1992 ALLMR ONLINE 726
S.M. DAUD AND M.G. CHOUDHARI, JJ.
PUNE MUNICIPAL CORPORATION Vs. MOHAN SHRIKRISHNA ASSAVA
F. A. No. 860 of 1984
3rd September, 1992
Petitioner Counsel: R. G. Ketkar, R. N. Dhorde
Respondent Counsel: S. M. Dandekar, Bhimrao N. Naik
Headnote not Available
S. M. DAUD, J. :- Appellants, the Pune Municipal Corporation and the Municipal Commissioner - hereinafter referred to as 'PMC' - take exception to a decree for damages passed against them in an action brought by the plaintiff/respondent.
Plaintiff - respondent before us-is a transporter to whom belongs goods truck bearing registration No. MTD 2619. The PMC is entitled to levy various taxes and imposts under section 127 of the Bombay Provincial Municipal Corporations Act, 1949 - hereinafter referred to as 'the Act'. Octroi is a cess leviable upon the entry of the goods into the limits of the city of Pune, which goods are meant for consumption, use or sale therein vide clause 42 of section 2 of the Act. Plaintiff has a house at Gultekdi in Pune No. 9 and on 28-11-1978 the aforementioned truck was found parked in front of the said house. The truck was loaded with goods and some Police Officers came to the plaintiff and informed him of the receipt of information by them about the truck containing smuggled goods. A search of the truck as also the godown of the plaintiff was taken, but no contraband was found. The office of the PMC was contacted on phone by a person whose name was not given out. The caller whispered that the goods in the truck of the plaintiff had not been assessed to octroi and that the plaintiff had not paid the octroi payable on the said goods. Acting on this information the Octroi Officers, Bhame, Patel and some 13 Inspectors of the PMC, came to the place where the truck was parked, in two jeeps. When questioned about the payment of octroi, the plaintiff gave evasive answers. Therefore, he was informed by the PMC staff that the truck in the condition in which it was, had to be carried to the office of the PMC. The goods found in the truck were unloaded in the open compound of the Corporation's office. A list of the goods was prepared. On 29-11-1978, the plaintiff gave an application to the PMC expressing readiness to pay the amount of octroi payable on the goods found in the truck and praying that the truck and the goods may be released. There were no response to this application and for that reason, the plaintiff filed an application in the Court of the Corporation Magistrate praying for release of the goods truck on the payment of the octroi cess, and this, without prejudice to the prosecution to be launched against him. The said application which was numbered as Misc. Criminal Application No. 4 of 1978 was dismissed by the learned Magistrate and plaintiff thereafter moved the Sessions Court in Revision by Criminal Revision Application No. 227 of 1978. As an interim measure, the Sessions Court gave a direction for the release of the truck on 29-1-1979. Acting upon this order, the plaintiff was given possession of the truck on 30-1-1979. The Revision was eventually decided on 27-2-1979, the Sessions Court holding that it had no jurisdiction to entertain the Revision.
3. Plaintiff's case was that as a result of the illegal and malicious detention of the truck, he had been deprived of the use thereof. This had entitled a loss of income which he calculated at the net rate of Rs. 4,000/- per week. Apart from this, there were certain perishable or near perishable articles in the truck like medicines, diaries and calendars. The damage caused to these articles had entailed a loss of Rs. 10,000/- to him. The other heads under which plaintiff claimed damage need not be enumerated here, for those have been disallowed by the trial Judge and the plaintiff has chosen to accept the said disallowance. The PMC's stand was that the plaintiff had evaded payment of octroi duty at the octroi outpost. For this reason the truck and the goods were lawfully detained by the Octroi Officers for the purpose of assessment. The Officers of the PMC had acted in good faith in the discharge of their official duties and were not liable to compensate the plaintiff, irrespective of the loss caused to him. In any case, there was no loss. It was the plaintiff who had delayed taking back the truck by resorting to frivolous litigation against the PMC and its Officers. The PMC on its part was always ready to return the goods and the truck to the plaintiff. The suit had not been preceded by the notice prescribed under section 497 of the Act. For all these reasons, the suit deserved to be dismissed with costs.
