Holding

Public bodies must refund unlawfully collected fees and the High Court, under Article 226, may order a scheme for refund and equitable redistribution without regard to any limitation bar.

Summary

The Supreme Court considered a series of appeals and writ petitions filed by traders who had paid market fees at a 3% rate under Haryana Act No. 32 of 1977, which was later held ultra vires for exceeding the authorized 2% rate. The Court examined whether the market committees were liable to refund the excess collections, whether any limitation period barred such claims, and whether the petitioners could invoke Article 226 despite the availability of alternative remedies. It held that public bodies must return unlawfully collected monies and that no limitation bar applies to such refunds. Exercising its discretionary power under Article 226, the Court devised an equitable scheme for the market committees to deposit the excess amounts with the High Court, allowing the Registrar to process claims and redistribute the sums to the affected traders. The directions also provided for publicity, claim procedures, and the handling of unclaimed amounts. The appeals were dismissed, and the refund scheme was ordered.

Issues considered

Whether the market committees are liable to refund the excess market fees collected under Haryana Act No. 32 of 1977 after the fee rate was declared ultra vires.
Whether a limitation period bars the refund claims and whether Article 226 of the Constitution can be invoked notwithstanding the existence of alternative remedies.
Whether the principle of "ubi jus, ibi remedium" obliges the court to grant equitable relief in the form of a refund scheme.
What procedural mechanism should be adopted to ensure equitable redistribution of the refunded amounts.

Legislation cited

Subjects

market feesrefundultra viresArticle 226equitable relieflimitation periodpublic lawconsumer protectionHaryana Act

Judgment

1170

A SHIV SHANKER D.\L MILLS ETC. ETC.
v.
STATE OF HARYANA & ORS. ETC.
November 9; 1979 I'
B [V. R. KRJSllNA IYER, R. s. PATHAK AND A. D. KosHAL, JJ.]

Constitution of India 1950, Artich; 226-1/igh Court /ioldin:_.: levy Ufegal-
Conscqe11tial liability to ref u11d-'A ltcrnative rcn1edj' arailable-Jurisdiction
under-Whether barred.
In Kewal K1ishan Puri v. State uf Punjab and others [1979J 3 S.C.R. page
1217, this Court struck down payn1ent of marki:t fees at the inl.'.rcased rate
c of 3 per cent (raised frorn the original 2 per cent) under lfaryana Act No. 22
of 1977. A consequential liability was therefore ca.st on the market committees
to refund the excess amounts collected.

The appellants and the petitioners who had paid under n1istake the excess
sums demanded a direction to the effect that these amounts be refunded.

D On the que~tion of refund of the, execs.'i arnounts collected by the J}]arkct
committees.

HELD : 1. Where public botiies under colour of public laws recover
people's money, later discovered to be erroneous levies, the· dhan11a of tflt;;
situation admits of no equivocation. There is no hnv of limitation especially
for public bodies on the virtue of returning what \\'O<; wrongly recovered to
E \vhom it bidongs, In our jurisprud<;>nce it is not palatable to turn down
the prayer for high prerogative writs on the negative plea of alternative remedy,
since the root principle of law married to justice, is ubi jus ibi rc11u:diu1n.
(1172 G·H]

2. In our jurisdktion, social justice is a pervasive preeience and save in
.speciGl situation it is fair to be guided by the strategy of equity by asking
F those \Vho claim the scr\•ices of the ju<licial process to en1b1 a(.;c the basic rules
of distributive justice, while n1oul<ling the relief by consenting to restore little
sums taken in little transactions from litt\e persons to whon1 they belong.
[1173 El

3. Article 226 grants an cxtraordinr:iry re1ncdy which i-; essentially discrc·
tionary, nlthough found~d on legal injury. It is perfectly open for the court
G exercising this fl~xible power to pass such orders as public interc_,, dictotes und
equity projecLi;;. [1174 D]

