Source: Supreme Court 

Why in News? 

A bench of Justice Vikram Nath and Justice PB Varale held Section 18 of Limitation Act shall apply in case of demand under Public Premises (Eviction of Unauthorised Occupants) Act, 1971. 

• The Supreme Court held this in the case of New Mangalore Port Trust & Anr v. Clifford D Souza Etc. (2025). 

What was the Background of New Mangalore Port Trust & Anr v. Clifford D Souza Etc. (2025) Case?   

• Initial Allotment (2003): The respondents (Licensees) received allotments from NMPT (New Mangalore Port Trust) in 2003. 
• License Fee Revisions: 
  • First revision: 20^th  June 2005 (effective from February 2002) 
  • Second revision: 23^rd  July 2010 (effective from 20th  February 2007 for five years) 
• Demand Notices: 
  • March 2011: Assistant Estate Manager/Estate Officer issued demand notices to Licensees for arrears from 20th  February 2007 to 23rd  July 2010. 
  • 15th  January 2015: Final notice demanding Rs. 55,32,234/- for difference in license fee. 
• Legal Proceedings: 
  • 2011-2012: Licensees filed writ petitions challenging the retrospective revision. 
  • 28th June 2013: Single Judge dismissed petitions, upholding retrospective revision. 
  • Licensees filed appeals before Division Bench (still pending without interim orders). 
• Response to Demands: 
  • 4th February 2015: Licensees responded to demand notice, arguing the matter was pending in court. 
  • Similar responses were given to subsequent notices. 
• Estate Officer's Action: 
  • 12th August 2015: Estate Officer issued notice under Public Premises (Eviction of Unauthorized Occupants) Act, 1971 (PP Act) Section 7(3). 
  • 15th  February 2016: Estate Officer issued another notice giving three weeks to show cause. 
  • Estate Officer eventually passed an order under PP Act Section 7(1) demanding payment. 
• Appeal to District Judge: 
  • Licensees appealed under Section 9 of PP Act. 
  • 15th  March 2017: District Judge allowed appeals, holding proceedings were time-barred. 
• High Court Petition: 
  • NMPT filed writ petitions against District Judge's order. 
  • These were dismissed, leading to the present appeals. 
• The core dispute concerns whether NMPT could retrospectively revise and collect license fees for the period from 20th February 2007 to 23rd July 2010.

What were the Court’s Observations?

• The Court rejected arguments from both sides about objections not being taken at the right time, choosing to deal with the plea of limitation based on undisputed facts and correspondence. 
• The Court acknowledged that the District Judge had allowed the respondents' appeal and quashed the demand notice on the finding that it was barred by limitation, with the calculated deadline being 11th May 2015. 
• The Court held that once the Limitation Act, 1963 (LA) applies to proceedings under the PP Act, all its provisions, including Section 18, will be applicable. 
• The Court found that the respondents' communication dated 4th February 2015 constituted an acknowledgment of liability under Section 18 of the LA, which extended the limitation period to 3rd February 2018. 
• The Court determined that the respondents were not denying the revised tariff but only challenging its retrospective application, and they were bound by the notification until it was set aside by a court. 
• The Court found that the High Court should have deferred hearing the writ petition until the disposal of the pending intra-court appeals, as their outcome would directly affect the writ petition. 
• The Court concluded that the respondents were attempting to delay payment while being bound by the Single Judge's decision and had no substantial objection to the demand except for the pending appeals. 
• The Court allowed the appeals, set aside the High Court's order, and restored the writ petitions to be heard after the disposal of the pending intra-court appeals. 
• The Court ruled that if the respondents' appeals are allowed by the Division Bench, the demands would be withdrawn, but if they fail, they would be liable to pay the demand with applicable interest. 

What is Section 18 of the Limitation Act? 

• Section 18 (1) lays down the following: 
  • This provision creates a mechanism to extend the limitation period when a debtor acknowledges liability in writing. 
  • The acknowledgment must occur before the original limitation period expires. 
  • The acknowledgment must be in writing. 
  • The writing must be signed by the party against whom the claim exists (the debtor) or their representative. 
  • When these conditions are met, a fresh limitation period begins from the date of the signed acknowledgment. 
  • This provision prevents debtors from benefiting from limitation periods when they have actually recognized their liability. 
  • It applies to suits or applications regarding property rights or other legal rights. 
  • It essentially "resets the clock" on the time limit for bringing legal action when liability is acknowledged. 
  • While protecting creditors who receive acknowledgments, it still provides certainty by creating a new defined limitation period. 
• Section 18 (2) lays down the following: 
  • This provision addresses situations where a written acknowledgment exists but lacks a date. 
  • In such cases, oral testimony is permitted to establish when the acknowledgment was signed. 
  • While oral evidence can be used to determine the date of signing, it cannot be used to establish the contents of the acknowledgment. 
  • Any oral evidence provided must comply with the rules set out in the Indian Evidence Act, 1872. 
  • This provision maintains the primacy of written evidence for the substance of the acknowledgment while allowing flexibility for establishing its timing. 
  • It resolves potential disputes about whether an acknowledgment was made within the original limitation period. 
  • It balances the need to determine accurate timing with the need to prevent fabrication of content. 
  • It provides a clear rule for courts to follow when handling undated acknowledgments in limitation cases. 
• Further the explanations attached to Section 18 provides for the following: 
  • Explanation (a) provides: 
    • An acknowledgment can be valid even if it doesn't precisely describe the property or right in question. 
    • An acknowledgment remains valid even if it states that the time for payment, delivery, performance, or enjoyment hasn't yet arrived. 
    • An acknowledgment remains effective even when accompanied by a refusal to pay, deliver, perform, or permit enjoyment. 
    • The presence of counterclaims or set-off claims doesn't invalidate an acknowledgment. 
    • An acknowledgment is valid even if addressed to someone other than the person entitled to the property or right. 
  • Explanation (b) provides: 
    • The word "signed" has a specific legal meaning in this context. 
    • A signature can be made personally by the acknowledging party. 
    • Alternatively, a signature can be made by a duly authorized agent acting on behalf of the acknowledging party. 
  • Explanation (c) provides: 
    • Applications for executing court decrees or orders are specifically excluded from being considered as applications regarding property or rights under this section. 
    • This ensures that enforcement proceedings for existing court orders don't restart limitation periods for the underlying claims.