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2018 Supreme(P&H) 1461
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
ANIL KSHETARPAL, J.
Food Corporation of India - Appellant
Versus
Municipal Committee, Kapurthala - Respondent
RSA No.1921 of 1997, RSA No.978 of 2000, RSA No.4594 of 2001, RSA No.3755 of 2000
Decided On : 02-05-2018
For the Appellant :Mr. Arun Walia, Sr. Advocate with Mr. Marinal Sharma, Mr. K.K. Gupta, Adv.
For the Respondent: Mr. H.S. Sethi, Mr. Pankaj Jain, Mr. Sanjeev Sharma, Adv.
The main legal point established in the judgment is that the cause of action to recover the amount arises on the day the mistake comes to the notice of the plaintiff, as per Section 17(1)(c) of the Limitation Act.
Headnote:
Illegal Recovery of House Tax - Punjab Municipal Act - 1911, Limitation Act - Section 17(1)(c)
Fact of the Case:
The Food Corporation of India filed multiple suits against different municipal bodies for the illegal recovery of house tax. The plaintiff argued that the house tax was wrongly recovered due to exemption notifications issued by the State of Punjab. The defendants contested the suits on the grounds of correctness and limitation.
Finding of the Court:
The Court found that the house tax was wrongly recovered and that the suits were not barred by time. The Court held that the cause of action to recover the amount arises on the day the mistake comes to the notice of the plaintiff, not on the day the deposit was made. The Court also referred to Section 17(1)(c) of the Limitation Act, stating that the period of limitation does not begin to run until the plaintiff has discovered the mistake.
Issues: The main issue was whether the cause of action to recover the amount arises on the day the deposit was made or on the day the mistake comes to the notice of the plaintiff. The Court also considered the applicability of exemption notifications and the correctness of the house tax recovery.
Ratio Decidendi: The Court held that the cause of action to recover the amount arises on the day the mistake comes to the notice of the plaintiff, in line with Section 17(1)(c) of the Limitation Act. The Court also emphasized that the recovery of tax had been declared void and illegal through the judgments passed by the Courts below.
Final Decision: The Court allowed all the appeals and decreed the suits filed by the plaintiff. The amount claimed was deemed liable to be recovered along with interest at 7.5% per annum from the date of institution of the suit till the date of payment.
ANIL KSHETARPAL, J.
Vide this judgment, I shall be disposing of four regular second appeals bearing RSA No.1921 of 1997, RSA No.978 of 2000, RSA No.4594 of 2001 and RSA No.3755 of 2000. Learned counsel for the parties are agreed that the common issue needs determination and hence, these appeals can be conveniently disposed of by a common judgment.
2. In the considered opinion of this Court, the following substantial question of law arise for consideration:-
“Whether in case of illegal recovery of house tax, cause of action to recover the amount arises on the day the deposit was made or cause of action would arise on the day, the mistake comes to the notice of the plaintiff?”
Facts of each appeal are being noticed.
RSA No.1921 of 1997
3. Plaintiff-appellant is in the regular second appeal against the judgment of the learned First Appellate Court. The plaintiff-Food Corporation of India filed a suit for declaration, permanent injunction, mandatory injunction and for recovery of Rs.2,51,942.40 illegally recovered as house tax from the plaintiff along with interest @ 18% per annum. It is the case of the plaintiff that it has constructed godowns and as per notification issued by State of Punjab dated 21.07.1980, the relevant provisions of the Punjab Municipal Act, 1911 ceased to operate as the godowns have been declared as new Mandi township. It is further the case of the plaintiff that on account of illegal demands, house tax from the year 1980-81 to 1991-92 has been paid. Hence, amount of Rs.17,496/- which is payable with respect to other godowns is liable to be adjusted and the remaining amount of Rs.2,51,941.40 paisa is recoverable. The plaintiff before filing the suit demanded the amount by notice dated 21.12.1991.
4. The defendant-Municipal Committee, Kapurthala contested the suit and pleaded that such notification would not be applicable and house tax has been correctly recovered. The suit was also contested on limitation. The suit was filed on 19.11.1992.
5. Learned trial Court after appreciating the evidence held that the house tax was wrongly recovered. The Court held that since the payment was made under a mistaken belief so there is no limitation to recover the amount. With these findings, the suit was decreed. Municipal Committee, Kapurthala filed the first appeal. Learned First Appellate Court upheld the finding of house tax that the amount was wrongly recovered. However, the learned First Appellate Court held that the plaintiff is only entitled to recover the amount paid during three years before the institution of the suit.
6. The appeal has been filed only by Food Corporation of India.
RSA No.978 of 2000
7. Food Corporation of India had filed a suit for mandatory injunction on account of illegal recovery of the house tax against the Municipal Committee, Kharar. In the present case, the notification exempting the applicability of the relevant provisions of the Punjab Municipal Committee Act was issued on 04.05.1990. The Court fee for recovery of the amount was paid. The notice for recovery was issued on 08.06.1993 before filing the suit. The Municipal Committee contested the suit on the ground that the house tax has been correctly imposed and recovered and the suit is barred by time. Learned trial Court after recording a finding that the Municipal Committee has wrongly and illegally recovered the amount of Rs.1,29,027/-. However, dismissed on the ground that the suit has been filed beyond the period of three years and hence, the suit is barred under Article 16 of the Limitation Act. The Food Corporation of India filed the first appeal. Learned First Appellate Court also dismissed the appeal.
RSA No.3755 of 2000
8. The suit was filed by the Food Corporation of India on 11.02.1992 against the Notified Area Committee, Mullanpur for recovery of illegally recovered amount. The notification examining the applicability of the relevant provisions of Municipal Act has been issued by the Government on 16.04.1980 and the house ta
