Limitation for refund under mistake of law begins on discovery of the mistake, not on an undisclosed internal decision.

A suit for refund of money paid under a mistake of law is a claim in restitution under section 72 of the Indian Contract Act, 1872, and limitation is governed by article 113 of the Limitation Act, 1963. By virtue of section 17(1)(c), time begins only when the mistake is discovered, or could with reasonable diligence have been discovered. An internal government decision that was never communicated to the claimants could not start limitation, and the relevant point was when they actually acquired knowledge of the mistake. The suit was therefore treated as within time.

---

---

Issues: Whether a suit for refund of money paid under a mistake of law was governed by article 113 of the Limitation Act, 1963, read with section 17(1)(c), and whether limitation began from the date of an internal government decision or from the date when the appellants acquired knowledge of the mistake.

Analysis: The claim was one for restitution of money paid under a mistake of law and therefore attracted section 72 of the Indian Contract Act, 1872. In such a case, article 113 of the Limitation Act, 1963 applies, and by virtue of section 17(1)(c), time does not begin to run until the mistake is discovered or could, with reasonable diligence, have been discovered. The internal letter of 17 October 1961 was never communicated to the appellants, so it could not fix the starting point of limitation. The Court also accepted that, even with reasonable diligence, the appellants would need at least some time to learn of the decision, and the unrebutted assertion that knowledge was acquired only after the later High Court decision meant the suit could still be within time.

Conclusion: Limitation did not begin on 17 October 1961, and the suit was not barred by time.

Ratio Decidendi: In a suit for refund of money paid under a mistake of law, limitation under article 113 of the Limitation Act, 1963 begins only when the mistake is discovered or could, with reasonable diligence, have been discovered within the meaning of section 17(1)(c).

---