A. VENKATA SUBBA RAO v. STATE OF ANDHRA PRADESH
Citation: [1965] 2 S.C.R. 577; 1964 INSC 288
Court: Supreme Court of India
Bench: A.K. SARKAR , N. RAJAGOPALA AYYANGAR , R.S. BACHAWAT
Judgment date:
Case summary
1964 INSC 288. Supreme Court of India judgment dated 1964-12-14. A. VENKATA SUBBA RAO v. STATE OF ANDHRA PRADESH. Read the judgment and case details on...
Judgment text
B c A. VENKATA SUBBA RAO v. STATE OF ANDHRA PRADESH (With Connected Appeals) December 14, 1964 [A. K. SARnll, N. RA. JAGOPALA AYYANGAR AND R. S. BACHAWAT, JJ. ) 577 &1ential Supplle• (Temporary Powers) Act (XXIV of 1946)- Procuring ag . C. B. Agarwala, R. Ganapathy Iyer and B. R. G. K. Achar, for the respondents (in C. A. No. 306 to 309 and 837 to 857 of 1962). R. Ganapathy Iyer, Yogeshwar PrtLfad and B. R. G. K. Achar, for the respondents (in C. A. Nos. 101, 131, 168 to 171, 259- 260, 302 and 303, 310 and 644 of 1962 and 325, 437 to 441 and 996 of 1963). Sarkar J. delivered a separate Opinion. The Judgment of Rajagopala Ayyangar and Bachawat JJ was delivered by Ayyan- gar J. Sarkar, J. These appeals arise out of suits filed for recovery of money from the Government. The appellants were the plain- ti1fs and the respondent in each appeal is a State, the defendant in the suits. F G A. v. SUBBA RAO v. STATE (Sarkar, I.
) 581 A In the years 1947 and 1948 there was rice scarcity in certain distincts in Madras as it was then constituted. These districts are now in Andhra Pradesh. The Government of Madras took action under the Essential Supplies (Temporary Powers) Act, 1946 and passed various orders for the procurement and distri· bution of rice. Rice thereafter could be procured only by the B Government or by the procuring agents appointed by it and dis- posed of according to the orders of the Government. Under these orders licensed wholesalers and retailers were also appointed. The appellants were procuring agents and wholesalers under this system. They entered into various agreements with the Govern- ment for the purpose. Their duty was to procure rice from speci- e fied areas at prices specified by the Government from time to time and to deliver it at prices so specified, to the Government or to persons nominated by it or to other licensed purchasers.
The procurement price was in each case lower than the selling price and the procuring agents were under the contract entitled to the D difference between the two prices. During the period with which we are concerned, three successive orders were made by the Government specifying the prices and in each case there was an increase. The first increase in prices took effect on July 27, 1947, the second on or about E December 6, 1947 and the third on November 21, 1948. On the dates on which each of these orders came into force, each appellant had lying with him in stock certain quantity of rice. This had been procured by the agents earlier and therefore at the then prevailing lower purchase price. The appellants had to sell this rice at the new increased price and hence became auto- F matically entitled to a larger sum than they were before the increase.
The enhancement of the procuring agents' profit was entirely due to the Government action in increasing the prices and the Government thought that they were not entitled to it and insisted that the excess sums should be paid to it by them. The appellants paid these moneys to the Government under protest G and it is for the recovery of the moneys so paid that, broadly speaking, the suits were filed. Now various methods had been employed by the Government for realising these excess amounts which have been described in these proceeding as 'surcharges'. Thus in some cases the pro- H curing agents or wholesalers refusing to pay were threatened with cancellation of their licences and to avoid this they made the payments. In other cases, these surcharges were deducted from 582 SUPREME COURT REPORTS (1965] 2 S. C. R. moneys payable by the Government to them for rice supplied by them.
