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State of Maharashtra and ors. Vs. Glaxo Laboratories (India) Pvt. Ltd and anr. - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtMumbai High Court
Decided On
Case NumberAppeal No. 127 of 1975 in Suit No. 238 of 1966
Judge
Reported in1990LC48(Bombay); 1979(4)ELT286(Bom)
ActsCode of Civil Procedure (CPC) , 1908 - Sections 9, 10, 19, 19(1) and 80; Central Excises Act, 1944 - Sections 17, 18, 20, 20(1)(2), 35 and 40; ;Medicinal and Toilet Preparations (Excise Duties) Act, 1955; ;Customs Act, 1878 - Sections 179 and 188; ;Central Excise Rules, 1956 - Rule 13; ;Drug Rules, 1945 - Rule 96; Rajasthan Town Municipalities Act, 1951 - Sections 179
AppellantState of Maharashtra and ors.
RespondentGlaxo Laboratories (India) Pvt. Ltd and anr.
Excerpt:
retrospectively - order based on a non-extant provision or on a later amendment is invalid and cannot apply to earlier periods when codopyria was not to be considered as p & p medicine so long as it conformed to the pharmacopoeia even if the label did not say so. violation of another act cannot be held to be a violation of excise act. refund--civil suit is the only remedy where an act does not contain a provision for refund. interpretation--construction of a rule cannot go beyond the scope of an act. limitation--inapplicable where an action is unauthorised. litigation--government must avoid wasteful and futile litigation. additional points of a material nature cannot be introduced during the course of proceedings. medicinal & toilet preparations (excise duties) act, 1955 and.....madon, j. 1. the glaxo laboratories (india) pvt. ltd., who are the first respondents before us, filed a suit on the original side of this high court against the state of maharashtra, the collector of bombay, the director of prohibition and excise, maharashtra, at the time when the orders complained of by the first respondents were passed, as also the director of prohibition and excise, maharashtra, at the time of the filing of the suit, and the union of india for a declaration that the orders dated march 3, 1962, april 10, 1962 and september 20, 3952 passed by the collector of bombay and the order dated february 2, 1965 passed by the director of prohibition and excise, maharashtra, and the notice of demand dated july 1, 1965 issued by the collector for the recovery of a sum of rs......
Judgment:

Madon, J.

1. The Glaxo Laboratories (India) Pvt. Ltd., who are the first respondents before us, filed a suit on the Original side of this High Court against the State of Maharashtra, the Collector of Bombay, the Director of Prohibition and Excise, Maharashtra, at the time when the orders complained of by the first respondents were passed, as also the Director of Prohibition and Excise, Maharashtra, at the time of the filing of the suit, and the Union of India for a declaration that the orders dated March 3, 1962, April 10, 1962 and September 20, 3952 passed by the Collector of Bombay and the order dated February 2, 1965 passed by the Director of Prohibition and Excise, Maharashtra, and the notice of demand dated July 1, 1965 issued by the Collector for the recovery of a sum of Rs. 1,64,415.34 P. from the first respondents by way of excise duty under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, were illegal, invalid and ultra vires and for a decree in the said sum of Rs. 1,64,415.34 P. with interest thereon at the rate of 9% p.a. from the date of the suit till payment and for the costs of the suit. The suit was decreed with costs by Mr. Justice Rege in the terms prayed for by the first respondents save that he granted them interest on the said sum of Rs. 1,64,415.34 P. at the rate of 6 per cent per annum from the date of the judgment till payment. The Union of India has not filed any appeal against the said judgment and decree, but the other defendants to the said suit have filed the present Appeal and have made the original plaintiffs and the Union of India as the Respondents thereto.

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7. At the hearing of this Appeal Mr. Desai, learned Counsel for the Appellants, has argued four points. They are :

(1) The plaintiffs' Suit was not maintainable by reason of the provisions of Section 20(1) of the Act.

