Plaint Seeking Interest on Principal Amount Already Accepted Unconditionally is Barred by Acquiescence and Limitation.

The Plaintiff established a Biomass Power Plant following a 2003 Government Notification providing for a 2% interest subsidy

Between 2008 and 2023, the parties engaged in extensive litigation (W.P.(C) 353/2008, W.P.(C) 8070/2011, and W.P.(C) 8827/2015) regarding the release of the subsidy

During the pendency of the third writ, the Defendant issued a letter dated 26th April 2023 agreeing to release the principal subsidy amount of ₹1,96,67,074/-.

Relying on this letter, the Plaintiff withdrew its writ petition on 17th May 2023 without reserving liberty to claim interest

After receiving the principal amount on 31st August 2023, the Plaintiff filed the present suit seeking ₹2,53,70,525/- as interest for the delay from 2012 to 2023

The Defendant filed the present application under Order VII Rule 11 CPC seeking rejection of the plaint

1. Whether the plaint discloses a real cause of action or an illusory one camouflaged by clever drafting

2. Whether the suit is barred by the principle of acquiescence due to the unconditional withdrawal of previous proceedings

3. Whether the suit is barred by limitation under Article 113 of the Limitation Act, 1963

The court applied Order VII Rule 11(a) and (d) of the CPC, emphasizing that a plaint must be rejected if it fails to disclose a cause of action or is barred by law

It relied on Dahiben v. Arvindbhai Kalyanji Bhanusali to hold that "clever drafting" creating an illusory cause of action should be nipped in the bud

The principle of "acquiescence" as a bar to suit was drawn from Asha Sharma v. Sanimiya Vanijiya P. Ltd., where the court held that inconsistent pleas in subsequent suits are barred

Regarding limitation, the court applied Article 113 of the Limitation Act, 1963, which prescribes a three-year period from when the "right to sue" accrues

Section 9 of the Limitation Act, which dictates that once time begins to run, no subsequent disability stops it

The court found that the Plaintiff’s claim for interest was intrinsically linked to the principal subsidy amount already litigated

By withdrawing W.P.(C) 8827/2015 "satisfied" with the principal amount and without seeking liberty to claim interest, the Plaintiff’s current suit was barred by acquiescence

The court rejected the argument that the cause of action arose only upon payment in 2023; instead, the "right to sue" for interest accrued when the delay first occurred in 2012

Since the Plaintiff admitted the amount was due from 2006/2012, the three-year limitation period under Article 113 expired long before the 2024 filing

The court determined the Plaintiff was attempting to revive a dead claim by linking it to the date of "quantification" of interest, which is legally impermissible under Section 9 of the Limitation Act

The court held that the suit disclosed no real cause of action, was barred by the principle of acquiescence, and was ex-facie barred by limitation

The suit [CS(OS) 200/2024] was dismissed