T. Ramaprasada Rao, J.
1. The Ramanathapuram Market Committee, Virudhu-nagar, constituted or established by the Govern men t of Tamil Nadu under Section 5 of the Madras Agricultural Produce Markets Act (XXIII of 1959) who is the defendant in OS. No. 90 of 1968, on the file of the Subordinate Judge of Ramanathapuram at Madurai is the appellant. The Tamil Nadu Act XXIII of 1959 came into force on 22nd October, 1962. But by a notification in the Fort. St. George Gazette on 18th April, 1962 pursuant to the G.O. Ms. No. 1054 (Food and Agriculture) dated 30th March, 1962 the State Government directed the constitution of a market committee at Virudhunagar and markets at Virudhunagar, Rajapalayam and Sattur in Ramanathapuram District. These committees were no doubt regularly constituted and established ur der the provisions of the Madras Commercial Crops Markets Act (XX of 1935). The main intend-ment of the Act is to provide for the better regulation of buying and selling of commercial produce in the State of Tamil Nadu and in order to achieve that object, a machinery is set up to control the trade in commercial crops and impose restrictions on the carrying of such trade. Cotton is one of the commercial crops, which comes within the purview of Act XX of 1933. Under the provisions of the Act, the State Government is entitled to exercise control over the purchase and sale of commercial crops including cotton, and declared certain areas to be specified areas within which such control could be exercised by the State. In order to achieve the said purpose market committee are established by the State Government for every notified area. Once a market committee is set up, and a notified area is notified, then the sale and purchase of commercial crops could be carried on only in such places as are notified and in accordance with the conditions of a licence issued by the appropriate authority. O: .e of the provisions of the Act authorises the market committee to levy such fee on the notified commercial crop bought or sold in the notified area at such rates as it might prescribe. Act XX of 1933 was repealed. and practically re-enacted though with slight modification under the caption of the Madras Agricultural Produce Markets Act (XXITI of 1959). This Act came into force on 22nd October, 1962. There arc provisions, which are very similar to the provisions of Act XX of 1933, to which we have already made a reference. Under this Act also a market committee is established and an area is notified on the notified market area for the sale and purchase of agricultural produce and the market committee is enabled to impose a cess by way of sales tax on any notified agricultural produce bought or sold in the notified market area at the prescribed rate. A saving provision is made under Section 38, which enabled the continuance of the notified area and. the market committee under the provisions of Act XXIII of 1959. What happened was that prior to the date when Act XXIII of 1959 came into force, the State Government declared and published several notifications amongst which the notification published pursuant to G.O. Ms. No. 1054 dated 30th March, 1962 is relevant. Under this, Virudhunagar, Rajapalayam and Sattur were notified as market areas under the latter Act. Realising the mistake, a notification under G.O. Ms. No. 1052 Food and Agriculture, dated 30th March, 1964 was made and published in the Gazette on 27th May, 1954 cancelling the 1962 notification and on the same date, a re-declaration, was made declaring certain areas' in Virudhunagar, Rajapalayam and Sattur as notified market areas in respect of cotton, groundnut and chilies. In the present litigation, the cess collected for a period prior to 22nd October, 1962 is not in dispute, as obviously the said collection was made under Act XX of 1933 and even otherwise such collections were validated by the passing of the Madras Commercial Crops Markets (Validation of Cess) Act (VII of 1963.).
2. The bone of contention between the parties, however, is that all such levy and collection of cess by the defendant as a market committee under Act XXIII of 1959 for a period commencing from 22nd October, 1962 till 26th May, 1964 is illegal and that they have paid the cess under a mistake of law or of fact.