The third method which concerned the increase made in November 1948 was to requisition the stock of rice lying with the procuring agents on the day immediately preceding the com· ing into force of the increased price at the rate then obtaining and thereafter releasing such rice to the procuring agents only upon their paying the surcharge or on their executing an agree- ment to pay the same. It is clear that if the Government was not entitled to the amount of the surcharge, it could not retain the moneys paid by A B the appellants to it on that account. The principal question is, C Was the Government entitled to those moneys ? In regard to the moneys collected cxc~pt by the method of requisition and release, the Government's contrn 0ellants could sell rice which they milled out of the paddy procured by them were enhanced on three occasion~ -July, 1947, December, 1947 and November 1948 and, on each 586 SUPllB. MB COUllT llBPOllTS {1965] 2 s,c. &.
occasion, they were directed to submit statements regarding the A stocks of paddy and rice held to them on the day just previous to that on which the increased prices were to . come into effect and they were directed to pay as a "surcharge" the amount representing that increase on the stocks held by them. The appellants demur- . red, but payment was insisted on and the same was either paid under protest or recovered from them in several modes to which B we shall refer in detail later. The suits out of which these appeala arise were brought by ·these miller-procuring agents for recovery Df the amounts of one or more of the three surcharges that were collected from them, on the ground that the "surcharges" were virtually taxes which had been illegally imposed and levied on them. These suits were filed in Courts of different Subo'rdinate C Judges having territorial jurisdiction over their places of business. Some of these suits were decreed while others were dismissed.
Appeals were filed to the High Court of Andhra Pradesh by the aggrieved parties and most of these appeals were heard together by the High Court and a common judgment was delivered directing D the dismissal of all the suits. A few of them came on for hearing subsequently, but the learned Judges following the judgment of the Court in the main batch disposed of them in accordance with that decision. On applications made by the several plaintiffs certificates of fitness were granted by the High Court and that is how the appeals are now before us. E As would be seen from the foregoing, the main point in con- troversy in these appeals is the legality of the collection by the Government of amounts which are termed "surcharges" in these proceedings from these several plaintiffs who are the appellants before us.
In order to appreciate how the surcharge came to be F imposed and the circumstances attending their collections as also the defences raised to the suits, it is necessary briefly to advert to the statutory provisions which furnish the background in which this levy came to be made and collected. As is well-known, at the end of the Second World War the country was faced with a scari:ity of foodgrains with the result that G statutory rationing had to be resorted to in most urban areas; and for the purpose of enforcing rationing stocks of paddy and rice had to be made available. Power in this behalf was originally exercised under the Defence of India Act and the Rules framed thereunder and by subordinate legislation undertaken by virtue of powers conferred by . the Defencd of India Rules. When the H Defence of India Act ceased to be in force on the expiry of six 1Donths after the termination of the war and· as this scarcity still A. v. SUBBA RAO v. STATE (Ayyangar, l. ) f;87 A.
continued the Essential Supplies (Temporary Powers) Act, 1946 repleading and replacing the Essential Supplies (Temporary Powers) Ordinance, 1946 (XVill of 1946) was enacted to be in force originally for 5 years till April 1, 1951 to deal with the probelm of maintaining supplies essential to the community. Under s. 3 of this statute "The Central Government, so far as it appears B to it to be necessary or expedient for maintaining or increasing sup- plies of any essential commodity, or for securing their equitable distribution and availability at fair prices, may by order provide for regulating or prohibiting the production,, supply and distribu- tion thereof and trade and commerce therein". Without prejudice C to the generality of the powers conferred by sub-s. (1), sub-s.
(2) empowered Government by order to provide inter alia for : D E F " ( c) for controlling the prices at which any essential commodity may be bought or sold; ( d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity; ( e) for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale; (f) for requiring any person holding stock of an essential commodity to sell the whole or a specified part of the stock at such prices and to such persons or class of persons or in such circumstances, as may be specified in the order; ( i) for requiring persons engaged in production, supply or distribution of, or trade or commerce in, any essential commodity to maintain and produce for inspec- tion such books, accounts and records relating to their business and to furnish 11uch information relating there- to, as may be specified in the order;" Under the powers thus conferred a scheme was devised for (a) the procurement of foodgrains (we are here concerned with paddy G and rice) from producers, (b) for their sale to wholesalers, ( c) a further sale to retailers and ( d) ultimately the sale to the consu- mers, the last of which was, rui stated already, based on a system of rationing to secure equitable distribution.
