Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 7412-7413 OF 2008
(Arising out of SLP (C) Nos.15533-34 of 2004)
Kopargaon S.S.K. Ltd. … Appellant
Versus
State of Maharashtra & Ors. … Respondents
WITH
CIVIL APPEAL NOS. ___ OF 2008
(Arising out of SLP (C) Nos.16982-16983 of 2004)
J U D G M E N T
S.B. Sinha, J.
1. Leave granted.
2. This appeal is directed against a judgment and order dated 23.9.2003
passed by the High Court of Bombay at Aurangabad in Writ Petition
No.3050 of 2003 declining to entertain the writ petitions filed before it.
3. Appellant has been granted licence for manufacturing spirit and
potable liquor in terms of the provisions of the Bombay Prohibition Act,
1949 and the Rules framed thereunder. Respondents, indisputably, posted
some of its employees for supervision of the manufacure or sale of country
liquor from the said factory.
4. A demand was raised for a sum of Rs.7,43,686/-. Admittedly, such
supervision charges have been paid in advance. The State, however, revised
the salary of its employees with retrospective effect from 1.1.1996 by
Notification dated 10.12.1998 for the period 1.1.1996 to 31.12.1998. A
communication dated 17.6.2000 was issued calling upon the appellant to
pay the arrears of supervision charges for the period 1.4.1996 to 31.12.2000
amounting to Rs.7,43,666/-
5. Questioning the legality and/or validity of the said claim, a writ
petition (No.4092 of 2000) was filed before the Bombay High Court by the
appellant praying for, inter alia, the following reliefs :
“(B) Hold and declare that the demand notice
dated 17.6.2000 and August 2000 and the
circular dated 17.6.1999, 30.7.1999 issued
by the Respondents 2, and the demand
notice issued by the Respondent No.3 dated
17.6.2000 towards the difference in the
salary and wages, w.e.f. 1.1.1996 i.e.,
retrospective effect towards the supervision
charges is therefore illegal, arbitrary and
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violative of Article 14, 19(1)(g) of the
Constitution of India; and therefore strike
down the same.
(C) Issue a Writ prohibition or any other
appropriate Writ, order or directions in the
nature of Writ of Prohibition prohibiting the
Respondent Nos. 1 to 4, their officers and
subordinates from demanding and/or
recovering any amount towards the salary
and wages with retrospective effect from
1.1.1996 as per the circular dated 30.7.1999
as per the demand notices dated 17.6.2000
and August 2000 and for that purpose issue
necessary orders.”
6. Similar other writ applications before the said court were also filed. A
learned Single Judge of the Bombay High Court, by a judgment and order
dated 7.12.2000 passed in Writ Petition No.3501 of 2000 opined as under :
“We are also amazed to note that in spite of the
fact that the Government of Maharashtra by
notification dated 10.12.1998 decided to
implement the Fifth Pay Commission’s
recommendations, the respondents did not
diligently and failed to claim the supervision
charges at the revised rates at least from 1.1.1999.
For the first time, such a demand has been raised
on 30.5.2000.”
7. The demand was held to be illegal. Following the said decision, the
writ petition filed by the appellant was allowed, holding :
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“In view of our detailed judgment passed today on
Writ Petition No.3501/2000, we allow the petition.
Karkhana is liable to pay the supervision charges
at the revised rates from 1.7.2000 as the first
demand notice for arrears for the period from
1.1.1996 onwards was issued on 17.6.2000. Rule
made absolute accordingly.”
Concededly, the said orders were not appealed against. They attained
finality.
8. One matter involving similar question, however, was brought to this
Court. The decision of this Court is since reported in Government of
Maharashtra & Ors. v. Deokar’s Distillery [(2003) 5 SCC 669]. The
majority opinion rendered in the said decision, inter alia, reads as under :
“This apart, the High Court was also not right in
rejecting the writ petition of the respondents at the
threshold. The High Court has failed to notice
another important factor that the statutory
provision under Article 309, namely, the
Notification dated 10.12.1998 and the
consequential administrative instructions/orders
issued for carrying out the executive function
under Section 58A of the Prohibition Act and
Article 162 namely, the circular letter dated
30.7.1999 had not been challenged by the
respondents herein and, therefore, they were not
entitled to challenge the demand notice which was
merely a consequential communication. The High
Court, therefore, is not right in quashing the
demand notice issued by appellant No. 4, namely,
the Sub-Inspector of State Excise, in charge of the
manufactory of the respondent, without examining
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the validity of or quashing the Rules of 1988 and
the consequential circular letter dated 30.7.1999
issued by appellant No. 2, namely, the
Commissioner, since the demand notice was
merely a consequential communication issued in
furtherance of the Rules of 1998 and the circular
letter dated 30.7.1999.”
