BANGALORE METROPOLITAN TRANSPORT vs SMT AKHILA BEGUM

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HC-KAR
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RFA No. 47 of 2016


CNR: KAHC010512392016







IN THE HIGH COURT OF KARNATAKA AT BENGALURU

TH
DATED THIS THE 30 DAY OF OCTOBER, 2026

BEFORE

THE HON'BLE MR. JUSTICE H.T. NARENDRA PRASAD

REGULAR FIRST APPEAL NO. 47 OF 2016 (MON)

BETWEEN:

BANGALORE METROPOLITAN
TRANSPORT CORPORATION
HAVING ITS CENTRAL OFFICES
K H ROAD DOUBLE ROAD
SHANTHI NAGAR, BANGALORE - 560027
REP. BY ITS CHIEF LAW OFFICER.
…APPELLANT
(BY SRI. P D SURANA., ADVOCATE)








AND:

1. SMT AKHILA BEGUM
W/O LATE ABDUL SHAKEEL
AGED ABOUT 60 YEARS
TH
R/AT NO 107/A 4 B CROSS
ILIYAS NAGAR J P NAGAR POST
BANGALORE – 560070.

2. THE SYNDICATE BANK
MANIPAL CENTRE FORMERLY
PRESENTLY CANTONMENT BRANCH
NO. 109 ST JOHNS ROAD OPP LAVANYA
THEATRE NEAR COMMERCIAL STREET
BANGALORE - 42
REP. BY ITS MANAGER.




Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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3. THE NATIONAL CO-OPERATIVE BANK LTD
TH RD
NO 198 9 MAIN ROAD, 23 CROSS
ND
BANASHANKARI 2 STAGE
BANGALORE - 560070
REP. BY ITS MANAGER.
…RESPONDENTS
(BY SRI. H SOMASEKHARAIAH FOR R2., ADVOCATE:
SMT. SHOBA K.R., ADVOCATE FOR R3:
R1 SERVED AND UNREPRESENTED
THIS RFA IS FILED UNDER SECTION 96 OF CPC.,
AGAINST THE JUDGMENT AND DECREE DATED: 04.08.2015
PASSED IN O.S NO.295/2012 ON THE FILE OF THE XXIX ADDL.
CITY CIVIL JUDGE, BENGALURU. (CCH-30), DISMISSING THE
SUIT FOR RECOVERY OF MONEY.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE H.T. NARENDRA PRASAD

ORAL JUDGMENT

1. This appeal is filed by the appellant-BMTC under
Section 96 of the Code of Civil Procedure, challenging the
judgment and decree dated 04.08.2015 passed by the
XXIX Additional City Civil and Sessions Judge, Bengaluru,
in O.S.No.295/2012, whereby the suit filed by the plaintiff
came to be dismissed.

2. For the sake of convenience, the parties are referred
to as per their ranking before the Trial Court.
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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RFA No. 47 of 2016


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3. Brief facts of the case are that defendant No.1 is the
widow wife of late Abdul Shakeel, who was working as a
Traffic Controller in BMTC and expired on 28.10.2002. He
was entitled to gratuity of Rs.2,46,467/-, out of which
Rs.90,825/- was deducted and the balance amount of
Rs.1,54,642/- was paid to defendant No.1. The said
deduction of Rs.90,825/- was made towards excess salary
of Rs.343/- paid to the deceased, vehicle loan of
Rs.56,279/- obtained by the deceased from the defendant
No.2-Syndicate Bank, loan of Rs.26,327/- obtained from
defendant No.3-National Co-operative Bank Ltd., income
tax of Rs.6,771/- and Rs.1,105/- towards payment to the
BMTC Employees Consumer Co-operative Society. Being
aggrieved by the said deduction, defendant No.1 filed
proceedings before the Assistant Labour Commissioner
and Controlling Authority under the Payment of Gratuity
Act, 1972 (hereinafter referred to as ‘Act, 1972’ for short)
to re-determine the gratuity amount payable. By order
dated 07.08.2007, the Assistant Labour Commissioner and
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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Controlling Authority directed the appellant-BMTC to pay
the gratuity amount of Rs.1,15,728/- along with interest
at 10% per annum, holding that the deduction of
Rs.90,825/- was not permissible. The appeal filed by the
appellant-BMTC against the said order was dismissed by
the Deputy Labour Commissioner and Gratuity Authority,
Region-I, Bengaluru, on 26.08.2008, affirming the order
dated 07.08.2007. Thereafter, W.P.No.12494/2008 filed
before this Court challenging the orders of the original and
appellate authorities was dismissed on 01.10.2008.
W.A.No.1770/2008 filed against the order of the learned
Single Judge was also dismissed by the Division Bench of
this Court on 16.07.2009, and the Special Leave Petition
filed before the Hon'ble Supreme Court against the said
order was also dismissed. Thereafter, the plaintiff-BMTC
has filed a suit for recovery of money. The Trial Court,
having answered issues No.1 and 2 in favour of the
plaintiff, dismissed the suit on the ground of limitation.
Hence, the appellant-BMTC preferred this appeal.
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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4. Learned counsel appearing for the appellant-BMTC
contended that the Special Leave Petition filed before the
Apex Court came to be dismissed on 19.02.2010 and the
suit was filed on 06.01.2012, within a period of three
years. Therefore, the Trial Court committed an error in
dismissing the suit on the ground that it is barred by
limitation. He further contended that the period of three
years has to be reckoned from the date on which the Apex
Court dismissed the Special Leave Petition and not from
the date on which the Controlling Authority passed the
order. The finding of the Trial Court in this regard is
contrary to the law laid down by the Apex Court in the
case of The Sales Tax Officer, Banaras and others vs.
Kanhaiya Lal Makund Lal Saraf and Others reported in
AIR 1959 SC 135 and also the decision passed by this
Court in CRP No.73/2014 disposed of on 12.09.2017 .
Therefore, he contended that the plaintiff-BMTC is entitled
to recover the amount of Rs.90,825/- from defendant
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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No.1. The Trial Court has committed an error in dismissing
the suit.