The appeal is con- cerned with the machinery and procedure employed for the procurement of foodgrains in the districts of East Godavari. We~t H Godavari and Krishna which were reck'. oned as surplus districts. Though legislation or that of a similar type was also applicable to certain other areas, these appeals are only concerned with the 588 SUPllBMB COU&T llBPOB. TS 11965] 2 S. C. R. events that happened in these three districts. The plaintiffs who A filed the several i>uits which have been directed to be dismissed by the High Court and who are the appellants before us were owners of rice mills or lessees or licensees of such mills in these three districts. They were appointed as procurement agents for buying up paddy from the producers i. e. , cultivators or landholders. They were also licensed under several Control Orders to which reference B will be made later, to deal in the paddy which they procured or the rice into which they converted the paddy in their mills.
The prices at which they could procure the paddy from the producers was fixed by executive order issued under the powers contained in 1>. 3(2)(c) of the Essential Supplies (Temporary Powers) Act. Similarly, the price at which they could sell to wholesalers was C likewise fixed. While things were going on in this state with he prices fixed operating to determine the purchase and the sale price of these procuring agents, Government raised the purchase and sale price of paddy and rice in or about July, 1947. They then directed D these procuring agents to pay over to them as a "surcharge the dif- ference between the original and the enhanced price on the stock of paddy held by them on the day previous to the rise in price. These miller-merchants resisted the levy but were forced to make the payment which they did under protest.
There were similar rises in prices on December 7, 1947 and on November 21, 1948 and in a similar manner the amounts of these surcharges were collected from the several millers, the amount payable by each being calculated on the stock of paddy or rice remaining with them on December 6, 1947 and November 20, 1948 respectiv~lv. E A very large number of suits were filed by these merchanlq F against the Government in the Courts of Subordinate Judges of l"! luru, Narasapur, Amalapuram, Kakinada, Rajahmundry and Masulipatnam for the repayments of these sums which they alleged had been illegally collected from them. The main defence of the Government was that the millers were really the agents of the Government and so were accountable to them for the extra t'roftt G taey would have made by reason of the increase in the price effect- ed by Government.
Besides, it was also asserted that the demand for the "surcharge" was authorised Qr pennitted by the terms of the "procuring agreement" entered into with them as also by the conditions of the licences which were granted to them under which H they were pennitted to trade in paddy or rice. There was also a minor point raised that the suits were barred by s. 16 of the Essential Supplies Act, 1946. As stated earlier, i>uitll filed in A. v. SUBBA RAO v. STATE (Ayyangar, J. ) 589 A some of the Courts were clis~d-~cceptlng ·the defence raiaed ·by the Goveffiment while those filed in other Courts succeeded and decrees were passed for the repayment of the several sums collected by the Government. Appeals filed to the High Court from these decrees and then those filed by the Government were allowed while ~ose by the miller-pl~tiffs were directed to be dismissed by a B co=on judgment from which most of the appeals before us arise.
· We should, however, mention even at this stage that besides this co=on question there have been other defences raised to some of these suits to which it would be necessary to advert but we shall defer stating them until after we have finished with the points that C are common to all these appeals. · We shall first take up for consideration the main point urged before us by Mr. Agarwala for the respondent-State that the appellant-millers were "agent" of the Government or, in any ·event, stood in a fiduciary capacity to the Government, so thl. t the latter had a right to call on them to disgorge any profit they might D make in their busines5 of procuring and selling foodgrains over and beyond the remuneration permitted to them by the relevant agreements, · ncences, notifications etc.
For this purpose it is necessary to set out the various statutory provisions under which tl:e appellants functioned ·as well as the terms and conditions of the agreements entered into by them with the Government. We E shall also narrate in some detail the circumstances in which the "surcharge" were imposed and collected as they bear on the points urged before us in these appeals. ·The first relevanf statutory provision to which it is necessary to advert in this connection is the Madras Foodgrains Procurement F Order, 1946 dated the 15th June, 1946 issued under Rule 81 (2) of the Defence of India Rules by the Government of Madras. It applied to several clistricts in the State, among them East Godavari, West Godavari and Krishna with which these appeals are concern- ed.
Paragraph 1 of this Order required "every person who whether as holder, occupier, tenant, sub-tenant or licensee or in any othu G capacity cultivates any land with paddy during the Fasli 1355 or Fasli 1356 or who receives any portion of such paddy or rent or interest or repayment of Joan in kind" "to sell the surplus of such paddy as determined by the District Collector to be available with such person after each harvest either as paddy or rice to the District Collector or an agent appointed by him and to no one el! le". The H Dist. Jct Collector and those authorised by hilil in that behalf were ' • thus to have the monopoly of purchasing surplus paddy or rice from cultivators. The formula for the determination of the snrplo; IASup. /65-4 590 SUP:&J! ME COUllT REPORTS [1965) 2 s. C·R. was laid down in the same paragraph but to this it is unnecessary A to refer.
