Full Judgment Text
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PETITIONER:
DHANYALAKSHMI RICE MILLS ETC.
Vs.
RESPONDENT:
THE COMMISSIONER OF CIVIL SUPPLIES AND ANOTHER
DATE OF JUDGMENT16/02/1976
BENCH:
RAY, A.N. (CJ)
BENCH:
RAY, A.N. (CJ)
BEG, M. HAMEEDULLAH
SARKARIA, RANJIT SINGH
SHINGAL, P.N.
CITATION:
1976 AIR 2243 1976 SCR (3) 387
1976 SCC (4) 723
ACT:
Practice and Procedure-Representation by millers for
permission to export rice-Permits granted on payment of
surcharge to meet expenses of administrative machinery set
up to ensure export-Writ of mandamus to refund money
collected-When may be issued by this Court.
Indian Contract Act (9 of 1872), s. 72-scope of.
HEADNOTE:
The respondent-State Government was exercising powers
delegated to it by the Central Government under the
Essential Commodities Act, 1955. It introduced an ’Incentive
Export Scheme’ under which, millers, who delivered 50% of
their purchases to the Food Corporation of India towards
mill levy, would be eligible for exporting rice either
within the State from one block to another or to States
outside. On payment of administrative charges. On the
representation of the millers (appellants) that they could
not sell rice locally because there was no demand, and that
unless they were allowed to move rice outside the blocks or
outside the State there would be deterioration of stocks
resulting in loss to both trade and the consuming public,
the State passed orders permittion the export of rice
subject to the fulfilment of their commitments to the Food
Corporation and the payment of administrative charges; and
also set up the necessary administrative machinery for
ensuring such export. Permits were accordingly granted on
terms and on condition of payment of the surcharge fixed.
and the millers paid the surcharge and received the benefits
under the permits. Thereafter, they claimed refund of the
administrative surcharge on the ground that the State had no
right to collect it and that they made the payments under
mistake of law. Where the State collected administrative
charges but could not grant permits, the State refunded the
money, but, where millers obtained permits and had taken
advantage thereof, the State contended that there was no
mistake on the part of the millers and that the payments
were made voluntarily with full knowledge of facts and in
discharge of their contractual obligations.
The millers filed writ petitions praying for directions
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to the State to refund the administrative surcharges
collected from them, but the High Court held that they were
not entitled to the relief on the grounds of delay,
insufficiency of particulars regarding expenses and charges
incurred by the Government, and the payments being
voluntary.
Dismissing the appeals to this Court,
^
HELD: The petitions were rightly dismissed by the High-
Court. Also, since various question of fact are involved as
to whether there was really a mistake, or whether it was a
case of voluntary payment pursuant to contractual rights and
obligations. the remedy under Art. 226 is not appropriate in
the present cases. [396C-D]
(a) A mandamus will go where there is a specific legal
right. If there is no other means of obtaining justice, the
writ of mandamus is granted to enable justice to be done. A
writ of mandamus for recovery of money could be issued only
when the petitioner was entitled to recover that money under
some statute. An order for payment of money may sometimes be
made to enforce a statutory obligation. A mandamus for
refund of tax could be issued when the assessments were held
to be illegal; but contractual obligations cannot be
enforced through a writ of mandamus. Normally, the parties
are relegated to a suit of enforce civil liability arising
out of a breach of contract or a tort, to pay an amount of
money. Mandamus may also be refused where there is an
alternative remedy which is equally convenient, beneficial
and effectual
[395F-396C]
388
R. V. Bristol and Exeter Railway Co. 1845(3) Ry. & Can.
Cas. 777; Lekh Raj v Deputy Custodian, [1966] 1 S.C.R. 120.
Har Shankar & ors. v. Deputy Excise and Taxation
Commissioner & Ors., A.I.R. 1975 S.C. 1121; Sales Tax
officer Banaras & ors. v. Kanhaiya Lal Mukundalal Saraf,
[1959] S.C.R. 1350; Suganmal v. State of Madhya Pradesh &
ors., A.I.R. 1965 S.C. 1740; Burmah Construction Co. v.