3. The plaintiff is a limited concern carrying on business in the purchase and sale of cotton. It has its Head Office at Madurai with branch offices in towns like Virudhunagar, Rajapalayam, and Sattur. The complaint is that the defendant as a market committee, did not have the jurisdiction to levy and collect cess under the Madras Agricultural Produce Markets Act, 1959 (XXIII of 1959) prior to the date when it came into force and that, therefore, the collection of the cess made during the period commencing from 22nd October, 1962 to 27th May, 1964 is invalid and that all such amounts which were paid under a mistake, is recoverables by the plaintiff. The plaintiff's case is that it was during the third week of September, 1965, it came to know about the unauthorised nature of the levy collected from it from 22nd October, 1962. In that situation, it laid the present suit on 28th August, 1968 for the recovery of a sum of Rs. 19,731.32 made up of Rs. 2,982.92 collected by the defendant as cess from its Virudhunagar branch, Rs. 8,383.50 from its Rajapalayam bi'anch, and Rs. 8,364.90 from its Sattur branch. The defendant's case is that the levy was authorised and that the defendant in exercise of its statutory functions, imposed the levy and collected the fee and that it cannot be challenged or declared to be unauthorised. The defendant also expressly pleaded that the suit is barred by reason of Article 78 of the Indian Limitation Act. The other contention is that as the plaintiff did not exhaust the special remedies provided under the Act for setting aside the levy, the civil court cannot adjudicate on it and in that sense the suit is not maintainable. On these relevant pleadings, the following issues were framed:
1. Whether levy and collection of cess made from 18th April, 1962 to 27th May, 1964, from the plaintiff at Virudhunagar, Rajapalayara and Sattur by the defendant market committee are illegal and unauthorised?
2. Whether the said levy and collections made by the defendant market committee cannot be challenged as illegal or unauthorised or ineffective for any of the reasons stated in the written statement?
3. Whether the suit filed without impleading the State Government as a party is not maintainable?
4. Whether the plaintiff is estopped from claiming the refund of the amounts collected?
5. Whether the suit is out of time under Article 72 of the Limitation Act?
6. What is the correct amount to which the plaintiff is entitled to get by way of refund?
7. To what relief is the plaintiff entitled?
4. The learned Judge came to the conclusion that the levy and collection of cess made by the defendant from the plaintiff for a period nd October, 1962 till 2 6th May, 1964 is illegal and unauthorised, and found the issue in favour of the plaintiff. On issues 2 and 4, he found against the defendant and held on issue 3 that the State Government was not a necessary on proper party to, the suit. On the main issue, which has been argued in full before us, he found that the suit having been filed on 28th August, 1968 was within time and that the mistake in the matter of the payment of the cess, though voluntary, could have been discovered by the plaintiff only on 20th September, 1965 and that, therefore, the suit was in time. In the result, he decreed the suit as prayed for. It is as against this, the present appeal has been filed.
5. It is unnecessary for us to go into the gamut of the case law regarding the validity of the levy.
6. We are not called upon in this case to consider whether the levy of the cess by the market committee is legal, as the finding of the Court below that it was not so, has not been seriously challenged before us. Even otherwise, in the view that we intend taking on the issue on limitation, it is not necessary even for us to consider the hesitant argument addressed by the learned Counsel for the appellants.
7. The material point, however, is whether the suit claim is barred by limitation. We have already referred to the fact that the plaintiff's case is that it paid the cess for the period commencing from 22nd October, 1962 to 27th May, 1964, under a mistake of law as well as fact. The plaint, to recover such amounts paid by the plaintiff under mistake, was filed on 28th August, 1968. Considerable reliance is placed on Exhibit A-1 , which is a letter written by the Raman athapu ram Market Committee, Virudhrnagar, to East India Corporation Ltd., Virudhunagar. It runs as follows:
In the notification, the previous order was cancelled and a new order was published. Nothing is said about the cess, whether the amount collected is to be refunded or collection is to be continued. For conducting normal work, the committee resolved to collect cess from 27th May, 1964.
The argument is that the plaintiff's knowledge as to its quondam mistake in the matter of the payment of the cess during the relevant period should be taken to be the date of the above letter, when the Market Committee informed them that nothing is known about the cess already collected and whether the amount collected is to be refunded or collection is to be continued.
8. Mr. K.K. Venugopal, learned Counsel for the respondent streneously contends that it is this fetter which has given the cause of action for the plaintiff to file the action and as the suit has been laid within three years from the date of Exhibit A-1, the claim is in time.
