Supreme Court of India
DHARMARTH TRUST J & K JAMMU & ORS.versusDINESH CHANDER NANDA
- Citation
- 2010 INSC 584
- Decided
- 8 September 2010
- Disposal
- Dismissed
- Bench
- P SATHASIVAM
Holding
A claim for professional fees of an architect is not covered by Article 56 of the Jammu and Kashmir Limitation Act, 1995 and is governed by the residuary Article 119.
Summary
The architect Dinesh Chander Nanda sued the Dharmarth Trust for professional fees after the Trust terminated his services. The Trust contended that the suit was governed by Article 56 of the Jammu and Kashmir Limitation Act, 1995 and was therefore time‑barred, while the lower courts held it fell under the residuary Article 119, giving a six‑year limitation period. The Supreme Court examined the meaning of "price" and "work done" in Article 56, concluding that these terms relate to the sale of goods or physical work, not to professional services rendered for a fee. It noted that architects are taxed under service tax law, reinforcing that their remuneration is a fee, not a price. Consequently, the Court affirmed that Article 56 does not apply to the architect’s claim and upheld the lower courts' application of Article 119. The appeal was dismissed.
Issues considered
- The suit for professional fees of an architect is governed by Article 56 or Article 119 of the Jammu and Kashmir Limitation Act, 1995.
- Whether the terms "price" and "work done" in Article 56 encompass professional services rendered for a fee.
Legislation cited
- Jammu and Kashmir Limitation Act, 1995s. Article 119, s. Article 56
Subjects
limitation periodprofessional feesarchitectservice taxArticle 56Article 119contractfee vs priceJammu and Kashmir Limitation Act
Judgment
.:,.
I
[2010] 10 S.C.R. 1101
DHARMARTH TRUST J & K JAMMU & ORS. A
v.
DINESH CHANDER NANDA
(Civil Appeal No. 7465 of 2010)
SEPTEMBER 08, 2010
B
[P. SATHASIVAM AND ANIL R. DAVE, JJ.)
Jammu and Kashmir Limitation Act, 1995 - Articles 56
and 119 - Suit by architect against trust claiming certain
amount towards professional charges - Issue as regards C
maintainability/limitation - Contention by the trust that suit is
governed by Article 56 and was barred by limitation on 'the
date of its institution - Courts below holding that suit is
governed by Article 119 and not Article 56 - Interference with
- Held: Not called for - Services provided by architect are D
taxable under the Service Tax laws - Term 'work done' as
appearing in Article 56 does not apply to architect providing
services for a fee, thus Article 56 not applicable.
Words and Phrases: Terms 'price' and 'work done' - E
Meaning of - In the context of Article 56 of the Jammu and
Kashmir Limitation Act, 1995.
The respondent-architect .filed a suit against the
appellant-trust claiming certain amount towards
professional charges including interest for various F
projects. During the pendency of the suit, the respondent
filed application for the amendment of the plaint. The
issue was raised regarding the maintainability/limitation
of the application. The trial court held that the case was
governed by Article 119 and not by Article 56 of the G
Jammu and Kashmir Limitation Act, 1995 and allowed the
amendment to the plaint. The appellant-trust filed a
revision petition. The appellant-trust contended that the
suit was governed by Article 56 of the Act and the same
1101 H
1102 SUPREME COURT REPORTS [201 OJ 10 S.C.R.
A was barred by limitation on the date of its institution. The
High Court upheld the order passed by the trial court.
Therefore, the appellant-trust filed the instant appeal.
Dismissing the appeal, the Court
B HELD: 1.1 The term 'work done' as appearing in
Article 56 of the Jammu and Kashmir Limitation Act, 1995
does not apply to the respondent, who is an architect
providing services for a fee. [Para 12] [1110-F-G]
c 1.2 The term 'price', as appearing in Article 56 of the
Act, is to be understood in common parlance/ordinary or
normal sense. It takes its colour from the meaning
attached to the term 'price' in the Articles immediately
preceding 'Articles 52 to 55'. 'Price' does not cover the
0 services provided by the professionals such as architect,
lawyer, doctor etc., as professionals charge a 'fee'. Also,
the term 'work done' in Article 56 will not be applicable
to professionals such as architect, lawyer, doctor etc. as
these professionals render services to their clients. The
E remuneration of a professional is in the form of a 'fee'
and, therefore, it cannot be said that the professional
earns a 'price'. In common usage, the term 'price' refers
to goods sold. The term 'price' is used in Articles 52 to
55 in correlation to goods delivered, goods sold and
delivered and trees or growing crops sold. In the said
F way, 'price' would take a similar meaning when used in
Article 56. [Paras 8 and 9] [1110-F-G]
Websters Encyclopedic Unabridged Dictionary;
"Chambers Twentieth Century Dictionary; Law Lexicon by P.