4. Pleadings summarised above gave rise to the requisite issues. The only witnesses examined at the trial were the plaintiff and a Senior Grade Clerk of the PMC. Acting upon the depositions of these witnesses and the documents on record, the learned trial Judge held that the detention of the truck as from 29-11-1978 upto 30-1-1979 was illegal and uncalled for. This had occasioned a loss of income to the plaintiff which loss was estimated at Rs. 3,000/- per week. The loss covered a period of 8 weeks and therefore the damages admissible can)e to Rs. 24,000/-. The other item allowed by the learned Civil Judge was a sum of Rs. 10,000/- to compensate plaintiff for the damage caused to medicines, diaries and calendars. The total of Rs. 34,000/- was made payable with proportionate costs and the remaining part of the claim was disallowed. The PMC was left to bear its own costs.
(1) Whether the PMC had acted illegally in detaining the truck from 29-11-1978 to 30-1-1979?
(2) Whether the illegal detention had caused a loss of income to the plaintiff and if so, the extent thereof?
(3) Whether damage was caused to the consignment of medicines, diaries and calendars? What was the loss caused to the plaintiff on this count?
(4) Whether the suit was barred under sections 486 and 487 of the Act?
(5) What order?
Our findings, for reasons given below, are :-
(2) Yes; but the loss caused to the plaintiff is estimated at Rs. 12,000/-.
(3) Yes. Rs. 5,000/-.
(5) Appeal partly allowed as per order.
6. We have been taken through the relevant provisions of the Act, the Rules framed thereunder and the Standing Orders which regulate the levy, assessment, collection and incidental matters vis-a-vis octroi. As said earlier, octroi is a cess on entry of goods into the limits of a city for consumption, use or sale therein. So far as the goods found in the truck of the plaintiff are concerned, these answer to that description and plaintiff makes no pretence of contending that the goods were not liable to octroi. The fact that the truck loaded with the goods was found parked in front of the residence of the plaintiff, is proof that the octroi payable thereon had not been paid at the relevant octroi outpost and that the plaintiff had evaded the payment of the prescribed octroi cess. Section 128 is an enabling measure laying it down that the Municipal tax which includes octroi amongst other taxes, may Be recovered in the manner prescribed by the Rules. Rules regulating the recovery of octroi have been formulated and we shall come to these later. All, that need-be said at this stage, is, that though the 5th clause of section 128 prescribes for the seizure and sale of goods and vehicles liable to octroi, there is no provision in the Rules for the detention of the vehicles used as a conveyance for the import of dutiable goods. Section 147 raises a presumption in respect of imported articles being so imported for the purposes of consumption, use or sale therein and thus liable to octroi. That presumption is not applicable in the instant case in view of the admission of the plaintiff that the goods found in the truck were so liable to be assessed to octroi. Section 398 lays down the penalty for evasion of octroi and to the extent relevant for the purposes of this case, reads as follows :-
"Where any vehicle..... goods imported into the limits of the City are liable to payment of .... octroi any person who, with the intention of defrauding the Corporation, causes or abets the introduction of or himself introduces or attempts to introduce within the limits of the City any such vehicle ..... goods upon which payment of the..... octroi due on such introduction has neither been made nor tendered, shall, on conviction, be punished with fine which may extend to ten times the amount of such.... octroi or to two hundred and fifty rupees, whichever may be greater."
