G.T. Nanavati, J.
1. The appellant entered into an agreement with the then State of Bhavnagar in 1944 for manufacture' sale and export of salt in and from the territories of Bhavnagar. As a part of the said agreement, the State of Bhavnagar had provided railway siding facilities to the appellant. The appellant had to pay freight charges for haulage of goods from the appellants siding to the concrete jetty and also the charges for placement of wagons. After the merger of the Bhavnagar State, the western railways revised shifting charges with effect from 1-8-1955 and placement charges with effect from 1-7-1955. The said upward revision of charges was challenged by the appellant by filing Regular Civil Suit No. 553 1957 in the Court of the learned Civil Judge (Senior Division), Bhavanagar on the ground that the western railways had no power or authority to unilaterally alter the rates of shifting charges beyond the extent provided by the contract. A declaration to that effect was sought for; and a prayer was also made for the refund of additional charges recovered from it by way of shifting charges for the period 1-7-1955 to April, 1957. That suit was dismissed by the trial Court on 25-1-1960. The appellant preferred an appeal to this Court; and it was allowed on 3-10-1970. The appellant, thereafter filed the suit out of which this First Appeal arises to recover the amount collected by the respondent railway for the period between April, 1957and March, 1958. Same contentions which were raised in the earlier suit were .raised in the present suit also. It was also averred by the appellant that as the dispute regarding the authority of the respondent railway to unilaterally enhance the charges was pending before the Court, the payments were made by it under protest and by way of deposits and they were accepted by the respondent railway as such. In addition to the other contentions raised by the respondent railway, it denied that the amounts paid by the appellant were accepted by it by way of deposits. It also contended that the suit was barred by limitation. On merits, except on the 5,8 point of the payments having been made and accepted as deposits, the trial Court held in favour of the appellant. The suit was, however, dismissed on the ground that it was barred by limitation. The appellant has, therefore, filed this appeal.
2. It was first heard by a Division Bench. The appellant contended before the Division Bench that Art. 113, Limitation Act, 1963, (hereafter referred to as 'the Act') would apply as this was a case of payments made under mistake of law. It also contended that the said mistake was discovered by the appellant only when this Court finally decided the first appeal on 3-10-1970. In support of its contentions, reliance was placed on the decision of the Supreme Court in D. Cayasji & Co. v. State of Mysore AIR 1975 SC 813 and a decision of a Division Bench of this Court in Mukhi Tapoobhai Keshavii v. Gondal Municipality : AIR1983Guj47 . The Division Bench which heard this appeal felt doubt about the correctness of the view taken by the Division Bench in Mukhi Tapoobhai's case (supra) in view of the two decisions of the Supreme Court in Tilokchand Motichand v. H. B. Munshi : 2SCR824 and Ranendra Narayan Sinha v. State of West Bengal : 2SCR537 . Therefore, it raised the following question and referred the matter to a larger bench for its decision thereon.
'Whether a litigant who is pretty sure of the alleged levy of charges. by the Government to be not in accordance with law and who had even initiated earlier proceedings, challenging the same, can file the suit for refund more than three years after the dates of respective payment, alleging that the case of action accrued to him only after his contention about the illegality of the levy came to be upheld for the first time in the earlier litigation between the parties?
That is now this appeal has been placed before us.
3. Before us also it was contended by the learned counsel for the appellant that Art. 113 of the Act would apply. It was urged that the suit filed by the appellant was for recovery of the amounts paid to the respondent railway under mistake of law and the said mistake became known to the appellant only when this Court decided the first appeal on 3-10-1970. It was submitted that in a case where payment is made under mistake of law' generally the mistake becomes known to the party only when the Court makes a declaration as to the invalidity of the law; and the limitation would start running from the date on which such a declaration is made. In this case, the question whether the respondent railway had power or authority under law to unilaterally enhance the freight charges beyond the extent permitted by the contract was wide open. till this Court decided the aforesaid first appeal. It was only thereafter that it became known to the appellant that the payments which it had made were made under a mistaken belief of law. The period of limitetion would, therefore, start running from that date only and not from the dates when the payments were made. It' was further urged that in view of these facts, Art. 24 of the Act would not apply and the suit must be held to have been filed within time.
4. On the other hand what is urged on behalf of the respondents is that this is not a case where payments were made under a mistaken belief of law. The appellant had already filed a suit earlier challenging the levy and collection of the freight charges at enhanced rates; and, therefore, the case was governed by Art. 24 of the Act. As the suit was admittedly filed after a period of three years from the dates of payments, it was barred by time and, therefore, it was rightly dismissed by the trial Court.