G Ramanatha Iyer 2nd Edn. 1997 - referred to.
1.3 The specific treatment of attorneys/vakils who
provide professional services is a reflection of the
intention of the Legislature to treat the services provided
H
DHARMARTH TRUST J & K JAMMU & ORS. v. 1103
DINESH CHANDER NANDA
by professionals differently from work done by others. A
The word 'price' was never intended to be used
synonymously with the word 'fee' and, therefore, the fee
charged by an architect for services rendered by him
would not be covered under Article 56 of the Act. In the
instant case, the trial court as well as the High Court 8
made a clear distinction between the terms 'work done'
and 'services'. The 'work done' would refer work done by
masons such as land filling or engineering projects etc.
[Para 11) [1109-F-H; 1110-A]
1.4 The services provided by an architect are taxable c.
under the Service Tax law. Whereunder the architects are
considered as persons providing a service and are liable
to pay service tax. The term 'work done' has not been
defined anywhere. [Para 12) [1110-D]
D
1.5 The claim of the respondent that the profession
of an Architect is one such service, hence Article 56 is
not applicable, is accepted. There is no error in the
conclusion arrived at by the trial court and upheld by the
High Court. [Para 16) [1112-E-F] E
Kaviraj Baroda Kant Sen vs. Court of Wards in Charge
of Baraon Estate AIR 1931 All. 752; Kakodonga Tea Estate
vs. J.N. Saikia AIR 1973 Gau. 27 - approved.
Case Law Reference: F
AIR 1931 All. 752 Approved. Para 14
AIR 1973 Gau. 27 Approved. Para 15
CIVIL APPELLATE JURISDICTION : Civil Appeal No. G
7465 of 2010.
From the Judgment & Order dated 18.10.2007 of the High
Court of Jammu & Kashmir at Jammu in Civil Revision Petition
bearing C. Rev. No. 177 of 2005.
H
1104 SUPREME. COURT REPORTS [2010] 10 S.C.R.
A Ashok Mathur, Anshul Narayan for the Appellants.
V. Giri, Rohit Bhat, Vikas Mehta for the Respondent.
The Judgment of the Court was delivered by
B P. SATHASIVAM, J. 1. Leave granted.
2. This appeal is directed against the judgment and order
dated 18.10.2007 passed by the High Court of Jammu &
Kashmir at Jammu in Civil Revision No. 177 of 2005 whereby
C the High Court dismissed the revision filed by the Dharmarth
Trust (hereinafter referred to as "the Trust")-appellants herein.
3. Brief facts:
(a) The Respondent, a qualified, registered and licensed
D Architect, is engaged in his professional business in the name
of Mis Nanda Designers Consortium having its office at 60
Purani Mandi, Jammu. On 19.10.1992, he was engaged by the
Trust for the purpose of providing professional consultancy
services as an architect for various projects at different sites
E in Jammu. As per the terms of the said contract, a fee of 2.5%
of the total project cost was fixed for providing such-services.
(b) On 14.12.1993, the appellants-Trust telephonically
communicated the respondent not to work further for their
projects and terminated his services as an Architect. A formal
F communication was also served on 16.01.1994 regarding the
termination of his services.
(c) On 16.10.1996, the Respondent served a legal notice
to the Trust claiming compensation amounting to Rs.
G 38,77,263.75 towards professional charges including interest
thereon for various projects. After not getting any reply from the
Trust, after a gap of four years, on 29.01.1998, a suit was filed ·
by the Respondent in the Court of the 1st Additional District
Judge, Jammu, claiming an amount of Rs, 43,30,797/-. During
H
DHARMARTH TRUST J & K JAMMU & ORS. v. 1105
DINESH CHANDER NANDA [P. SATHASIVAM, J.]
the pendency of the suit, on 08.02.1999, the Respondent filed A
an application under Order VI Rule 17 of the Code of Civil
Procedure for amendment in the Plaint. On 22.09.1999, the
Trust filed their reply objecting to the maintainability of the
application. By order dated 08.10.1999, the trial Court allowed
the application. Challenging the said order, the Trust filed Civil B
Revision No. 162 of 1999 before the High Court praying that
the trial Court had committed an error in law by allowing the
amendment in the plaint without addressing the legal issue
regarding its maintainability. The High Court, vide order dated
19.07.2001, disposed of the civil revision petition filed by the c
Trust and remanded the matter back to the trial Court to
address the legal issue regarding maintainability/limitation.