The above section comes into play after a conviction is recorded against the evader of octroi. In the present case section 398 is not attracted because till the date of the delivery of the judgment by the learned Civil Judge, it does not appear that the prosecution launched against the plaintiff had ended. Significantly, section 398 prescribes the penalty for importing a vehicle or goods without payment of octroi which octroi is otherwise leviable on the vehicle or the goods affected. Now, in the present case, it is not the case of the PMC that the truck in which the goods were found was itself liable to payment of octroi duty. In other words, octroi had been evaded only in respect of the goods, for it was not so leviable on the conveyance i.e. the truck in which the goods were loaded. Section 149 prescribes the procedure to be followed in levying various taxes, but this has to be done by the formulation of regulations which, to use the language of the section, "shall be in the form of rules, modifying, amplifying or adding to the rules at the time in force". Section 457 is the rule making power and it is without prejudice to the generality of the powers conferred by section 454 of the Act. Turning now to the rules, rule 8 prescribes as to when octroi has to be paid. Rule 12 empowers the officers authorised by the Municipal Commissioner to call upon for information from a person bringing into or receiving from beyond the Octroi Limits any goods to enable the authorised Officer to ascertain whether octroi is payable on such goods as also the amount chargeable as octroi. Sub-rule (2) of rule 12 enjoins upon every driver of the vehicle or every person in-charge when so required by the Import Naka Officer to make a full and correct declaration in the prescribed from vis-a-vis the description, weight and number of goods carried in the vehicle. Rule 13 empowers the Officer authorised by the Commissioner to seize the goods on which octroi is chargeable, which are in his opinion of sufficient value to satisfy the demand for octroi together with the expenses incidental to the seizure, detention and eventual sale, if necessary, of such goods or any part thereof. The power to detain, conferred by rule 13, is restricted to the goods or part thereof.Rule14 empowers the making of a provisional assessment pending the furnishing of relevant documents to enable a proper and final valuation of the goods for the purposes of assessment of octroi. In the event of it being found that provisional assessment has resulted in the importer paying less than the actual amount chargeable, the importer has to pay the difference. Rule 23 empowers the authorised officer to require the driver of the vehicle or the person in-charge of the goods to stop with a view to enable him to ascertain whether due and proper octroi was collected at the outpost. Perhaps the only two provisions relevant in the Standing Orders are those at clauses 11 and 12. Clause 11 requires the importer to produce the original invoice relating to the goods imported. This production is with a view to enable the Import Naka, Officer to ascertain the value of the goods for the purpose of assessing octroi. The Import Naka Officer may not accept the invoice, bill or other documents if they appear to be unreliable. In this eventuality, Standing Order No. 12 comes into operation and this enables the Officer to assess the goods on the basis of something in the nature of a provisional schedule of value of goods fixed by the Commissioner, which schedule may be varied from time to time. Having taken a full survey of the provisions cited by learned counsel, we must confirm the findings of the learned Civil Judge that there is no legal provision which entails the detention of a vehicle after the assessment or dutiable goods for the purpose of collecting octroi has been made. In the present case, the truck was taken from the place where it was parked to the PMC's campus on 28-11 -1978. The preparation of a list of the goods found in the truck begun on 28-11-1978 could be completed only on the next day. Having regard to the powers, which have been summarised above, the stopping of the truck on the 28th evening and its detention till 31-11-1978 is justified. But detention thereafter has to be held as unjustifiable. It is said that the plaintiff involved the PMC in a series of cases in various Courts and that in any case the PMC was ever ready and willing to allow the plaintiff to take away the goods and the truck and that it was the plaintiff who was remiss in not doing the needful. None of these contentions can be accepted. The PMC was opposing the release of the truck and it was only on 29-1-1979 that the plaintiff could secure an order from the Sessions Court for the release of the truck. In the face of the obstruction caused by the PMC it cannot be said that the detention was for reasons other than the unwillingness of the PMC to let go of the truck.