State of Orissa, [1962] Supp. 1 S.C.R 242 and State of
Kerala v. Aluminium Industries Ltd., 16 S.T.C. 689, referred
to.
(b) The ground of delay on which the High Court, in the
exercise of its discretion, refused to grant a mandamus is
not confined purely to the period of limitation. Though some
of the petitions were filed within 3 years from the date of
payment, the delay is bound up with matters relating to the
conduct of parties in regard to payments pursuant to
agreements between the parties.
[395B-C]
(c) In the present cases, several petitioners have
joined in the writ petitions. Since each has an individual
and independent cause of action, such a combination would be
open to the objection of misjoinder even in a suit.
[395C-D]
(d) The issues regarding limitation, estoppel and
questions of fact in ascertaining the expenses incurred by
the Government for administrative purposes of the scheme and
allocating the expenses with regard to the quality as well
as quantity of rice covered by the permits, are triable more
appropriately in a suit.
[395D]
(e) The plea of mistake is a bare averment in the writ
petition. The payments did not disclose the circumstances
under which the alleged mistake occurred nor the
circumstances in which the legal position became known to
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the millers. Whether there was a mistake in paying the
amounts and when exactly the mistake occurred, are also
issues triable in a suit.
[1396D-E]
(f) The Government did not support its demand for
administrative charges either as a tax or a fee, but as a
condition of the permit and as a term of agreement between
the parties to meet the maintenance and supervision ex
penses for the Scheme of export permits. Under s. 72,
Contract Act, 1872 if one party, under a mistake of law,
pays to another money which is not due
by contract or otherwise, that money has to be repaid. The
mistake is material only so far as it leads to the payment
being made without consideration. But if a mistake of law
had led to the formation of a contract. s. 21 of the
Contract Act enacts that such a contract is not, for that
reason, voidable; and if money is paid under that contract,
it cannot be said that the money was paid under mistake of
law. It was paid because it was due under a valid contract,
and if it had not been paid, payment could have been
enforced.
[396E-397A]
The State of Kerala etc. v. K. P. Govindan Tapioca
Exporter etc. [1975] 2 S.C.R. 635; State of Madhya Pradesh
v. Bhailal Bhai [1964] 6 S.C.R. 261 and Shiba Prasad Singh
v. Srish Chandra Nandi, 76 I.A. 244, referred to.
(g) Where the High Court has, in the exercise of its
discretion refused to grant a writ of madamus, this Court
does not ordinarily interfere
[394E]
Municipal Corporation of Greater Bomboy v. Advance
Builders (India) Private Limited. [1972] I S.C.R. 408 at p.
420 and D. Cawasji d Co. v. State of Mysore [1975] 2 S.C.R.
511 at p. 527, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals No. 2390-
2391 of 1972.
(From the Judgment and order dated 27-3-1972 of the
High Court of Andhra Pradesh in Writ Petition Nos. 3976-3977
of 1971.)
Civil Appeal No. 604 of 1975
(From the Judgment and order dated 28-3-1973 of the Andhra
Pradesh High Court in Writ Petition No. 685/72).
389
Civil Appeals Nos. 2423-2437
(From the Judgment and order dated 27-3-1972 of the
Andhra Pradesh High Court in Writ Petitions Nos. 3974, 3975,
3978, 4015, 4016, 4017, 4018, 4019, 4020, 4021, 4247, 4246,
4248, 4249 and 5779/71).
Civil Appeal Nos. 2584-2586 of 1972
(From the Judgment and order dated 28-3-1972 of the
Andhra Pradesh High Court in Writ Petition No. 606 and 620,
622/72). Civil Appeals Nos. 281-286of 1973 (From the
Judgment and order dated 28-3-1972 of the Andhra Pradesh
High Court in Writ Petitions Nos. 4642, 4643, 4644, 4701,
4702 and 5776 of 1971)
Civil Appeals No. 539-540 of 1973
(From the Judgment and order dated 27.3.1972 of the
High Court of Andhra Pradesh in Writ Petition NOS. 5170,
5173/71).
Civil Appeals No. 2019-2034 of 1973.
