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Potnuru Swamy Babu Vs. the Union Board - Court Judgment

SooperKanoon Citation
CourtChennai
Decided On
Judge
Reported in146Ind.Cas.499
AppellantPotnuru Swamy Babu
RespondentThe Union Board
Cases ReferredLakshmanan Chetti v. Union Board of Devakottai
Excerpt:
madras local boards act (xiv of 1920), section 225 - suit for refund of tax illegally collected--limitation--section 225, whether applies. - - the privy council have condemned on more than one occasion the practice of construing indian statutes like the madras local boards act which are from time to time wholly repealed and re-enacted or extensively amended by the language of those which they re-placed or of similar legislation elsewhere in india or england on an assumption that no change in the law was intended and thereby declining to give effect to the words: 580 and municipal committee of morada-bad v. i have little doubt, if it had arisen for decision, the court would have held that a suit like the present one is within the section......more than six months after the date of the cause of action as provided by section 225 of the local boards act, 1920, as it stood before the amendment of 1930. the learned district judge has held the suit barred and the plaintiff appeals.2. the appellant mainly relies on lakshmanan chetti v. union board of devakottai 132 ind. cas 113. 60 m.l.j.600 : 33 l.w. 532 : (1931) m.w.n. 428 : a.i.r. 1931. mad. 520 : ind rul. (1931) mad. 609, where madhavan nair, j., held in february 1931, that the above section is applicable only to suits for compensation and damages; and also that a suit for a declaration that a union board is not entitled to levy profession tax and for recovery of the tax illegally collected is not a suit for compensation or damages and does not require notice under the.....
Judgment:

Krishnan Pandalai, J.

1. The appellant sued the respondent, Union Board of Narasan napet for refund of Rs. 118-8-0 and interest thereon being the amount of house tax for 1924-25 illegally collected from him on May 1, 1925. The suit was brought on May 6, 1926. To the defences on the merits it is needless to refer as it has been held, by both the courts below and is no longer questioned that the levy was illegal as an essential, notice was not published. The only point for decision is whether the suit was barred by limitation being brought more than six months after the date of the cause of action as provided by Section 225 of the Local Boards Act, 1920, as it stood before the amendment of 1930. The learned District Judge has held the suit barred and the plaintiff appeals.

2. The appellant mainly relies on Lakshmanan Chetti v. Union Board of Devakottai 132 Ind. Cas 113. 60 M.L.J.600 : 33 L.W. 532 : (1931) M.W.N. 428 : A.I.R. 1931. Mad. 520 : Ind Rul. (1931) Mad. 609, where Madhavan Nair, J., held in February 1931, that the above section is applicable only to suits for compensation and damages; and also that a suit for a declaration that a Union Board is not entitled to levy profession tax and for recovery of the tax illegally collected is not a suit for compensation or damages and does not require notice under the section. Although this decision was not on limitation but on notice the reasoning would equally apply to limitation under the section. As against this there is the decision of the late Chief Justice and Madhavan Nair, J., in Municipal Council, Dindigul v. Bombay Co. Ltd. Madras 120 Ind. Cas. 867 : 52 M. 207 : 29 L.W. 525 : (1929) M.W.M. 225 : A.I.R. 1929 Mad. 409 : 56 M.L.J.525, in April, 1928, where, in holding that, a suit for company's tax illegally levied by the Dindigul Municipality is not governed by the six months' period prescribed by Section 350 of the District Municipalities Act (V of 1920) corresponding to Section 225 of the. Local Boards Act XIV of 1920, both learned Judges expressly founded themselves on the words 'suit for damages or compensation' in, Section 350 of the former Act but for which the decision would have been otherwise. The Chief Justice observed that ne was quite prepared to concede that if an action for money had and received sounds either a tort or implied contract in this country, it would, be within the words of Section 350 of Act V of 1920 and that the plaintiff company would be time-barred; because either form of such an action would obviously, be a suit for damages or compensation within the meaning of the section. He added that he was prepared to think that if the draftsman had not added the qualification 'for damages or compensation', in that case the arrears claimed could not be recovered. Madhavan Nair, J., discussing the effect to be given to the words 'suit for damages or compensation' in Section 350 said that the corresponding Section 261 (1) of the old District Municipalities Act IV of 1884 corresponding to Section 156 of the Local Boards Act V of 1884 used the words 'no action shall be brought' thus bringing within its scope all descriptions, of actions as under the English Law. He added that in view of the express language suit for damages or compensation' used in the Indian enactment it was no use discussing whether the suit before them sounded in contract or tort. It thus seems by parity of reasoning that according to the then view of both the learned judge in Municipal Council Dindigul v. Bombay Co. Ltd., Madras 120 Ind. Cas. 867 : 52 M. 207 : 29 L.W. 525 : (1929) M.W.M. 225 : A.I.R. 1929 Mad. 409 : 56 M.L.J.525, the language of Section 225 of the Local Boards Act, 1920, which is similar in generality of application to all suits to Section 156 of the Local Boards Act of 1884. and in that respect difference the language; of Section 350 of the District Municipalities Act of 1920 is not to be confined to suits for compensation and damages and that this limit was placed in Section 350 of the District Municipalities Act, 1920, only on account of the express words above mentioned.

