Bombay High Court
State Of Maharashtra And Ors. vs Glaxo Laboratories (India) Pvt. Ltd. ... on 1 January, 1800
JUDGMENT
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 September20, 1962 passed by the Collector of Bombar 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 sum of Rs. 1,64,415.34 P. form 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 ths 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 annum form the date of 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.
2. Order based on a non-existent provision is not an order issued in good faith, and hence not barred by S. 20(1) of the Act. Sub-Section (2) of Section 20. "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, Sub- section (1) will have no application to it,....an order based on a statuary 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," (paras 7 & 9)
3. Fundamental principles of judicial procedure-violation of law under another Act or rule cannot be a cause of action under the Excise Act. The fact that the petitioners had committed a breach of under Rule 96 of the Drugs Rules, does not make the codeine tablets eligible to duty under the Excise Act. The levy is therefore against the fundamental principles of Judicial procedures under which circumstance the Civil Court has the jurisdiction to entertain the suit and grant the relief asked for. "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 end have evolved for a breach of one of these rules a penalty non- existent in the Drugs Act or the rules made thereunder under for this violation ... 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 of what has been laid down by the Supreme Court the Plaintiff's Suit would be maintainable...." (paras 9 & 14)
4. When duty is illegally collected and the Act does not contain a machinery for the refund of such tax collected illegally, the remedy via a Civil suit is proper and maintainable (ratio of S.C. judgment). "........Hidayatullah; C.J. who spoke for the court, laid down seven propositions deducible from decided cases. These seven propositions are ..... (5) Where the particular Act contains no machinery for refund of tax collected in excess of constitutional limits or illegally collected, a suit lies." (para 9)
5. Construction of a rule cannot be such that it goes beyond the scope of the Act or becomes ultra vires the Act. Since the Act allows the institution of Civil procedings under sub-section (2) of Section 20. Rule 127 cannot be interpreted in such a manner as to bar the institution of all proceedings. "........the Rules made by the Central Government must be in conformity with the parent 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 ....... 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. ......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..." (para 12)
6. Limitation--In case of civil suits relating to an act which was not done under the statue, the period of limitation prescribed in the statue will not apply. Sec 20, sub-section (2), Medicinal and Toilet Preparations (Excise Duties) Act, 1955. The usual period of limitation under the Limitation Act, 1963 therefore comes into play. Suit held to be within time as per the provisions of the imitation Act. "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... 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... ...Under Section 80 of the Code of Civil Procedure 1908, the Plaintiffs were required to give a notice to the Union of India, the State of Maharashtra and the Government officers..... The period of two months of this notice is required to be excluded in computing the period of limitation by reason of the provisions of section 15(2) read with section 29(2) of the Limitation Act, 1963, The period of limitation for filing this Suit would thus expire on May 6, 1966. The Plaintiffs have filed their Suit on that day and Suit is, therefore, in time." (paras 15 & 16)
7. Wasteful & futile litigation by taxing authorities must be avoided, where they have no case on merits and as a responsible Governmental body they are required to act in a manner consistent not with technicalities, but with the broader concepts of justice. " 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 centered around the technical defence of maintainability of the Suit.... 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 ... there was no real object in raising these technical defences because, as we have pointed out above, if not by way of a 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." (para 19) At the hearing of this Appeal Mr. Desai, learned Counsel for the Appeallants, has argued four points. They are :
(1) The Plaintiffs' suit was not maintianable by reason of the provision of section 20(1) of the Act.
(2) The plaintiffs' Suit was not maintainable by reason of the provisions of rule 127 of the Medical 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 sectio 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 suit 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 gaith 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 aginst 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 uinsustaibnable on tha bare laanguage of the section itself. this section deals with two subject : (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 legala proceedintgs. The suits and legal proceedings which are mentioned in sub-section (1) of section v are aginst the collecting Government or agianst 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 raltes to an order or an act not done or ordered to be done under the Act, sub-section (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 or a suit or legal proceeding which cannot be instituted. It is only in respect of suit and legal proceedings which can be instituted in Civil Courts that a period of limitatio can be presecribed. The argument bases on section 20 with respect to the implied exclusion of jurisdiction of Courts in respect of all suits and proceedigns would, if it were correct, render sub-section (2) of that section meaningless and nugatory.
