Discovery of mistake and limitation: overpayment recovery was time-barred because reasonable diligence could have uncovered the error earlier.

Section 17 of the Limitation Act postpones limitation in a suit for relief from the consequences of mistake only until the mistake is discovered, or could with reasonable diligence have been discovered. Mere assertion of a later discovery date is insufficient where the surrounding records show earlier discoverability. On the available materials, including the ledger, schedule, loan register, statement of account and annual audit practice, the alleged overpayment could have been detected earlier with reasonable diligence. Applying strict construction of limitation statutes, the Delhi HC held that the suit for recovery was barred by limitation and that time ran from the date of payment, not the claimed date of discovery.

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Issues: Whether the suit for recovery of the alleged overpayment was barred by limitation under Section 17 read with Article 113 of the Limitation Act, 1963, and whether the period of limitation commenced from the date of payment or from the date of discovery of the mistake.

Analysis: Section 17 postpones the commencement of limitation in a suit for relief from the consequences of a mistake until the mistake is discovered, or could with reasonable diligence have been discovered. The mere assertion of a later discovery date does not control the issue where the surrounding records and available documents show that the mistake could have been discovered earlier. The materials on record, including the appellant's own ledger, schedule, loan register, statement of account, and annual audit practice, showed that the alleged overpayment was discoverable with reasonable diligence well before the claimed date of discovery. The court also applied the principle that limitation statutes are to be construed strictly.

Conclusion: The suit was barred by limitation because the mistake could have been discovered earlier with reasonable diligence, and limitation was computed from the date of payment.

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