{"id":63864,"date":"2009-11-17T00:00:00","date_gmt":"2009-11-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/building-vs-pune-municipal-corporation-on-17-november-2009"},"modified":"2019-02-16T16:00:07","modified_gmt":"2019-02-16T10:30:07","slug":"building-vs-pune-municipal-corporation-on-17-november-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/building-vs-pune-municipal-corporation-on-17-november-2009","title":{"rendered":"Building vs Pune Municipal Corporation on 17 November, 2009"},"content":{"rendered":"
Bombay High Court<\/div>\n
Building vs Pune Municipal Corporation on 17 November, 2009<\/div>\n
Bench: F.I. Rebello, J. H. Bhatia<\/div>\n
                                                1\n\n     hvn\n\n                IN THE HIGH COURT OF JUDICATURE AT BOMBAY\n\n\n\n\n                                                                               \n                           CIVIL APPELLATE JURISDICTION\n\n\n\n\n                                                       \n                           WRIT PETITION NO. 9343 OF 2009\n\n     Bank of Baroda,\n\n     a body Corporate Constituted under the\n\n\n\n\n                                                      \n     Banking Companies (Acquisition and Transfer\n\n     of Undertakings) Act, 1970 having their head office\n\n\n\n\n                                           \n     at Mandvi Baroda, Gujarat State\n                         \n     AND\n                        \n     Corporate Office at Baroda Corporate\n\n     Centre, C-26,m G Block, Bandra Kurla\n      \n\n     Complex, Mumbai 400 051.\n   \n\n\n\n     AND\n\n     One of the Regional Office at 11\/1,\n\n\n\n\n\n     Sharda Centre, Khilare Path, Erandavana,\n\n     Pune 411 004.\n\n\n\n\n\n     AND\n\n\n\n     Branch Office at Laxmi Road,\n\n     181, Budhwar Peth, Nagar Vachan Mandir\n\n\n\n\n                                                       ::: Downloaded on - 09\/06\/2013 15:18:53 :::\n                                                 2\n\n     Building, Pune 411 002                                     ...      Petitioner\n\n\n\n\n                                                                               \n                                              Versus\n\n\n\n\n                                                       \n     1.     Pune Municipal Corporation,\n\n            A Corporation Constituted under the\n\n            provisions of Bombay Provincial\n\n\n\n\n                                                      \n            Municipal Corporation Act, 1949,\n\n            Having Office at Octroi Office,\n\n\n\n\n                                          \n            Pune Municipal Corporation,\n                         \n            Shivaji Nagar, Pune 411 016\n                        \n     2.     The State of Maharashtra                            ...      Respondents\n      \n\n     Mr. Anant B. Shinde for Petitioner.\n\n     Mr. Rajeep Khadapkar for R. No. 1.\n   \n\n\n\n                                    CORAM : F.I. REBELLO &\n\n\n\n\n\n                                                J.H. BHATIA, JJ.\n<\/pre>\n
                                   DATED : NOVEMBER 17, 2009<\/p>\n
     ORAL JUDGMENT (Per Ferdino I. Rebello,J.):\n<\/p>\n
            Rule. By consent heard forthwith.\n<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 15:18:53 :::<\/span>
\n                                                3<\/span><\/p>\n
            Petitioner carries on banking business, including selling of gold coins as per<\/p>\n
     the provisions of section 6 of Banking Regulation Act, 1949. For that purpose the<\/p>\n
     Petitioner has entered into an agreement with a reputed supplier of bullion on<\/p>\n
     consignment sale basis from Volcambi, Switzerland. The IBB Mumbai branch of<\/p>\n
     Petitioner has been identified as a Controlling Branch, which is         monitoring the<\/p>\n
     overall gold business of Petitioner Bank. There are various other branches which are<\/p>\n
     receiving the consignment from the overseas supplier of gold coins for further<\/p>\n
     distribution to Point of Sale (POS) branches.           These branches are having<\/p>\n
     responsibility for sales Tax\/VAT consolidation and payment of the same to the<\/p>\n
     respective State Government Authorities. As per the said procedure all gold coins are<\/p>\n
     imported at Mumbai office of Petitioner. Petitioner after paying all duties, taxes and<\/p>\n