5. The learned counsel for the appellant invited our attention to the decision of the, Supreme Court in Sales Tax Officer v. Kanhaiyalal Mukundlal Saraf : 1SCR1350 , in support of his contention that if one party under a mistake, whether of facts or of law, pays to another party money which is not due under contract or otherwise that money must be repaid. He also invited our attention to another decision of the Supreme Court in State of Madhya Pradesh v. Bhika Bhai : 6SCR261 , wherein it has been held that where sales tax, assessed and paid by the dealer, is declared by a competent Court to be invalid in law, the payment of tax already made is one made under a mistake within S. 72, Contract Act, and- so the Government to whom the payment has been made by mistake must in law repay it. In view of those decisions of the Supreme Court, it cannot be disputed, and in fact it was not disputed by the respondents before us,. that if a payment is made under a mistake of law, then that money is required to be repaid. However, that is not the real question in controversy in this appeal. As pointed out above, the real question which is required to be decided in this appeal is whether the payments which were made by the appellant between April, 1957 and March, 1958 can be mid to have been made under a mistaken belief of law? The next question which would arise is which article of the Act would apply to the facts of this s case ?
6. The learned Counsel for the appellant then relied upon a decision of the Supreme Court in Venkataraman & Co. v. State of Madras : 60ITR112(SC) . In para 34, the Supreme Court has observed as under:
' .......... It is now settled by decisions of this Court thata suitfor refund of tax paid undera mistaken belief that in law tax was payable, was, at the material date governed by Art. 96 Limitation Act~ 1908, and the period prescribed by that article commenced to run from the date when the mistake become known.'
In that case, the appellant had filed the suit on 23-3-1956 for recovery of the total amount of taxes levied and collected from it between May 21, 1949 and 2-2-1954 under the Madras General SalesTax Act, on the ground that the sales-tax authorities had no authority under law to levy such taxes and that the payments were made by it undera mistake of law which became known to it only when the Madras High Court held on April 4, 1954' in Garman Dunkerley and Co. (Madras) Ltd. v. State of Madras, AIR 1954Mad. 1130, that the relevant provisions of the Madras General Sales Tax Act were ultra vires the power of the State legislature. The appellant in that case had not challenged the authority or power of the sales. tax authorities to levy the said tax, in the earlier suit. It was only when the Madras High Court held in Gannon Dunkerley and Co.'s case that the relevant provisions of the Madras General Sales Tax Act under which the tax was levied in rome the appellant were ultra vires, that it became aware of the mistake of law under which it had made the payments. In view of these facts, it was held that Art. 96, Limitation Act, 1908, applied to the facts of that case. The learned Counsel for the appellant also relied upon the decision of the Supreme Court in D. Cawasji & Co. v. State of Mysore : 1978(2)ELT154(SC) . The appellants in that case had earlier challenged certain provisions of the Mysore Elementary Education Act, 1941 in the High Court of Mysore; and they were struck down as unconstitutional (vide AIR 1969 Mysore, 23). That decision was affirmed by the Supreme Court in the State of Mysore v. D. Cawasji and Co. : 2SCR799 . After the decisions of the Mysore High Court in AIR 1969 Mysore 23 and before the. Supreme Court rendered its judgment in appeal against that decision, the appellants had filed writ petitions before the Supreme Court in June and July, 1968 for a declaration that certain provisions of the same Act were ultra vires, and for refund of the education cess paid by them during the period between 1951-52 and 1965-66: Those writ petitions were dismissed. The appellants, therefore, filed appeals in the Supreme Court. What was contended on behalf of the appellants in that case was that the payments of cases were made by them under mistake of law and that they discovered the mistake only on May 2, 1968 when the High Court, by its judgment, declared that the relevant provisions of the said Act and the amendments thereto were unconstitutional; and that, as they filed the writ petitions within three months of that decision, the writ petitions were within time. The High Court had dismissed the petitions on the ground that there was delay in filing the petitions. The Supreme Court after referring to S. 17(l)(c), Limitation Act, 1963, held that 'In a case where payment is made under a mistake of fact, generally the mistake becomes known to the party only when a Court makes a declaration as to the invalidity of the law. Though a party could, with reasonable diligence, discover a mistake of fact even before a Court makes a pronouncement, it is seldom that a person can, even with a reasonable diligence, discover a mistake of law before a judgment adjudging the validity of the law.' It further held that for-filing a write petition to recover the money paid under a mistake of law, the starting point of limitation is from the date on which the judgment declaring as void the particular law under which the tax was paid was rendered, as that would normally be the date on which the mistake becomes ' known to the party. Even this decision is of no assistance to the appellant as in that case, it was not in despite that the payments were made under a mistake of law and that the said mistake was discovered by the appellants of that case only when Mysore High Court had rendered its decision on May 2, 1968 declaring the provisions of the Mysore Elementary Education Act, 1941 and the amendments thereto as unconstitutional. For that reason, the Supreme Court distinguished its earlier decision in Tilokchand Motichand v. H. B. Munshi : 2SCR824 , and held that it was not applicable to the facts before it.