(2) The plaintiffs' Suit was not maintainable by reason of the provisions of Rule 127 of the Medicinal and Toilet Preparations (Excise Duties) Rules, 1956 (hereinafter referred to as 'the Rules').

(3) Assuming neither Section 20(1) of the Act nor Rule 127 of the Rules applied to the plaintiffs' Suit, the plaintiffs' Suit was barred as having been filed after the expiry of the period of limitation prescribed by Section 20(2) of the Act.

(4) The plaintiffs' preparation Codopyrin, as manufactured and marketed during the period September 26, 1961 to April 22, 1962, was a patent or proprietary medicine and was, therefore, liable to excise duty.

8. We will now examine the Appellants' case with respect to the maintainability of the suit under Section 20(1) of the Act. Section 20 of the Act provides as follows :

'20. Bar of suits and limitation of suits and other legal proceedings. - (1) No suit or other legal proceeding shall lie against the collecting Government or against any officer in respect of any order passed in good faith or any act in good faith done or ordered to be done under this Act.

(2) No suit, prosecution or other legal proceeding shall be instituted against the collecting Government or against any officer for anything done or ordered to be done under this Act after the expiration of six months from the accrual of the cause of action or from the date of the act or order complained of.'

Under Section 9 of the Code of Civil Procedure, 1908, the Courts have jurisdiction 'to try all suits of a civil nature excepting suits of which their congnizance is either expressly or impliedly barred.' Mr. Desai, learned Counsel for the Appellants, submitted that Sub-section (1) of Section 20 expressly bars the jurisdiction of the Court in respect of suits of the type mentioned therein, and a reading of the whole section shows that the jurisdiction of the Civil Courts with respect to other classes of suits was impliedly barred by the said Section 20. This argument is unsustainable on the bare language of the section itself. This section deals with two subjects : (1) the bar of Courts' jurisdiction in respect of certain suits and legal proceedings, and.(2) the providing of a special period of limitation for the institution of other suits, prosecutions and legal proceedings. The suits and legal proceedings which are mentioned in Sub-section (1) of Section 20 are against the collecting Government or against any officer in respect of (1) any order passed in good faith under the Act, and (2) any act in good faith done or ordered to be done under the Act. Thus, if a suit relates to an order which has not been passed in good faith, or to any act which has not been done or ordered to be done in good faith, or if it relates to an order or an act not done or ordered to be done under the Act, subjection (1) will have no application to it. The argument that Section 20 read as a whole impliedly excludes the jurisdiction of Courts with respect to suits other than those in Sub-section (1) wholly overlooks the fact that Sub-section (2) of Section 20 prescribes a period of limitation. No period of limitation could be prescribed in respect of a suit or a legal proceeding which cannot be instituted. It is only in respect of suits and legal proceedings which can be instituted in Civil Courts that a period of limitation can be prescribed. The argument based on Section 20 with respect to the implied exclusion of jurisdiction of Courts in respect of all suits and proceedings would, if it were correct, render Sub-section (2) of that section meaningless, and nugatory.