9. Mr. Parasaran, learned Counsel for the appellants, however, would say that even on a reading of the letter, it is clear that the plaintiff was making enquiries regarding the refund of cess and such enquiry was possible only when the plaintiff definitely entertained a doubt about the validity of the payments it made earlier during the suit period. The parties did not produce any earlier letter so as to bring home the date of discovery of its knowledge as to such mistaken payments. Mr. Parasaran, therefore, .rightly contends that the date in Exhibit A-1 by itself cannot be the date, when such a discovery as to the mistake committed was found and that it was long prior' to that date and if it was prior to 21st September, 1965 then the presumption is that the plaintiff ought to have known about such' mistaken payment, when the fresh notification, was. issued cancelling the earlier notification., If this d ate is taken as the d ate when the plaintiff could have reasonably discovered the mistake on its part, then the suit is barred by limitation.
10. The law as to limitation affords a guarantee to the litigant public that after' the lapse of a particular priod of time prescribed under the Act, the cause of action rests. The object of the statute of limitation is preventive and not creative. It interposes a statutory bar after a certain period and gives a quietus to suits to enforcean existing right. Such extinguishment of claims by statutory interference resulting in making certain demands state should be construed strictly. No doubt the provisions of the Limitation Act should be interpreted strictly in accordance with the language used, but it is always necessary that a litigant, who relies upon it, should bring his cause within the four corners of the terms of the statute. An attempt to deprive the party entitled to aright arising out of the existing benefit should not lightly be made by Courts. But such, a pleading as to the bar of the cause of action should flow from a permissible construction of the statutory provision.
11. We shall now refer to the pleadings to find as to hew the plaintiff, who has come to Court, could plead that its cause is in time. According to the plaintiff, during the third week of September, 1965 it came to know about the unauthorized and illegal levy and. collection of the cess by way of sales-tax from 18th April, 1962 and thereupon it made enquiries and that the Ramanathapuram Market Committee, Virudhunagarj under Exhibit A-1 held out that the previous notification was cancelled and a new order was published. The plaintiff desires to infer that it is only from Exhibit A-1 the plaintiff came to know about the publication of a new order and that that date which Exhibit A-1 bears, ought to be the date when the plaintiff discovered the mistake. In the cause of action paragraph, the plaintiff states that, the cause of action for the suit, arose when the illegal collections have been made during the period 22nd October, 1962 to 26th May, 1964 and on 20th September, 1965 when the mistake of collection and the payment was made known to the plaintiff by the defendant under Exhibit A-1 . The defendants expressly plead that when?. flesh notification dated 27th May, 1964 was made car celling the earlier notification dated 18th April, 1962, that is the basis of the plaintiff's claim and it was futile for the plaintiff to state that he came to know of the unauthorised and illegal levy only during the third week of September, 1965. The appellants add that such a statement has been made only to escaps the fact that the claim is out of time. They also referred to the fact that traders similarly placed like the plaintiff challenged Tamil Nadu Act XX of 1933 and Tamil Nadu Act XXXIII of 1959 and it is, therefore ,futile for the plaintiff to say that it could discover the illegality of the levy only during the middle of September, 1965. The defendants add that the suit is out of time under Article 72 of the Limitation Act.
12. It is interesting to note that the plaintiff did not even examine any witness on its side to pin-point the reasonable date when they had knowledge about the mistaken payment. of the other hand, the defendants examined two witnesses. The plaintiff's counsel in cross-examination specifically invited the attention of D.W. 1 to Exhibit A-1. There was not even a suggestion in the cross-examination to this witness that the plaintiff began to enquire about the mistaken payments only in the third week of September, 1965. It is in this nebulous state of affairs the issue as to limitation has to be looked into. The learned Trial Judge heard arguments of counsel, one relying upon Article 59 of the Limitation Act and other upon, Article 72 of the Act. The learned Judge brushed aside the argument of the learned Counsel for the plaintiff that Article. 59 could be invoked in the instant case. He also rejected the argument of the counsel for the defendants, who invoked Article 72 of the Act. The learned Judge for himself investigated into the matter and was of the view that Article 24 read with Section 17 of the Limitation Act of 1963 would apply. He concluded by saying that the plaintiff has proved that under a mistake of law, the suit amount was paid and, therefore, the onus of proof is on the defendants to establish that the plaintiff had either discovered or could have discovered with reasonable diligence the mistake at a time beyond the period of limitation. He solely relied upon the pleading in the plaint wherein the plaintiff alleged that it came to know of the mistaken payment and the unauthorised levy only on 20th September, 1965 and reading it in the light of Exhibit A-1 found that there was no other document in the case to indicate that the plaintiff could have discovered the mistake prior to 20th September, 1965. He held, therefore, that the suit was within time.