12. It is in the context of Explain 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 aauthorities 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 plaintiff' medicinal preparatio 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 cotai the words "Compound codein Tablets B.P 1958". During the relevant period whether these words were shown on the label or not was, howevern 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 appaly, codopyring was not liable to any excise duty by reason of the provisions of item No. 5 in the said Schedule, beacause 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 not 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, can not 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 plaintiff were liable to pay excise duty because they had commited a breach of the provision 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 labels of the contianers, 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 undert the Act was not concerned with any violation of the Drug 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 provisio either in the Drugs Act or the Drugs Rules or the Act or the Rules that a manufacturer of a medicinai 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 drug 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 panalty non-existent in the drug 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 aapplication to the case.
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 was disposed of was turned down by the Collector. The Union of India did not case to decide the Plaintiffs' application for stay pending the hearing of their revision applicationnor did it care to decide the said revision appalication. 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 threatended that the warrant would be executed, and as a consequence thereof if the amount demanded was not paid, the property attaced would be sold. Under these circumstances, the Plantiffs had no option but, under the threat of the coercive machinery of the Act, to pay up the amout demanded, in spite of their contentio that the levy of excise duty was.... illegal. Act does not contain any provision for refund of tax illegally colleted. so far as the rules are concerned, the only rule which provides for refund of duties or charges is Rules 13. That Rule is as follows :
"13. No refund of duties or charges 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 Commisioner 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 witten claim is lodged with the proper officer within six months from the date of such Payment of 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 Condopyrin 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 Dhulabai'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 lie to the Excise Commissioner of the State concerned :
Provided that an appeal against a 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, ne final."
The word had number "rule 129" in sub-rule (ii) of Rule 127 appear to be a printing error or "rule 128" because it is Rule 128 which confers revision jurisdictio 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 or an appellate authority with finality subjected to the power of revision conferred under rule 128 upon the Central Government, the jurisdiction of Civil Courts to entertain any suit challengig 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 Officer 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 the express language of section 19(1) the rules which the Central Government is authorised to make arfe 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 generally 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 laready provided in which particular matter the jurisdiction of the Court would be barred. It would not be upon 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 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 fof by Mr. Desai, learned Counsel for the Appellants, were placed upon rule 127, that 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 contined 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 sun-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 Cours 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 & Bros. . 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, 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 assessories of motor cycle 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 cycle 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 knocked down condition. In adoptig the latter approach the Collector was acting contrary to and beyond the relevat 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 noncompliance 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 readilyh 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. Accordingly, a determination by a tribunal of a question other than the one which the statute directs it to decide would be a decision 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 provisios 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 onn- exciseable goods, nemely, 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 plantiff's Suit would be maintainable in spite of Rule 127, assuming it were to be constured as convassed for by the Appellants.
February 23, 1979
19. The point of limitatio now falls to be decided. the Appellants' sub-mission on this point is that the plantiffs' 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- sectio (1) applies to suits or other legal proceedings, sub-section (2) applies to suits, prosectuions 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 quantification with respect to good faith in sub-section(1) is not to be fond in sub- section(1) is not to be found in sub-section (2). The one common factor to be found in sub-section(1) and (2) is the qualification that order or tha 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-sectio (2) as also the omission of the qualification with respect to good faith in sun-section (2) are significant. It is these different pharaseologies used in these two sunb-section 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 section 17 and 18. If we look at these sections, we find that mens rea is essential ingredient of the offences created by these sections. Thus there can be no presecution 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 prosecujtion, 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 be found in sub-section (1). The phras "in good faith" is not used in sub-section (2) because sub-sectio (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 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-section. 