Court caseAIR 1950 PC 99

The plaintiff purchased certain mills from the State of Gondal. Arrears of municipal taxes in respect of the mills, which the vendor State was liable to pay for the period before the sale, remained outstanding, and the property was liable to be proceeded against for their recovery. To protect the mills he had bought, the purchaser paid the arrears and then sued the State for reimbursement.

The Privy Council held that the purchaser was entitled to be reimbursed under s. 69. He was a person interested in the payment because the property he had bought could be sold to realise the tax; the vendor was the person bound to pay it; and the purchaser had in fact paid it. The words 'bound by law to pay' are not confined to statutory liabilities and include an obligation the other party has undertaken by contract.