7. Learned counsel appearing for the PMC submits that the officers of the octroi department of the PMC would be entitled to indemnity conferred by section 486 of the Act. This section confers indemnity on Municipal Officers or servants of the Corporation vis-a-vis "anything m good faith done or purported or intended to be done under this Act". The expression 'good faith' is not defined in the Act and therefore, it is the definition of the Bombay General Clauses Act, 1909 which will be applicable. Section 3(20) of the said Act says that a thing shall be deemed to be done in "good faith" where it is in fact done honestly, whether it is done negligently or not. Now, from amongst the Officers who were responsible for the detention of the truck, the PMC has not cared to examine even one. The Senior Grade Clerk examined knows nothing personally. His testimony rests entirely upon documents which were with him. The deposition given by the witness could not be a substitute for proof of honesty contemplated by section 3(20) of the Bombay General Clauses Act, 1904. There is no general presumption in respect of any servant. In the instant case the plaintiff has in fact gone to the extent of saying that the then Municipal Commissioner had dared him to do his worst, as he i.e. the Commissioner, was bent upon seeing that the plaintiff could not carry on his business. This may be an exaggeration but in the face of the plaint recitals to the above effect, it was the duty of the PMC to examine the octroi staff associated with the lowing of the truck to the PMC's campus and its detention there upto 30-1-1979. The reliance placed upon section 487 is equally misplaced. That section requires a notice as a condition precedent to the institution of the suit; but only in respect of "any act done or purported to be done in pursuance of or execution or intended execution of the Act or in respect of any alleged neglect or default in the execution of this Act." As said earlier, neither the Act nor the rules or the Standing Orders enable the detention of a truck beyond the period required for making of an assessment vis-a-vis goods suspected to have evaded payment of the correct octroi duty payable. That task was completed on 29-11-1978. So right from 29-11-1978 upto 30-1-1979 there was not the slightest justification for the PMC to cling to the truck and yet it would not let go of the truck, and this, in spite of an application for the release of the truck made by the plaintiff. In fact the PMC positively put up a dogged resistance to the plaintiff's attempt to secure the release of the truck. This was therefore not an "act in pursuance or execution or intended execution of the Act or any neglect or default in the execution of the Act". The refusal to release the truck was in fact in defiance of the Act. Consequently, the notice prescribed as a condition precedent to the institution of the suit is not a protection which could be availed of by the PMC in this suit.
8. This brings us to the assessment of damages. So far as loss of income is concerned, the say-so of the plaintiff has been accepted as if it were the gospel truth. Plaintiff has testified that he was earning an income of Rs. 4,000/- per week. With respect to the learned Civil Judge, this was a patently unacceptable assertion. Plaintiff himself has admitted that the income tax per annum paid by him ranged from Rs. 7,000/- to Rs. 8,000/-. Had the income earned from the transport business been as much as Rs. 48,000/- per month, the tax liability of the plaintiff would have been far more than the niggardly sypl of Rs. 7,000/- to Rs. 8,000/- per year. Taking the figure given by the plaintiff as an indication, we would say that the income-tax paid by him represents about 10 per cent of the annual income earned by him. This would take the annual income to about Rs. 70,000/- to Rs. 80,000/-. The period for which the plaintiff lost the chance to ply the truck and earn an income was about 2 months. This is about 1/6th of the yearly income which we have estimated above. Thus calculated, the loss of income for which the plaintiff was entitled to be reimbursed would come to Rs. 12,000/-. In regard to the damage caused to a part of the consignment, viz. medicines, diaries and calendars, Mr. Ketkar argued that the plaintiff had not examined the consignee or consignors who had to be compensated for the damage caused to this part of the consignment. It is not disputed that part of the goods carried in the truck was medicines, diaries and calendars. Judicial notice can be taken that these goods deposited as they were in the open must have become valueless for anything more than their salvage value. The value of the medicines, diaries and calendars taken from Ex. 36 does not exceed more than Rs. 5,721/-. Assuming the sum of Rs. 721/- to be the value that could be obtained by the plaintiff from the salvage, the plaintiff would be entitled to Rs. 5,000/- for the damage caused to the goods. Therefore, the total damages to which the plaintiff was entitled comes to Rs. 17,000/-. The result of the foregoing discussion is that the appeal is partly allowed. The decree passed by the trial Court is set aside and substituted by one reading as under :-
Defendant PMC to pay do the plaintiff a sum of Rs. 17,000/- and the corresponding costs in both the Courts. Rest of the plaintiff's claim is dismissed with the balance of the costs. The PMC to bear its own costs in both the Courts. Rs. 17,000/- from out of the decretal amount to carry interest at rate of 6% per annum from the date of the suit till realisation.