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12. It is in the context of Explanation I both as inserted by the Amending Act 19 of 1961 with effect from June 1, 1961 and as substituted by Amending Act 20 of 1962 with effect from April 23, 1962 that the impugned orders of the authorities are required to be looked at. We have already set out earlier the grounds given both by the Collector and by the Director of Excise and Prohibition for holding that the plaintiffs' medicinal preparation codopyrin manufactured with the revised formula, namely, the formula to be found in the British Pharmacopoeia, 1958 Edition, was liable to excise duty. The ground in both these orders was that the containers in which Codopyrin was manufactured and sold during the relevant period did not contain the words 'Compound Codeine Tablets B.P. 1958'. During the relevant period whether these words were shown on the label or not was, however, immaterial because the new Explanation I did not apply. Though in terms neither the Collector nor the Director of Excise and Prohibition have referred to the new Explanation I, it is clear from their orders that they have proceeded to determine the matter as if the new Explanation I applied. It is not disputed that if the new Explanation I did not apply, codopyrin was not liable to any excise duty by reason of the provisions of item No. 5 in the said Schedule, because it having been manufactured from a formula which was standard formula found in the British Pharmacopoeia, 1958 Edition, it was not a patent or proprietary medicine. An order based on a statutory provision which had no existence during the relevant time cannot be said to be an order passed under the Act. Secondly, an order based on a statutory provision which was enacted later and had no retrospective effect, in the sense of applying it to the relevant period, cannot be said in law to be an order passed in 'good faith'. Further, both the Collector and the Director of Excise and Prohibition have proceeded upon the basis that the plaintiffs were liable to pay excise duty because they had committed a breach of the provisions of Rule 96 of the Drugs Rules, 1945. Under Rule 96, as amended on January 13, 1965, the plaintiffs were required to give on the lables of the containers, in as conspicuous a manner as the trade name of the drug, the name of that particular drug which was mentioned in the relevant pharmacopoeia. As mentioned earlier, the Drugs Control Director had permitted the plaintiffs to make use of the old labels till such time as the new labels and containers were printed and had intimated this fact to the Collector of Bombay in the Prohibition and Excise Department, but apart from that fact, the taxing authority under the Act was not concerned with any violation of the Drugs Rules. A violation under the Drugs Rules was matter which concerned authorities under the Drugs Act. For a breach of Rule 96 penalty has been provided in Rule 85 of the Drugs Rules, 1945. That penalty is the cancellation or suspension of the manufacturing licence granted to the offending manufacturer. This penalty is to be imposed by the licensing authority -under the Drugs Rules. There is no provision either in the Drugs Act or the Drugs Rules or the Act or the Rules that a manufacturer of a medicinal preparation, if he commits a breach of the Drugs Rules, the medicinal preparation manufactured by him would be exigible to duty under the Act irrespective of the fact whether by the Act it is exigible to duty or not. What the Collector and the Director of Excise and Prohibition both have done in relying upon this so-called breach of Rule 96 of the drugs rules is to incorporate into the Act a new item of taxation and have arrogated to themselves the function of authorities under the drugs rules and have evolved for a breach of one of these rules a penalty non-existent in the drugs Act or the rules made thereunder for this violation. The orders passed on this basis cannot be said to be orders passed under the Act nor can they be said in law to be ordered passed in good faith within the meaning of Section 20. Section 20(1) of the Act has thus no application to the case.

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14. The plaintiffs' Suit is really and in substance a suit for the recovery of tax illegally collected from them. A demand was made upon them for the payment of the said sum of Rs. 1,64,415.34 P. The plaintiffs' request for stay of the recovery until their revision application was disposed of was turned down by the Collector. The Union of India did not care to decide the Plaintiffs' application for stay pending the hearing of their revision application nor did it care to decide the said revision application. We have set out above the coercive machinery of the Act. In fact, a warrant of attachment had already been issued and the Plaintiffs were threatened that the warrant would be executed, and as a consequence thereof if the amount demanded was not paid, the property attached would be sold. Under these circumstances, the Plaintiffs had no option but, under the threat of the coercive machinery of the Act, to pay up the amount demanded, in spite of their contention that the levy of excise duty was...illegal. The Act does not contain any provision for refund of tax illegally collected. So far as the rules are concerned, the only rule which provides for refund of duties or charges is Rule 13. That Rule is as follows :

'13. No refund of duties or charge erroneously paid, unless claimed within six months. - No duties or charges which have been paid or have been adjusted in an account-current maintained with the Excise Commissioner under Rule 9 and of which repayment wholly or in part is claimed in consequence of the same having been paid through inadvertence, error or mis-construction, shall be refunded unless a written claim is lodged with the proper officer within six months from the date of such Payment or adjustment, as the case may be.'