7. Heavy reliance was placed on the decision of this Court in Mukhi Tapoobhai Keshavji v. Gondal Municipality, AIR 1983 Gui 47. The appellant in that case was carrying on business in fruits and vegetables at Gondal. The respondent Gondal Municipality levied octroy duty on various items, but exempted vegetables from such levy. Amongst other vegetables, the appellant was importing potatoe's and onions and the respondent municipality used to levy octroy on these two items as according to it, they were not vegetables within the meaning of its octroy rules. The appellant challenged the levy of octroy on potatoes and onions by filing a suit in 1958; and prayed for refund of the amount of octroy paid by it. The said suit was dismissed. The appellant then filed an appeal in the District Court. That appeal was decided on I12-1960. The appeal was allowed and the declaration sought for was granted in favour of the appellant. The respondent Gondal Municipality, then filed a second appeal in this Court. It was dismissed on 20-8-1968. Thereafter, the appellant filed a suit for refund of octroy paid by it between 5-12-1960 and 255-1966. That suit was contested by the respondent municipality, inter alia, on the ground that it was barred by time. It was not in dispute before the High Court that Art. 113 of the Act applied. The only point in dispute was when the right to sue accrued to the appellant. According to the appellant, the right accrued to the appellant when the second appeal was decided on 20-8-1968, whereas according to the respondent municipality, the right to file the suit had occurred when the first appeal was decided on 1-12-1960. It was in this context that this Court observed as under:
'.... The only question, therefore, which requires consideration is whether the starting point should be decision given by the first appeal Court or the starting point should be considered from the date on which the decision in second appeal was rendered. The appeal is a continuation of a suit. Second appeal is also a continuation of -the same suit. The, plaintiff had failed. His suit was dismissed. He carried the matter in First Appeal where he succeeded. The respondent filed second appeal. That second appeal was admitted. So soon the second appeal was admitted the question whether the octroy would be legal on potatoes and onions was wide open. the decision could be one way or the other. Neither party could be sure of the decision. Each party will have a belief of success, and with that belief the party carries on the litigation. Ultimately the Court has to decide the matter and when the Court decides the matter the question of law becomes settled for all purposes. Till then that question is wide open it then held: ' .... The parties under the circumstances though they may have their own belief must be in doubt in regard to the correct position of law which for all purposes was got settled on the day on which second appeal was decided and that date was 20-8-1968. The suit is filed within a period of three years from that date.-In support of its conclusion, the Division Bench relied upon the observations made by the Supreme Court in paras 8, 9 and 10 of its judgment in D. Cawasji and Co.'s case (supra). The aforesaid observations, if read dehors the context in which they have been made, may lead one -to believe that in all cases where payment is made pursuant to a provision of law which is subsequently declared by a competent Court of law to be void, the period of limitation would start running only from the date on which the final decision is rendered declaring such a provision of law to be void. The Division Bench could not have intended to lay down such a wide proposition in view of the other decisions of the Supreme Court on the point. If the facts of the said case are examined closely, it becomes apparent that as in D. Cawasji and Co.'s case, there was no dispute on the point before the Division Bench that the payments were made under a mistake of law. Both the parties agreed that Art. 113 of the Act was applicable to the facts of that case. The only point in controversy in Mukhi Tapoobhai's case (AIR 1983 6uj 47) was as to when the right to sue had accrued. According to the appellant in that case, the right had accrued when the second appeal was decided on 20-8-1968; whereas according to the respondent municipality, it had occurred when the first appeal was decided on 1-12-1960. It was not contended before the Division Bench that really A rt. 113 had no application to the facts of that case, and that the case was governed by Art. 24 of the Act. The Division Bench, therefore, did not examine such a question at all. It is, therefore, obvious that the observations made by the Division Bench can have no application to the cases where it is in dispute as to whether payments were made under a mistake of law or not. The observations made therein naturally will have application only to those cases where it is not in dispute that payments were made under a mistake of law. And the only question to be considered is when that mistake became known to the party filing the suit.