Under Paragraph 2 delivery of the paddy and rice bad to be made to the Collector or his agent in the village in which that paddy or rice was cultivated or at some place within the Dis- trict in which the cultivation took place, the price varying with the place of delivery i. e. , taking into account the transport charges. The provision that the procurement by the Government or their B authorised agents and at the prices fixed by the Collector on a monopoly basis was reinforced by Para 3 of this Order which prohibited any person from selling or otherwise disposing of any quantity of paddy or rice to any person other than the District Collector or an agent notified in that behalf. We are omitting reference to the other paragraphs of this order as unnecessary for C our purposes. This Order was, among several others, continued in force by the Essential Supplies (Temporary Powers) Act, 1946 when the Defence of India Act lapsed and ceased to be in opera- tion.
Slight variations were made in this Order by subsequent notified ordem-vide for instance, the Intensive Procurement 0 Order dated March 26, 1947 but these change; or modifications related mostly to the formula or basis for determining the surplus available for purchase, but as these made no material variation for our present purpose we arc not setting them out. Several millers in the three districts of East and West Godavari and Krishna . whose busiat& consisted in buying paddy, milling E them and selling the rice, applied to the Government for appoint- ment as procuring agents in accordance with this notification. Before however they could be appointed as procuring agents each of them had to execute an agreement in a form prescribed by rules and as the terms of this agreement from the core of the case of the State Government on the question of Agency it is necessary to refer to them in some detail.
The heading of this model agree- ment which was signed by each one of the appellants reads : "Agreement executed by Procuring Agent/ Autho- rised wholesale Distributor. " It then proceeds : "I. . . . . . having been appointed a dealer for the purchase, storage and distribution of paddy, rice or ... under the Intensive Procurement Scheme and or Infor- F G mal Rationing Scheme, shall abide by all the provisions H prescribed from time to time by or under the said schemes and any directions issued thereunder ' A. v. SUBBA RAO v. STATE (Ayyangar, J. ) 591 A In particular- ! undertake to purchase paddy, rice .... that are available for purchase in the area allotted to me at the rates prescribed from time to time by the Commissioner of Civil Supplies, Madras, or any officer authorised by B him in this behalf. c D E F I undertake to store paddy, rice or millets purchased by me in proper godowns and to be responsible for their safe custody.
I also undertake to sell the stocks of paddy, rice or millets with mo to the pe™>m to whom I am directed to sell it at such rates as may be prescribed from time to time. I agree to deposit with the District Supply Officer ........ District Rs. 2,000/- against the fulfil- ment of this undertaking. I agree to the forfeiture by the District Supply Officer . . . . . . . . District of this deposit for any breach by me or by any person acting on my behalf for failure on my part to comply with or to secure compliance with the aforesaid provisions, regulations and dutiel! pres- cribed from time to time under the Intensive Procure- · ment and or Informal Rationing Scheme. " On: the execution of this agreement they wore appointed as agents for purchasing paddy and rice determined as surplus with the ryots. This appointment was notified in tho District Gazette and as against each group of agents the area in which they were authorised to procure was set out.
This was, however, not the only statutory provision regulating the conduct and dealings of the appellants. Under the Madras Foodgrains Control Order, 1947 issued under the Essential Sup- plies Act, 1946 which was in supersession of the Madras Food- grains Control Order, 1945 promulgated under Rule 81 (2) of G the Defence of India Rules though containing substantially the same terms, the business of dealing in foodgrains was subjected to statutory control. Clause 3 of this Order prohibited any person from engaging in any undertaking which involved the purchase. sale or storage fer sale in wholesale quantities of any foodgrains "exceot and in accordance with a licence issued in that behalf bv H an officer authorised by the Government". Purchase and sale of 10 maunds and 1 more in one tran,action was defined by the Order as beinir in wholesale and. similarly. stora~e of 15 maunds and 592 SUP. REME COURT . REPO. RTS [1965] 2 S. C. R more was so treated.