Rule 13 thus applies to a claim from refund of amount of duty paid under very limited circumstances only, that is, when such duty has been paid through 'inadvertence, error or misconstruction'. The plaintiffs did not act inadvertently in paying the amount. In fact, they adverted full well to the fact that the demand of amount of duty from them was an illegal demand. They were not under any error as to the illegality of the orders levying excise duty upon them nor did they misconstrue any section of the Act in paying the said sum of Rs. 1,64,415.34 P. In fact, they correctly understood the law and raised the correct contention that Codopyrin manufactured by them with the revised formula during the period in question was not exigible to excise duty. They were nonetheless forced to pay this sum under threat of the coercive machinery of the Act. Their case, therefore, did not and could not fall under the said Rule 13. If so, under the fifth proposition laid down by the Supreme Court in Dhulabhai's case the plaintiffs were entitled to file this suit for duty illegally collected from them.

15. We will now turn to the Appellants' submission that the Suit is barred by reason of the provisions of Rule 127 of the Rules. The said Rule provides as follows :

'127. Appeals. - (i) An appeal against an order or an officer other than an Excise Commissioner made in exercise of the powers conferred on him by the Act or these rules shall he to the excise Commissioner 0f the State concerned :

Provided that an appeal against an order passed by the Excise Commissioner shall lie to the State Government:

Provided further that if, between the date of the order or decision appealed against and the date of the hearing of the appeal, the officer who passed the order or decision is promoted to be the officer to hear such appeal, such appeal shall be heard by an officer superior in rank to such officer.

(ii) Every appeal under this rule should be filed within three months of the date of the decision or order appealed against. An order passed in appeal under this rule shall, subject to the power of revision conferred by Rule 129, be final.'

The word and number 'rule 129' in Sub-rule (ii) of Rule 127 appear to be a printing error for 'rule 128' because it is Rule 128 which confers revisional jurisdiction upon the Central Government, while Rule 129 deals with how an appeal memo or an application for refund is to be filed.

16. Mr. Desai, learned Counsel for the Appellants, submitted that since Sub-rule (ii) of Rule 127 clothed the order of an appellate authority with finality subject to the power of revision conferred under Rule 128 upon the Central Government, the jurisdiction of Civil Courts to entertain any suit challenging the legality of an order passed under the Act was impliedly barred. There are two complete answers to this argument, namely, (1) the Rules are made by the Central Government in exercise of the powers conferred upon it by Sections 9, 10 and 19 of the Act. Sections 9 and 10 authorize the Central Government to empower, by rules, Excise Officers to arrest persons as also vest in them the power to summon persons to give evidence and produce documents in inquiries conducted under the Act. Section 19 confers upon the Central Government a general rule-making power, but by the express language of Section 19(1) the rules which the Central Government is authorised to make are rules 'to carry out the purposes of this Act'. Sub-section (2) confers upon the Central Government specific rule-making powers in respect of particular topics without prejudice to the generality of the powers conferred by Sub-section (1). Thus, the Rules made by the Central Government must be in conformity with the present statute and cannot travel beyond its scope. Section 20 of the Act has already provided in which particular matters the jurisdiction of the Court would be barred. It would not be open to the Central Government under its rule-making power to enlarge the scope and ambit of Section 20. Even Sub-section (2) of Section 19, which prescribes certain specific matters with respect to which the Central Government may make rules, does not clothe the Central Government with power to oust the jurisdiction of Civil Courts. Courts always lean in favour of the validity of a statutory provision. We must, therefore, so construe Rule 127 as not to make it ultra vires the Act. If the construction canvassed for by Mr. Desai, learned Counsel for the Appellants, were placed upon Rule 127, that Rule would be beyond the scope of the rule-making power of the Central Government and would be ultra vires of the Act. A Court, however, would not lightly place a construction upon a statutory provision, whether enacted by the Legislature or contained in a piece of delegated legislation, which has the effect of rendering that provision unconstitutional or ultra vires where two constructions are possible according to one of which it would, be valid. Bearing this principle in mind We must place upon Rule 127 a construction which safeguards its validity by holding that it does not oust the jurisdiction of Civil Courts except with respect to suits and other legal proceedings falling under Sub-section (1) of Section 20.