Thereafter, on 27.09.2005, 1st Additional District Judge framed
the issue and passed an order holding that the case is
governed by Article 119 and not by Article 56 of the Jammu & D
Kashmir Limitation Act, 1995 (hereinafter referred to as "the
Act") and consequently, allowed the amendment to the Plaint.
(d) Challenging the said order, the Trust filed Civil Revision
No. 177 of 2005 before the High Court. Vide order dated
18.10.2007, the High Court dismissed the revision and upheld E
the order dated 27.09.2005, passed by the 1st Additional
District Judge. Aggrieved by th~ said order, the Trust has filed
this appeal by way of special leave before this Court.
4. Heard Mr. Ashok Mathur, learned counsel for the F
appellants and Mr. V. Giri, learned senior counsel for the
respondent.
5. The short question that arises for consideration in this
appeal is whether the suit filed by the respondent-Architect is
covered under Article 56 of the Act or whether the said suit is G
covered under Article 119 of the Act.
6. The Trial Court and the High Court have held that the
suit is covered by Article 119 of the Act. According to the
appellants, the suit filed by the respondent-Architect is governed H
1106 SUPREME COURT REPORTS [2010] 10 S.C.R.
A by Article 56 of the said Act and the same was barred by
limitation on the date of its institution. On the other hand, the
submission of the respondent is that the same was covered by
the residuary Article 119 which provides for a period of 6 years
on the ground that the nature of services provided was
B professional services and the remuneration for the same being
termed as 'fee' and the same does not fall within the expression
'price' for 'work done'.
7. Article 56 and Article 119 of the Schedule to the Jammu
C and Kashmir Limitation Act, 1995 provides as follows:-
Article For the price of work done by Three When the
56 the Plaintiff for the Defendant Years work is
at his request, where no done.
time has been fixed for
D
payment.
Article Suit for which no period Six When the
119 of limitation provided Years right to sue
elsewhere in the Scheduel. accrues.
E
8. The term 'price', as appearing in Article 56, is to be
understood in common parlance/ordinary or normal sense. It
takes it colour from the meaning attached to the term 'price' in
the Articles immediately preceding 'Articles 52 to 55'. 'Price'
F does not cover the services provided by the professionals such
as Architect, Lawyer, Doctor etc., as professionals charge a
'fee'. Also, the term 'work done' in Article 56 will not be
applicable to professionals such as Architect, Lawyer, Doctor
etc. as these professionals render services to their clients. The
G remuneration of a professional is in the form of a 'fee' and
therefore, it cannot be said that the professional earns a 'price'.
In common usage, the term 'price' refers to goods sold. For
illustration, the term 'price' is defined in Section 2 (10) of the
Sale of Goods Act, 1930 as "price" means the money
consideration for a sale of goods.
H
• DHARMARTH TRUST J & K JAMMU & ORS. v. 1107
DINESH CHANDER NANDA [P. SATHASIVAM, JT--
9. The word 'price' according to Websters Encyclopedic A
Unabridged Dictionary means:
"Price- 1. the sum or amount of money or its equivalent
for which anything is bought, sold, or offered for sale 2. a
sum offered for the capture of a person alive of dead: The
B
authorities put a price on his head. 3. the sum of money,
or other consideration, for which a person's support,
consent, etc., may be obtained, esp. in cases involving
sacrifice of integrity: They claimed that every man has his
price. 4. that which must be given, done, or undergone in C
order to obtain a thing: He gained the victory, but at a
heavy price. 5. Odds (def.2). 6. Archaic, value or worth:
The price of an honest man is beyond measure. 7. Archaic,
great value or worth (usually prec by of): Among the
inventory were many articles of price. 8. at any price, at
any cost, no matter how great: There were no bananas to D
be had at any price. He would have his own way at any
price. 9. beyond or without price, of incalculable value;
priceless: The crown jewels are beyond price.-v.t. 10. to
fix the price of. 11. to ask or determine the price of: We
spent the day pricing furniture at various stores. E
"Chambers Twentieth C_entury Dictionary defines "price"
to mean:
"The amount, usually in money, for which a thing is sold or
offered; that which one for goes or suffers for the sake of F
or in gaining something: money offered for capture or killing
of anybody; that for which one can be bribed; betting odds;
value."