Each one of the appellants before us held licences to deal in foodgrains under this Order. Two of the clauses of the licence issued under this Order are of some relevance to the points arising in these appeals and have been referred to during the course of the arguments and it would be convenient to set them out at this stage : "Clause 8. The licensee shall give all facilities at all reasonable times to any authorised officer of Govern- ment, for the inspection of his stocks and accounts at any shop, godown or other place used by him for the storage or sale of any of the foodgrains mentioned in paragraph l and for the taking of samples of such food- grains for examination. Clause 9. The licensee ·shall comply with any direc· tions that may be given to him by the Government or by the officer issuing this licence in regard to the purchase, sale or storage for sale of any of the roodgrains men- 1ioned in paragraph I .......... " Of course.
these licenses were granted on applications made in statutory form by the several applicants and a paragraph in this application read : "I have cerefully read the conditions of licence given in Form A of the Second Schedule to the Foodgrains Control Order and I agree to abide by them. " It need hardly be pointed out that the prices at which purchasel: 'aid sales by the. procuring agents, wholesalers and retailers could A B c D E take place were all determined by orders issued from time to time. F · under ss. 3(1) and 2(c) of the Essential Supplies Act, and these dealers were enjoined strictly to adhere to them on pain of pm:e- cutions and cancellation of their licences. The prices fixed varied· from district to district and, of course, between several varie 1 ies of paddy and rice. In their fil! :ation allowance was made for trar-s- port charges by adding the freight to the prime cost. It i• not G nece•sarv to go into· the d~ ..
llils of these prices but it is sufficient to ~tale thnt they were ''aried ·from time ro ti! Jle. Pausing here. it is necessary to refer to the manner in which the miller-procuring agents disposed of the stock which they had procured from the producers. Thcv could sell onlv to cl~~Jcr~ H whn had licrnces to purchase fro•n them, these buyers mfont b~ either wholesalers or retailers. It is in evidence that in Eome A. v. SUBBA RAO v. STATE (Ayyangar, I. ) 593 A ca:,e;, lhc procedure followed (particularly where the purchasers aut. hoiiscd 10 buy from the millers were outside their district) was i. ilat the purchasers were directed to pay the value of the grain w hlch they were authorised to purchase into the Government Treasury. Intimation was thereafter given to the millers of the deposit an:l of the quantity which the purchaser was permitted to B obtain. The specified quantity of grain would then be delivered to the auchorised purchaser and the millers would then be paid by Government.
This, however, was not the only method by which the miller-procuring agents could or did effect sales. They were, besides, pem1itied and authorised to sell to dealers of their choice C provided suc 1 1 dealers were licensed dealers and so authorised to buy. Needless to add that the price which the millers could charge the dealers had to be the controlled price. Procurement, however, was. as would be evident from what we have stated earlier, confined to particular areas of the Province D which were surplus in that type of foodgrain. There were deficit districts which the Government had to supply with the requisite quantity of foodgrains. The foodgrains necessary for this pur- pose was obtained by the Government by purchases from the pro- curing agents. For this purpose agreements were entered into with the miller-procuring agents to which it is now nece. ssary to E refer. That agreement ran, to quote only the material tenns : "This agreement made the ...... day of. ...... .
between His Excellencv the Governor of Madras of the one part and .... (hereinafter called the supplier .. ) of the other part. F Wherea~ the District Smmlv Officer .......... has been authorised to buy paddy and rice on behalf of the Government of Madras. -\\ :ents of the Government and were. therefore, liable to account to them for the profits which they deriv·'d over and ?. bove the commission or rcmun~ration which was fixeil for them by the relevant noti- fication of Government fixing t! ;ie nrices which rnirrht be char~ed. The learned JuMcs of the High. ~ourt were not nrepare lll. T RBPOllTS (1965] 2 S. C. R. nineteenth century and the temptations of a new analyti· . cal jurisprudence gradually underqlined Lord Mans- field's position. So long as the common lawyers thought in terms of procedure and associated quasi-contract with ·the writ of Indebitatus Assumpsit, they were content to accept the implications of unjust benefit.