17. Even assuming for the sake of argument that Rule 127 has the effect of impliedly ousting the jurisdiction of Civil Courts, what must be borne in mind is that even in cases where such provision were enacted in statutes the Supreme Court has held that suits could be filed in Civil Courts for certain reliefs and in certain circumstances. That aspect of the case we have already dealt with earlier and the circumstances in which suits, in spite of such provisions, can be filed in... Civil Courts have been set out by the Supreme Court in Dhulabhai's case. In this connection, we may usefully refer to another decision of the Supreme Court, namely, Union of India v. Tarachand Gupta and Bros, : 1983(13)ELT1456(SC) . That was a case under the old Sea Customs Act, 1878. Section 188 of the said Act provided for an appeal from orders passed by Customs Officers. ' The last paragraph of that section provided, 'Every order passed in appeal under this section shall, subject to the power of revision conferred by Section 191, be final.' It is pertinent to bear in mind that this is the exact phraseology of the last sentence in Sub-rule (ii) of Rule 127 of the rules. The facts in Tarachand Gupta's case were that Tarachand Gupta and Bros. imported certain goods under their import licence granted to them to import parts and accessories of motor cycles and scooters. The goods imported by them were motor cycle parts. These goods arrived in two consignments. The Customs authorities on examining the goods held that these goods when put together constituted 51 sets of 'Rixe Mopeds complete in a knocked down condition' and were not parts and accessories of motor cycles and scooters, and ordered...confiscation of the goods. The plaintiffs thereupon filed a suit to set aside that order. The Supreme Court held that what the Collector of Customs had to ascertain was whether the goods were parts and accessories and not whether the goods, though parts and accessories, were so comprehensive that if put together would constitute motor cycles and scooters in a knocked down condition. In adopting the latter approach the Collector was acting contrary to and beyond the relevant entry under which he had to find out whether goods were of the description given in that entry. The Supreme Court further held that such an approach would be in non-compliance of the entry which was applicable. So far as the position with respect to the exclusion of jurisdiction of civil courts is concerned, the Supreme Court observed [at p. 1566(1)] :

'The principles thus is that exclusion of the jurisdiction of the Civil Courts is not to be readily inferred. Such exclusion, however, is inferred where the statute gives finality to the order of the tribunal on which it confers jurisdiction and provides for adequate remedy to do what the Courts would normally do in such a proceeding before it. Even where a statute gives finality, such a provision does not exclude cases where the provisions of the particular statute have not been complied with or the tribunal has not acted in conformity with the fundamental principles of judicial procedure. The word 'jurisdiction' has both a narrow and a wider meaning. In the sense of the former, it means the authority to embark upon an enquiry; in the sense of the latter it is used in several aspects, one of such aspects being that the decision of the tribunal is in non-compliance with the provisions of the Act. Accordinglyly, a determination by a tribunal of a question other than the one which the statute directs it to decide would be a devisors not under the provisions of the Act, and therefore, in excess of its jurisdiction.'

18. Bearing in mind what has been laid down by the Supreme Court in Tarachand Gupta's case, let us see what we have in the case before us. We have here orders of statutory authorities, which authorities have decided the case not by applying the test laid down in the relevant item which they had to consider, namely, Item No. 5 of the Schedule to the Act read with Explanation I as it was on the statute-book during the period in question but instead by applying a statutory provision which came into existence after the period in question and which did not apply to the period in question, namely, the new Explanation I as substituted with effect from April 23, 1962. Further, they proceeded to determine the case before them on the provisions of rules made under a different Act and which had no application to the case and which did not provide for the penalty by way of payment of excise duty on non-excisable goods, namely, the provisions of the Drugs Rules, Such an approach adopted by the authorities can only be described as an approach which would be a non-compliance of the statute, and on this basis in view what has been laid down by the Supreme Court the plaintiff's Suit would be maintainable in spite of Rule 127, assuming it were to be construed as canvassed for by the Appellants. February 23, 1979