(From the Judgment and order dated 28.3.1972 of the
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Andhra Pradesh High Court in Writ Petitions Nos. 4512, 4588,
4589, 4590, 4591, 4679, 4683, 4684, 4690, 4943, 4953, 4983,
5115, 5117 and 5118 of 1971)
Civil Appeal No. 653-662/74
(From the Judgment and order dated 28.3.1972 of the
High Court of Andhra Pradesh in Writ Petitions NOS. 603,
607, 609, 621, 627, 629, 738, 739, 744 and 746/72).
Civil Appeals NOS. 637, 1837-1842 of 1973.
(From the Judgment and order dated 27.3.1972 of the
Andhra Pradesh High Court in Writ Petitions NOS. 343/72 and
5669/71, 254, 256, 260, 334, 562/72).
A. K. Sen, for the appellants in CAs 2390-2391 & 2423-
2437/72.
P. A. Chowdhary, for the appellants in Cas 2019-
2034/73.
N. Bhaskar Rao, for the appellants in CAs 2390-2391,
2423-2437/72.
B. Kanta Rao, for all the appellants.
A. K. Sen with S. Markandeya and N. Madhusudan Raj, for
the appellants in CAs 604/75, 2584-2586/72 and 653-662/74. H
A. K. Sen with N. Madhusudan Raj and G. N. Rao, for the
appellants in CAs 281-286/73.
390
P. Ram Reddy with P. P. Rao, for the respondents in CAs
2390 2391 & 2423-2437/72, 281-282, 539, 540, 2019-2034/73;
rr. 2-4 in CA No. 664/75, 653-662/74 and 2584-2586/72; rr.
1-3 in CA 1042/73 and for rr. in CA 636/73. 1837-1841/73.
P. P. Rao for Respondent No. 1 in CA 604/75.
S. P. Nayar and Girish Chandra for respondent No. 1 in
CAs 653-662/74 & rr. in CAS 2584-2586/72.
The Judgment of the Court was delivered by
RAY, C.J. These appeals are by certificate from the
common judgment dated 27 March, 1972 of the Andhra Pradesh
High Court dismissing the writ petitions of the appellants.
The appellants filed the writ petitions for an
appropriate writ or order directing the respondent State of
Andhra Pradesh to refund the sums of money collected from
the appellants as administrative surcharges.
The appellants are dealers in foodgrains and held
licences issued in accordance with the provisions of
relevant statutes and control orders.
Under the provisions of the Essential Commodities Act,
1955 various Control orders have been issued for maintaining
or increasing supplies of any essential commodity or for
securing their equitable ‘ distribution and availability at
fair prices. The Control orders contemplate regulation or
prohibition or production, supply and distribution of
essential commodities and trade and commerce therein.
The State Government exercising powers delegated to it
by the Central Government in accordance with the provisions
of the Essential Commodities Act issued several measures to
achieve the objectives of the Control orders.
The Government of Andhra Pradesh introduced a scheme
known as "Incentive Export Scheme". Under that Scheme all
millers who delivered 50 per cent of their purchases to the
Food Corporation of India towards mill levy would be
eligible for export under the Scheme. Incentive export
permits were to be granted in the ratio of 2: 3. The ratio
meant that if a miller delivered two additional wagons to
the Food Corporation of India he would be entitled to export
three wagons on private trade account. The last date for
delivering rice to the Food Corporation of India was fixed
as 20 May, 1971. The last date for issue of permits was
fixed as 31 May, 1971.
Permits were of four types. The A type of permits was
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for export from one block to another within the State. Under
these permits administrative charge were Rs. 2.50 per
quintal. The type of permits was for export from the State
of Andhra Pradesh to other States in the South. The
administrative charges under the type permits were RS. 10/-
per quintal. The type permits was for export to any State
outside Andhra Pradesh. The administrative charges for type
permits were RS. 8/- per quintal. The fourth
391
type of permits was for export of broken rice under the A
type or the A type permits and the surcharges were Re. 1.00
per quintal.
