Rajasthan High Court - Jaipur
Murlidhar Sharma vs Addl. Registrar And Ors. on 4 April, 2006
Equivalent citations: RLW2006(4)RAJ2970, 2006(4)WLC747
JUDGMENT Rajesh Balia, J.
1. Heard learned Counsel for the parties.
2. This appeal is directed against the judgment dated 16.9.1997 passed by the learned Single Judge by which the writ petition was dismissed.
3. The appellant was at the relevant time a Pax Manager of Damdi Gram Sewa Sahakari Samiti Ltd. Non-petitioner No. 3. Assistant Registrar of Cooperative Societies vide impugned order dated 19.2.1990, after holding the inquiry under Section 74 of the Act of 1965 against the petitioner-appellant directed recovery of Rs. 7,500/- with 18% interest w.e.f. 8.7.78 and imposed penalty of Rs. 50/-.
4. On appeal, Additional Registrar, Cooperative Societies, Jodhpur vide his order dated 22.1.94 set aside the order passed by the Assistant Registrar and remanded the case back to the Assistant Registrar to decide the case afresh. By order dated 22.1.94 the Additional Registrar held that the action taken against the petitioner-appel-lant by instituting an enquiry on 23.12.89 was barred by time under Section 74 of the Act of 1965 and no action could have been against the appellant, as the alleged omission attributed to the petitioner took place before eleven year of the institution of enquiry under Section 74. However, he directed the Deputy Registrar to find out whether any order of the State Govt. giving relaxation in period of limitation exist there or not and directed that if the sanction of the State Govt. has been received, the proceedings may be re- initiated and inquiry be conducted.
5. This resulted in filing of SBCWP No. 4894/94 impugning both the orders passed by the Assistant Registrar as well as Additional Registrar, inter alia on the ground that the action initiated against the petitioner on 23.12.89 by the Assistant Registrar was barred by time and did not provide foundation for any valid order nor the Additional Registrar could have issued direction for reinstituting enquiry on relaxation in limitation by the State Government. The learned Single Judge held as under:
the question as to whether the period of six years contemplated by Section 74 of the Act is over or not is the question if jurisdictional fact which is ascertained as a fact. It is specifically stated in the order passed by the Assistant Registrar that the offence was disclosed in an investigation camp conduction under Section 74 of the Act.Consequently, the question as to whether the period of limitation pre-scribed for offence commences from the date when the matter came to knowledge or from the date when it was actually committed will also have to be determined. In the circumstances, there is no reason why all of these issues should be prempted by taking up the proceedings here and now. There is no error ion the order of remand as is made. Learned Single judge further observed that the application is moved for sanctioning or permitting to raise all the disputes under Section 74 after the period of limitation is over. Even this aspect will have to be taken into consideration before adjudicating the question regarding commencement of proceedings the petitioner shall be at liberty to raise the question of limitation as prescribed by Section 74 of the Act before the Assistant Registrar shall decide the question of limitation first and then proceed.
In the result, the petition fails and is dismissed.
6. Aggrieved by the aforesaid judgment passed by learned Single Judge, this appeal is before us.
7. The contention of learned Counsel for the appellant is that since admittedly facts with regard to proceeding under Section 74 that is to say that institution of enquiry on 23.12.89 was clearly barred under Section 74 of the Rajasthan Cooperative Societies Act, 1965 as it was then existing. Subsequent amendment brought into Section 74 w.e.f. 27.3.91 being not retrospective in effect, the proceedings which have become barred before commencement of amending provision, could not have revived. He placed reliance on two decisions of this Court in DBCSP No. 1198/2000 decided on 12.2.2001 and SBCWP No. 2127/89 decided on 29.6.1999 wherein learned single Judge held that the second part of the proviso, which provides for limitation from the date of knowledge, was brought by the Amendment with effect from 27.3.1991 and that too without having any retrospective application did not apply retrospectively to resurrect the time barred claims which have so become barred by time before amendment.
