17.10. Writ jurisdiction and the bar of limitation.- The Supreme Court has held1 that in the absence of any provision of law specifically applicable, a period of limitation cannot be provided by judicial legislation. Nor can the court relax the law of limitation except as provided by a specific statutory provision2.
1. State Bank of Bikener and Jaipur v. C.S. Verma, (1968) 1 Labour LI 840 (844) (SC).
2. Cf. Rajender Singh v. Santa Singh, AIR 1973 SC 2537 (2547).
17.11. However, a different approach is visible in the case of writs.
In a recent case1, the question that fell for consideration revolved round the modalities of the refund of excess market fees realized by the several market committees of Haryana. The original rate of market fee of 2 per cent. was increased to 3 per cent. under Haryana Act 22 of 1977. This increase was challenged as being unconstitutional.
The challenge was upheld and the recovery of excess of 1 per cent. was held to be ultra vires. No directions were, however, given for refund at the time when the Haryana Act 22 of 1977 was declared unconstitutional, because these amounts could not then be quantified. There was some discussion before the High Court regarding the article of limitation applicable to such a claim for refund of levies held unconstitutional by the court. But the Supreme Court observed as under on this poin.-
"There cannot be any dispute about the obligation or the amounts since the Market Committees have accounts of collections and are willing to disgorge the excess sums. Indeed, if they file suits within the limitation period, decrees must surely follow. What the period of limitation is and whether Article 226 will apply are moot as is evident from the High Court's judgment, but we are not called upon to pronounce on either point in the view we take.
Where public bodies under colour of public laws, recover people's moneys, later discovered to be erroneous levies, the dharma of the situation admits of no equivocation. There is no law of limitation, especially for public bodies on the virtue of returning what was wrongly recovered to whom it belongs.
Nor is it palatable to our jurisprudence to turn down the prayer for high prerogative writs, on the negative plea of 'alternative remedy' since the root principle of law married to justice, is ubi jus ibi remedium."
The number of occasions on which the market committee realised the increased levy of rupees three must have been legion. But, as appears from another judgment of the Supreme Court2, the levy was effected under the provisions of Ordinance 12 of 1977 dated 5th September, 1977 (in Haryana) and Ordinance 2 of 1978 promulgated on 28th April, 1978 (in the State of Punjab).
That is to say, in both the cases, if the market committees were to file suits before the judgment of the Supreme Court3 was delivered, the civil suits would have been in time. But the observations of the Supreme Court extracted above indicate a readiness to give relief in writ jurisdiction unhampered by the technicalities of limitation.
1. Shiv Shankar Dal Mills v. State of Haryana, (1980) 2 SCC 437 (438).
2. K.K. Puri v. State of Punjab, (1979) 3 SCR 1217 (1228, 1262).
3. Shit, Shankar Dal Mills v. State of Haryana, (1980) 2 SCC 437, supra.
17.12. In an earlier case1 the Supreme Court that observed that where a person comes to the court for a relief under Article 226 of the Constitution on the allegation that he has been assessed to tax under a void legislation and, having paid it under a mistake, is entitled to get it back, the court, if it finds that the assessment was void, being made under a void provision of law, and that the payment was made by mistake, is still not bound to exercise its discretion directing repayment. Whether repayment should be ordered in the exercise of this discretion will depend in each case on its own facts and circumstances. The court, felt that it was not easy nor was it desirable to lay down any rule for universal application.
1. State of Madhya Pradesh v. Bhailal Bhai, AIR 1962 SC 1008.
17.13. Exercise of writ jurisdiction.- The observations of the Supreme Court1 to the effect that where the delay is more than the period of limitation prescribed for a civil action (which is three years), "it will almost always be proper for the court to hold that the delay is unreasonable", were pleaded in a recent case before the Calcutta High Court2 on behalf of the State of West Bengal as a justification for denying the refund of certain taxes paid by a sanitary contractor under the Bengal Finance (Sales Tax) Act, 1941. Rejecting the contention, however, the High Court observe.-
"In our view, in Bhailal Bhai's case, the Supreme Court has not laid down any fixed period namely, three years when the mistake was detected as in Article 96 of the Indian Limitation Act, 1908. As we have understood the decision of the Supreme Court in Bhailal's case, it has been laid down by the Supreme Court that the High Court should not normally exercise its discretion when the claim for refund is made beyond the period of three years from the date the mistake came to be known to the party.