By an order dated 24 July, 1967 under section S of the
Essential Commodities Act, l955 the Central Government
directed that the powers conferred on it by section 3 (1) of
the Essential Commodities ‘ I Act, 1955 to make orders to
provide for matters specified in clauses (a), (b), (c), (d),
(e), (f), (h), (i) and (j) of sub-section (2) thereof shall,
in relation to foodstufls be exercisable also by a State
Government subject to the conditions (1) that such power
shall be exercised by a State government subject to such
directions, if any, as may be issued by the Central
Government in this behalf, and (2) .- that before making any
order relating to any matter specified in clauses (a) and
(c) or in regard to regulation of transport of any
foodstuffs under clause (d) of section 3 (2) of the
Essential Commodities Act, the State Government shall also
obtain prior concurrence of the Central Government.
By an order dated 30 September, 1967 in exercise of
powers conferred by section S of the Essential Commodities
Act the Central .- Government made an amendment to the order
dated 24 July, 1967. The amendment was to the effect that
before making an order relating to any matter specified in
clauses (a), (c) and (f) or in regard to t distribution or
disposal of foodstuffs to places outside the State or in
regard to regulation of transport of any foodstuff under
clause (d) the State Government shall obtain the prior
concurrence of the Central Government.
The State of Andhra Pradesh by an order dated 22 July,
1968 pursuant to the representation of the millers for
export of rice outside the block but within the State passed
orders that permits for export of rice would be issued
subject to the fulfilment of their commitments and that
administrative charging of Rs. 2.50 per quintal of rice
would be collected from the millers before the issue of
permits.
Under the Southern States (Regulation of Export of
Rice) (Order, 1964, Andhra Pradesh Rice and Paddy
(Restriction on Movement) order 1965 and the Andhra Pradesh
Rice Procurement (Levy and Restriction on Sale order, 1967
every dealer or miller was required to supply a minimum
quantity of rice to the State Government or its nominees and
the balance, that is to say levy free rice, could be sold in
the open market or exported to the places outside the block
or State under permit issued by the State Government. The
representation of the millers for permission to export rice
outside the block or the State was that the denial of
permission to export rice would result in deterioration of
stocks and consequential loss to both the trade and
consuming public.
The appellants applied for and obtained permits by
fulfilling two principal conditions. One was to satisfy the
statutory requirements of supply to the Food Corporation of
India and the another was payment of administrative
surcharges for every quintal of rice.
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In the petitions before the High Court the appellant
alleged that they paid the surcharge under "trying
circumstances", "mistaken belief and impression" that "the
respondent has the right to collect the surcharge". The
appellants also alleged that having come to know about
392
the correct legal position in the matter they asked the
respondents to refund the administrative surcharges. The
respondents refused to refund any administrative surcharge.
The appellants contended in the petitions that the
respondent Government has no right to collect any
administrative surcharge, and, therefore the amount should
be refunded. The appellants alleged that they made the
payments under mistake of law.
The High Court held that the levy of administrative
surcharge is not backed by valid legislative sanction". The
High Court said that the agreements between the State and
the appellant millers for export were an executive scheme
undertaken by the State but liability to pay tax must be
covered by the statute. The High Court expressed the view
that there could be no estoppel when both parties are under
a mistake of law.
The High Court however hold that the appellants were
not entitled to any relief on three grounds. First, the
administrative surcharges were paid voluntarily by the
appellants. The appellants themselves represented for issue
of permits. The appellants obtained the permits. They
exported rice under the permits. The High Court, therefore,
held that the appellants cannot claim refund of the entire
amount without giving due credit for the expenses or charges
incurred by the Government for the issue of permits and for
the supervision of export, transport and other
administrative charges. The second reason given by the High
Court was that the Court would not be justified in
exercising discretion in favour of the appellants who
voluntarily paid the administrative charges, obtained the
permits and derived considerable profits therefrom. The
third reason given by the High Court was that there was
undue delay in claiming the refund.
