TMI Blog1977 (1) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... pay a sum of Rs. 18,096.75 towards the assessment aforementioned under threat of legal and revenue proceedings. Kunhammaman Raja also died on December 23, 1960, and he was succeeded by Sri P. C. Cheriya Kunhunni Raja. The agricultural income-tax department proceeded against him and imposed further a penalty of Rs. 5,000 for non-payment of the tax. This resulted in his paying a sum of Rs. 20,100 towards the tax and penalty. In the circumstances, the payment could only be taken to be under coercion. Sri P. C. Cheriya Kunhunni Raja passed away and he was succeeded by Sri K. C. Cheriya Kunhunni Raja. The department proceeded against him for the realisation of the balance tax amount and penalty. He, however, refused to pay the arrears of tax and penalty on the ground that under law he was not liable to pay the same. He contended that he had nothing to do with the stanam properties which had got divided under section 7(3) of the Hindu Succession Act, 1956, on the death of Sri K. C. Sreemanavikraman alias Ettan Raja on May 2, 1958. The Hindu Succession Act had come into force on June 18, 1956. This contention was not, however, accepted by the Agricultural Income-tax Officer who passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned was quashed by the High Court. The Inspecting Assistant Commissioner of Agricultural Income-tax Department, Kozhikode, filed C.A. No. 1397 of 1969 [Inspg. Asst. Commr. of Agrl. LT. v. Ramunni Panikkar--[1972] 84 ITR 370 (SC)] before the Supreme Court of India challenging the decision of the High Court in O.P. No. 2413 of 1965. During the pendency of that appeal, the joint receivers were discharged and the plaintiff in the present suit was appointed as the receiver. This appointment was in the partition suit O.S. No. 80 of 1964. The plaintiff was impleaded as the respondent in the appeal before the Supreme Court. The Supreme Court dismissed the appeal as per its judgment dated October 5, 1971. The Supreme Court declared in its judgment that there was no stanam after the death of Sreemanavikraman Raja in view of section 7 of the Hindu Succession Act and the assessment made on the stanam was a result of misunderstanding of the true legal position. There was no fresh assessment by the department. The estate had paid Rs. 38,196.75 towards illegal assessment which had been quashed as per the judgment of the High Court as well as the Supreme Court. The present suit is brought forwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidering the matter we find that in answering the question it is not altogether free of difficulties. Questions of equity may not arise here as pointed out as early as in Luchmee Buksh Roy v. Ranjeet Ram Pandey [1874] 20 WR 375 (PC). The judicial Committee of the Privy Council observed : " It has been said that this case ought to be decided upon an equitable construction and not upon the strict words of the statute ; but their Lordships think that the statutes of limitation, like all others, ought to receive such a construction as the language in its plain meaning imports. Statutes of limitation are in their nature strict and inflexible enactments. The object of legislature in passing them is to quiet long possession and to extinguish stale demands. Such legislation has been advisedly adopted in India as it has been in this country and their Lordships think that in construing these statutes the ordinary rules of interpretation must prevail. " The statute of limitation is a disabling Act and, therefore, the limitation has to be found within the four corners of the statute. As B. B. Mitra points out in his interpretation of Limitation Act that, basically, the laws of limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed upon the fraud of the defendant or respondent or his agent ; or (b) the knowledge of the right or title on which a suit or application is founded is concealed by the fraud of any such person as aforesaid ; or (c) the suit or application is for relief from the consequences of a mistake ; or (d) where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him ; the period of limitation shall not begin to run until the plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, have discovered it ; or in the case of a concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production : Provided that nothing in this section shall enable any suit to be instituted or application to be made to recover or enforce any charge against, or set aside any transaction affecting, any property which-- (i) in the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know, or have reason to believe, that any fraud had been c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Venkataraman (K.S.) Co. v. State of Madras [1966] 60 ITR 112, 136 (SC) the Supreme Court pointed out : " It is now settled by decisions of this court that a suit for refund of tax paid under a mistaken belief that in law tax was payable, was at the material date governed by article 96 of the Indian Limitation Act, 1908, and the period prescribed by that article commenced to run from the date when the mistake became known." It was further observed in the same ruling as follows : " The appellants' suit was instituted within three years from the date on which the appellants claim that they came to know about the decision of the Madras High Court in Gannon Dunkerley and Company's case [1954] 5 STC 216 (Mad) and the claim was unquestionably within limitation. " Article 24 of the present Act which is the same as article 62 of the old Act may not be the proper article applicable in the matter. Article 24 runs : " 24. For money payable Three When the by the defendant to years. money is the plaintiff for money received." received by the defendant, for the plaintiff's use The Supreme Court in Venkata Subbarao (A.) v. State of A.P. AIR 1965 SC 1773 said : " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1919] ILR 46 Cal. 670 ; [1919] 50 IC 444, 446, 447 (PC). The facts of the case as stated by Sir Lawrence Jenkins on behalf of the Privy Council are as follows : " On the 14th May, 1904, a patni taluq known as Lot Mirzapur was put up for sale for arrears of rent under the Bengal Patni Taluqs Regulation, 1819, at the instance of the Zamindar, Musammat Bhagwanbati Chowdhrain. The defendant-respondent, Pirthichand Lal Chowdhury, as her successor in title, is the present zamindar. The defaulting patnidar was Chhatrapat Singh. Hukum Chand Boid, now represented on this appeal by his heirs the plaintiffs-appellants, was the highest bidder, and the tenure was knocked down to him. The purchaser paid in the entire amount of the purchase money, and on the 23rd of May, 