Public Prosecutor, Madras Vs. R. Raju
& ANR [1972] INSC 164 (8 August 1972)
RAY, A.N.
RAY, A.N.
SIKRI, S.M. (CJ) REDDY, P. JAGANMOHAN MATHEW,
KUTTYIL KURIEN
CITATION: 1972 AIR 2504 1973 SCR (1) 812 1972
SCC (2) 410
CITATOR INFO :
R 1974 SC 923 (31) RF 1991 SC 506 (2,3)
ACT:
Central Excises and Salt Act, 1944, s.
40(2)-Bar of limitation on certain suits, proceedings, prosecution, when
applicable-Whether applies in case of Government servants only-Whether not
applicable when acts complained of are malicious-Words "anything done or
ordered to be done" in section whether include acts in violation of the
Act.
HEADNOTE:
Section 40(2) of the Central Excises and Salt
Act, 1944 provides that no suit prosecution or other legal proceeding shall be
instituted or anything done or ordered to be done under the 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. The respondents in the present appeals
were prosecuted for violations of Central Excise Rules, punish-able under s.
9(b) and (d) of the Act and also under s. 420 read with section 511 of the Indian
Penal Code and Section 109 of the Indian Penal Code. The High Court found that
the prosecution in both the cases was barred by the rule of limitation in
section 40 of the Act because the prosecutions were instituted subsequent to
the expiry of six months from the date of the alleged offences.
In appeals before this Court by special leave
it was contended on behalf of the appellant that (i) the section applies only
to government servants; (ii) the protection given to Government servants under
the section is for actions done inadvertently or mistakenly, but not for acts
done deliberately and maliciously; and (iii) the words "anything done or
ordered to be done" under this Act in the section do not mean any act in
violation of the provisions of the Act.
HELD (i) The provisions contained in section
40 of the Act show that the first sub-section speaks of bar of suits against
the Central Government or any officer of the Central Government in respect of
orders passed in good faith or act in good faith done or ordered to be done.
The second subsection of section 40 provides bar of limitation of time in
respect of suits, prosecutions or other legal proceedings without any
qualifying words as to persons against whom suit proceeding and prosecution
shall be instituted. The contention of the appellant that subsection (2) is
confined only against the Government officers is not warranted by the words of
the statute and is repelled by reference to other comparable statutes which
leave indicated in clear words when the statute contemplates bar of suits,
proceedings or prosecution against Government servants only. The words in
section 40(2) of the Act in the present case are of wide amplitude to apply to
the prosecution which was commenced against respondents in the present case.
[817H-818B] (ii) The contention that "anything done" would not
include a malicious act or an act done in bad faith could not be accepted.
Sub-section (2) of section 40 does not introduce the test of good faith in,
relation to act done. Good faith is one of the aspects in section 40(1). The
present appeals did not turn on sub-section (1) of section 40. [818D-E] 813
(iii) The decisions of this Court in the light of the definition of the word
"act" in the General Clauses Act establish that noncompliance with
the provisions of the statute by omitting to do what the Act enjoins will be
"anything done or ordered to be done" under the Act. The complaint
against the respondents was that they wanted to evade payment of duty. Evasion
was by using and affixing cut and torn banderols. Books of account were not
correctly maintained. There was shortage of banderol in stocks.
Unbanderolled matches were found. These were
all infraction of the provisions in respect of things done or ordered to be
done under the Act. [820B] The High Court was therefore right in its conclusion
that the prosecution was barred by the provisions of section 40 of the Act.
[821D] Pritam Singh v. State of Haryana, [1971] 1 S.C.C. 653, Maulad Ahmad v.
State of Uttar Pradesh, [1963] Supp. 2 S.C.R. 38, Sitaram v. State of Madhya
Pradesh, [1962] Supp.
3 S.C.R. 21 and Amalgamated Electricity Co.
v. Municipal Committee Ajmer, [1969] 1 S.C.R. 430, relied on and applied.
CRIMINAL APPELLATE JURISDICTION : Criminal
Appeals Nos. 194 and 195 of 1969.
Appeals by special leave from the judgment
and order dated November 21, 1968 of the Madras High Court in Criminal Appeals
Nos. 211 and 232 of 1966 and Criminal E.C. No. 1643 of 1966.
Gobind Das and S. P. Nayar, for the
appellant.