The appellants contended that the three grounds on
which the High Court dismissed the writ petitions were
unsustainable. It is said on behalf of one of the appellants
(Civil Appeals No. 2584 to 2586 of 1972) that in their
application dated 10 February, 1970 for refund of charges
paid by them the appellants gave particulars of payments
showing the dates of payment, quantity covered by the
permit, the amount of charges paid, the number of permit
against which payment was made as well as the challenge
under which the payment was made Thereafter the appellants
called upon the Collector to furnish copies of regulations
under which surcharge was collected. The Collector by letter
dated 28 July 1970 informed the appellants that the State
Government alone was competent to give the copy of the
relevant rule or regulation under which surcharge was
collected. The appellants referred to the letters dated 22
December, 1970 and 2 January, 1971 by which the State
Government refused to grant certified copy of the rule or
regulation on the ground that it was part of the official
correspondence not meant to be supplied to the private
party. In this back ground the appellants contended that
since 10 February, 1970 when the appellants demanded refund
the appellants from time to time made application for refund
and the last reminder was on 30 December, 1971. Some of the
appellants filed their writ petitions in the
393
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High Court in the month of September, 1970 and some of them
filed A, their writ petitions in the month of January 1972.
It was, therefore, said that The applications for refund
were all made within three years from the date of payment
and the High Court should not have dismissed the writ
petitions on the ground of delay.
The appellants next contended that the pleadings were
not vague and the appellants in Civil Appeals No. 2584 to
2586 of 1972 gave B. all details of the payments and,
therefore, the High Court should not have dismissed the writ
petitions on the ground of vagueness of particulars and
pleadings.
It was also said on behalf of the appellants that if
the levy as well as collection of administrative surcharges
was without authority of law the High Court was in error in
refusing any relief to the appellants on the ground that the
payments were voluntarily made.
The appellants relied on the decision of this Court in
The State of Kerala etc. v. k-. P. Govindan Tapioca Exporter
etc.(l) as an authority for the proposition that the levy of
administrative surcharge is illegal. In the Tapioca case
(supra) under the Kerala Tapioca Manufacture and Export
(Control) order, 1966 no person could export tapioca except
in accordance with permit. The State Government Levied
administrative surcharge under a scheme. The State contended
that the administrative surcharge was in effect and
substance a licence fee charged in exercise of the police
powers of the State for permitting the appellants by grant
of permits to export tapioca. This Court held that the
scheme was not an order under any of the provisions of the
Essential Commodities Act and no licence fee or fee for
grant of permit was imposed by the Kerala Tapioca Control
order. The E. Kerala Tapioca Control order only provided for
levy of administrative surcharge. The Kerala Tapioca Control
order came into existence on 9 June, 1966. Even before the
promulgation of the order administrative surcharge was
levied under a scheme formulated by the State Government on
15 April, 1966 published in the Kerala Gazette on 3 May,
1966. The rate of administrative surcharge levied on tapioca
under the scheme dated 15 April, 1966 varied from time to
time. This Court found that the order dated 15 April, 1966
formulating the scheme was not an order under any of the
provisions of section 3 of the Essential Commodities Act.
The Scheme did not impose any licence fee. The scheme merely
provided for levying of administrative surcharge. The orders
levying administrative surcharge which followed the Tapioca
Control order did not refer to the exercise of any power
under the order. Therefore, this Court held that G. the
administrative surcharge in the Tapioca case (supra) was bad
and the realisations were without any authority of law.
The appellants contended relying on the decision of
this Court in State of Madhya Pradesh v. Bhailal Bhai(2)
that the High Court in exercise of powers under Article 226
has power to order refund and repayment of tax illegally
collected. The appellants submitted H: that the State had no
power under any statute or any authority to
(1) [1975] 2 S.C.R. 635 (2) [1964] 6 S.C.R 261
394
impose and collect administrative surcharge and, therefore,
the payments which were made by the appellants were made
under mistake of law and the State was liable to refund
them. The appellants contended that the administrative
surcharge was neither in the nature of a fee nor was it a
tax and there was no authority of law to support the levy
and collection of administrative surcharge. It was said on
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behalf of the appellants that neither the Essential
commodities Act, 1955 nor the Southern States (Regulation of
Export of Rice) order, 1964 nor the Andhra Pradesh Rice and
Paddy order, 1965 nor the Andhra Pradesh Rice Procurement
(Levy and Restriction on Sale) order, 1967 conferred any
power to levy administrative surcharge.