19. The point of limitation now falls to be decided. The Appellants' submission on this point is that the plaintiffs' Suit has been filed after the expiry of the special period of limitation prescribed by Sub-section (2) of Section 20 of the Act. This submission is on the basis that the Court's jurisdiction to entertain the suit is now barred under Sub-section (1) of Section 20. As pointed out earlier, there is a difference in the language used in Sub-section (1) and that used in Sub-section (2). When we contrast these two sub-sections, we find that there are three cardinal differences, namely, (1) while Sub-section (1) applies to suits or other legal proceedings, Sub-section (2) applies to suits, prosecutions or other legal proceedings; (2) while Sub-section (1) applies to suits or other legal proceedings in respect of any order passed in good faith or any act in good faith done or ordered to be done under the Act, Sub-section (2) applies to suits, prosecutions or other legal proceedings in respect of anything done or ordered to be done under the Act ; (3) the qualification with respect to good faith in Sub-section (1) is not to be found in Sub-section (2). The one common factor to be found in Sub-sections (1) and (2) is the qualification that order or the Act, as the case may be, must be one which is passed or done or ordered to be done under the Act. The omission of any reference to prosecutions in Sub-section (1) and the omission of any reference to any order in Sub-section (2) as also the omission of the qualification with respect to good faith in Sub-section (2) are significant. It is these different phraseologies used in these two Sub-sections that give us the clue to what Sub-section (1) is intended to apply to. The word 'prosecution' is not mentioned in Sub-section (1) because a prosecution in respect of any act done or ordered to be done can only be with reference to special offences created by the Act by a public servant. The offences which can be committed under the Act by officers exercising powers under the Act are provided for in Sections 17 and 18. If we look at these sections, we find that mens rea is an essential ingredient of the offences created by these sections. Thus there can be no prosecution in respect of any act done in good faith or ordered to be done in good faith under the Act nor can there be any prosecution, from the nature of things, with respect to any order passed under the Act, and it is for this reason that the word 'prosecution' is not to b3 found in Sub-section (1). The phrase 'in good faith' is not used in Sub-section (2) because Sub-section (2) refers to suits, prosecutions and other legal proceedings in respect of anything done or ordered to be done under the Act otherwise than in good faith, because for an act done or ordered to be done in good faith a complete immunity is provided for by Sub-section (1). Thus, there are two distinct categories of suits and legal proceedings provided for by these two sub-sections. The first is with respect to orders passed and acts done or ordered to be done in good faith, and the second is with respect to suits, prosecutions and legal proceedings in respect of acts done or ordered to be done otherwise than in good faith. The important qualification with respect to both these categories is that the order must be passed or act done or ordered to done under the Act. Sub-section (2) will apply to suits for damages or compensation against the collecting Government or an officer for an act done or ordered to be done under the Act otherwise than in good faith. To give an illustration of this, ,if an officer clothed with the power of search, seizure and arrest veraciously and unnecessarily exercises any of these powers, apart from the fact that he is liable to a prosecution under Section 17, he will also be liable in