In the instant case although the refund of cxce:-.s collections might be
legally due to the traders, many of the traders had themselves recovered the
excess percentage from the next purchasers. To the extent the traders bad paid
out of their own, they were entitled to keep them, but not where they had in
H turn collected from elsewhere. It would be he.rd to leave every agriculturist
to file a suit or other legal proceeding for recovery of negligible sums which
cumulatively amount to colossal amounts. [1173 F-H]
SHIV SHANKER DAL MILLS v. HARYANA (Krishna Tyer, J.) 1171

4. 111 Newabgani Sugar Mills v. Union of India and others [1976] 1 SCR A
.:803 this Cou11 in a similar situation devised a new prucedure to deal \vith a
new situation \vhere equity demanded redistribution but procedur.al expensi,'e-
ness and cu111bcrson1ent:ss effectively tfiwarted legal actions. [1173 li·ll74 Al

5. Situations without precedent demand remedies v1ithout preced 1~nt. [1174 B]
[The Court devised a scheme uf refund by the market committees and
redistribution of the small amounts to those from whom unwarranted collec-
B
tions had been made.] [1174 CJ

Ovrr. APPELLATE luRISDICTION: Civil Appeal Nos. 3220-3234
of 1979.
Appeals by Special Leave from the Judgment and Order dated
11-7-79, 23-8-79, 8-8-79, 15-10-79, 30-7-79, 18-9-79, 22-10-79, c
18-10-79, 29-10-79, 16-10-79, and 12-10-79 of the Punjab and
Haryana High Court in Civil Writ Peittions Nos. 2306, 2966, 2737.
3617, 2588, 3277, 3749, 3697, 3820, 3625, 3624 and 315-317/79
respectively.
AND D

I
Writ Petitions No. 892, 918, 921, 979-980, 1057-1058, 1095,
1234, 1273, 1051, 997, 940 and 981/79.
(Under ArJiclc 32 of the Constitution)
Dr. Y. S. Chitale (CA 3220/79), R. A. Gupta, Adarsh Goel and
S. K. Goel, for the Appellant in CA 3220/79 and 3222/79 for the E
Petitioner in W.P. 892, 918 and 921/79.
B. Datta and K. K. Manchanda for the Appellant in CA 3221/
79, 3224-3226/79.
A nil B. Dewan, Adarsh Goel, S. K. Goel, and R. A. Gupta for
1he Appellant in CA 3323/79. F
Adarslz K. Goel, S. K. Go~! and R. A. Gupta for the Appellants
in CA 3222/79, for the Petitioner in WP 892/79, 918/79, 921/79.
A. K. Goel and S. K. Goel for the Petitioner in WP 979 /79.
B. Datta and K. K. Manchanda for the Petitioner ~n WP 980/79.
G
Sarwa Mitter, Ved Prakash Gael and B. S. Mali// for the Peti-
tioner.

-~· P.. Iha, Cyan Chand D!mrt'wala and Sanjee Walia fc.r the
Pel!t10ner m WP 1057-58/79.

M. P. Iha and P. C. Khungu for the Petitioner in W.P. 1095/79.
H
·. N. D. Garg and T. L. Garg for the Petitioner in WP 123•1/79
21-743 SCI/79 .
I I 72 SUPREME COURT REPORTS (1980] 1 S.C.R.
A R. K. Garg (WP 892/79 and CA 3220/79) Gian Singh and
S. C. Patel for the Respondents 2-3 in CAs. 3220/79, 3221, 3222,
3223, 3224 and for the Respondent in WP 892/79, 921, 979, 981,.
1057-58/79, 1273, 997 and for Respondent in CA 3230, 3225/79.

Hardev Singh and R. S. Sodhi for the Respondent in WP 918/
B 79 and 980/79, 1095 and 1234/79.