     Octroi on the gold at Mumbai, distributes the same      to the other branches such as<\/p>\n
     Pune, Nashik etc. The gold in form of coins is to be delivered to the said branches<\/p>\n
     and actual sale is to be done by the Corporate Office of Petitioner situated at<\/p>\n
     Mumbai. The sale proceeds is to be deposited by the said branch through e-payment<\/p>\n
     in the Corporate office at Mumbai.\n<\/p>\n
     2.     The Petitioner through its office at Mumbai had already paid the Octroi in<\/p>\n
     Mumbai to Municipal Corporation of Greater Mumbai at 0.10% and then distributed<\/p>\n
     the same to the other branches of the Petitioner Bank. Respondent No1 by their<\/p>\n
     notice dated 11.09.2009 had asked the Petitioner to provide details for the gold<\/p>\n
     imported in the city of Pune during the period 01.04.2006 to 31.08.2009. Petitioner<\/p>\n
     accordingly has provided the details of the gold coins delivered at Pune Branch by<\/p>\n
     Corporate Office at Mumbai of the Petitioner by letter dated 23.09.2009.\n<\/p>\n
                                                        ::: Downloaded on – 09\/06\/2013 15:18:53 :::<\/span>
\n                                                 4<\/span><\/p>\n
     3.     Respondent No. 1 on the basis of information provided by the Petitioner<\/p>\n
     calculated the Octroi amount and sent a demand notice dated 06.10.2009 to the<\/p>\n
     Petitioner thereby demanding the Octroi amount and also penalty charges at ten times<\/p>\n
     of the Octroi amount on gold imported in Pune since year 2005 and demanded to<\/p>\n
     pay an octroi amount of Rs.9,42,200\/- and ten times penalty of Rs.94,22,000\/- total<\/p>\n
     amounting to Rs.1,03,64,200\/- before 14.10.2009. Petitioner’s contention is that<\/p>\n
     Corporation had calculated the octroi amount as per the current prevailing market<\/p>\n
     rates of gold and not as per the rates of gold in the year 2005 and thereafter.\n<\/p>\n
     4.     Petitioner immediately on 09.10.2009 had replied to the above said demand<\/p>\n
     notice dated 06.10.2009 and requested for waiver of the penalty charges.           Various<\/p>\n
     contentions were raised as to why the Petitioner is not responsible. Second demand<\/p>\n
     notice was served on Petitioner on 14.10.2009 and Petitioner was asked to pay<\/p>\n
     Octroi within three days. Petitioner on 14.10.2009 sent a Pay Order bearing No.<\/p>\n
     573360 by registered post for Octroi amount of Rs.9,42,200\/- demanded by<\/p>\n
     Respondent Pune Municipal Corporation. The respondent Corporation through their<\/p>\n
     notice dated 15.10.2009 demanded an amount of Rs.1,03,64,200\/- on account of<\/p>\n
     Octroi and ten times penalty to be paid before 18.10.2009. The Respondent<\/p>\n
     Corporation refused to accept the Pay order and issued notice            to that effect on<\/p>\n
     20.10.2009.\n<\/p>\n
     5.     It is the case of the Petitioner that the rate of the penalty demanded by the<\/p>\n
     Respondent Pune Municipal Corporation is arbitrary and exorbitant. Even the rate of<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 15:18:53 :::<\/span>
\n                                                5<\/span><\/p>\n
     Octroi is also on the higher side as compared to Octroi rates of other Municipal<\/p>\n
     Corporations. Petitioner   had set out that they are ready to pay the Octroi charges<\/p>\n
     once again, even through they had paid the Octroi in Mumbai. Petitioner had shown<\/p>\n
     their bona fide intention, by sending a Pay Order to the Respondent Pune Municipal<\/p>\n
     Corporation, but Respondent Pune Municipal Corporation had returned the said Pay<\/p>\n
     Order and refused to accept the said amount of Octroi.\n<\/p>\n
     6.      The demand notice is challenged on various grounds. It is principally pointed<\/p>\n
     out that the penalty charges demanded by Respondent Corporation are contrary to<\/p>\n
     Section 398 of Bombay Provincial Municipal Corporation. 1949. It is submitted that<\/p>\n
     considering the provisions, what the Petitioners are demanding is the compounding<\/p>\n
     amount of penalty. The Petitioners do not desire to compound. In the absence of<\/p>\n
     Petitioner agreeing to pay the compounding amount, it is not open to respondents to<\/p>\n
     demand the same from the Petitioners and consequently the present petition for<\/p>\n