8. The decision which is really helpful on the point is the one rendered by the Supreme Court in Tilokchand Motichand v. H. B. Munshi : 2SCR824 (supra). Interpreting S. 72, Contract Act, the Supreme Court held that the right to relief under S. 72 extends to money paid under mistake of law i.e. 'mistake in thinking that the money paid was due when, in fact, it was not due.' While thus interpreting what mistake of law is, the Supreme Court followed the decision of the Privy Council in Shiba Prasad Singh v. Srish Chandra Nandi and its earlier decision in Sales Tax Officer V.. Kanhaiyalal Mukundlal Saraf : 1SCR1350 . Thus, it is settled beyond controversy that when payment is made believing that it is due, but in fact, it is not due. it can be said to be a payment made under a mistake of law. It, therefore, follows there from that if payment was made not laboring under such a belief but because - of coercion or for some other reason, for example, for avoiding some adverse consequences, it cannot be said to be a payment made under mistake of law. For the payment to be a payment made under a mistake of law, it has to be a payment made willingly and under a belief that money paid is really due and payable. It is the subsequent event which proves that belief to be mistaken and it is really because of that reason that the limitation is made to run only from the date when such a mistake is discovered either because of a declaration to that effect made by a competent Court or because of some other reason. If a person believes that the party seeking to recover a particular amount from him has no authority to do so and disputes its authority either by filing a suit or in any other manner, then it cannot be said that the payments made by him subsequently, not believing that money is really payable by him, but for some other reason, were made under a mistake of law. In such a case, Art. 113 of the Act (Art. 96 of Limitation Act, 1908) can have no application.
9.In this case, the appellant disputed the authority of the respondent railway and its officers to re freight at enhanced rates even before the previous suit was filed by it. It made payments not under a belief that the charges which it was paying were really payable under the contract and the law. They were made so that it may not be deprived of the facilities provided by the respondent railways. It then filed a suit challenging the authority of the respondent railways to collect the said charges at enhanced rates and also prayed for refund of the amount already paid by it. In view of these facts, it cannot be said that the charges which were paid by the appellant after the date of the institution of the earlier suit were paid under the mistake of law i.e. under the belief that the said amounts were really due and payable by it to the respondent railways. It is pertinent to note that the Supreme Court in Tilokchand and Motichand's case : 2SCR824 (supra) for similar reasons came to the conclusion that the payments which were made by the appellant in that case were not made under a mistake of law.
10. The only other decision which requires to be dealt with now and which was relied upon by the learned counsel or the respondents is the one in R. M. Sinha v. State of W. B. : 2SCR537 . In that case, the plaintiff had claimed the amount of revenue recovered from him in excess of the amount of revenue lawfully due from him and had also prayed for a declaration that the revenue stood abated. The High Court held that the claim made by the plaintiff was barred by law of limitation. The Supreme Court, while considering the plea of limitation observed as under:
'......and if the plaintiff had been compelled to pay sums of money which he was not liable to pray the claim could properly be made within three years from the date on which the payment was made.'
This decision, to some extent, supports the contention raised on behalf of the respondents.
11. The above discussion leads us to conclude that the payments which were made ,by the appellant between April, 1957 and March, 1958, were not made under mistake of law; and, therefore, the suit filed by the appellant was governed not by Art. 113butby Art. 24 of the Act. In that view of the matter, the suit filed by the appellant must be held to be time barred; and that is our answer to the question which is referred to us by the Division Bench. Since the question which we have considered is the only question raised in the appeal, we do not think it necessary to send the matter back to the Division Bench for final disposal, and we think it proper to dispose of the appeal ourselves. We hold that the trial Court was right in holding that1he suit filed by the appellant was time barred and was, therefore, liable to be dismissed.
12. In the result, this appeal is dismissed with no order as to costs.
13. The learned Counsel for the appellant prays for leave to appeal to the Supreme Court. In our opinion, this case does not involve any substantial question of law of general importance which needs to be decided by the Supreme Court; and hence we do not giant leave. Leave declined. Orders regarding Cross objections filed in First Appeal No. 853 of 1975.
P.S. Poti, J.
14. Mr. R. M. Vin for respondent 2 not present. No merit in the cross-objections. Dismissed with no order as to costs.
15. Appeal dismissed.