8. Thus, under the existing proviso the proceedings ought to have been initiated within the period of six years from the date of act or omission or the irregularity complained of. As the incident of irregularity in the present case was committed in 1971, the action initiated by the respondents in 1989 was without jurisdiction being time barred. He also relied on the decision in Rajendra Kumar v. State of Raj. DBCSA No. 1198/2000 decided on 12.2.2001 holding the proviso to Section 74(1) to be very clear. Under the proviso, no inquiry can be initiated after the expiry of six years from the date of indicated omission or commission by the concerned person. That decisiorl of learned single judge referred to above is the correct view of the matter.
9. The undisputed position here is that if the extant position was continuing, be as if no amendment was brought in to proviso to Section 74, the initiation of proceedings on 23.12.89 was barred by time and could not have been validly instituted on that date. The proviso to Section 74(1) read at the time the Assistant Registrar proposed to exercise jurisdiction under Section 74 as under:
Provided that no such enquiry shall be held after the expiry of 6 years from the date of acts or omissions referred to in this section.
10. Obviously, as is apparent from the order of Assistant Registrar that the act of alleged distribution of founds of the Society to different parties took place on 8.7.72 and after six years from the alleged act or omission the limitation for initiating any enquiry under Section 74 in respect of such acts or omission had expired on 8.7.78 it was only on 23.12.89 the proceedings were initiated against the petitioner under Section 74 to recover the said amount from the appellant and others. Hence the Assistant Registrar assumed jurisdiction which did not vest in him on 23.12.89.
11. It may also be noticed that the order passed by the Additional Registrar also came before amendment was brought in proviso to Section 74 Vide amending Rajas-than Act No. 2 of 1991, proviso was amended and alternate date of expiry of six years period was prescribed by inserting at the end of the aforesaid existing proviso the following words or the case may be from the date of knowledge of the registrar of such act of omission, whichever is later with the amendment the proviso of Section 74 w.e.f. 27.3.91 reads as under:
Provided that no such inquiry shall be held after the expiry of six years from the date of any act or omission referred to in this sub-section Or as the case may be from the date of knowledge of Registrar of such act or omission whichever is later.
12. There is no dispute about the facts, as is apparent from the material on record that case was registered that case was registered only in 1989 against the petitioner inasmuch as it is stated by respondents that in a vigilance camp held on 31.8.1989 the alleged act of the petitioner-appellant about the immediate complaint brought to the notice of the officer in charge of the camp. The reply of the respondent in this action reads as under:
As special campaign was launched by the Co-operative Department in Rajasthan and various Camps were organized to find out the cases of embezzlement and to prosecute defaulter as per the provisions of the co-operative Societies Act, 1965. In the Camp organized in Damri Gram Sewa Sahkari Samiti Ltd. A complaint was made by the Ex-Chairman and Secretary of Demri G.S.S. Ltd. On.31.8.89 against the petitioner before the officer in charge of the Camp. On the basis of the said complaint an enquiry against the petitioner was initiated by the officer in charge of the camp under Section 70 of the Act. In the enquiry the petitioner was found guilty. Thereafter, the petitioner's case was referred to a Committee formed to find out the viability of the petitioner's case and its tenability to initiate proceedings under Section 74 of the Act. The matter was decided by the Committee on 4.12.1989 with the recommendation that petitioner's case should be dealt with under Section 74 of the Act. Accordingly, a case was registered by the then Assistant Registrar on 23.12.89 against the petitioner under Section 74 of the Act. That Assistant Registrar in its order dated 19.2.1990 found petitioner guilty for embezzlement of Rs. 7,500/-.
13. Obviously, the knowledge of the Registrar about the acts and omission of petitioner is allegedly attributed at the camp held on 31.8.89. As per the amended provision, if it can be invoked by the registrar by applying the yardstick of the date of knowledge as starting point of limitation of the initiation of proceedings, the initiation of proceedings against appellant- petitioner on 27.12.89 will be within limitation.
14. Undoubtedly, the aforesaid two decisions relied on by the counsel for the petitioner does help him in this regard. However, the learned Counsel for the respondents urges that one important aspect has not been considered while deciding the aforesaid two cases that it is well settled principle of law of limitation that it does not apply to any proceedings in vacuo but the law of limitation which is in force as on the date of institution of proceedings, governs the limitation. Learned Counsel contends that if such principle is applied than even if no proceeding could have been initiated in Dec. 1989, fresh proceedings could be initiated after the amended provision cameinto force, as if on that date the limitation for initiating proceedings under amended provision survive, because from the date of knowledge of the Registrar about alleged act of embezzlement limitation had not expired. He also placed reliance on the decision of Supreme Court in AIR 1963 Page 1356. The majority view of Supreme Court has affirmed that law of limitation is not law of substantive right but a procedural law which bars the remedy but does not affect the right of the State to recover the dues and the period of limitation for such recovery can be adjusted from time to time so as to enforce the recoveries which remain to be enforced.
