PENTAKOTA AUDINARAYANA NAIDU Vs. PANCHAYAT BOARD OF MUNAGAPAKA REPRESENTED BY ITS PRESIDENT, PENTAKOTA AYODHYARAMAYYA NAIDU

JUDGEMENT

(1.) This is a revision from the decree of me Subordinate Judge of Vizagapatam acting as a judge of the Court of Small Causes in a suit instituted by one Pentakota Audinarayana Naidu against the Panchayat Board of Munngapaka for the refund of money alleged to have been paid by him for profession and house taxes and in regard to the licensing fee for his rice mill and brick kiln under a mistaken belief that the properties or business in respect of which he had paid the license fees or other taxes were situated within the jurisdiction of the Panchayat Board. The levy of the profession-tax was also questioned on the ground that the notice issued to the plaintiff by the Panchayat Board did not comply with the requirements of law and the demand was therefore illegal. The Subordinate Judge disallowed the plaintiff's claim in regard to the refund of house-tax and license-fee as he held the payments made by the plaintiff to have been voluntary and not under a mistake of fact that arose out of contractual relation, although to use the Sub-Judge's words: There was an error in understanding the limits of this jurisdiction owing to ignorance of all parties concerned.

(2.) In regard to the profession-tax however he passed a decree for the refund of the tax paid for the year 1934-35 as he found the notice served by the Board on the plaintiff to be illegal and the levy of the same consequently ultra vires. The claim for, refund of the profession-tax for prior years was not allowed as it was held that the plaintiff had failed to prove that the notices in regard to them were defective and the demand by the Board unjustified. This has led the plaintiff to file the present revision.

(3.) Although conceded by the trial Court, learned Counsel on, behalf of the respondent contended in this Court that the mistake found to have been committed by the parties was one of law and not that of fact and would not therefore entitle the plaintiff to sue the Board on that basis. Mr. Balaparameswari Rao (learned Counsel for the petitioner) denied this and contended on the other hand that Section 72 of the Indian Contract Act made no distinction between mistakes of fact and those of law and alleged that the money paid erroneously was refundable whether it was paid under one kind of mistake or the other. It must be admitted that the words of this section are very general and capable of bearing the interpretation which was attempted to be put upon them; but in view of Section 21 of the Contract Act which provides that a contract is not voidable because it was caused by a mistake as to any law in force in British India, it has been decided in some cases that the mistake, to entitle a party to get the relief, must be one of fact and not of law - see Appavu Chettiar V/s. South Indian Railway Co. Ltd. (1928) 56 M.L.J. 269 : A.I.R. 1929 Mad. 177, Raja Rajeswara Sethupathi Avergal V/s. Secretary of State (1929) 55 M.L.J. 770 : I.L.R. 52 Mad. 12 : A.I.R. 1929 Mad. 179 and Wolf & Sons V/s. Dadyba, Khimji & Co. (1919) I.L.R. 44 Bom. 631 at 648. It may be argued that since the term coercion used in Section 72 of the Indian Contract Act has been held by their Lordships of the Privy Council in Kanhaya Lal V/s. National Bank of India Ltd. (1913) 25 M.L.J. 104 : L.R. 40 I.A. 56 : I.L.R. 40 Cal. 598 (P.C.), to have been used in the ordinary sense and the definition in Section 15 held not to control the meaning of that word in this section, the word mistake might similarly be construed in the ordinary sense and should not be controlled by Section 21 of the Act. It is unnecessary, however, for me to consider this question in this case as there is no doubt that the payments were made by the plaintiff to the defendant Board under the mistaken notion that the properties in regard to which those were made were situated within the local jurisdiction of the Board and not beyond it. Whether the plaintiff is entitled to recover them on the ground of failure of consideration or on the basis of an express or at least an implied request of the defendant, there can be no doubt that they were made under a mistake of fact and the plaintiff is entitled to recover them as money had and received by the defendant for the plaintiff's use. The observations of their Lordships otjhe Privy Council in Tom Boevey Barrett V/s. African Products Ltd. (1928) 29 L.W. 72 (P.C.) are helpful and may be cited. They observed: It follows that in the absence of such proof, the payment made to the appellant in respect of his one thousand shares was, on the interpretation of the facts most favourable to himself, a payment made under a mistake of fact common to himself and the company, namely, that he was a shareholder for one thousand shares, when in truth he was not, and money so paid can be recovered as money had and received to the use of the company and this was the form of the action.