Adarsh Goel and Gyan Sudha Misra for the Petitioner in WP
1273/79.
The Order of the Court was delivered by
c KRISHNA IYER, J. This big bunch of writ petitions shows how
litigation has a habit of proliferation in onr proccssual system since
cases are considered in isolation, not in th~ir comprehensive implica-
tions and docket management is an art awaiting its Indian dawn.
The facts, being admitted, obviate debate. All these appellants and
writ petitioners had paid market fees at the increased rate of 3 per cent
D
(raised from the original 2 per cent) under Haryana Act No. 32
of 1977. Many dealers challenged the levies as unconstitutional,
and this Court, in a series of appeals (C.A. Nos. 1083 of 1977
etc.)(') rule<l that the ~xcess of 1 per cent over the original rate of
2 per cent was ultra vires. This cast a· consequential liability on the
E market committees to refund the illegal portion. They were not so
ordered probably because they could not straightway be quantified.
The petitioners who had, under mistake, paid large sums which,
after the decision of this Conrt holding the levy illegal, have become
refundable, demand a direction to that effect to the market com-
mittees concerned. The~e cannot be any dispute about the obliga-
F tion or the amounts since the market committees have accounts of
coll~ctions and are willing lo disgorge the excess sums. Indeed, if
they file suits within the limitation period, decrees must surely
follow. What the period of limitation is and whether Art. 226 will
apply arc moot as is evident from the High Court's judgment, but we
am not called upon to pronounce on either point in the view we take.
G Where public bodies, under colour of public laws, recover people's
moneys, later discovered to be erroneous levies, the dharma of the
situation admits of no equivocation. There is no law of !imitation.
espccialiy for public bodies, on the virtue of returning what was
wrongly recovered lo whom it belongs. Nor is it palatable to our
jurisprudence to tum down the prayer for high prerogative writs, on
H
the negative plea of 'alternative remedy', since the root principle of
(I) Kewal Krishan Puri v. State of Punjab [1979] 3 S.C.R. 1217.
SHIV SHANKER DAL MILLS v. HARYANA (Krishna Iyer, J.) 1173
---·· A- .,
law married to justice, is ubi jus ibi remedium. Long a,go Dicey
wrote:
"The saw ubi jus ibi remedium, becomes from this Point
of view something more important than a mere tautological
proposition. In its bearing upon constitutional law, it
means that the Englishmen whose labours gradually form- B
ed the complicated set of laws and institutions which we
call the Constitution, fixed their minds far more intently
on providing remedies for the enforcement of particular
rights or for averting definite wrongs, than upon any decla-
rations of the Rights of Man or Englishmen .... The Con-
stitution of the United States and the Constitutions of the c
separate States are embodied in written or printed docu·
mcnts, and contain declaration of rights. But the states-
men of America have shown an unrivalled skill in provid-
ing means for giving legal security to the rights declared by
American Constitutions. The rule o[ law is as marked a
foatun of the United States as of England." D

Another point. In our jurisdiction, social justice is a pervasive
presence; and so, save in special situations it is fair to be guided by
tho strategy of equity by asking those who claim the service of the
judicial process to embrace the basic rule of distribulive justice,
while moulding the relief, by consenting to restore little sums, taken E
in little transactions, from )ittlc persons, to whom they belong.
When we reminded counsel 011 both sides of these guidelines of
Good· Samaritan jurisprudence and desired consensual disposal of
these cases, we gratifyingly found wdcome echo and we apprecia-
tively record this stance. F
The counsel for the market committees pointed out that although
refund of excess collections might be legally due to the traders
many of the traders had themselves recovered this excess percentage
from the next purchasers. So much so, these tiny tittles if they arc
to return to the original payers, should revert to the next purchasers
themselves. The traders who are the petitioners have no mor.c right G •
to keep such small sums than the market committees themselves. Tu
th;; extent to which the traders had paid out o[ their own, of rnursc.
they were en!itled to keep them, but not where they had, in tum.
col'.ected from elsewhere. It would be hard to leave every a:;ricul-
tunst to file a suit or other legal proceeding for recovery of negligible H
sums which cumulatively amount to colossal amounts. Many a little
makes a mickle. A similar situation arose in Newabganj Sugar
1I 74 SUPREME COURT REPORTS [1980] 1 S.C.R.
.A Mill.i case(') where this Court devised a new procedure to deal with
a new situation where equity demanded redistribution but procedmal
expensiveness and cumbersomeness effectively thwarted such legal
actions by the "small" many. Situations without precedent demand
remedies without precedent.