5. Learned counsel appearing for respondent No.2
submits that he has supported the judgment and decree
passed by the Trial Court.

6. None appears on behalf of respondent No.3.

7. Heard. Perused the material on record.

8. The point that arises for consideration in this appeal
is:
“Whether the Trial Court is justified in dismissing the
suit on the ground that the suit is barred by limitation, in
the facts and circumstances of the case?”

9. It is not in dispute that defendant No.1 is the widow
wife of late Abdul Shakeel, who was an employee of the
plaintiff-BMTC and died on 28.10.2002. It is also not in
dispute that he was entitled to gratuity of Rs.2,46,467/-.
It is also not in dispute that the plaintiff-BMTC deducted a
sum of Rs.90,825/- from the said gratuity amount and
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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paid the balance amount of Rs.1,54,642/- to defendant
No.1.

10. The Controlling Authority under the Act, 1972 by
order dated 07.08.2007, allowed the petition filed by
defendant No.1 to re-determine the gratuity payable and
directed the plaintiff-BMTC to pay a sum of Rs.1,15,728/-
along with interest. Being aggrieved by the same, the
plaintiff-Corporation preferred an appeal before the
Appellate Authority, which came to be dismissed.
Thereafter, the plaintiff-BMTC filed a writ petition before
this Court challenging the orders passed by the
authorities, which came to be dismissed on 01.10.2008.
Against the said order, the plaintiff-BMTC preferred a writ
appeal, which also came to be dismissed on 16.07.2009.
Thereafter, the plaintiff-BMTC filed a Special Leave Petition
before the Apex Court, which came to be dismissed on
19.02.2010.

11. The limitation for filing the suit begins from the date
on which the Special Leave Petition came to be dismissed
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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by the Apex Court, i.e., on 19.02.2010. The Trial Court
has committed an error in considering the date on which
the Controlling Authority allowed the petition filed by
defendant No.1, i.e., 07.08.2007.