The use of the words 'almost always' is very significant. The facts and circumstances of a particular case may be such as to persuade the High Court to exercise its discretion in favour of the party claiming refund even beyond the period of three years from the date of his knowledge of the mistake.
If a party, after coming to know of the mistake committed by him in paying taxes not payable him because the law under which the taxes were realised was void, does not take any step in the matter either by making an application for refund or bringing it to the notice of the authorities concerned about the illegal realisation of the tax under a common mistake of law, or in other words, if the party sits idle during the period of time within which a civil action is to be brought, in such a case, the High Court should not exercise its discretion in granting relief to that party for refund."
1. State of Madhya Pradesh v. Bhailal Bhai, para. 17.12, supra.
2. State of West Bengal v. Suresh Chandra Bose, (1980) 84 CWN 229 (237).
17.14. Then there is a Madras case also on the subject. In a suit filed by Parry and Company against the State of Tamil Nadu on the original side of the Madras High Court1, the question of applicability of section 17(1)(c) came up for consideration. Parry and Company, a dealer in engineering equipments (for goods imported under the Import Trade Control Permit) were taxed by the sales tax authorities on certain transactions as local sales for the assessment year upto 1966-67. In view of the decision of the Supreme Court in Khosla's case,2 the plaintiffs became entitled to refund of the sum of Rs. 43,659 paid by way of sales tax for the recovery of which the suit was filed.
The Supreme Court judgment was delivered on 18th January, 1966 and reported on 1st May, 1966. The court found, as a question of fact, that the plaintiff had knowledge about the judgment on 14-3-1968. As the suit was filed on 20th March, 1972, the court dismissed it as being barred by time, but there are observations in the judgment to indicate that if the plaintiff had approached the court within three years of his knowledge of the decision of the Supreme Court in Khosla's case, the suit would have been within limitation.
1. Parry & Co. v. State of Tamil Nadu, 1975 Tax Law Report 1565 (Mad).
2. K.G. Khosla & Co. Pvt. Ltd. v. Deputy Commissioner of Commercial Taxes, AIR 1966 SC 1216.
17.15. Another case1 relating to the refund of sales tax recovered under mistake of l.-this time from Madhya Pradesh brings out how the omission from the Act of 1963 of Article 96 (which occurred in the Act of 1968) makes no substantial difference to the position. The following observations are pertinent:
"Under the Indian Limitation Act, 1908, a claim for relief on the ground of mistake was governed by Article 96 and time commenced to run from the date when the mistake becomes known to the plaintiff. See State of Madhya Pradesh v. Bhailal Bhai, 15 STC 450: AIR 1964 SC 1006 and (1965) 16 STC 689 (SC) (supra). In. both these cases it was held that Article 96 applied to a suit for recovery of money paid under a mistake of law. Article 96 has been omitted in the new Limitation Act of 1963.
However, section 17(1)(c) of this new Act provides that in the case of a suit for relief from the consequences of a mistake, the period of limitation shall not begin to run until the plaintiff has discovered the mistake or could with reasonable diligence have discovered it."
1. Caltex (India) Ltd. v. Asstt. Commissioner of Sales Tax, Indore Region, Indore, AIR 1971 MP 162.
17.16. Position summed up as to mistake of law.- The upshort of the above discussion is that even though Shiv Shankar Dal Mills case expounds a theory that there is no law of limitation for returning what was wrongly recovered, this observation was intended to indicate only the width of the writ jurisdiction. It should not be taken to mean that the courts should ignore the provisions of section 17 read with Article 113 of the Limitation Act and decree a time-barred suit.
17.17. Recommendation to insert an Explanation to section 17.- In the result, the only change needed in section 17 is the addition of an Explanation to deal with conduct which is unconscionable, having regard to the special relationship between the parti.-a point already dealt with earlier in this Chapter.1 For this purpose, we recommend the insertion of the following Explanation below section 1.-
"Explanatio.-For the purposes of this section, fraud' includes conduct on the part of the defendant or the opposite party, as the case may be, which, having regard to some special relationship between the parties, was unconscionable."
1. See para. 17.8, supra.