1904, he received from the officer conducting the sale a certificate of payment under section 15 of the Regulation. On the 28th May, 1904, the purchaser received the usual amaldustak or order for possession, but on the 30th of June following, a darpatnidar, being desirous of contesting the right of the zamindar to make the sale, sued her for its reversal. Three similar suits for the same purpose were instituted by othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss, and time began to run from the date of the decree of the trial court and not that of the appellate court. " Similarly, in N. Pakuran v. K. Kandan Kutty AIR 1923 Mad 23 in a suit under article 120 of the Limitation Act of 1908, a Division Bench of the Madras High Court held that the starting point of limitation is the date of the first decree declaring that the defendants in the suit had no saleable interest in the land and not the date of the appellate decree confirming the same. Nagayya v. Penukonda Co-op. Town Bank Ltd. AIR 1947 Mad 90 is another case in point. The facts of the case were as follows : " A member of a co-operative society, by name Narasimha Sastri, borrowed a sum of money from the society and purported to mortgage to it the house in which he was living. In fact, he was a tenant of that house and had no right whatsoever ; but the fraud he played on the society was not detected and his mortgage was accepted. When he did not pay the debt, an application was filed before the Deputy Registrar of Co-operative Societies in Claim No. 7 of 1933-34 for the amount due. An award was passed and in due course E. P. No. 693 of 1933-34 was filed by the co-operative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52(1) and 59 of the Municipal Act to be void and unconstitutional. When discovery of the mistake is a sine qua non for computing the period of limitation, reference to the time of payment of amount becomes wholly immaterial, and what is to be seen is when the mistake was discovered or could have with reasonable deligence been discovered. No doubt, as Mr. T.R.G. Warriar, the learned counsel for the plaintiff-respondent, contended where it is once established that the payment, even though it be of a tax, has been made by the party labouring under a mistake of law, the party is entitled to recover the same and the party receiving the same is bound to repay or return it. No distinction can be made in respect of a tax liability and any other liability on a plain reading of the terms of section 72 of the Contract Act. The term " mistake ", used in that section, has been so used without any qualification or limitation whatever and comprises within its scope a mistake of law as well as a mistake of fact. And also to hold that the tax paid by mistake of law cannot be recovered under section 72 will be not to interpret the law but to make a law by some such words as " otherwise than by wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... state that in the relevant context where these observations appear the Supreme Court was not considering the question of limitation in the matter of filing the proceedings. The court was dealing with the question whether in the nature of the voluntary payment of the tax by the concerned assessee he can ask for refund. That would be clear from the immediate succeeding lines in the said judgment [1958] 9 STC 747, 758 (SC) : " The state of mind of the respondent would be the only thing relevant to consider in this context and once the respondent established that the payments were made by it under a mistake of law (and it may be noted here that the whole matter proceeded before the High Court on the basis that the respondent had committed a mistake of law in making the said payments), it was entitled to recover back the said amounts and the State of U.P. was bound to repay or return the same to the respondent irrespective of any other consideration. There was nothing in the circumstances of the case to raise any estoppel against the respondent nor would the fact that the payments were made in discharge of a tax liability come within the dictum of the Privy Council above referred to. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrong on the part of the receiver of the estate to have launched the proceedings for refund when the matter was pending in the Supreme Court and the right to refund depended upon the Supreme Court's decision finally. He places reliance on the Privy Council's statement in Bassu Kuar's case [1889] ILR 11 All 47, 49, 56 (PC) : " It would be an inconvenient state of the law if it were found necessary for a man to institute a perfectly vain litigation under peril of losing his property if he does not." To understand this statement we have to go into the facts of the case : " In 1879, Dhum Singh owing money to Baru Mal, they entered upon an arrangement that Baru Mal, buying villages of Dhum Singh, for Rs. 55,000, should give credit for and write off so much as was equal to the debt, receiving only the balance in cash ; it appearing from the accounts down to 1st September, 1879, that the debt was Rs. 33,359. The conveyance was to be made to Bassu Kuar, the wife. But, disputes afterwards arising, completion was refused by Baru Mal. On 3rd September, 1880, Dhum Singh sued him for specific performance ; but his suit, although decreed by the court of first instance, was dismissed by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and decreed completion of the contract according to that view. Up to the date of the Subordinate Judge's decree in 1881, Dhum Singh retained the amount of his debt as of right, and in accordance with the contract alleged by him. After the decree of 1881 he still retained it as of right, and with a title which could not be disputed in any court of justice, except by the one mode of appeal from the decree of 1881. Baru Mal might have sued for his debt, but the utmost benefit that could have come to him from such a suit would have been to have it suspended or retained in court till after decision of the appeal in the specific performance suit. Dhum Singh's defence would have been that the debt was paid by virtue of the contract, and that defence must have prevailed if the suit were heard while the decree of 1881 still stood unreversed. It would be an inconvenient state of the law if it were found necessary for a man to institute a perfectly vain litigation under peril of losing his property if he does not. And it would be a lamentable state of the law if it were found that a debtor who for years has been insisting that his creditor shall take payment in a particular mode, can, when it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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