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  • 72) Mahabir Kishore and Others V State of MP

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    The appellants were allotted liquor contracts by the government and paid an illegal 7.5% mahua and fuel cess, and filed a suit to recover the money after learning several years later that the cess had been ruled illegal; while the respondent argued the suit was barred by limitation, the Supreme Court ruled that the limitation period began when the appellants learned of the declaration of invalidity, not the date of the initial ruling, and the suit was therefore timely.

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    72)Mahabir Kishore and Others v State of MP

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    The appellants were allotted liquor contracts by the government and paid an illegal 7.5% mahua and fuel cess, and filed a suit to recover the money after learning several years later that the cess had been ruled illegal; while the respondent argued the suit was barred by limitation, the Supreme Court ruled that the limitation period began when the appellants learned of the declaration of invalidity, not the date of the initial ruling, and the suit was therefore timely.

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    413 views2 pages

    72) Mahabir Kishore and Others V State of MP

    Uploaded by

    Rajat
    The appellants were allotted liquor contracts by the government and paid an illegal 7.5% mahua and fuel cess, and filed a suit to recover the money after learning several years later that the cess had been ruled illegal; while the respondent argued the suit was barred by limitation, the Supreme Court ruled that the limitation period began when the appellants learned of the declaration of invalidity, not the date of the initial ruling, and the suit was therefore timely.

    Copyright:

    © All Rights Reserved
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    of 2

    Mahabir Kishore and Others v State of MP

    Facts:

    Supreme Court

    31 July 1989

    Appellant was allotted contracts for manufacture and sale of liquor for 1959 at 2,56,200 and from
    1/1/1960 to 31/3/1961 for 4,71,900 by the govt. 7.5% was charged as mahua and fuel cess. Firm paid
    extra of 54,606.

    Writ petitions pending in court to challenge this. Therefore, question of stopping it was under
    consideration of the govt.

    17/10/1961-Forest department wrote a letter- MP HC decided that the levy of the cess was illegal and
    cannot be recovered from the liquor contractors. Also, no free supply of mahua or fuel should be
    permitted.

    Appellants got to know about it in September 1962.

    17/10/1964- Appellants served a notice to the govt. under S.80 of CPC requesting refund.

    24/12/1964- Suit for recovery was filed.

    Appellant’s argements:

     Had no opportunity to know about the ruling with reasonable diligence.


     Limitation period begins from a week after the date of the letter.

    Respondent’s argument:r

     Limitation period starts from 17/10/1961. The suit was barred.


     Appellants should have known about the govt’s decision on the same day.

    Judgement:

     The money realized was under a mistake and without the authority of law.
     Principle of unjust enrichment requires: (To justify restitution)
    1. The defendant has been enriched by a receipt of a benefit.
    2. This enrichment is at the expense of the plaintiff.
    3. The retention of the enrichment is unjust.
     No situation of pari delicto because if the appellants had not paid the money, they would not
    have given the contracts.
     According to 17(1)(c) of the Limitations Act,
    1. Mistake of fact: Starts when the plaintiff discovers the mistake or with reasonable
    diligence, should discover it.
    2. Mistake of law: Starts when a court makes a declaration as to the invalidity of the law.
     Period of limitation of 3 years will start from the date of knowledge of the particular law, under
    which money is paid, being declared void.
     Suit within the limitation period.

    Appeal is allowed.

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