tort, because false arrest, false imprisonment...or wrongful detention of goods are well-recognized heads torts, and it is for this reason that various statutes which confer such or similar powers upon officers grant them a complete immunity or, as in the present case, a partial immunity in respect of the exercise of such powers. In placing this construction upon Sub-section (2) of Section 20, we are fortified by the decision of the Division Bench of our High Court in The Union of India v. Mansingka Industries Private Limited, (1975) 77 BomLR 663, already referred to earlier. As pointed out by us, the section which the Division Bench had to construe is identical with the section which falls to be construed by us, and this authority is, therefore, binding upon us. If an act, which is not an act under the Act, is done or ordered to be done by merely ostensibly purporting to do it under the Act, neither Sub-section (1) nor Sub-section (2) will apply. Similarly, if an order is passed otherwise than in good faith, Sub-section (2) will not in terms apply. Thirdly, if an order is passed, which is not in law an order under the Act though it may ostensibly state that it is an order under the Act, Sub-section (1) also will not apply. Thus, there arises a third category of suits and legal proceedings which are not covered either by Sub-sections (1) and (2), and in respect of these suits the Civil Courts will continue to have jurisdiction, and as Sub-section (2) will not apply, the period of limitation for filing such suits will be the ordinary period of limitation prescribed by the Limitation Act, 1963. We have already seen in the Supreme Court cases referred to above the types of suits which do not fall under such sections even in the case of statutes where the section provides for a complete bar to court's jurisdiction. We have also pointed out that the plaintiffs' suit is one which falls in the class of suits which constitute an exception to such sections. We, therefore, hold that the plaintiffs' suit was not governed by Sub-section (2) of Section 20 but was governed by the ordinary period of limitation of three years under the Limitation Act, 1963. In this connection, we may refer to a recent decision of the Supreme Court in Firm Surajmal Banshidhar v. Municipal Board, Ganganagar, : [1979]2SCR169 . The facts of that case were that under the Rajasthan Town Municipalities Act, 1951, the municipality had no power to levy a terminal tax. Under the earlier Municipal Acts it had such power. The terminal tax levied under the earlier statutes was, however, continued by the municipality even after the coming into force of the Rajsthan Town Municipalities Act. Several persons from whom this tax was collected filed suits to recover the amounts of tax paid by them. The Supreme Court held that the imposition of this tax after the coming into force of the Rajasthan Town Municipalities Act was beyond the taxing power of the municipality. Section 179 of that Act provided for a special period of limitation of six months and the giving of a notice of two months for any suit in respect of anything done or purporting to be done under the said Act, Disposing of the defence that the suits were barred under Section 179 of the said Act, the Supreme Court held that the suits were outside the purview of the said Act. It further held, 'we have no hesitation in holding, in the circumstances of the present cases...that the suits did not fall within the purview of Section 179 of the Act (that is, the Rajasthan Town Municipalities Act, 1951) and were not barred by limitation.' This authority is, therefore, a direct binding authority for the proposition that where a suit is in respect of an act which is not done or purported to be done under the statute, the period of limitation prescribed by the statute does not apply to the suit.