     quashing the demand of penalty.\n<\/p>\n
     7.      On behalf of the Respondents, it is submitted that they have not forced the<\/p>\n
     petitioner to pay the amount. It is also submitted that the Petitioner have an<\/p>\n
     alternative and efficacious remedy and consequently this court should not admit this<\/p>\n
     petition.\n<\/p>\n
     8.      To understand the controversy, we may gainfully refer to section 398 of the<\/p>\n
     Bombay Provincial Municipal Corporation Act, 1949 (hereinafter referred to as<\/p>\n
     “Act”). Section 398 of the Act, reads as under :\n<\/p>\n
                                                        ::: Downloaded on – 09\/06\/2013 15:18:53 :::<\/span>
\n                                                6<\/span><\/p>\n
                   “398. Penalty for evasion of octroi or toll : Where any<\/p>\n
                   vehicle, animal or goods imported into the limits of the<\/p>\n
                   city are liable to the payment of toll or octroi any<\/p>\n
                   person who, with the intention of defrauding the<\/p>\n
                   Corporation, causes or abets the introduction of or<\/p>\n
                   himself introduces or attempts to introduce within the<\/p>\n
                   limits of the City any such vehicle, animal or goods<\/p>\n
                   upon which payment of the toll or octroi due on such<\/p>\n
                   introduction has neither been made nor tendered, shall,<\/p>\n
                   on conviction, be punished with fine which may extend<\/p>\n
                   to ten times the amount of such toll or octroi or to two<\/p>\n
                   hundred and fifty rupees, whichever may be greater.”\n<\/p><\/blockquote>\n
     9.      The Respondent Corporation has also framed rules for octroi, including for<\/p>\n
     offence, punishment and compounding. We are concerned with Rule 40, the<\/p>\n
     translated version of which reads as under :\n<\/p>\n
                   “40. Offence, Punishment and Compounding of the<\/p>\n
                   Offence:    Municipal Commissioner or the Officer<\/p>\n
                   authorised by him, in respect of any such         offence<\/p>\n
                   which is punishable, shall have power to recover<\/p>\n
                   Octroi amount plus an amount to the extent of 10<\/p>\n
                   times of the octroi amount, as a fine, from any person<\/p>\n
                                                       ::: Downloaded on – 09\/06\/2013 15:18:53 :::<\/span>
\n                                               7<\/span><\/p>\n
                    who is charged with such offence, before or after<\/p>\n
                    filling the proceedings, towards the compounding of<\/p>\n
                    the offence.”\n<\/p><\/blockquote>\n
     10.    The question before us is whether before any prosecution is launched against<\/p>\n
     the Petitioner or if launched they are not convicted for the same, can respondent<\/p>\n
     Corporation demand by way of compounding an amount equal to ten times of<\/p>\n
     octroi as a fine as demanded by Respondent Corporation.\n<\/p>\n
     11.<\/p>\n
            Under Section 398 any person with an intent to defraud the corporation<\/p>\n
     causes or abates the introduction of any goods on which octroi is due but not paid or<\/p>\n
     tendered on conviction can be punished with fine which may extend to ten times<\/p>\n
     the amount of such octroi or toll. Thus the power is on conviction, in the authority<\/p>\n
     deciding the case, to impose the fine. Ten times is the maximum fine which can be<\/p>\n
     imposed. Rules have been framed for compounding. A reading of Rule 40 would<\/p>\n
     show, in a case, where there be an offence, which is punishable, as and by way of<\/p>\n
     compounding                                   of                                        the<\/p>\n
     offence,   the corporation can recover Octroi, plus an amount equal to the extent of<\/p>\n
     ten times of the Octroi amount, as a fine, from any person who is charged with such<\/p>\n
     offence if such person desires to compound the offence. In other words, it is only in<\/p>\n
     the event that the person is liable to pay octroi and has committed an offence in<\/p>\n
     respect of whom    the respondent Corporation      before or even after prosecution is<\/p>\n