But when they abandoned their traditional forms and substituted a dichotomy of tort and contract, the old explanation :seemed no longer to suffice. The various actions ·grouped under the insidious title of quasi-contract were ·clearly not tortious : if the new antithesis of the common law was inevitable, they must perforce be contractual. And, as they were equally clearly not based upon any . genuine consent, they must rest upon an implied or hypothetical agreement. " • c Various bases have been suggested in modern times as tho rationale and proper foundations on which to rest this action. But we are not concerned with these theories or their history and D evolution in England. What is of relevance is the content and · significance of the words "received by the defendant for the plain- tiff's use". Article 62 in its present form was first enacted in the Limitation Act of 1871 as Art. 60 and it has continued in the same terms since then with only a change in its number.
We have, therefore, to see what exactly the draftsmen of this Article a "! lleant when it was first introduced in 1871. In Mohomed Wahib -v. Mohomed Ameer( 1 ) Mookerjee, J. explained the basis of -Article 62 in these terms : "The Article, when it speaks of a suit for money received by the defendant for the plaintiff's use, points r to the well-known English action in that form; conse- quently the Article ought to apply wherever the defen- dant has received money which in justice and equity belongs to the plaintiff under circumstances which in law render the receipt of it, a receipt by the defendant to the use of the plaintiff. " G · .
In other words, the learned· Judge held that it was not necessary in order to attract Article 62 that at the moment of the r~ the defendant should have actually intended to receive it for· the use of the plaintiff and that it was sufficient if the receipt was in · such circumstances that the law would impute to him an obliga- H tion to retain it for the use of the plaintiff and refund to him when (I). L. R. 32 Cal. 527 at p. 533. A. v. SUBBA RAO v. STATE (Ayyangar, /. ) 617 A demanded. In Biman Chandra v. Promotho Nath(') it was said, following the decision in Mohomed Wahib v. Mohomed Ameer(') that Article 62 ·most nearly approaches the formula of 'money had and received by the defendant for the plaintiff's use, if read as a description and apart from the technical qualifications import- ed in English Law and Procedure'. B A' different note was, however, struck by the Calcutta High Court in Anantram Bhattacharjee v. Hem Chandra Kar(').
It was npt a case where the defendant directly received the money from the plaintiff but where a defendant withdrew frOJp the office of the Collector an amount which in law belonged to the plaintiff. c The learned Judges held that there was no reason why the artificial form of action of money had and received should be imported ta. <lecide a question whether the suit would come under Article 62. Ghose, J. with those judgment Walmsley, J. agreed, took the· view that the Article would apply only to a case where the defen-- dant in terms received the money for the benefit of the plaintiff. D The learned Judge observed: 1 G H "The Common Law form of action for money had and received grew out of the circumstance that at Common Law in England an action in personam is maintainable only on contract or on tort. Where there- fore an action was not based on tort and the plaintiff was unable to establish any contract by evidence, it was.
found necessary to have recourse to a fiction of a pro- mise to pay "implied in Jaw" in order to give relief to the plaintiff and to meet the justice of the case. The history of this form of action and the reasons which Jed· to its extension are set forth in the case of Sinclair v. Brougham (1914 A. C. 398). Speech of Lord Haldane, L. C. at pages 415--417, and of Lord Sumner at pages 454-456. It is pointed out by Lord Sumner that this was •said to be a 'liberal' action in that it was attended· by a minimum of formality, and was elastic and readily capable of being adapted to new circumstapces. There does not appear to be any sufficient reason why this artificial form of action shpuld be imported in this country in order to decid~ whether a suit would come under Article 62 of the Ljmitation Act. In India Jaw and equity are administerell by the same Courts, which are untrammelled by any technical riiles as to the form (I) J. L. R. 49 Cal. 886. --- (2) J. L. R. 32 Cal. S27 at p.
533": 3 ) I. L. R. SO Cal. 475 at p. 480. '618 SUPIUlMB COURT lUlPORTS (1965] 2 S. C. R. of an action in giving relief to the plajntiff, where the A defendant has received money which according to the justice of the case he ought to refund. The observations of the Judicial Committee in the case of John v. Dodwell (1918 A. C. 563) furnish an illustration of this view. In my opinion the plain meaning of the words in Article 62 of the Limitation Act should be given effect to B without having recourse to any technical rules of English Law regarding forms of action. " He then cited the decision of the Privy Council in Gurudas Pyne v. Ram Narain Sahu(') where Article 120 was applied to a claim against a person in a fiduciary position as supporting his views. C A similar view was adopted by Chagla, C. J. in Lingangouda v. Lingangouda( 2 ) where the learned judge preferred to follow Anantram's( 3 ) case in preference to Mahomed Wahib's(') case.