M. S. Narasimhan, for the respondents.
The Judgment of the Court was delivered Ray,
J. These two appeals are by special leave from the judgment dated 21 November,
1968 of the High Court at Madras dismissing the appeals filed by the appellant
against the order of the Sub-Divisional Magistrate dated 30 November, 1965 and
the order of the Sessions Judge dated 16 November, 1965 acquitting the
respondents.
The question which falls for consideration in
these appeals is the interpretation of section 40(2) of the Central Excises and
Salt Act, 1944 hereinafter referred to for brevity as the Section and the Act.
The section is as follows "No suit, prosecution or other legal proceedings
shall be instituted for anything done or ordered to be done under the 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".
The respondents in both the appeals were
prosecuted for violation of rules 9, 53, 64, 67, 68, 70, 71, 66 and 226 of the
Central Excise Rules punishable under section 9(b) and (d) of the Act and also
under section. 420 read with section 511 of 814 the Indian Penal Code and section
109 of the Indian Penal Code. The High Court found that the prosecution in both
the cases was barred by the rule of limitation in section 40 of the Act. The
acts complained of in Criminal Appeal No. 194 of 1969 occurred on 25 July, 1964
and the complaint was filed on 18 May, 1965. In Criminal Appeal No. 195 of 1969
the acts complained of occurred on 20 June, 1964 and the complaint was filed on
15 January, 1965.
The appellant's contentions are three-fold.
First, the section applies only to Government servants. Second, the words
"anything done or ordered to be done under this Act" in the section
do not mean any act in violation of the provisions of the Act. Third, the
protection given to Government servants under the section is for actions done inadvertently
or mistakenly but not for acts done deliberately and maliciously. It was
therefore said that the prosecution of the respondents was no within the
mischief of the section.
The respondents' contention on the other hand
is that the section applies to prosecution of the respondents for violation of
the provisions of the Rules and the Act. It is further said on behalf of the
respondents that they were rightly acquitted by the High Court because the
prosecution were instituted subsequent to the expiry of six months from the
date of the alleged offences.
In Criminal Appeal No. 194 of 1969 the
complaint was filed on 18 May, 1965. The complaint was filed against accused
No. who was the licencee of Paulraj Match Works, Nallichatram and accused No. 2
who was the accountant in the factory and who had assisted accused No. 1 in the
manufacture of matches and maintenance of accounts and records of the factory.
The complaint against the accused who are respondents in this appeal was that
on 25 July, 1964 the accused being proprietor and accountant respectively of
Paulraj Match Works at Nallichatram were found to have affixed cut banderols
and torn banderols to the matches manufactured in the said Match Factory with a
view to evade the payment of excise duty payable to the Government and that the
accused also attempted to deprive the Central Government of Rs. 577.42 by their
acts. The complaint against the accused was for violation of Rules 53, 64, 67,
68, 70, 71, 66 and 226 of the Central Excise Rules punishable under section
9(b) and (d) of the Central Excises and Salt Act, 1944 and also under section
420 of the Indian Penal Code read with section 511 of the Indian Penal Code and
section 109 of the Indian Penal Code. The further details of the complaint were
that the register R.G.I. was not written out from 2 July, 1964 and R.G. 3
register was not correctly maintained. There was also a shortage of 50 leaves
of banderols in stock.
815 In Criminal Appeal No. 195 of 1969 the
complaint was against accused No. the licencee of Meenachi Match Works and
accused No. 2 husband of accused No.. 1 who was running the factory and
maintaining accounts. The complaint against the accused was that on 20 June,
1964 the Central Excise staff visited the factory and found that the factory
was working at night. On inspection it was found that cut banderols instead of
full banderols had been pasted on certain quantities of match boxes with a view
to evade payment of excise duty in violation of rules 64, 68 and 70 of the
Central Excise Rules. The further allegations in the complaint were that on
inspection of lorry dispatches and clearances of the factory, it was found that
during 1963-64 and 1964-.65 upto 20 June, 1964 the licencehad actually cleared
without entry in the official Central Excise Records and without payment of
duty a quantity of matches in excess of the quantity shown in the records. The
complaint was that tile accused had attempted to deprive the Central Government
of Rs. 2437.50 being the Excise duty calculated at the standard rate. The
accused were alleged to have committed violation of Rules 9, 53, 64, 66, 67,
68, 70 and 226 of the Central Excise Rules punishable under section 9(b) and
(d) of the Central Excises and Salt Act. 1944 and also under section 420 of the
Indian Penal Code read with sections 511 and 109 of the Indian Penal Code.