15. We have closely examined the contention of learned Counsel. On close scrutiny, we find that the principle stated in SC Paraser's case (supra) was in the background of Income Tax Act and sovereign power of levy and collection of taxes with the legislative history of amendments in Section 34 and keeping in view the fact that the amendment brought in Section 34 of Income Tax Act, 1972 came into effect retrospectively, saving the proceedings initiated under unamended provision, cannot be extended to present case.
16. General principle of statutory provision of limitation and effect of making amendments in the period of limitation can be stated to be that when a statutory Act seeks to revive the barred claims under the repealed law, specific statutory provisions are needed to the enacted to that effect. In the absence of specific provision reviving the remedies which have already become barred by time and are lost before law, the period of limitation comes into force, such claims do not survive for remedy within enlarged limitation. Reference can be made in this connection to a catena of decision: Mani Devi and Ors. v. Ravi Prasad and Ors. , Kumar Tarachand Sinha v. Thakur Chandra Bhusanpal Singh and Ors. , Subodh Chandra Mitra v. Kanailal Mukherjee , Official liquidator, Palai Central Bank Ltd. (inliquidation) Emakulan v. K. Joseph Augusti, Kayalackakam House, Palai and Ors. .
17. The privy council as early as in Khunni Lal v. Govind Krishna Narain (38 Ind App 87 At Page 102 (PC) said that;
No suit could be brought, even if the enactments referred to above had permitted it, to enforce the right after the lapse of twelve years, 'from the time the cause of action arose'. Nothing could lead to the revival of a right that had already become barred.
18. In this connection one may notice this distinction drawn by the Supreme Court in Paraser's case also. Minority view in Paraser's case rejecting the contention said that;
The case under Section 34 was not analogous to a time- barred claim to recover money from one individual by another by holding that no distinction is entirely out of place so far as Section 34 is concerned between right of Income-tax Officer and the remedy available to him. If the remedy is lost, the right is also lost and if the right is lost, much more so is the remedy.
19. For majority view Hon'ble Justice Mr. A-K. Sarkar and Mr. Raghubar Dayal, concurrently held that limitation prescribed in fiscal statutorily cannot be equated with law of limitation as statute of repose. It was stated;
Before dealing with this question we wish to say a few words about the well-known principle that subsequent changes in the period of limitation do not take away an immunity which has been reached under the law as it was previously. In this sense statutes of limitation have been picturesquely described as "statutes of repose." We were referred to many cases in which this general principle has been firmly established. We do not refer to these cases because in our opinion it is some what inapt to describe Section 34 with its many amendmentsand validating sections as a "section of repose". Under that section there is no repose till the tax is paid or the tax cannot be collected. What the law does by prescribing certain periods of time for action is to create a bar against its own officers administering the law. It tries to trim between recovery of tax and the possibility of harassment to an innocent person and fixes a duration for action from these two points of views. These periods are occasionally readjusted to cover some cases which would otherwise be left out and hence these amendments. As assessment can be said to become final and conclusive if no action can touch it but where the language of the statute clearly reopens closed transactions there can be no finality. We would not raise these prescribed periods to the level of those periods of limitation which confer not only immunity but also give titles by the passage of time.
20. Before coming to this conclusien the nature of the liability under income tax was considered in the said judgment and it was held that:
Under the scheme of the Income-tax Act, a liability to pay tax is incurred when according to Finance Act in force the amount of income, profits or gains is above the exempted limit. That liability to the State is independent of any consideration of time, and, in the absence of any provision restricting action by a time limit, it can be enforced at any time. What the law does is to prevent harassment of assessees to the end of time by prescribing a limit of time for its own officers to take action. This limit of time is binding upon the officers, but the liability under the charging section can only be said to be unenforceable after the expiry of the period under the law as it stands. In other words, though the liability to pay tax remains it cannot be enforced by the officers administering the tax laws. If the disability is removed or according to a new law, a new time limit is created retrospectively, there is no reason why the liability should not be treated as still enforceable. The law does not deal with concluded claims or their revival but with the enforcement of a liability to the State which though existing remained to be enforced.