In the case before him he held that the claim of the plaintiff was an equitable claim and not a contractual claim thus attracting not Article 62 but the ,residuary Article 120. One of the main D reasons why Chagla, C. J. held that Article 62 should not apply to a case where the terms of the section were not literally complied with was that such a construction would result in plaintiffs losing a large number of cases on the ground of limitation, whereas if Article 120 were held applicable they would b~ safe. There arc a few other decisions of the High Courts taking a similar view E but as these merely follow the Calcutta and the Bombay cases we have referred to, it is unnecessary to detail them. Having considered the matter carefully we are inclined to prefer the interpretation of the Article by Mookerjee, J. in Mahomed Wahib's(') case.
What we are solely concerned with is the meaning of the words employed in the first column of the F Article which specifies the nature of the suit dealt with. That they were derived and adopted from the terminology employed in the English action for money had and received is not disputed. The Courts in India being courts administering both law and equity, no doubt we are not concerned with the technicalities of the English forms of action which originated at a time before the Judicature G Acts when law and equity were administered by different Courts. But that is only as regards the merits of a claim and its maintain- ability in a Court. With great resooct to the learned Judges who decided Anantram's(') and Lingangouda's(2) cases, we are unable to agree that the changes which the doctrine has under- H gone in E_nglan~ _ha_v! _! _ny bearing on what the Article meant in 11) T. L. R. 10 Cal. 86'1. (3) I. L. R 50 Cal. 4 . ,5 at p. 480. (2) I. L. R. 1953 Bom. 214 (-\) I. L. R. 32 Cal.
527 at p. sn. A B A. v. SUBBA RAO v. STATE (Ayyangar, J. ) 619 1871 when the legislature lifted the words descriptive of a form of an English action and incorporated it in the Indian statute. Nor are we impressed with the argument that if the terms of a specific Article do apply to a specific case, one could ignore it and seek a general Article merely on the ground that the latter affords a longer period of limitation for the filing of a suit. So far as the present claim for recovery of a tax illegally collected is concerned the authorities are fairly uniform that the period of limitation for a suit making such a claim is governed by Article 62: Rajputana Malwa Railway Co-operative Stores Ltd. , v. The Ajmer Municipal Board(') arose out of a suit against a c Municipal Board for refund of certain octroi duty which they were not legally entitled to levy.
The suit for that claim was held to be governed by Article 62, the learned Judges stating : D E F "The language of Article 62 is borrowed from the form of count in vogue in England under the Common Law Procedure Act of 1852. Prior to the passing of the Supreme Court of Judicature Acts of 1873 and 1875, there was a number of forms of pleading known as the common indebitatus counts, such as counts for money lent, money paid by the plaintiff for the use of the defen- dant at his request, money received by the defendant for the use of the plaintiff, & co. . . . . . . . . The most com- prehensive of the old common law counts was that for money received by the defendant for the use of die plaintiff. Thi5 count was applicable where a defendant received money which in justice and equity belon". ed to the plaintiff under circumstances which rendered the receipt by the defendant to the use of the plaintiff ....
It was a form of claim which wa5 applicable when the plaintiff's money had been wrongfully obtained by the defendant. " A similar view was taken of claims of a like nature in Municipal Council Dindigul v. The Bombay Co. Ltd. , Madras('), India G Sugar and Refinery Ltd. v. The Municipal Council Hospet( 1 ), State of Madras v. A. M. N. A. Abdul Kader('), and The Municipal Committee, Amritsar v. Amar Dass('). Learned Counsel sub- mitted that these cases proceeded, in great part, on the inapplic- ability of the shorter periods of limitation provided in the particular statutes for amounts improperly collected thereunder. We do not, H however, consider that this militates, in any manner, from the (I) I. L. R. 32 All. 491. (2) I. LR. 52 Mad. 217. (3) I. LR. 43 Mad. 521. (4) A. l. R. 1953 Mad. 995 (S) A. l. R. 1953 Punjab 99. 620 SUPREME COURT REPORTS [1965] 2 S. C. R..
reasoning upon which the decisions are based, for they all refer A to the terms of Article 62, to its ·scope and their applicability in terms to cases of suit for refund of tax illegally collected. In addi- tion, we might point out that in India Sugar and Refinery Ltd. v. The Municipal Council, Hospet(') the claim for some of the years for which the suit was filed was dismissed as barred by limitation by applying the. three year rule. In fact, learned Counsel B conceded that save a solitary decision in Govind Singh v. The State of Madhya Pradesh ( 2 ) to which we shall presently refer, the decisions were uniform in applying Article 62 to cases of suits for refund of taxes illegally collected. We consider that these decisions are correct and they have applied the proper article of limitation.