In Criminal Appeal No. 194 of 1969 the
Sub-Divisional Magistrate on 30 November, 1965 acquitted the accused of the
charges and held that the bar of limitation under the section applied to the
prosecution by the State. The complaint was received in the Court of the
Sub-Divisional Magistrate on 18 May, 1965. The inspection of factory by the
Central Excise staff was on 25 July, 1964. The Sub Divisional Magistrate
therefore held that computing the period of six months from the date, the last
date within which the complaint should have been laid would be 25 January,
1965. The State preferred an appeal to the High Court of Madras. The High Court
held that the prosecution must fail as it was barred by limitation. The present
appeal is from the judgment of the High Court.
In Criminal Appeal No. 195 of 1969 the
Sub-Divisional Magistrate on 6 July, 1965 found the respondents guilty.
'rite respondents preferred an appeal to the
Sessions Court at Ramanathapuram. The Sessions Judge on 16 November, 1965 set
aside the conviction and sentence and acquitted the respondents. The Sessions
Judge held that the bar of limitation under the section operated against the
State because the prosecution was commenced after the expiry of prescribed
period of limitation. The State preferred an appeal to the High Court. The High
816 Court maintained the judgment of the Sessions Judge. The appeal is from the
decision of the High Court., Counsel on behalf of the appellant contended that
the provisions of the section did not apply to prosecution for offences
committed by individuals in contravention of the Act and the Rules made there
under. It was said that the section was intended for prescribing limitation in
respect of prosecution only against departmental officers or Government
servants.
The section consists of two sub-sections. The
first subsection speaks of bar of suits against the Central Government or
against any officer of the Government in respect of any order passed in good
faith or any act in good faith done or ordered to be done under the Act. The
second sub-section speaks of limitation of suits, prosecution or other legal
proceeding for anything done or ordered to be done under the 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. The two subsections operate indifferent
fields. The first sub-section contemplates bar of suits against the Central
Government or against the officers by protecting them in respect of orders
passed in good faith or acts done in good faith. It is manifest that the second
subsection does not have any words of restriction or limitation of class of
persons unlike sub-section (1).
Sub-section (2) does not have any words of
qualification as to persons. Therefore, subsection(2) is applicable to any
individual or person.
Reference may be made to some statutes to
indicate as to how the Legislature places bar against any class of person in
respect of suits, proceedings, prosecutions for anything done or ordered to be
done under the relevant statute.
Section 20 of the Medicinal and Toilet Preparations
(Excise Duties) Act, 1955 (16 of 1955) containing two sub-sections is a type.
The first sub-section there speaker of bar of suits or other legal proceedings
against the collecting Government or against any officers in respect of any
order passed in good faith or any action in good faith done or ordered to be
done under the Act. The second sub-section there speaks of bar of suit,
prosecution or other legal proceeding against the collecting Government or
against any officer for anything done or ordered to be done under the 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. These provisions illustrate the
manner in which the legislature has by appropriate words placed bar of suits or
prosecution or other legal proceedings only against the Government or any
officer. There is no bar in that statute of suits, prosecutions against
individuals. In the present case, sub-section (2) of 817 section 40 of the Act
does not contain any bar of suit, prosecution or legal proceeding 'by confining
the same. only to Government servants.
The Madras General Sales Tax Act, 1959
affords another illustration. Section 50 of the Madras Act, 1959 enacts that no
suit shall be instituted against the Government and no suit, prosecution or
other proceeding shall be instituted against any officer or servant of the
Government in respect of any act done or purporting to be done under the Act
unless the suit, prosecution or other proceeding is instituted within six
months from the date of that act complained of. The Madras General Sales Tax
Act provides yet another instance of limitation for suits and prosecution
against specified class of persons, namely, Government and Government servants.
The Bombay (District) Tobacco Act, 1953 deals
in section 24(1) of the Act with protection of persons acting in good faith and
limitation of suits and prosecutions against them.
Limitation of suits and prosecutions in
section 24(2) of the Bombay Act is provided by enacting that no suit shall be
instituted against the Government and no prosecution or suit shall lie against
any Tobacco Officer in-respect of anything done or alleged to have been done,
in pursuance of the Act, unless the suit or prosecution has been instituted
within four months from the date of the act complained of. The Bombay statute
typifies in section 24(2) limitation of suit and prosecution by restricting the
operation of the provisions only against the Government and Tobacco Officers.