3. But in the later case Lakshmanan Chetti v. Union Board of Devakottai 132 Ind. Cas 113. 60 M.L.J. 600 : 33 L.W. 532 : (1931) M.W.N. 428 : A.I.R. 1931. Mad. 520 : Ind Rul. (1931) Mad. 609 Madhavan Nair, J. held that even without, any words in the section which limit Section 225 to suits for compensation and damages, it is to be limited as if these words were there and understood as in the earlier case. For this he relied on earlier decisions on the corresponding provisions of the Local Boards Act and District Municipalities Act of 1884; Ameer Sahib v. Venkatarama 16 M.396; President of the Taluk Board Shivaganga v. Narayanan 16 M.317 : 3 M.L.J. 12; Srinivasa v. Rathnasabapathi 16 M. 474 : 3 M.L.J. 124 and Govinda Pillai v. Taluk Board Kumbakonam 4 Ind. Cas. 32 : 32 M. 371 : 19 M.L.J. 333;4 M.L.T. 209. Having so limited the section by words which are not found there and which were considered the deciding factor in Municipal Council Dindigul v. Bombay Co. Ltd., Madras 120 Ind. Cas. 867 : 52 M. 207 : 29 L.W. 525 : (1929) M.W.M. 225 : A.I.R. 1929 Mad. 409 : 56 M.L.J.525, he thereupon applied to the Local Boards Act the doctrine enunciated in that case with respect to District Municipalities that in India a suit for money had and received is not one for compensation or damages but for an equitable remedy binding on the conscience of the defendant ex aequoet bono and, therefore, is not governed by Section 225 of the Local Boards Act. In C.R.P. No. 1147 of 1928, in August, 1932, Sundaram Chetty, J., followed Lakshmanan Chetti v. Union Board of Devakottai 132 Ind. Cas 113. 60 M.L.J.600 : 33 L.W. 532 : (1931) M.W.N. 428 : A.I.R. 1931. Mad. 520 : Ind Rul. (1931) Mad. 609, and held that a suit for recovery of profession tax illegally levied is not governed by the six months limitation provided in Section 225 of the Local Boards Act. Both because the earlier case is a decision of a Bench and because the reliance on the difference in language emphasised therein appears to me to be more in accord with rules of statutory construction, I prefer to follow it. The Privy Council have condemned on more than one occasion the practice of construing Indian Statutes like the Madras Local Boards Act which are from time to time wholly repealed and re-enacted or extensively amended by the language of those which they re-placed or of similar legislation elsewhere in India or England on an assumption that no change in the law was intended and thereby declining to give effect to the words: Henrietta Muir Edwards v. Attorney-General of Canada 16 Ind. Cas. 88 : 58 M.L.J. 300 : A.I.R. 1930 P.C. 120 : 31 L.W.601 : Ind. Rul. (1930) P.C. 312 (P.C.); Narendra Nath Sircar v. Kamalbasini 23 C. 563 at p 571 and Ramanandi Koer v. Kalawati Kuer 107 Ind.Cas. 14: 7 Pat. 221 at p 227 : A.I.R. 1928 P.C. 2 : 5 C.W.N. 96 : I.L.T. 40 Pat. 19, 30 Bom. L.R.227 : 47 C.L.J. 171 : 54 M.L.J. 281 : 9 P.L.T. 97 : 32 C.W.N. 402 : 26 A.L.J. 385 : 27 L.W. 782 (P.C.). I shall now refer to the cases.

4. In Ameer Sahib v. Venkatarama 16 M. 396, the suit was to recover land on which a Local authority (Panchayat of a Union) had wrongfully trespassed and erected a latrine. The question of limitation arose on Section 156 of the Local Boards Act V of 1881 which prescribed six months for actions brought for anything done or purporting to be done under that Act. All that was decided was that it was not the intention of the Legislature to allow Local bodies to appropriate the lands of private individuals otherwise than under the Land Acquisition Act or curtail the rights of such individuals by cutting down the period provided by the general law of limitation for suits for land. It was held that the section Only applied to suits for compensation claimed for wrongful acts committed under colour Of the Act. With the greatest respect to the learned Judges (Madhavan Nair and Sundaram Chetty, JJ.) this decision is not in any way an authority in support of the proposition that a suit for recovery of profession tax wrongfully levied under colour of the Local Boards Act is not governed by Section 156 then under consideration. On the contrary the reference to Chander Sikhur Bandopadhya v. Obbohy Charan Bagchi 6 C.8; Joharmal v. Municipality of Ahmednagar 6 B. 580 and Municipal Committee of Morada-bad v. Chatri Singh 1 A.269, would show that all that was decided following those cases was that suits for land are not Within the section. I have little doubt, if it had arisen for decision, the court would have held that a suit like the present one is Within the section.

