Supreme Court clarifies the scope of notice under Section 80 of the Code of Civil Procedure in Government Contract Disputes (30 April 2019)

Date of the Judgment: 30 April 2019
Citation: CIVIL APPEAL NOS.4495-4496 OF 2019
Judges: R. F. Nariman, J. and Vineet Saran, J.
Can a government contractor proceed with a civil suit against the State without strictly adhering to the notice requirements under Section 80 of the Code of Civil Procedure (CPC)? The Supreme Court, in this case, addressed the issue of whether a notice sent to the State of Tamil Nadu substantially complied with the requirements of Section 80 of the CPC, which mandates a two-month notice period before filing a suit against the government. The Court emphasized that the purpose of the notice is to inform the government of the claim and allow for potential settlement, rather than to act as a technical barrier to justice.

Case Background

The appellant, a government contractor, entered into an agreement on 15 October 1997 with the second respondent for roadwork on National Highway 7. The work was to be completed within 18 months. The site was handed over on 20 October 1997. However, the appellant claimed delays caused by the respondents hindered progress. On 16 December 1999, the Superintending Engineer partially terminated the contract due to insufficient progress by the appellant.

The appellant initially filed a Writ Petition in the High Court of Madras, which was dismissed on 24 December 1999, citing the availability of an alternative remedy through a civil suit. An appeal against this order was also dismissed on 10 July 2000, suggesting arbitration as an alternative.

Prior to the dismissal of the Writ Appeal, the appellant sent a legal notice dated 14 January 2000, stating he had completed work worth Rs. 1,25,00,000 despite delays. The notice also mentioned an extension of the original 18-month period to 30 March 2000, due to departmental delays. The appellant contended that the partial termination before the extended deadline was arbitrary and that a fresh tender was called without notice. This notice was followed by letters dated 25 January 2000 and 29 January 2000, the latter including a list of payments due amounting to Rs. 88.06 lakhs.

As arbitration was not viable for claims exceeding Rs. 2 lakhs, the appellant filed O.S. No. 2/2002 in the Court of the Special Judge at Virudhunagar on 12 September 2002, seeking a declaration that the partial termination was illegal and claiming Rs. 3.30 crores with interest.

Timeline

Course of Proceedings

The appellant initially filed a Writ Petition before the Madras High Court, which was dismissed on 24 December 1999, stating that an alternative remedy existed in the form of a civil suit. The subsequent Writ Appeal was also dismissed on 10 July 2000, suggesting arbitration. However, arbitration was not feasible for claims above Rs. 2 lakhs, leading the appellant to file a civil suit.

The learned Additional District Judge ruled on 29 June 2007 that there was substantial compliance with Section 80 of the CPC, noting that the notice dated 14 January 2000 was sent to the relevant authorities, and the cause of action and reliefs were substantially set out. The appellant was awarded Rs. 87,01,200 with interest.

Both the appellant and the State filed appeals. The High Court allowed the State’s appeal, holding that Section 80 of the CPC was mandatory and that the notices sent did not contain “full particulars,” thus rendering the suit not maintainable.

Legal Framework

The core legal provision in question is Section 80 of the Code of Civil Procedure (CPC). It states:

“80. Notice.—(1) Save as otherwise provided in sub-section (2), no suit shall be instituted against the Government (including the Government of the State of Jammu & Kashmir) or against a public officer in respect of any act purporting to be done by such officer in his official capacity, until the expiration of two months next after notice in writing has been delivered to, or left at the office of-
(a) in the case of a suit against the Central Government, except where it relates to a railway, a Secretary to that Government;
(b) in the case of a suit against the Central Government where it relates to railway, the General Manager of that railway;
(bb) in the case of a suit against the Government of the State of Jammu and Kashmir the Chief Secretary to that Government or any other officer authorised by that Government in this behalf;
(c) in the case of a suit against any other State Government, a Secretary to that Government or the Collector of the district;
and, in the case of a public officer, delivered to him or left at this office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims; and the plaint shall contain a statement that such notice has been so delivered or left.”

