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TMI Blog1989 (7) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... , itself or within a reasonable time thereafter. We are inclined to allow at least a week to the appellants under the above provision. Again Mr. Rana has not been in a position to show that the statement of the appellants that they knew about the mistake in or about September, 1962, whereafter they issued the notice under section 80 of the Code of Civil Procedure was untrue. This statement has not been shown to be false. Thus knowledge one week after the letter dated October 17, 1961, or in or about September, 1962, the suit would be within the period of limitation under article 113 of the Schedule to the Limitation Act, 1963. In the result, we set aside the judgment of the High Court, allow the appeal and remand the suit. - Civil Appeal No. 1826 (N) of 1974 - - - Dated:- 31-7-1989 - Judge(s) : K. N. SAIKIA., G. L. OZA JJ. U.A. Rana and S.K. Agnihotri, Advocates, for the respondents. M.V. Goswami, Advocate, for the appellants. JUDGMENT The judgment of the court was delivered by SAIKIA J. - This plaintiffs' appeal by special leave is from the appellate judgment of the Madhya Pradesh High Court dismissing the appeal, upholding the judgment of the trial cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manlal v. State of M. P. declaring the collection of 71/2 per cent. illegal was reported in [1960] MPLJ 39. Even after this decision, the Government continued to charge 71/2 per cent. extra money. Again, on August 31, 1961, the High Court of Madhya Pradesh in N. K. Doongaji v. Collector decided that the charging of 71/2 per cent. by the Government above the auction money was illegal. This judgment was reported in [1962] MPLJ 130. It is the appellants' case that they came to know about this decision only in or about September, 1962. On October 17, 1964, they served a notice on the Government of Madhya Pradesh under section 80 of the Code of Civil Procedure requesting the refund of Rs. 54,606, failing which, a suit for recovery would be filed ; and later they instituted Civil Suit No. 1-B of 1964 in the Court of the Additional District Judge, Jabalpur, on December 24, 1964. The Government resisted the suit on, inter alia, the ground of limitation. The trial court, taking the view that articles 62 and 96 of the First Schedule to the Limitation Act, 1908, were applicable and the period of limitation began to run from the dates the payments were made to the Government, held the suit to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that 71/2 per cent. above the auction money was charged by the Government of Madhya Pradesh as mahua and fuel cess and the High Court subsequently held that it had no power to do so. In view of those writ petitions challenging that power, the Government asked the contractors to continue to pay the same pending Government's decision on the question ; and the appellants accordingly paid. Ultimately, on October 17, 1961, the Government decided not to recover the extra amount any more but did not yet decide the fate of the amounts already realised. There is no denial that the liquor contracts were performed by the appellants. There is no escape from the conclusion that the extra 71/2 per cent. was charged by the Government believing that it had the power, but the High Court in two cases held that the power was not there. The money realised was under a mistake and without authority of law. The appellants also, while paying, suffered from the same mistake. There is, therefore, no doubt that the suit was for refund of money paid under mistake of law. The question is what was the law applicable to the case. Nul ne doit s'enrichir aux depens des autres-No one ought to enrich himself at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cover observing as above. Courts in England have since been trying to formulate a juridical basis of this obligation. Idealistic formulations as "aequum et bonum" and "natural justice" were considered to be inadequate and the more legalistic basis of unjust enrichment is formulated. The doctrine of "unjust enrichment" is that, in certain situations, it would be "unjust" to allow the defendant to retain a benefit at the plaintiff's expense. The relatively modern principle of restitution is of the nature of quasi-contract But the English law has not yet recognised any generalised right to restitution in every case of unjust enrichment. As Lord Diplock has said, "there is no general doctrine of 'unjust enrichment' recognised in English law. What it does is to provide specific remedies in particular cases of what might be classed as unjust enrichment in a legal system, i.e., based upon the civil law." In Sinclair v. Brougham [1914] AC 398 (HL), Lord Haldane said that law could not "de jure" impute promises to repay whether for money "had and received" otherwise, which may, if made de facto, it would inexorably avoid. The principle of "unjust enrichment" requires : first, that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case. It may be said that this court has referred to unjust enrichment in cases under section 72 of the Contract Act. See Shiv Shanker Dal Mills v. State of Haryana, AIR 1980 SC 1037 ; U. P. State Electricity Board v. City Board, AIR 1985 SC 883 and State of M. P. v. Vyankatlal, AIR 1985 SC 901. The next question is whether, and if so, which provision of the Limitation Act will apply to such a suit. On this question, we find two lines of decisions of this court, one in respect of civil suits and the other in respect of petitions under article 226 of the Constitution of India. Though there is no constitutionally provided period of limitation for petitions under article 226, the limitation prescribed for such suits has been accepted as the guideline, though a little more latitude is available in the former. A tax paid under mistake of law is refundable under section 72 of the Indian Contract Act, 1872. In STO v. Kanhaiya Lal Makund Lal Saraf [1959] SCR 1350, where the respondent, a registered firm, paid sales tax in respect of its forward transactions in pursuance of the assessment orders passed by the Sales Tax Officer for the years 1949 to 51 ; in 1952, the Allahabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent were not, therefore, in pari delicto in receiving and paying respectively the illegal premium, which, therefore, in accordance with established common law principles, the respondent was entitled to recover from the landlord and that the omission of a statutory remedy did not, in cases of this kind, exclude the remedy by money had and received. In the instant case also, the parties could not be said to be in pari delicto in paying and receiving the extra 71/2 per cent. Had the appellants not paid this amount, they would not have been given the contracts. In D. Cawasji and Co. v. State of Mysore [1975] 2 SCR 511, the appellants paid certain amounts to the Government as excise duty and education cess for the years 1951-52 to 1965-66 in one case and from 1951-52 to 1961-62 in the other. The High Court struck down the provisions of the relevant Acts as unconstitutional. In writ petitions before the High Court claiming refund, the appellants contended that the payments in question were made by them under mistake of law; that the mistake was discovered when the High Court struck down the provisions as unconstitutional and the petitions were, therefore, in time but the High Court d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of limitation and that section 17(1)(c) and article 113 of the Limitation Act, 1963, would be applicable. In CST v. Auraiya Chamber of Commerce [1987] 167 ITR 458; [1986] 3 SCC 50, the Supreme Court, in its decision dated May 3, 1954, in STO v. Budh Prakash Jai Prakash [1954] 5 STC 193 having held that tax on forward contracts to be illegal and ultra vires the U. P. Sales Tax Act and that the decision was applicable to the assessee's case, the assessee filed several revisions for quashing the assessment order for the year 1949-50 and for subsequent years which were all dismissed on the ground of limitation. On appeal to this court, Sabyasachi Mukharji J., while dismissing the appeal, held that money paid under a mistake of law comes within section 72 of the Contract Act; there is no question of any estoppel when the mistake of law is common to both the assessee and the taxing authority. His Lordship observed that section 5 of the Limitation Act, 1908, and article 96 of its First Schedule which prescribed a period of 3 years were applicable to suits for refund of illegally collected tax. In Salonah Tea Co. Ltd. v. Superintendent of Taxes, Nowgong [1988] 173 ITR 42 ; [1988] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng been that it was after the judgment in the case of Loong Soong Tea Estate that the cause of action arose. That judgment was passed in July, 1973. The High Court was, therefore, held to have been in error in refusing to order refund on the ground that it was possible for the appellant to know about the legality of the tax sought to be imposed as early as 1963 when the Act in question was declared ultra vires. The court observed (at p. 46 of 173 ITR) : "Normally speaking, in a society governed by rule of law, taxes should be paid by citizens as soon as they are due in accordance with law. Equally, as a corollary of the said statement of law, it follows that taxes collected without the authority of law as in this case from a citizen should be refunded, because no State has the right to receive or to retain taxes or monies realised from citizens without the authority of law." On the question of limitation, referring to Suganmal v. State of M. P. [1965] 56 ITR 84 ; AIR 1965 SC 1740, and Tilokchand Motichand v. H. B. Munshi [1969] 2 SCR 824, his Lordship observed that the period of limitation prescribed for recovery of money paid by mistake started from the date when the mistake w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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