13. The earlier law on the aspect under consideration was covered by two Articles under the Limitation Act, 1908. Article 95 dealt with a cause grounded on fraud. Article 96 dealt with the reliefs on the ground of mistake. In the former Article a period of three; years was provided to seek for a relief on the ground of fraud from the time when the fraud becomes known to the party wronged. Similarly,' a period of three years was provided in cases wherein a relief on the ground of mistake is asked from the time when the mistake becomes known to the plaintiff. In the new Act, the appropriate Article, which could, if at all, be attracted is Article 24, which runs as follows:
Description of suit. I eriod of Limitation Time from which periode beings to run.'24. For money payable by Three years. Whne the money isthe defendant to the received,plaintiff for money received by the defendant, for the plaintiff's use.
But this has to be read in conjunction with Section 17 of the Limitation Act.
14. Section 17 of the Limitation Act deals with the effect of fraud or mistake in. a particular suit or application for which a period of limitation is prescribed by the Act. Section117 says that where the suitor application is for relief from the consequence of a mistake, 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, haves discovered it. We are not referring to the other limbs of Section 17, as they are not absolutely necessary for purposes of the present litigation.
15. The difference in the context and the language adopted by the old and the new Acts is rather significant. In the old Act, stress is laid on the knowledge of the per SOD, who wants to take advantage of the enlarged period of limitation. In the new Act, emphasis is on the date when the plaintiff has discovered the fraud or mistake or could, with reasonable diligence, have discovered it. By the 'use of the phrase 'with reasonable diligence ' in Section 17ofthe Act, the Legislature has given scope to the defendant to contend that the date of knowledge or discovery pleaded is not the sure date of such discovery of mistake or fraud. It is open to the defendant to establish that 'with reasonable diligence '.the plaintiff could have discovered the fraud or the mistake earlier. The plaintiff, therefore, is not mechanically permitted to adduce a plea over the matter in issue as a step in aid to maintain the action. Where the legality of some proceeding is the matter in dispute between the two parties, he, who maintains its legality and seeks to take advantage of it, cannot rely upon the proceeding itself as a bar to the adverse party. To do so, would involve the logical fallacy of' petitio principi and would in many cases preclude redress to the aggrieved party. If the plaintiff's allegation as to the date of the knowledge of mistake is adepted and accepted as a matter of course, then he would automatically' be licensed to prejudice his adversary.' A fortiori in a case where the defendant challenges the aligation, it is for the plaintiff to establish that he could not have discovered the mistake, 'with reasonable diligence' on a date earlier than that on which the plaintiff bases his cause of action. As is said, it would be unreasonable to expect an exact definition of the word ''reasonable'. Reason varies according to times and circumstances in which the individual thinks. Thus, the word 'reasonable ' has always been understood in law as prim a facie mean in g, reasonably in regard to those circumstances of which the actor called on to act reasonably, knows or ought to know. It is also a fundamental maxim, of things relating to each other, one being known, the other is also known '. In the instant case, when the plaintiff knew about the cancellation of the earlier notification by a later notification then it is normally and reasonably expected that it knew or with reasonable diligence ought to have discovered that the payments made by it under the earlier cancelled notification were irregular and improper and the payments were made under a mistake of law or of fact. The cancellation of the earlier order is intimately connected with the mistake in the payments made by the plaintiff pursuant to the first withdrawn order. As' it knew or ought to have known and with reasonable diligence should have discovered that the earlier notification has become inoperative by its cancellation under the second notification, then that being known, then the other,' namely, that it should seek for the refund of the said amounts on such discovery within the prescribed period of limitation, could have been known also. Such, a discovery is possible because of the impact of one event as against the other.