The Madhya Pradesh Motor Vehicles (Taxation
of Goods) Act, 1962 has comparable provisions in section 25 thereof by
providing that, no suit or other proceeding shall be instituted against the
State and no suit, prosecution or other proceeding shall be instituted against
any officer or servant of the Government in respect of any act done or
purporting to be done under this Act, unless the suit, prosecution or other
proceeding is instituted within one year from the date of the act complained
of.
These different statutes have been mentioned
only to indicate that where the legislature, intends to restrict the limitation
of suits, proceedings or prosecutions against the Government servants only the
legislature has chosen proper words of limitation to ensure 'the restricted
operation of the provisions of the statute.
The provisions contained in section 40 of the
Act in the present case show that the first subsection speaks of bar of suits
against the Central Government or any officer of the Government in respect of
orders passed in good faith or act in good faith done or ordered to be done.
The second subsection of section 40 3-L172Sup CI/73 818 provides bar of
limitation of time in respect of suits, prosecutions or other legal proceedings
without any qualifying words as to person against whom suit, proceeding and
prosecution shall be instituted. The contention of the appellant that
sub-section (2) is confined only against the Government officers is not
warranted by the words of the statute and is replied by reference to other
comparable statutes which have indicated in clear words when the statute
contemplates bar of suits, proceedings or prosecution against Government
servant only. The words in section 40(2) of the Act in the present case are of
wide amplitude to apply to ,the prosecution which was commenced against the
respondents in the present appeals.
Section 40(2) of the Act cannot be said to be
confide in its operation only to Government servants. The sub-section is
applicable to any person against whom suits or proceedings or prosecution shall
lie for anything, done or ordered to be done under the Act.
The other contention on behalf of the
appellant was that the words "anything done or ordered to be done" in
the section would not mean anything done in violation of the provisions of the
Act. It was also said that "anything done" would not include a
malicious act or an act done in bad faith. Subsection (2) of section 40 does
not introduce the test of good faith in relation to act done. Good faith is one
of the aspects in section 40(1). The present appeals do not turn on sub-section
(1) of section 40.
Section 9 of the Act deals with offences and
penalties. The offences mentioned in section 9 are mainly these. Evasion of
payment of duty under the Act is an offence. Failure to supply any information
required by Rules under the Act or supply of false information is also an
offence.
Contravention of provisions and of Rules
under the Act is also an offence. Rules are made under section 37 of the Act.
In the present case, the complaint was that Rules 9, 53, 64, 67, 68, 70, 71, 66
and 22 were violated. Rule 9 speaks of time and manner of payment of duty. No
excisable goods shall be removed from any place where they are produced, unless
the excise duty leviable thereon has been paid at such place and in such manner
as is prescribed in these Rules. If excisable goods are in contravention of
sub-rule (1) of Rule 9 removed from any place the manufacturer shall pay duty
leviable on such goods and shall also be liable to a penalty. Rule 53 deals
with daily stock account. Every manufacturer shall maintain a stock account in
the proper form and is required to enter in such account daily the weights,
descriptions and rating of all excisable goods. Matches are dealt with in Rules
58 to 82. Rule 64 requires that each box or booklet of matches shall bear 819
banderol. Duty on matches is paid by affixing to each box or booklet a
Government banderol of a value appropriate to the rate of duty. Rule 65 states
that all banderols shall be procured from a Government Treasury. Rule 66
provides that banderols are to be kept in a secured place and are to be
periodically inspected. Rule 67 requires the manufacturer to maintain account
of banderols purchased and used. Rule 68 deals with the manner of affixing
banderols.
Every banderol shall be so affixed that the
words and figures on the banderol specifying the maximum number of matches
covered by the banderol are legible. The box or booklet cannot be opened
without tearing the banderol,. and where it is affixed to a box, the ends of
the banderol are covered by the factory's label. Rule 70 states that as soon as
possible after matches are finished they shall be banderolled and enclosed in
packets and presented to the officers of the factory for assessment. Rule 71
deals with the method of packing. Rule 226 sets out that the entry books, stock
account and warehouse register should be maintained. Reference to these rules
is necessary to understand, the requirements of the Act and the violations
committed by the respondents. The complaint in the present appeals against the
respondents was that the stock and accounts were examined and the banderols
affixed to the unit box were also examined. The examination revealed that cut
banderols have been affixed and full length torn banderols were affixed with a
view to evade excise duty.