The respondents contended that the permits were granted
pursuant to the representation of the appellants that unless
they were allowed the movement of rice to places outside
their blocks or outside the State they could not sell rice
locally because there was no demand. The respondents further
said that for ensuring export of rice the administrative
machinery had to be set up. The permits were grant ed on
terms and conditions of payment of surcharge and the
appellants voluntarily paid surcharge and received benefits
under permits. The respondents also said that the permits
were contractual obligations between the appellants and the
respondents.
The High Court in exercise of its discretion refused to
grant mandamus on a consideration of facts and
circumstances of the case. The two principal matters which
weighed with the - High Court are these. First, the
appellants voluntarily paid the amounts and derived full
advantage and benefit by utilizing the permits. Second,
there is undue delay in claiming refund. Where the High
Court has in exercise of discretion refused to grant a writ
of mandamus, this Court does not ordinarily interfere. (See
Municipal Corporation of Greater Bombay v. Advance Builders
(India) Private Limited;(l) D. Cawasji & Co, v. State of
Mysore.(2)
Refund of illegal taxes stands on a different footing
from claiming refund of surcharge paid under terms and
conditions of permits. The only basis of tax is legislative
sanction and if the legislative sanction fails, the
collection of tax cannot be sustained. In the present case
the claim for refund is to be judged between the rival
contentions. The appellants contend that there is no
legislative sanction for collection of administrative
surcharge. The respondents on the other hand support the
collection of administrative surcharge first as a condition
for permit and second as an item of maintenance charges in
the maintenance and supervision of the scheme for export of
rice.
The respondents also contend that the appellants have
no right to claim refund under section 72 of the Indian
Contract Act because the payments were neither under mistake
of law nor under coercion. It is said by the respondents
that there is no coercion because the export scheme was
voluntary. Again, it is said that there is no mis take
because the payments made were in fact due as part of the
export scheme initiated at the instance of the appellants.
The respondents deny the claim of the appellants on the
further ground that the
(1) [1972] 1 S.C.R. 408 at p. 420. (2) [19751 2 S.C.R.
Sl I at p. 527
395
appellants having derived the benefit and caused detriment
to the A Government are estopped from questioning the
validity of the payments voluntarily made. Another ground on
which the respondents challenge the claim of the appellants
is that the payments were part of the consideration of the
agreement entered into by the appellants with State. If it
be assumed that the agreements are illegal, the respondent
contends that the appellant being a party to the same cannot
sue for recovery of money paid.
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All the matters were covered by the common judgment. In
some cases the claims were beyond three years from the date
of the payments. In some cases they were within a lesser
time but the ground of delay on which the High Court
exercised discretion is not confined L purely to period of
limitation but is bound up with matters relating to conduct
of parties in regard to payments pursuant to agreements
between the parties.
The remedy under Article 226 is not appropriate in the
present cases for these reasons as well. First, several
petitioners have joined. Each petitioner has individual and
independent cause of action. A suit by such a combination of
plaintiffs would be open to misjoinder. Second, there are
triable issues like limitation, estoppel and questions of
fact in ascertaining the expenses incurred by the Government
for administrative surcharges of the scheme and allocating
the expenses with regard to quality as well as quantity of
rice covered by the permits.
The appellants contended that in all cases of claim for
refund of money, the payments were voluntary and, therefore,
the High 3 Court was in error in refusing refund because of
the voluntary character of payment. In cases relating to
refund of payments of tax which is illegal the voluntary
character of payment is that tax payer has no say but is
compelled to pay. In the present cases the questions are
whether it can be said that payments of administrative
charges were voluntary in order to reap benefits of export
of rice covered by the permits. The contention of the
respondents that the export scheme was framed at the
instance of the appellants and that the administrative
surcharge is the consideration for preparation, maintenance
and supervision of the scheme raises questions which can be
solved by a suit. A mandamus will go where there is a
specific legal right. Mandamus may be refused where there is
an alternative remedy which is equally convenient,
beneficial and effectual. If there is no other means of
obtaining justice, the writ of mandamus is grant ed to
enable justice to be done. Those are cases where justice can
not be done unless a mandamus is to go. R. V. Bristol and
Exeter Railway Co.(l) is an authority for the proposition
where the Corporation could be compelled to pay a sum of
money pursuant to an agreement which could not be enforced
by action because the agreement was not under seal. This
Court in Lekh Raj v. Deputy Custodian(2) and Har Shankar &
Ors. v. Deputy Excise and Taxation Commissioner & ors.(8)
held that contractual obligations cannot be enforced through
a writ of mandamus.