5. Similarly the suit in President of the Taluk Board Shivaganga v. Narayanan 16 M. 317 : 3 M.L.J. 12 was for an injunction against a Taluk Board and a Union to restrain, them from interfering with a wall which they threatened to demolish unless the plaintiff removed it. The question was whether notice of suit as required by Section 156 of the Local Boards Act was necessary and it was held that the section applied only to suits for compensation and or damages (i.e. to money claims in respect of acts already done) and that the principle of the provision for notice is to allow public bodies time for tender of amends to avoid litigation and that it did not apply to suits for declaration of title to immovable property and for an injunction to restrain future acts interfering with such property.

6. This principle Was again affirmed in the Full Bench decision in Govinda Phial v. Taluk Board Kumbakonam 4 Ind. Cas. 32 : 32 M. 371 : 19 M.L.J. 333;4 M.L.T. 209, which was decided after Section 156 was amended by Act VI of 1900 and it was held that a suit for injunction against interference with plaintiff's enjoyment of his land is not Within Section 156 and that neither the notice nor the period of limitation prescribed by that section applied to such suits. The decision relied with approval on Mahamahopadyuya Rangachariar v. Municipal Council of Kumbakonam 29 M. 539 a case under corresponding Section 261 of the District Municipalities Act, 1884 and quoted with approval the language of Submarine Iyer, J., at p. 545 Page of 29 M.--[Ed.] that:

Suits referred to in Clause (1) of Section 261 are by its very terms those which, relate to acts 'done or purporting to be done' whereas, a claim for an injunction is with reference to what is apprehended will be done in the future.

There is as little in this decision to support the proposition in Lakshmanan Chetti v. Union Board of Devakottai 132 Ind. Cas 113. 60 M.L.J.600 : 33 L.W. 532 : (1931) M.W.N. 428 : A.I.R. 1931. Mad. 520 : Ind Rul. (1931) Mad. 609 as there is in the two decisions previously cited.

7. The last case relied on is Srinivasa v. Rathnasdbapathi 16 M. 474 : 3 M.L.J. 124, a decision under Section 261 of the District Municipalities Act, 1884. There the Municipality of Negapatam purporting to act under a contract made with its lighting contractor forfeited a deposit made by him for the due performance of the contract on the allegation of default. It was held that the contract was not one for which any special provision, was made in the District Municipalities Act and could not be placed in a different category to a contract made with any private individual. The principle was again affirmed that the cases contemplated in Section 261 are suits for compensation and damages for acts done or purporting to be done under colour of the Act and not suits governed by the general law of contract. Therefore, the suit was governed by the ordinary law of limitation for compensation for breach of contract. With the greatest respect, this is the same principle which runs through similar legislation in England and India and is referred to by the Chief Justice in Govinda Pillai v. Taluk Board, Kumbakonam 4 Ind. Cas. 32 : 32 M. 371 : 19 M.L.J. 333 : 4 M.L.T. 209 and lends no support to the view in Lakshmanan Chetti v. Union Board of Devakottai 132 Ind. Cas 113. 60 M.L.J.600 : 33 L.W. 532 : (1931) M.W.N. 428 : A.I.R. 1931. Mad. 520 : Ind Rul. (1931) Mad. 609, that where, as in this case, powers given to a local body to impose taxation are illegally exercised under colour of the Act governing that local body, a suit for the return of the sum wrongfully levied is not one in the words of Section 225 of the present Local Boards Act

on account of any Act done or purporting to be done in pursuance of execution or intended execution of this Act.

The reference in some of the cases to suits for compensation and damages as the proper scope of the sections considered is to draw the distinction between money claims arising (Jut of acts already done under colour of the Act on the one hand and suits for land or for injunction for threatened injury or for things done de hors the special powers given by the Act on the other. The distinction was not between compensation and damages on the one hand and money had and received on the other.

8. The present is not a suit for land, nor for an injunction against threatened injury, nor for breach of contract or other wrong dehors the Local Boards Act in which the Local Board occupies the same position as any other party; but it is for compensation in money with interest thereon for money exacted from the plaintiffs by a Local Board by a purported exercise of powers given by the Local Boards Act but in excess of them because done without observing the necessary formalities prescribed for the exercise of those powers. The case falls exactly within the scope of Section 225. I am unable to see anything in the decided cases or in the language of the section as contrasted with that of the corresponding Section 350 of the District Municipalities Act considered in Municipal Council, Dindigul v, Bombay Co. Ltd., Madras 120 Ind. Cas. 867 : 52 M. 207 : 29 L.W. 525 : (1929) M.W.M. 225 : A.I.R. 1929 Mad. 409 : 56 M.L.J.525, which would justify the exemption of such a case from the operation of the section. In my humble opinion and with the utmost respect, I think that enquiry into the historical origin, in actual or imputed contract, of suits for money had and received and reference to the jurisdiction of Indian Courts being alike extended to equitable as to legal claims irrespective of their historical origin are irrelevant to the construction of the section in question and I think that to exclude such suits as the present from its operation would be to defeat the object with which it is framed to protect local bodies from long periods of limitation for money claims arising from irregular exercise of their powers and to give them a chance of tendering amends before a suit is brought.

9. The decision appealed from is right and the appeal is dismissed.


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