     launched, can call on such person if such person is willing to compound the offence<\/p>\n
     and if it be so then, by way of compounding, to pay a fine equal to ten times the<\/p>\n
                                                        ::: Downloaded on – 09\/06\/2013 15:18:53 :::<\/span>
\n                                                 8<\/span><\/p>\n
     octroi due and payable. A conjoint reading therefore, of the Act and Rules would<\/p>\n
     clearly indicate that there is no power in Respondent Corporation to demand fine<\/p>\n
     from the person who is not willing to compound the purported offence. Any other<\/p>\n
     construction will make the rule ultra vires Section 398 of the Act.\n<\/p>\n
     12.    Our attention was invited to the Division Bench Judgment of this court in<\/p>\n
     M\/s.       Dhoot Agencies Pvt. Ltd. Vs. Aurangabad Municipal Corporation and Ors.\n<\/p>\n
     2000(1) ALL M.R. 421. In that case also, the demand was made for octroi and for<\/p>\n
     penalty to the extent of ten times of octroi duty so as to avoid prosecution. The<\/p>\n
     proposal was accepted and accordingly received an amount of Rs.28,590\/- towards<\/p>\n
     octroi as well as penalty, the four cars were released. The question before the learned<\/p>\n
     Division Bench was whether the Municipal Corporation can impose fine without<\/p>\n
     prosecution resulting into conviction. The learned Bench held that it was not open to<\/p>\n
     the Corporation to impose penalty without conviction.\n<\/p>\n
     13.    In our opinion, considering section 398 and the rule as referred to earlier, it is<\/p>\n
     only an enabling power in the Corporation to inform the party who is liable for<\/p>\n
     prosecution or is being prosecuted, that the offence can be compounded by paying<\/p>\n
     the    fine as demanded. If such party refuses to compound the offence, the<\/p>\n
     Corporation cannot demand from such party the compounding fine. Any such action<\/p>\n
     would be clearly without jurisdiction. The power to impose fine is conferred by the<\/p>\n
     Act and in such event it is only on conviction that there is power to impose fine<\/p>\n
     which may extend to ten times the amount of octroi or Rs. 250\/- whichever may be<\/p>\n
     greater.      We are therefore, clearly of the opinion that the demand is without<\/p>\n
                                                         ::: Downloaded on – 09\/06\/2013 15:18:53 :::<\/span>
\n                                                9<\/span><\/p>\n
     jurisdiction.\n<\/p>\n
     14.     The learned counsel for the Corporation has sought to place reliance on the<\/p>\n
     judgment of the Division Bench of this court in            Maharashtra Chamber of<\/p>\n
     Commerce, Industries and Agriculture and Ors. Versus State of Maharashtra and Ors.\n<\/p>\n
     2003 (4) ALL MR 32 to contend that this court should not exercise its extra ordinary<\/p>\n
     jurisdiction. The rule of alternate remedy is a rule of procedure. It does not prohibit<\/p>\n
     this court from exercising its extra ordinary jurisdiction. In the instant case, demand<\/p>\n
     was clearly without jurisdiction and consequently a nullity at law. In these<\/p>\n
     circumstances, in our opinion, this is a fit case to exercise        our extra ordinary<\/p>\n
     jurisdiction.\n<\/p>\n
     13.     In the light of the above, we make rule absolute in terms of Prayer Clause<\/p>\n
     (a).\n<\/p>\n
             (J.H. BHATIA, J.)                           (F.I. REBELLO,J.)\n\n\n\n\n\n\n                                                        ::: Downloaded on - 09\/06\/2013 15:18:53 :::<\/span>\n <\/pre>\n","protected":false},"excerpt":{"rendered":"
Bombay High Court Building vs Pune Municipal Corporation on 17 November, 2009 Bench: F.I. Rebello, J. H. Bhatia 1 hvn IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 9343 OF 2009 Bank of Baroda, a body Corporate Constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-63864","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nBuilding vs Pune Municipal Corporation on 17 November, 2009 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/building-vs-pune-municipal-corporation-on-17-november-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Building vs Pune Municipal Corporation on 17 November, 2009 - 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