The provision mandates a two-month notice period before a suit can be filed against the government or a public officer. The notice must include the cause of action, the plaintiff’s details, and the relief sought.

Sub-section (3) of Section 80, introduced by the 1976 amendment, provides that a suit should not be dismissed merely due to an error or defect in the notice if the notice sufficiently identifies the plaintiff and substantially indicates the cause of action and relief claimed.

“(3) No suit instituted against the Government or against a public officer in respect of any act purporting to be done by such public officer in his official capacity shall be dismissed merely by reason of any error or defect in the notice referred to in sub-section (1), if in such notice-
(a) the name, description and the residence of the plaintiff had been so given as to enable the appropriate authority or the public officer to identify the person serving the notice and such notice had been delivered or left at the office of the appropriate authority specified in sub-section (1), and
(b) the cause of action and the relief claimed by the plaintiff had been substantially indicated.”

Arguments

Appellant’s Arguments

• The appellant argued that the legal notice dated 14 January 2000, along with subsequent letters, constituted substantial compliance with Section 80 of the CPC.

• The appellant contended that the notice was sent to the three relevant authorities, and the cause of action and reliefs were substantially set out in the notice and the letter dated 29 January 2000.

• The appellant emphasized that the 1976 amendment to the CPC, specifically Section 80(3), made it clear that substantial compliance is sufficient, provided the State is properly notified and the cause of action and prayer are substantially communicated.

State’s Arguments

• The State argued that none of the notices/letters explicitly stated that they were issued under Section 80 of the CPC.

• The State submitted that the notices were issued before the disposal of the Writ Appeal, which was still pending, thus hindering the possibility of the government settling the claim.

• The State contended that no notice was issued after the Writ Appeal was dismissed, which would have been necessary before filing the civil suit.

Submissions Table

Issues Framed by the Supreme Court

• Whether a notice under Section 80 of the Code of Civil Procedure (CPC) has been given to the State of Tamil Nadu in terms of the Section or in substantial compliance thereof.

Treatment of the Issue by the Court

Authorities

Cases Cited

• Dhian Singh Sobha Singh & Another v. Union of India, (1958) SCR 781: This case clarified that Section 80 should be construed with common sense and not in a pedantic manner. It emphasized that the object of the section is to give sufficient warning to the government about the case to be instituted. (Supreme Court of India)

• Vithalbhai (P) Ltd. v. Union Bank of India, (2005) 4 SCC 315: This case reiterated that the object of Section 80 is the advancement of justice and the securing of public good by avoiding unnecessary litigation. (Supreme Court of India)

• Ghanshyam Dass and Others v. Dominion of India and Others, (1984) 3 SCC 46: This case discussed the amendment made by the Law Commission and emphasized that procedural laws should subserve justice rather than defeat it. It also highlighted the principle of substantial compliance. (Supreme Court of India)

• State of A.P. and Others v. Pioneer Builders, A.P., (2006) 12 SCC 119: This case referred to the Law Commission Report and reiterated that the legislative intent of Section 80 is to give the government sufficient notice of the suit so that it may reconsider the decision. It also discussed the amendments to Section 80. (Supreme Court of India)

Legal Provisions

• Section 80 of the Code of Civil Procedure (CPC): This section mandates a two-month notice period before a suit can be filed against the government or a public officer, specifying the requirements for such notice.

Authority Table

Judgment

Treatment of Submissions

Treatment of Authorities

• Dhian Singh Sobha Singh & Another v. Union of India, (1958) SCR 781*: The Court relied on this case to emphasize that Section 80 should be interpreted with common sense, not pedantically.
• Vithalbhai (P) Ltd. v. Union Bank of India, (2005) 4 SCC 315*: The Court cited this case to highlight that the purpose of Section 80 is to advance justice and avoid unnecessary litigation.
• Ghanshyam Dass and Others v. Dominion of India and Others, (1984) 3 SCC 46*: The Court used this case to support the principle of substantial compliance with Section 80 and overruled S.N. Dutt v. Union of India (1962) 1 SCR 560, which did not align with the principle of substantial compliance.
• State of A.P. and Others v. Pioneer Builders, A.P., (2006) 12 SCC 119*: The Court referred to this case to reinforce the legislative intent of Section 80, which is to provide sufficient notice to the government.