'B We indicated to counsel that the procedure adopkd in the
Newabganj Sugar Mills case (supra) may usefully be adapted to the
present case. In broad principle, counsel did agree, and we pro-
ceed Ofl that footing, that we devise a scheme of refund by the
market committees and redistribution, to the extent indicated above,
of small amounts to those from whom unwarranted collections had
·C been made, may be unwittingly, by the traders who are appellants
or petitioners.

Article 226 grants an extra-ordinary remedy which is essentially
discretionary, although founded on legal injury. It is perfectly open
for the court, exercising this flexible power, to pass such order as
public interest dictates and equity projects.
"Courts of equity may, and frequently do, go much
further both to give and withhold relief in furtherance of
the public interest than they are accustomed to go where
only private in!erests are involved. Accordingly, the
granting or withholding of relief may properly be dependent
upon considerations as of public interest. ... "(')

Keeping in mind these guidelines we make the following directions:

I. Subject to the directions given below, all the sums collected
'F by the \Wious market committees who are respondents in these
various writ petitions or appeals shall be liable to be paid into the
High Court of Punjab and Haryana within one week of intimation
by the Registrar of the amount so liable to be paid into the court .

. IT. A stateme'1t of the amounts collected in excess (1 % ) shall be
·f; put into this court by the dealers with copies to the various market
committees aforesaid within 10 days from today, and if there is any
difference between the parties it shall be brought to the notice of this
Court in the shape of miscellaneous petitions. On final orders, 'if any,
passed thereon by this Court, thos() amounts, as so determined, shall
be treated as final.
H
(1) [l,76] 1 S.C.R. R03.
(2) 21 Am. Jur. 2Jd Equity p. 626.
\
SH!VSHANKER DAL MILLS v. HARYANA (Krishna Iyer, J.) I I75

III. The Registrar of the High Court shall isime public notice A
and otherwise give due publicity to the fact that dealers who have
not passed on the liabilities to others and others who have contribut-
ed to or paid the excess one per cent cover\'d by these writ petitions
and appeals may make claims for such sums as are due to them from
him within one month or such other period as he may fix. The
Registrar shall scrutinise such claims and ascertain the sums so B
proved. He will thereupon demand of all the market committees
concerned payment into the Registry of such sums in regard to which
proo[ of claims have been made. On such intimation, the market
committees shall pay into the Registry the amounts so demanded by
the Registrar within one week of such intimation. The amount
shall be paid together with interest at 10 per cent per annum from
c
today upto the date of deposit with the Registrar.

IV. It shall be open to the Registrar to make such periodical
claims on appropriate proof by claimants on the lines slatd above.
D
V. He will devise the mechanics of processing the claims as best
as he may and, in the event of dispute, may refer to the High CO'Dr~
for its decision of such disputes, if he thinks it necessa"·· Other-
wise, he may dispose of the objections finally.

VI. If any further directions regarding the mechanics of the claim
E
of refund or otherwise are found necessary from this Court, the
High Court will report about such matter to this Court and orders
made thereon will bind the parties.

VII. If parties eligible for repayment of amounts do not claim
within one year from today the Registrar will not entertain any
F
further claims. It will be open to such parties to pursue their reme-
dies for recovery for any sums that may be due to th~m.

VIII. Each State Marketing Board will deposit within 10 days
frnm today a sum of Rs. 5,000/- before the Registrar for ~he preli-
minary expenses of publicity and other incidentals for the implemen- G
tation of the directions given above. Any unexpended amount, at
the end of one year, will be repaid to the respective State Marketing
Board.

IX. We further direct that the unclaimed amounts, if any, shall
be permitted to be used by the respective Marketing Committee~ for
the purposes falling within the statute as interpreted by this Court in
ilie CA No. 1083/77.
"
1176 SUPREME COURT REPORTS [1980] l S.C.11..

·A These appeals and writ petitions are disposed of on the above
lines, the winners being both the sides before us, the invisible small
consumers and above all, justice, equity and gocd conscience to the
inarticulate community, which is the functional triumph of law in
action within hailing distance of each other.
B We wind up with a word of satisfaction that each on~ has had
his meed and in recognition thereof we direct the parties to bear
their own costs.

N.V.K.