According to P. Ramanatha Iyer, Law Lexicon (2nd Edn. G
1997),
"the term 'price' is the value which a seller places upon his
goods for sale. It is not a fixed or unchangeable thing. It
may be one thing today and another tomorrow and one
H
1108 SUPREME COURT REPORTS [2010] 10 S.C.R.
A valuation to one customer and a different one to another
on the same day or hour. Whether a seller asks any one
to give is the price until he changes it for another. The price
asked is changed to another price, the former price is no
longer an existing fact."
B
The Law Lexicon also defines the term 'price' as
"the sum or amount of money or its equivalent, which a
seller asks or obtains for goods in market-the
exchangeable value of a commodity-and hence, as used
c in a contract providing for the sale of articles at a fixed
price, and that if the price falls below such fixed price, a
rebate will be given ... "
"The term 'price' is sometimes also used for "work done"
D in the context of work done by masons such as land filling
etc. or engineering contracts. In view of the above, the term
'price' is in common usage used in correlation to either
goods bought or sold or work done."
There is further indication of this word in the Act itself. The
E setting of Article 56 i.e. immediately after Articles 52 to 55 is
important. Articles 52 to 55 uses the expression 'price'. These
are reproduced hereinbelow:-
Article For the price of goods Three The date of
F 52 delivered where no fixed years the delivery of
period of credit is agreed upon. goods.
Article For the price of goods sold Three When the
53 . and delivered to be paid years period of credit
for after the expiry of fixed expires.
G period of credit.
Article For the price of goods sold Three When the
54 and delivered to be paid for years period of the
by a bill of exchange, no pro posed bill
H such bill being oiven. elapses.
..
DHARMARTH TRUST J & K JAM MU & ORS. v. 1109
DINESH CHANDER NANDA [P. SATHASIVAM, J.)
A
Article For the price of trees or Three The date of the
55 growing crops sold by the years sale
plaintiff to the defendant
where no fixed period of
credit is agreed upon.
B
The term 'price' has been used in Articles 52 to 55 in correlation
to goods delivered, goods sold and delivered and trees or
growing crops sold. In this way, 'price' would take a similar
meaning when used in Article 56.
c
10. The intention of the Legislature can also be
ascertained by referring to Article 114 of the Act where the
Legislature has specifically provided for the period of Limitation
for suits filed by an attorney/vakil. Article 114 is as follows:-
D
Article By an attorney or vakil for Six The date of the
114 his costs of a suit or a Years termination of the
particular business, there suit or business,
being no express agreement or (where the
as to the time when such attorney or vakil E
costs are to be paid. properly
discontinues the
suit or business)
the date of such
discontinuance.
F
11. As rightly pointed out by Mr. Giri, learned senior
counsel for the respondent that the specific treatment of
attorneys/vakils who provide professional services is a reflection
of the intention of the Legislature to treat the services provided
by professionals differently from work done by others. The word G
'price' was never intended to be used synonymously with the
word 'fee' and, therefore, the fee charged by an Architect for
services rendered by him would not be covered under Article
56 of the Act. In the case on hand, the Trial Court as well as
the High Court have made a clear distinction between the terms
H
1110 SUPREME COURT REPORTS [2010] 10 S.C.R.
A 'work done' and 'services'. The 'work done' would refer work
done by masons such as land filling or engineering projects etc.
12. It is useful to refer to the tax treatment of Architects
under the Service Tax Law. Chapter V of the Finance Act, 1994,
B which contains the law relating to Service tax in India defines
an "architect" in Section 65(6) as:-
"any person whose name is, for the time being, entered in
the register of architects maintained under section 23 of
the Architect Act, 1972 and also includes any person
C engaged in any manner, whether directly or indirectly, in
rendering services in the field of architecture."
It is brought to our notice that the services provided by an
architect are taxable under the Service Tax law. Under the
0 Service Tax Laws, the architects are considered as persons
providing a service and are liable to pay service tax. The term
'work done' has not been defined anywhere. We have already
pointed out the dictionary meaning to the definition of 'work'.