Unbanderolled matches were also found in
excess stock over and above the book value. The register was not correctly
maintained. The complaint was that the respondents violated the provisions of
the Rules. The respondents did not comply with the Rules.
The word 'act' is defined in the General
Clauses Act,1897.
The definition is as follows :
"act" used with reference to an
offence or a civil wrong, shall include a series of acts and words which refer
to acts done extend also to illegal commissions".
The words "anything done or ordered to
be done" under the Act in section 40(2) of the Act were therefore
contended by counsel for the respondents to extent to illegal commissions and
infraction of the requirements of the statute.
In Pritam Singh v. State of Haryana(1) a
Police Officer was Prosecuted for offences under section 29 of the Police Act.
Section 42 of the Police, Act enacted that
"prosecution against any person which may be lawfully brought for anything
done or intended to be done under the provisions of the Act shall be commenced
within three months after the act complained (1) [1971] 1 S.C.C. 653.
820 of shall have been committed and not
otherwise." The appellant in that case was found absent from duty from the
Police Line at the time of roll-call. Prosecution of the appellant in Pritam
Singh's case (supra) was initiated for non-compliance with the requirements to
be on duty as required under the Police Act. This was held to be prosecution
for something done under the provisions of ;the Act.
This Court in Maulud Ahmad v. State of Uttar
Pradesh(1) considered the case of prosecution of a head Constable.
Section 42 of the Police Act was invoked as a
bar to the prosecution in Maulud Ahmad's(1) case (supra) the question was
whether Chauhan abetted Maulud Ahmad in making false entries in the General
Diary of Police Station Mailani and whether Maulud Ahmad made false entries in
the General Diary of Police Station Mailani with the intention to save or
knowing it likely that he would thereby save the offenders from legal
punishment. The Court in Maulud Ahmad's(1) case (supra) said that if the
appellant did not discharge his duty in keeping a regular diary he has
committed an offence under section 29 of the Act.
Sitaram v. State of Madhya Pradesh (2 ) this
Court examined a criminal trial in respect of the offence of filing false
returns of sales tax. Section 26 of the C.P. and Berar Sales Tax Act, 1947
provided inter alia, that no prosecution shall be instituted against any person
in respect of anything done or intended to be done under the Act unless the
prosecution has been instituted within three months of the date of the act
complained of. It was contended that the words "any person" showed
the intention of the legislature to give protection to Government servants in
regard to prosecution and not to persons other than Government servants. This
Court did not accept that contention, because there were no words to restrict
the meaning of the words "any person". Furthermore this Court held
that when the appellant in that case submitted returns he did so under the
provisions of the Act. When he produced the accounts he did so under the provisions
of the Act. The filing of the returns and the production of accounts could not
be said to be outside the provisions of the Act.
These decisions in the light of the
definition of the words 'act' in the General Clauses Act establish that noncompliance
with the provisions of the statute by omitting to do what the act enjoins will
be anything done or ordered to be done under the Act. The complaint against the
respondents was that they wanted to evade payment of duty.
Evasion was by using, and affixing cut and
torn banderols.
Books of account were not correctly
maintained. There was shortage of banderol in stock. Unbanderolled (1) [1963]
Supp. 2 S.C.R. 38.
(2) [1962] Supp. 3 S.C.R. 21.
821 matches were found. These are all
infraction of the provisions in respect of things done or ordered to be done
under the Act.
In Amalgamated Electricity Co. v. Municipal
Committee, Ajmer(1) the meaning of 'omission' of a statutory duty was explained
by this Court. Hegde, J. speaking for the Court said "The omission in
question must have a positive content in it. In other words, the non-discharge
of that duty must amount to an illegality". The positive aspect of
omission in the present case is evasion of payment of duty. The provisions of
the Act require proper affixing of banderols.
Cut or torn banderols were used. Unbanded rolled
match boxes were found. These provisions about use of banderols are for
collection and payment of excise duty. The respondents did not pay the lawful
dues which are acts to be done or ordered to be done under the Act.
The High Court was right in its conclusion
that the prosecution was barred by the provisions of section 40 of the Act.
The appeals therefore fail and are dismissed.
G.C.
Appeals dismissed.
(1) [1969] 1 S.C.R. 430.
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