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1988 Supreme(MP) 158
IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR
C.P. Sen and Y.B. Suryavanshi, JJ.
Madhya Pradesh High Court Bar Association and others
Vs.
Union of India and others
Misc. Petition No. 3404 of 1986
Decided On: 03.08.1988
For Appellant/Petitioner/Plaintiff: N.S. Kale and D.M. Dharmadhikari
For Respondents/Defendant:B.K. Rawat for Respondents Nos. 1 and 3 and S.L. Saxena, Addl. A.G. for Respondents Nos. 2 and 4 to 6
The limitation period for a suit for refund of fees paid under illegal bye-laws is three years from the date of payment, and the limitation period is not extended under Section 17(1)(c) of the Limitation Act, 1963, unless the plaintiff exercised reasonable diligence in discovering the mistake.
Headnote:
LIMITATION ACT - ARTICLE 24 - SECTION 17(1)(C) - Suit for refund of fees paid under illegal bye-laws - Limitation period of three years from the date of payment - Discovery of mistake - Reasonable diligence - Amended law conferring legislative competence to impose fees - Revival of bye-law - No refund for fees paid after amendment.
Fact of the Case:
Plaintiff, a transport company, filed a suit against the Municipal Council, Bhind, seeking a refund of fees paid for parking vehicles within the municipal area from 1971 to 1973. The plaintiff claimed that the fees were illegally collected as the bye-law authorizing the collection was ultra vires the Madhya Pradesh Municipalities Act, 1961. The plaintiff relied on a judgment of the High Court in 1972, which held that the bye-law was illegal.
Finding of the Court:
The High Court held that the suit was barred by limitation under Article 24 of the Limitation Act, 1963, which prescribes a three-year limitation period from the date of payment. The Court rejected the plaintiff's argument that the limitation period was extended under Section 17(1)(c) of the Act, which provides for extension in cases of fraud or mistake, as the plaintiff failed to exercise reasonable diligence in discovering the mistake.
Issues: 1. Whether the suit was barred by limitation under Article 24 of the Limitation Act, 1963? 2. Whether the limitation period was extended under Section 17(1)(c) of the Act due to fraud or mistake?
Ratio Decidendi: 1. Article 24 of the Limitation Act, 1963 applies to suits for refund of money paid under illegal bye-laws. 2. The limitation period under Article 24 is three years from the date of payment. 3. Section 17(1)(c) of the Act extends the limitation period in cases of fraud or mistake, but only if the plaintiff exercised reasonable diligence in discovering the mistake. 4. The plaintiff failed to exercise reasonable diligence in discovering the mistake as the judgment relied upon by the plaintiff was reported in an All India Reporter in 1967, and the plaintiff could have discovered the mistake earlier with due diligence.
Final Decision: The High Court allowed the appeal, set aside the judgment and decree of the trial court, and dismissed the suit as barred by limitation.
Dr. T.N. Singh, J.
1. This is defendant's appeal which must succeed on a very short point of limitation despite long arguments being advanced on both sides on merits of plaintiffs claim.
2. To the claim made in the suit, undisputedly Article 24 of the Limitation Act applied inasmuch as in para 6 of the plaint, plaintiff stated its own case and also stated that suit was "within limitation as per Article 14 read with section 17(1)(c) of the Limitation Act, 1963". The suit was for refund of certain "fees" said to have been recovered by the defendant illegally from the plaintiff "from the year 1971 upto December, 1973" as stated in para 5 of the plaint. Within that period, a sum of Rs. 19,471/- is said to have been paid "under mistake of law" by the plaintiff to the defendant. However, the statement that the mistake was discovered when this Court passed its judgment dated 13-7-1973, certified copy whereof was annexed to the plaint, is not acceptable for reasons to follow.
3. As appears from Ex. P/1, which was addressed in the month of November, 1971 by Chief Municipal Officer, Bhind Municipality to the Managers, M.P.S.R.T.C. of Bhind, Morena, Gwalior and Guna depots, the Municipality informed the plaintiff that fees will be levied for parking of vehicles belonging to the plaintiff within the municipal area in virtue of the bye-law in that regard being approved by the State Government on 29-10-1971.
4. In the certified copy of the Judgment annexed to the plaint, which is proved as Ex. P/71, at para 2, what is observed is crucial to disposal of the instant appeal Therein, it is stated "the present petitions are directly covered by a decision of a Division Bench of this Court in Sindhi Sahiti Multipurpose Transport Cooperative Society, Ltd., Bairagarh, Bhopal vs. Municipal Council Bhopal, 1967 MPLJ 108 : AIR 1967 MP 169." There is no doubt that the question which arose for this Court's consideration in Misc. Petition No. 109 of 1972 which was decided on 19-9-1972 (as per Ex. P/71) had been decided by this Court much earlier, in 1967 itself and that decision has been duly reported in an All India Journal of repute. It was held in the earlier Judgment rendered in the case of Sindhi Sahiti's case (supra) that no municipality in the State of Madhya Pradesh had the required legislative competence to frame bye-laws under clause (m) as it then existed, of Section 358(7) of MP. Municipalities Act, 1961, for short, the 'Act'. That position was reiterated subsequently in 1972 in Ex. P/71. In the suit in the instant case, it was claimed that in ignorance of law laid down by this Court, the plaintiff had paid the "fees" demanded by the Municipal Council, Bhind and said Municipal Council, cited as defendant (herein respondent), was found, therefore, liable to refund the same to the plaintiff.
5. No doubt, the plaintiff admitted applicability of Article 24, but I am otherwise too satisfied that provision was rightly cited Law in that regard is well-settled In the case of Venkata Subbarao, AIR 1965 SC 1773, the suit was instituted for recovery of money from the Government which, it was claimed, were not due payable by the plaintiffs to the Government, but had been paid by the plaintiffs in ignorance of their legal rights. It was held that Article 62, limitation Act, 1908 (which is in pari materia with Article 24 of 1963 Act) was applicable because "the money was received as tax by the defendant State from the plaintiff which the plaintiff was not bound in law to pay". The same view wall taken in R.N. Sinha's case, AIR 1971 SC 1245 on Article 62 to a suit for recovery of tax illegally collected.
6. As per Article 24, the period of limitation prescribed is three years from the time "when the money is paid". Evidently the suit filed on 7-7-1976 could only take care of payment of "fees" paid by the plaintiff to the defendant upto 7-7-1973. A major portion of the claim accordingly was evidently barred; but by amending the plaint, aid was invoked of Se
