiniyam bars institution of suit against a rural local body or its official after six months from the date of the accrual of the alleged cause of action.

A woman - a photocopy centre owner, had earlier instituted a suit for recovery of a sum of Rs.2,86,886 from Janpad Panchayat Kasrawad for the work done by her for the local body. The defendant had moved an application before the trial court under OVII R11 CPC on the ground that the suit was barred under Section 108(2) of the 1993 Act. The said application was dismissed.

Aggrieved, the panchayat challenged the decision before high court.

Taking note of Section 319 of the M.P. Municipalities Act,1961 and Section 108 of the Adhiniyam, 1993, Justice Pranay Verma said the provisions are pari materia to each other.

The court added that Section 319 has been interpreted in Nagar Palika, Murena and Another V/s. Shivshankar Gupta and I.B.Mishra V/s. Nagar Panchayat Suhagpur and Others. 

In Nagar Palika Murena, the high court had held that, "the officers or the Council, while asking the plaintiff to supply the materials was not doing anything under the provisions of the Municipalities Act but have simply entered into a contract to supply materials for the purpose of 'Mela Pashupatinath Mahadev, Morena' and therefore, they were not acted or purported to have been acting under the provisions of the Act and in such circumstances Section 319 of the Act will not be attracted.”

"Both the provisions contain a bar on institution of suit and the contingencies provided in both of them are the same. The words “anything done or purporting to be done under this Act” are contained in both the provisions and since Section 319 of the Municipalities Act has been interpreted in the decisions as above, the principles laid down therein would very much be applicable for interpretation of Section 108 of the Adhiniyam, 1993 and would apply in full force to the same," said Justice Verma.

The court said the photocopy centre owner is stated to have raised bills for her work from time to time but the same have not been paid to her by the defendants. The said allegations while considering the application under Order 7 Rule 11 of the CPC filed by defendant have to be taken to be true at this stage, it added.

"Thus plaintiff has performed the work which was awarded to her and defendants have taken benefit of the same knowing that they have to pay the amount as agreed to the plaintiff but have not done so. The act of the defendants in not making payment to the plaintiff cannot be said to be an act done or purported to be done under the provisions of the Adhiniyam, 1993," said the court.

It further said that withholding of amount legally due to her cannot be said to be such an act. "Since action of defendants cannot be said to be done or purported to be done under the Adhiniyam, 1993, the bar under Section 108 (2) thereof would have no application and the suit would not be barred on the ground of the same having been instituted beyond the period of six months from the date of accrual of cause of action," said the court.

The Panchayat had earlier argued that the work was assigned to the photocopy centre owner under the provisions of the Adhiniyam of 1993. Therefore, she was bound by the provision U/S 108(2) of the Adhniyam of 1993, whereby she ought to have instituted the suit within six months from when the cause of action had arisen. Instead, she filed the suit two years later. Thus, it was contended that her suit was barred by limitation.

Per contra, the woman submitted that action of the panchayat in withholding the amount that she was legally entitled to could not be said to be done under the Adhiniyam of 1993. Hence, it was argued that the objection raised by the Petitioner was not sustainable.

The court said it does not find that the trial Court has committed any illegality in rejecting the application filed by the Panchayat.