Thus, the distinction was drawn in prescribed period enforcing the liability to the State independent of any consideration of time and, in the absence of any provision restricting action by a time limit, it can be enforced at any time. What the law does is to prevent harassment of assessees to the end of time by prescribing a limit of time for its own offices to take action. This limit of time if binding upon the officers, but the liability under the charging section can only be said to be unenforceable after the expiry of the period under the law as it stands. In other words, though the liability to pay tax remains it cannot be enforced by the officers administering the tax laws. If the disability is removed or according to a new law a new time limit is created retrospectively and not otherwise.
This clearly following observed in the said majority judgment. The only case in which no further action can be taken is one in which action was not taken under the old law within the period prescribed by that law and which is not also within the period mentioned in the new law if its operation is retrospective.
21. Apparently, it is only by amending law retrospectively either by prescribing period of limitation by including retrospective period or by clearly indicating that the operation of amended provision providing a period of limitation different from the previous one, the same can affect the time barred claim only if the subsequent law is retrospective in its operation. The retrospectivity can be brought in by saving the proceedings initiated prior to amendment and be governed by amended or new provision by providing different law of limitation.
22. Therefore, in the absence of any retrospective amendments being made in the provision prescribing limitation, for initiating proceedings general principle would apply that where authority is to initiate proceedings for recovery is barred under the existing statute of limitation the enactment of new provision would not revive that authority on the basis of extended period of limitation prescribed under the new law. Secondly, it must be noticed that the period of six years was not extended but by amended provision the change was brought about in the date of commencement or the starting point of time for computing the time of six years limitation and alternative commencement point was provided under the amended provision. Before amendment, commencement of period of six years within which action under Section 74 could be commenced started from the date of alleged act or omission of the person concerned whereas under the new amended provision, the starting point was made depending upon the date of knowledge of the Registrar about such alleged act or omission in respect of which action under Section 74 of the Act of 1965 is desired to be taken.
23. Admittedly, this provision was not made retrospective in operation. There-fore, the period of limitation commenced on the date on which act or omission is attributed to the person concerned if the period within which action could be initiated against such persons for recovery of dues had expired before commencement of new provision, the same is not saved by such amendment. We may notice that in Paraser's case also, the court clearly stated that it was not concerned with the question of reviving a proceedings which had become barred by time before the commencement of new provision. It is not the case of respondents either that proceedings initiated on 27.12.89 were within limitation. Authority has assumed beyond statutory provision as on 27.12.89 could not be sustained. Even as per the new law the proceedings could be initiated within 6 years from the date of knowledge of the registrar. It is not the case of respondents that the Registrar initiated any proceedings with six years of knowledge of alleged acts or omission which came to his knowledge on 31.8.89. Fresh proceedings could have been initiated by 31.8.95. No proceedings were initiated by the competent authority after commencement of amendment so as to examine whether on the anvil of amended provision the proceedings initiated after such provision could be examined on its yardstick. The period of six years has since long expired so as to warrant permission to initiate fresh proceedings now. Thus, viewed from any angle, in which the matter is required to be considered the contention raised by learned Counsel for the respondent for reconsidering the earlier decision referred to above by this Court does not arise.
24. As a result of aforesaid, it must be held that the proceedings initiated against the appellant-petitioner on 23.12.89 were clearly without jurisdiction as on that date no proceedings could be initiated and the subsequent law being not retrospective in its operation cannot revive that remedy. Those proceedings could not be sustained under amended law. These facts are clear from the statement made by the respondents in their own reply. No proceedings having been initiated after amendment came into force, examining validity of such non-existence proceedings cannot arise in this case.
25. Accordingly, the appeal is allowed, judgment under appeal is set aside and impugned order Annex. 1 & 2 passed by Assistant Registrar and Additional Registrar respectively are quashed. There shall be no order as to costs.