16. The plaintiff in this case does not deny the knowledge of cancellation of the earlier order. He knew that G.O. Ms. No. 1054, dated 30th March, 1962 was cancelled by G.O. Ms. No. 1052, dated 30th March, 1964. The later was published in the gazette on 27th May, 1964. The payments, which are claimed to have been made under, a mistake whether of facts or of law, were during the period commencing from 22nd October, 1962 till 26th May, 1964. By the publication of the second notification on 27th May, 1964the plaintiff with reasonable diligence could have discovered the mistake committed by it. It ought to have, therefore, filed the suit for refund of the amounts paid as a consequence of such a mistake within three years from the date when the second notification became effective, that is, the suit ought to have been filed within three years from 27th May, 1964. The plaintiff does not deny the knowledge of the cancellation of the earlier order, nor the publicatibn of the second order cancelling, the former. The impact of such knowledge leads to the reasonable inference that the discovery of the mistake in the payment of the cess was contemporaneous with the publication of the second notification. Having regard to the circumstances in which the plaintiff was called upon to act in law, it knew or ought to have known about the mistake in the payments made by it and it ought to have, therefore,, been diligent in instituting the a ion within three years from the date of the second notification.
17. The decision quoted by Mr. Venugopal in Gunabai v. Matilal, has no application. The learned Judge was dealing with a case under the old Limitation Act where the accent was on know-led go. In that case, the plaintiff specifically alleged that it was only at a certain time, he had knowledge of facts, which would entitle him to have the instrument cancelled or set aside. In those circumstances, the learned Judge' held that it is incumbent on the persori who pleads that the suit is barred by time, to allege and prove a knowledge prior to the period from which time begins to run. On the facts, the learned Judge held that the defendant did not discharge his burden. In our case, the specific allegation of the defendants-appellants is that the plaintiff, by reason of the second notification, should be presumed to have discovered the mistake in the earlier payments on that very date. This contention is not an unreasonable contention, for it is always necessary for Courts to be satisfied with the reasonableness within reach. It cannot be said that the contention of the appellants that on the date when the second notification became effective, the plaintiff should be deemed to have discovered the mistake, is an unreasonable contention or conclusion.
18. We have already seen Exhibit A-1. The plaintiff was making enquiries and it was only, pursuant to such enquiries that the defendant wrote Exhibit A-1 in reply. It cannot, therefore, be said that Exhibit A-1 gave any cause of action at all to the plaintiff. On the other hand,' it would be fair to assume that the enquiries which the plaintiff was making prior to the date when Exhibit A-1 was written by the defendants, was in relation to the refund of the cess paid by it under a mistake. The plaintiff avoids the box. It docs not even explain as to what was the nature of the enquiries irade. It is no doubt well established that the word 'mistake' appearing in Section 72 of the Indian Contract Act takes into its fold mistake of fact as well as law and would entitle a litigant to recover even a. tax, if it is established that such a payment has been made by the party labouring under a mistake of law. (See Sales-tax Officer, Benaras and Ors. v. Mukundlol Saraf : 1SCR1350 . When the plaintiff alleged a mistake in this case and particularly stated that it discovered such a mistake on a particular date, the initial burden would be on it to lead evidence, prima facie at any rate to establish the date of discovery of such a mistake. It is only in extraordinary cases where the plaintiffs are emphatic and the defendants avoid answering a specific claim as to the date of discovery or knowledge, the Courts in their discretion might dispense with the further proof of the date of acquisition of such knowledge or date of discovery. Sec Sri Kishan v. Ghananand A.I.R. 1959 All. 721. We have already referred to the fact that the plaintiff has avoided the box. The Bombay High Court in-Martand v. Radhabai A.I.R. 1931 Bom. 97 , relying upon Sapdar Qurbaksh v. Gurdial Singh , observed thus:
It is the bounden duty of a party per sonally knowing the facts and circumstances, to give evidence on his own behalf and to submit to cross-examination and his on-appearance as a witness would be the strongest possible circumstance which will go to discredit the truth of his case.
After giving our anxious consideration to this subject, we are of the view that the suit is out of time, since the plaintiff should be deemed to have with reasonable diligence, discovered the mistake as to the mistaken payments on the date when the second notification was made and the suit having been filed beyond three years from the said date, it is barred under Article 24 of the Limitation Act, The learned Judge went wrong in having applied a wrong principle and ultimately decreeing the suit.
19. The result is that the appeal is allowed, but in the peculiar circumstances, there will be no order as to costs.