Before referring to Govind Singh's(2) case it would be convenient to clarify the position as regards certain circum- stances in which the Article would be applicable without making c any exhaustive list. Where the defendant occupies a fiduciary relationship towards the plaintiff it is clear that Article 62 is in- applicable. Next even if the claim could have been comprehended D under the omnibus caption of the English "action for money had and received", still if there are other more specific articles in the Limitation Act-vide e. g. , Article 96 (mistake), Article 97 (con- sideration which fails) Article 62 would be inapplicable. Lastly, if the right to refund does not arise immediately on receipt by the defendant but arises by reason of facts transpiring subsequently, E: Article 62 cannot apply, for it proceeds on the basis that the plain- tiff has a cause of action for instituting the suit at the very moment of the receipt. It is this last point that was involved in Govlnd Singh v.
Th~ State of Madhya Pradesh ( 2 ) on which learned ·Counsel relied as a F decision which had refused to apply Article 62 and applied Art. 120 to a claim for refund of tax overpaid. There the assessee deposited along with his return certain sums. He had overpaid and so was entitled to obtain a refund when the assessment was completed. A suit for the amount of that excess was held to be governed by Article ~20. It is clear that at the time when the c assessee made the deposit of the tax he was not entitled to the refund. That right accrued to him only after the comnletion of the assessment. We consider, therefore, that this decision does not assist the appellant in the construction _which he seeks to persuade us to adopt of Article 62. If Article 62 were the proper Article of limitation applicable, Civil Appeal 644 of 1962 has to be dismissed as the suit was filed (I) t. L. R. 43 Mad. S21 (2) 12 S. T. C. 8:ZS. H A. v. SUBBA RAO v. STATE (Ayyangar, ].
) 621 A admittedly beyond three years after the receipt of the money by the respondent. There should also have to be a modification in the decree passed in Civil Appeal 306 of 1962. The claim in that suit included the amounts collected from the appellant as sur- charge in July, 1947, in December, 1947 and November, 1948 i. e. , for all the three surcharges. It is common ground that if the B three years' period of limitation under Article 62 was applied the claim for the refund of the surcharge imposed in July, 1947 would be beyond time. The appellant is, therefore, entitled Qnly to his claim for the refund of the amounts collected for the sur- charges imposed in December, 1947 and November, 1948. C As a result of the foregoing Civil Appeal 644 of 1962 shall stand dismissed, but there shall be no order as to costs as the appellant has succeeded on the merits of his claim, though the appeal fails on the ground of limitation.
All the other appeals excepting Civil Appeal 306 of 1962 will D be allowed and the judgment of the High Court set aside. In Civil Appeals 101, 131, 168 to 171, 259, 260, 302, 307 to 310, 838, 839 of 1962 and Civil Appeals 325, 437-441 and 996 of 1963 the decrees of the trial court shall be restored with co&ts here and in the High Court. F In Civil Appeal 306 of 1962 the amount decreed by the trial Court shall be modified by deducting therefrom a sum of Rs. 2,725/14/- made up of Rs. 2,261/8/- paid for the surcharge in July, 1947 together with Rs. 464/6/- being the interest claimed on the said sum. Subject to this modification the decree of the trial Court shall be restored with costs here and in the High Court. In Civil Appeals 303, 837, 840-857 of 1962 the suits will be decreed for the amounts prayed for with costs throughout. In the computation of the costs in this Court two sets of hearing fees shall be a1Iowed---0ne sp,t to be shared by the appel- G lantc.
in Civil Appeals 131, 170, 307 to 309 and 837-857 of 1962 and the other set by the successful appellants in the other anpeals to whom we have awarded costs. ORDER In accordance with the majority judgment, appeals are dis- H missed with costs. IASup. /65-6
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