12. The Apex Court, in the case of ‘ The Sales Tax
Officer, Banaras’ (supra) , particularly in paragraph 27,
has held as follows:
“If this is the true position the fact that both the
parties, viz., the respondent and the appellants, were
labouring under a mistake of law and the respondent
made the payments voluntarily would not disentitle it
from receiving the said amounts. The amounts paid
by the respondent under the U.P. Sales Tax Act in
respect of the forward transactions in silver, had
already been deposited by the respondent in advance
in accordance with the U.P. Sales Tax Rules and were
appropriated by the State of U.P. towards the
discharge of the liability for the sales tax on the
respective assessment orders having been passed.
Both the parties were then labouring under a mistake
of law, the legal position as established later on by
the decision of the Allahabad High Court in Messrs
Budh Prakash Jai Prakash v. Sales Tax Officer,
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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Pilibhit(2), subsequently confirmed by this Court in
Sales Tax Officer, Pilibhit v. Budh Prakash Jai
Prakash(3) not having been known to the parties at
the relevant dates. This mistake of law became
apparent only on May 3, 1954, when this Court
confirmed the said decision of the Allahabad High
Court and on that position being established the
respondent became entitled to recover back the said
amounts which had been paid by mistake of law. The
state of mind of the respondent would be the only
thing relevant to consider in this context and once
the respondent established that the payments were
made by it under a mistake of law, (and it may be
noted here that the whole matter proceeded before
the High Court on the basis that the respondent had
committed a mistake of law in making the said
payments), it was entitled to recover back the said
amounts and the State of U.P. was bound to repay or
return the same to the respondent irrespective of
any other consideration. There was nothing in the
circumstances of the case to raise any estoppel
against the respondent nor would the fact that the
payments were made in discharge of a tax liability
come within the dictum of the Privy Council above
referred to. Voluntary payment of such tax liability
was not by itself enough to preclude the respondent
from recovering the said amounts, once it was
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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established that the payments were made under a
mistake of law. On a true interpretation of section 72
of the Indian Contract Act the only two
circumstances there indicated as entitling the party
to recover the money back are that the moneys must
have been paid by mistake or under coercion. If
mistake either of law or of fact is established, he is
entitled to recover the moneys and the party
receiving the same is bound to repay or return them
irrespective of any consideration whether the moneys
had been paid voluntarily, subject however to
questions of estoppel, waiver, limitation or the like. If
once that circumstance is established the party is
entitled to the relief claimed. If, on the other hand,
neither mistake of law nor of fact is established, the
party may rely upon the fact of the moneys having
been paid under coercion in order to entitle him to
the relief claimed and it is in that position that it
becomes relevant to consider whether the payment
has been a voluntary payment or a payment under
coercion. The latter position has been elaborated in
English law in the manner following in Twyford v.
Manchester Corporation(1) where Romer, J.,
observed:
"Even so, however, I respectfully agree with the rest
of Walton, J.'s judgment, particularly with his
statement that a general rule applies, namely, the
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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rules that, if money is paid voluntarily, without
compulsion, extortion, or undue influence, without
fraud by the person to whom it is paid and with full
knowledge of all the facts, it cannot be recovered,
although paid without consideration, or in discharge
of a claim which was not due or which might have
been successfully resisted."

13. And also following the said judgment of the Apex
Court, this Court, in CRP No.73/2014 disposed of on
12.09.2017, has held in paragraph No.6 as follows:
“6. In the case decided by the Hon'ble
Supreme Court consisting of five judges of the
Apex Court, wherein it is held that mistake of law
became established only after declaration of the
law by the Hon'ble Apex Court in the appeal.
Hence the contention of the learned counsel for
the petitioner that the limitation commenced
from the date of the order of the original
authority is without substance and deserves to
be rejected. Even otherwise, the cause of action
for the first respondent Corporation/plaintiff
arose after the repayment of sum and
admittedly, it is after the order passed by the
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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appellate authority. Viewed from that angle, the
contention raised by the learned counsel for the
petitioner regarding the suit being barred by
limitation is without substance and deserves to
be rejected and it is rejected.”

14. In view of the above, the period of limitation has to
be reckoned from the date on which the Special Leave
Petition came to be dismissed by the Apex Court, i.e., on
19.02.2010. The Trial Court has committed an error in
taking the date of the order passed by the Controlling
Authority, i.e., 07.08.2007, for computing the period of
limitation. Therefore, the finding of the Trial Court that the
suit is barred by limitation is contrary to the law laid down
by the Apex Court and the decision passed by this Court.
On this ground, the appeal deserves to be allowed and the
matter requires to be remitted back to the Trial Court to
reconsider the matter afresh on merits.


Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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15. Accordingly, the following order is passed:
ORDER

a) The appeal is allowed .

b) The judgment and decree judgment and decree
dated 04.08.2015 passed by the Trial Court, in
O.S.No.295/2012 on the ground of limitation is
hereby set aside.

c) The order of dismissal for default insofar as the
respondent No.1-defendant No.1 is concerned is
also set aside.

d) The Trial Court shall reconsider the matter afresh
on merits.

e) Since the matter is remitted back to the Trial
Court, in view of Section 66 of the Karnataka
Court Fees and Suits Valuation Act, 1958, the
Registry is directed to refund the court fee in
favour of the appellant-BMTC, subject to due
verification.
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

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f) Since the order of dismissal for default insofar as
the first respondent is concerned is also set aside,
notice shall be issued to the respondent No.1
regarding the date of appearance before the Trial
Court, so as to enable respondent No.1 to appear
and contest the matter.
Digitally Signed by NARENDRA PRASAD
HAREKOPPA THIMMANNA GOWDA

(H.T. NARENDRA PRASAD)
JUDGE




HA
LIST NO.: 1 SL NO.: 21