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 lagal 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 office 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 oficer clothed with the power of search, seizure and arrest vexatiously ans unneccesarily exersice any of these powers, apart from the fact that he is liable to a procescution section 17, he will also be l,iable in tort, because false arrest, false imprisonment....or wrongful detention of goods are well-recongnized heads torts, and it is for this reson that various statutes which confer such or similare powers upon officer grant them a compleate 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 Bom. L.R. 663, already referred to earlier. As pointed out by us the sectio which the Division Beaznch had to construe is identical with the sectio which fails to be construed by us, and this authority is , therefore, binding upon us. If an act,which is not an act undert the Act,is done by merely ostensibly purporting to do it under the Act, niether sub- section(1) nor sub-section (2) will apply. Simi-larly, if an order passed otherwise than in good faith sub-section (2) will not in termns apply. Thirdly, if an order is passed, which is not in law an order under the Act throught ut may ostensibly state that it is an order under the Act, sub-sction (1) also will not apply. Thus, therearises a third category of suits and legal proceedings which are not covered either by sub-section (1) and (2), and in respect of these sutis the Civil courts will continue to have juridiction and as sub-section (2) will not apply, the period of limitaion for filing such suits will be the ordinery period of limitation prescribed by the Limitaion Act, 1963. We have already seen in the Supreme Court cases referred to above the types of suits which don not fall under such sections even in the case of statues where the section provides for a complante bar to couts 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 section. We. therefore hold that the plalntiffs, suit was not governed by sub-section (2) of section 20 but was governed by the ordfinery period of limitation of three yerars under the Limitation Act, 1963. In this connection, we may refer to a recent of the Supreme Cout in firm Surajmal Banshidhar v. Muncipal Board, Gangangar, . The facts of that case were that under the Rajsthan Town Municipalities Act, 1951, the muncipality had no power to levy a terminal tax. Under the earlier Municipal Acts it had such power. The terminal tax levied under theearlier statutes was, however, continued by the municipality even after the comming into force of the Rajashtan Town Municipalkities Act. Several persons from this tax was collected filed suits to cover the amounts of tax paid by them. The Supreme Court held that the imposition of this tax after the coming into force of the Rajastan Town Muncipalities Act was beyond the taxing power of the municipality. Section 179 of that Act provided for a special period of limitastion of six months and the giving of a notice of two months for any suit in respect of anything done or purposing to be done under the said Act. Disposing of the defence that the suits were bared 8under 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 holding, in the circustances of the present cases....that the suits did not fall within the purview of S. 179 of the Act (that is, the Rajasthan Town Municilalities Act, 1951) and were not barred by limitastion." this authority is, therefore, a direct binding authority for the proposition tha 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.
21. So far as the last point urged before us, namely, that the plaintiffs'medicinal preparation Codopyrin was during the period in question patent or dealing with the question of maintainability of the suit, and we have already held that it was not a patent or preprietary medicine which attracted the application of Item No. 4 inthe 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 ber applied, and as the judgment under appeal shows, almost sone 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 expres our distress at this wastful and futile litiagation. there was almost nothing to be said by the Appellants ans the Union of India sa far as the merits of the case were concerned. As we have mentioned earlier, no arguments have ben attempted to be advanced to justify the orders of the authorities. the arguments in this Court as also in the trail Court mostly central around the technical defence of maintainability of the Suit. We may 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 mony?' Had the plaintiffs failed in the suit on this point, they could have immediatly filed a writ petition under Article 226 of the Constitution for the same relif. tere being no answere on the merits, they would have been granted the relief prayed for From our experience of litigation of this type, we, of course, can conteplate sone 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 funished 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 Apeal arises, in the Written Statement filed by the Union of Inida a defence has been taken that the suit is barred by limitation, and immediately therefore 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 espect from the Government and its officers. For the filling of a suit the Code of Civil Procedure requires a notice under section 80 to be given to the Government and itsd offers. the object of that notice is to bring to the attention of the proper department of the Government the injustice which the plaintiff cl;aims he has suffered, and if his claim is true, to give as 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 nowdays a notice under section 80 is only taken in hand when a suit is filed in order to find out from is 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 becausem as we have pointed put 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.Narasimhalu, . In that case the respondent who had imported certian goods applied for refund of the duty paid by him. His application was dismissed as also his apeals to the authorities. The respondents then filed a suit against the Union of India. The defence raised was that the suit was not maintainable. this defence was negativeed 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 apeal 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 fairt illustration of the administration not making a serious attempt to avoid futile litighaZtion 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 articles 226, the Union had preactically no defence. The Union could wihout loss of face accede to the request of the plaintiff to refund the amount collected. The learned Attorny-General stated tyhat the Union desired to obtain a decision of this courts 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 apeal after the claim was resisted by Union. We are glad to record the assureance give by the Attorney- General that wahtever 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 waws served, the Central Government ahould instead of relying upon techincalities have refunded the amount collected. We trust that the Administrative 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 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 attutude which the Government adopts towards legal proceedings which are filed against it. We wxpress a hope that hereafter in legal proceedings against the Government will adopts and approvh consistent with and befitting its role as a social welfre State With these words and with the expection that these words will not fall on deaf ears, we dismiss this appeal.
24. The Appellants will pay to the first respondents (the orginal plintiffs) 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 advancates, at Rs.10,500. The second respondents, the Union of India, will bear and pay their costs of the Apeal,
25. The first respondents will be at liberty to withdraw the amount of security for costs given by the Appellants.