The Law Lexicon defines 'work' as:-
E "the word "work" has a very wide meaning. It is really used
in two senses of bestowing labour and that upon which
labour has been bestowed. When used in plural the word
certainly means some outstanding or important result of
the labour that has been bestowed and large industrial and
F scientific establishment are called works"
We have already referred to Articles 52 to 55 which are placed
above Article 56. It is clear that the term 'work done' as
appearing in Article 56 does not apply to the respondent, who
G is an architect providing services for a fee.
13. It is also pointed out that Article 56 of the Act is a
verbatim of Article 18 of the Indian Limitation Act, 1963. Article
18, in turn is the same as Article 56 of the old Indian Limitation
Act, 1908.
H
DHARMARTH TRUST J & K JAMMU & ORS. v. 1111
DINESH CHANDER NANDA [P. SATHASIVAM, J.]
14. The High Court of Allahabad in Kaviraj Baroda Kant A
Sen vs. Court of Wards in Charge of Baraon Estate, Al R 1931
All. 752, as early as in 1931, while interpreting Article 56 of the
Indian Limitation Act, 1908 has stated as follows:
" ..... it is difficult to apply Article 56 which relates to a suit
B
for the price of work done by the Plaintiff for the Defendant
at his request. No special article appears to be applicable
to a claim by a medical practitioner for recovery of his fees
for attendance on a patient. The residuary Article 115
which applies to all breaches of contract, would therefore C
apply, for there was undoubtedly a contract, at east, an
implied one, to pay the fee, and the non-payment of that
fee amounted to a breach for which the plaintiff would be
entitled to compensation. In Harish Chander Surmah vs
Brojonath Chackerbutty [1870] 13 W.R. 96 a suit for
recovery of compensation for the fees of a medical D
practitioner was held to lie under the corresponding article
of the Limitation Act then in force"
15. The High Court of Gauhati in Kakodonga Tea Estate
vs. JN. Saikia, AIR 1973 Gau. 27, has also held that "a suit to E
recover unpaid professional fees by a Chartered Accountant
falis under Article 113 and not under Article 18 or Article 55 ... ".
The High Court of Gauhati furth~r specifically held as follows:
"8. It is easy to assume that very deep thought must have
been devoted by the Legislature in giving shape to the F
various Articles of the old as well as the new Limitation
Act. It is equally legitimate to assume that the words of
each Article must have been used in their commonly
accepted connotation unless contrary intention is
expressed in the body of the Act just as is apparent from G
Section 2 wherein certain expressions have been defined
to mean something less or more than what their commonly
known attributes are. The expression "price" used in Article
18 must, therefore, be taken to convey the commonly
H
1112 SUPREME COURT REPORTS (2010] 10 S.C.R.
A accepted sense implicit in it. According to the Chambers
Twentieth Century dictionary the word "price" means: the
amount. usually in money, for which a thing is sold or
offered; that which one forgoes or suffers for the sake of
or in gaining something: money offered for capture or killing
B of anybody: that for which one can be bribed; betting odds;
values. In common parlance what a client pays to a
professional person like an Advocate and a CA is
described as "fee" and not "price". Likewise, what a
patient pays to a medical-man for the services rendered
c to him by the latter is called "fee" and not "price". Therefore,
it would be unduly straining the expression "price" used in
Article 18 if it were held synonymous in connotation with
the fee paid to an Advocate, a Medical-man or a CA. For
this reason alone, I believe, Article 18 does not provide
for a suit for the professional fee of the nature just
D
stated ..... "
16. We agree with the ratio laid down by the Allahabad
and Gauhati High Court relating to Article 56 of the Indian
Limitation Act, 1908 that the term "price of work done" cannot
E be made applicable to professions where the professionals
merely provides services for a "fee". We accept the claim of
the respondent that the profession of an Architect is one such
service, hence Article 56 is not applicable to the present case.
Both the Trial Court as well as the High Court has arrived correct
F conclusion.
17. In the light of the above discussion, we do not find any
error in the conclusion arrived at by the Trial Court and affirmed
by the High Court. Consequently, the appeal fails and the same
is dismissed with no orders as to costs. We further make it
G clear that our conclusion is confined to the interpretation relating
to limitation and we have not expressed anything on the merits
of the claim made by the parties.
N.J Appeal dismissed.
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