(1) 1845 (3)(1) 1845(3)Ry. & Can. Cas. 777. (2) 11966]
I S.C.R. 120.
(3) A.I.R. 1975 S.C. 1121.
396
The view of this Court in Sales Tax officer, Banaras &
ors. v A Kanhaiya Lal Mukundalal Saraf(1) was that a
mandamus could be issued when the assessments were found to
be illegal. In Suganmal v. State of Madhya Pradesh & ors.(2)
this Court said that the mandamus for recovery of money
could be issued only when the petitioner was entitled to
recover that money under some statute. In Burmah
Construction Co. v. State of Orissa(8) this Court said that
normally the parties are relegated to a suit to enforce
civil liability arising out of a breach of contract or a
tort to pay an amount of money. An order for payment of
money may sometimes be made to enforce a statutory
obligation. In the State of Kerala v. Aluminium Industries
Ltd.(4) the refund claimed was by reason of the moneys being
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paid under mistake of law and the collection having been
made wrongly. The petitions solely for the writ of mandamus
directing the State to refund the moneys in the present case
have been rightly refused by the High Court on the grounds
of delay, insufficiency of particulars and pleadings, and
voluntary payments. The additional reasons in our opinion
are that various questions of fact arise as to whether there
was really mistake or it was a case of voluntary payment
pursuant to contractual rights and obligations.
The plea of mistake is a bare averment in the writ
petitions. The payments did not disclose the circumstances
under which the alleged mistake occurred and the
circumstances in which the legal position became known to
the appellants. The respondents contradicted the plea of
mistake. A triable issue arose as to whether there was a
mistake in paying the amounts and when exactly the mistake
occurred and under what circumstances.
Section 72 of the Contract Act states that a person to
whom money has been paid, or anything delivered, by mistake
or under coercion, must repay or return it. The mistake is
material only so far as it leads to the payment being made
without consideration. This Court has said that the true
principle is that if one party under a mis take of law pays
to another money which is not due by contract or otherwise
that is to be repaid. When there is a clear and unambiguous
position of law which entitles a party to the relief claimed
by him equitable considerations are not imported. A contract
entered into under a mistake of law of both parties falls
under section 21 of the Contract Act and not section 72. If
a mistake of law had led to the formation of a contract,
section 21 enacts that the contract is not for that reason
voidable. If money is paid under that contract, it cannot be
said that the money was paid under mistake of law; it was
paid because it was due under a valid contract and if it had
not been paid payment could have been enforced. (See Shiba
Prasad Singh v. Srish Chandra Nandi(5) See also Pollock &
Mulla-Contract Act 9th Ed. by J. L. Kapur pp. 519-520). In
the present case, the respondents do not support the demand
for administrative charges either as a tax or as a fee but
as a term and condition of permit and as a
(1) [1959] S.C.R. 1350. (2) A.I.R. 1965 S.C. 1740.
(3) [1962] Supp. 1 S.C.R. 242. (4) 16 S.T.C. 689.
(5) 76 I.A. 244.
397
term of agreement between the parties for the maintenance
and supervision expenses for the scheme for export permits
of rice from one block to another within the State or
outside the State.
It may be stated here that in cases where the State
collected administrative changes but could not grant permits
the State refund t ed moneys to such Person. It is only
where millers have obtained permits and taken advantage
thereof that the State contends that there is no mistake and
that the payments were made voluntarily with full knowledge
of facts.
For these reasons the appeals are dismissed. If the
parties are so advised they may institute suits and all
rival contentions would be . open to both parties. Parties
will pay and bear their own costs.
V.P.S. Appeals dismissed.
11-L522SCI/76
398