What weighed in the mind of the Court?

The Supreme Court emphasized the principle of substantial compliance with Section 80 of the CPC, rather than strict adherence to technicalities. The Court noted that the purpose of Section 80 is to ensure that the government is informed of the claim and has an opportunity to settle it, not to create a technical barrier to justice. The Court also highlighted that the legal notice sent by the appellant, along with subsequent letters, sufficiently communicated the cause of action and the relief sought.

Sentiment Analysis

Fact:Law Ratio

Logical Reasoning

The Court reasoned that the legal notice dated 14 January 2000, along with the subsequent letters, sufficiently communicated the cause of action, the plaintiff’s details, and the relief sought. The Court emphasized that the purpose of Section 80 is to ensure the government is informed of the claim and has an opportunity to settle it. The Court also noted that the 1976 amendment to the CPC introduced Section 80(3), which allows for substantial compliance rather than strict adherence to technicalities.

The Court rejected the State’s argument that the notice was invalid because it did not explicitly mention Section 80 of the CPC. The Court clarified that a notice does not need to state the specific section under which it is made, as long as it meets the requirements of Section 80(3). The Court also dismissed the State’s argument that the notice was invalid because it was issued before the disposal of the Writ Appeal, clarifying that the notice was valid for a subsequent civil suit.

The Supreme Court quoted from the judgment:
“We are, therefore, of the view that the learned Additional District Judge’s judgment was correct. In this view of the matter, we set aside the impugned judgment of the High Court and remit the matter to the High Court to dispose of the two appeals on merits.”

The Court further stated:
“It is clear, therefore, that there is sufficient compliance with the provisions of Section 80 CPC as has been introduced by the Amendment Act introducing section 80(3) into the Statute book.”

The Court also observed:
“The respondents’ argument that section 80 is not expressly referred to and that the legal notice and letters were written prior to the disposal of the Writ Appeal have no legs to stand on.”

Key Takeaways

• Substantial compliance with Section 80 of the CPC is sufficient, provided the government is properly notified of the claim and the cause of action and relief sought are substantially indicated.

• A notice does not need to explicitly mention Section 80 of the CPC as long as it meets the requirements of Section 80(3).

• The purpose of Section 80 is to ensure that the government is informed of the claim and has an opportunity to settle it, not to create a technical barrier to justice.

• The judgment clarifies that the notice under Section 80 can be valid even if sent before the disposal of any related legal proceedings, as long as it is intended for a subsequent civil suit.

Directions

The Supreme Court set aside the impugned judgment of the High Court and remitted the matter to the High Court to dispose of the two appeals on merits. The Court also requested the High Court to expedite the disposal of the appeals, given that the suit was filed in 2002.

Development of Law

The ratio decidendi of this case is that substantial compliance with Section 80 of the Code of Civil Procedure (CPC) is sufficient, provided the government is properly notified of the claim and the cause of action and relief sought are substantially indicated. This judgment reinforces the principle that procedural laws should subserve justice rather than defeat it, and it clarifies that the purpose of Section 80 is to inform the government of the claim, not to create a technical barrier to justice. This case also clarifies that a notice under Section 80 does not need to explicitly mention the section, as long as the requirements of Section 80(3) are met.

Conclusion

The Supreme Court’s judgment in this case clarifies the scope of Section 80 of the Code of Civil Procedure (CPC), emphasizing that substantial compliance with the notice requirements is sufficient, provided the government is adequately informed of the claim. The Court set aside the High Court’s judgment and remitted the matter for disposal on merits, underscoring the importance of adhering to the spirit of the law rather than its strict technicalities. This ruling ensures that the government is duly notified of claims while also preventing procedural technicalities from obstructing the path of justice.