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21. So far as the last point urged before us, namely, that the plaintiffs' medicinal preparation codifying was during the period in question patent or proprietary medicine, we have already dealt with this aspect of the case while dealing with the question of maintainability of the suit, and we have already held that it was not a patent or proprietary medicine which attracted the application of Item No. 4 in the Schedule to the Act. We may mention that on this aspect of the case no arguments whatsoever were advanced to us to show why the wordings on the lable were the criterion to be applied, and as the judgment under appeal shows, almost some was the position at the time of the trial of the suit. Thus, we negative all the points raised by the Appellants. The result is that this Appeal must fail.

22. Before parting with this Appeal we would like to express our distress at this wasteful and futile litigation. There was almost nothing to be said by the Appellants and the Union of India so far as the merits of the case were concerned. As we have mentioned earlier, no arguments have been attempted to be advanced to justify the orders of the authorities. The arguments in this Court as also in the trial Court mostly central around the technical defence of maintainability of the Suit. We may well ask, 'To what purpose, assuming for the sake of argument that the Court were to hold that the suit was not maintainable, was this waste of public time and money ?' Had the plaintiffs failed in the suit on this point, they could have immediately filed a writ petition under Article 226 of the Constitution for the same relief. There being no answer on the merits, they would have been granted the relief prayed for. From our experience of litigation of this type, we, of course, can contemplate some technical defences which would have been raised in that writ petition. One of them would have been that of delay, but the answer to that defence would have been furnished by the period taken up by the pendency of this case. Another technical defence very likely would have been that the respondents' proper remedy was to file a suit. We are not saying this is an facetious vein, because in the very suit from which this Appeal arises, in the Written Statement filed by the Union of India a defence has, been taken that the suit is barred by limitation, and immediately thereafter another defence is taken that the suit is premature. This we may well expect from a private litigant who seeks to postpone the evil day, but these are certainly not pleas which we expect from the Government and its officers. For the filing of a suit the Code of Civil Procedure requires a notice under Section 80 to be given to the Government and its officers. The object of that notice is to bring to the attention of the proper department of the Government the injustice which the plaintiff claims he has suffered, and if his claim is true, to give an opportunity to the Government to make redress or to settle his claim. Unfortunately, this salutary object underlying Section 80 seems today to have been perverted, and we find that nowadays a notice under Section 80 is only taken in hand when a suit is riled in order to find out from it whether any defence as to non-compliance or want of proper compliance with the provisions of Section 80 can be raised in the suit. Thus, there was no real object in raising these technical defences because, as we have pointed out above, if not by way of suit, by way of a writ petition the plaintiffs would have succeeded. The only object, therefore, could have been to drive the plaintiffs from pillar to post. In this connection, we would like to refer to the decision of the Supreme Court in Union of India v. A.V. Narasim-halu, : 1983(13)ELT1534(SC) . In that case the respondent who had imported certain goods applied for refund of the duty paid by him. His application was dismissed as also his appeals to the authorities. The respondent then filed a suit against the Union of India. The defence raised was that the suit was not maintainable. This defence was negatived by the High Court, but in appeal by the Union of India this defence was upheld and the appeal allowed and the suit dismissed. While allowing appeal the Supreme Court observed as follows (at p. 662) :

'The jurisdiction of the Civil Court to entertain a suit challenging the validity of the imposition of the duty of customs being excluded, the plaintiff's suit must fail. But it must be observed that the present is a fair illustration of the administration not making a serious attempt to avoid futile litigation for small claims. There was a judgment of the High Court of Madras on the identical question which fell to be determined. If the plaintiffs had moved the High Court in exercise of its jurisdiction under article 226, the Union had practically no defence. The Union could without loss of face accede to the request of the plaintiff to refund the amount collected. The learned Attorney-General stated that the Union desired to obtain a decision of this court on the extent of the jurisdiction of the Civil Court to entertain a suit challenging the decision of the Customs Authorities, because in the view of the Law Advisers the High Court had fallen into error in enunciating the principles. But the High Court recorded the judgment under appeal after the claim was resisted by Union. We are glad to record the assurance given by the Attorney-General that whatever may be the decision in the appeal, the Union of India will refund the amount of tax unauthorisedly recovered by the Assistant Collector of Customs. This was essentially a case in which when notice was served, the Central Government should instead of relying upon technicalities have refunded the amount collected. We trust that the Administrative authorities will act in a manner consistent not with technicalities but with a broader concept of justice if a feeling is to be nurtured in the minds of the citizens that the Government is by and for the people.'

23. No such statement as was made by the Attorney-General in that case was at any time made before the trial Court or before us. Here the only object was to deprive the plaintiffs of their just claim. Today the Government, both the Central and the State Government, are expressing great concern for what is termed arrears in Courts. We are constrained to observe that a considerable part of such arrears is due to litigations of this type in which the State or the Union is a party and is the result of the attitude which the Government adopts towards legal proceedings which are filed against it. We express a hope that hereafter in legal proceedings against the Government will adopt an approach consistent with and befitting its role as a social welfare State. With these words and with the expectation that these words will not fall on deaf ears, we dismiss this Appeal.

24. The Appellants will pay to the first respondents (the original plaintiffs) the costs of this Appeal fixed under Rule 569D of the Rules and Forms of the Bombay High Court (on the Original Side), 1957, on the basis of two advocates, at Rs. 10,500. The second respondents, the Union of India, will bear and pay their costs of the Appeal,

25. The first respondents will be at liberty to withdraw the amount of security for costs given by the Appellants.


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