Pursuant to the said decision, the Commissioner of Excise issued a
circular letter, operative portion of which reads as under :
“M/s. Polychem Ltd. & Ors. v. Govt. of
Maharashtra, the Supreme Court had ruled in their
decision on appeal No.3494/1991 that recovery of
outstanding of supervision charges with
retrospective effect is illegal. Considering the said
decision the units who were provided supervision
were informed vide above circular of this office
that presently the difference of enhanced
supervision charges with retrospective effect not
be recovered. Further taking support of Supreme
Court above decision some units had filed
petitions in Mumbai High Court, Aurangabad and
Nagpur Bench and the decision on some of them
was in the favour of the units. A special petition is
being filed in Supreme Court against that decision.
If the decision of it is in favour of Govt. all the
Superintendants were informed that the
outstanding amounts should be necessarily
recovered with interest, vide above referred
circular and instructions were issued to recover the
difference of outstanding.
Now Supreme Court has ruled that the orders to
recover outstanding of supervision charges with
retrospective effect are legal. This was the
decision of Supreme Court on the Civil Appeal
No.7399/2001, 7400/2001 and 1302/2003 and
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Special Leave Petition No.22942/2001 in M/s.
Deokar Distillery and others case on 10.3.2003.
Considering the above decision of Supreme Court,
it is necessary to recover from those units with
whose difference in supervision charges with
retrospective effect are pending. Therefore, you
are required to submit in the attached format the
details of suit outstanding from units in your
district and submit action taken report. Copy of
Supreme Court decision is sent to all Divisional
Dy. Commissioner along with this letter.”
In terms of the said circular letter, the appellant was asked to pay the
dues of the supervision charges along with interest by the Deputy
Superintendent, State Excise Duty, Kosaka by a letter dated 26.6.2003.
Appellant denied and disputed its liability, inter alia, contending that the
dispute between the parties has been settled by the Bombay High Court in
the aforementioned Writ petition No.4092 of 2000. It was stated :
“The basis on which you demanded the recovery
of the difference amount that is wrong, as the said
decision is not applicable to us. By filing
independent petition against your demand notice,
your demand is cancelled. You have no right to
recover the said amount. This is the ruling of the
Supreme Court, which is still valid. Therefore,
you cannot demand the difference amount. This is
our position, which we have put forward in our
letter dated 12.6.2003. It is for you to decide what
to do. In spite of this, your office is repeatedly
issuing warning that action would be taken if the
amount is not paid immediately. This is not
proper.”
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9. Notwithstanding the said contention, several other demands were
raised. It is in the aforementioned situation, appellant filed another writ
petition marked as W.P.No.3050 of 2003, inter alia, praying for the
following reliefs :
“(B) Hold and declare that, the said Maharashtra
Civil Services (Revised Pay) Rules, 1998
dated 11.12.1998 namely sub-section (ii) of
Rule (1) is not applicable to the Petitioners
along with circular dated 17.6.1999 and
30.7.1999 being illegal, arbitrary and
violative of Articles 14, 19(1)(C) and 19(1)
(G) of the Constitution of India and quash
and set aside the same along with circular
dated 17.6.1999, 30.7.1999, 17.6.2000 and
29.4.2003 and for that purpose issue
necessary orders;
(C) Hold and declare that, the demand notices
dated 20.5.2003, 10.6.2003 and 26.6.2003
are illegal, arbitrary and violative of Articles
14, 19(1)(C) and 19(1)(G) of the
Constitution of India and therefore same are
liable to be quashed and set aside and for
that purpose issue necessary orders;
(D) Hold and declare that the said demand
notices are illegal, arbitrary and violative of
Articles 14, 19(1)(C) and 19(1)(G) of the
Constitution of India and Section 114 of the
Bombay Prohibition Act, 1949 and further
declare that the State is not entitled to
charge the said interest in pursuance of the
demand notices dated 20.5.2003, 10.6.2003
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and 26.6.2003 and for that purpose issue
necessary orders.”
10. During the pendency of the said writ application, the respondents
withdrew the said demand letter, stating :
“With reference to above subject, it is informed
that Dy. Superintendent, State Excise Duty,
officiating Kopargaon S.S.K. Ltd., Kolpewadi,
Tal. Kopargaon had erroneously issued demand
letter No.Supervision 112003/333 dated 20.5.2003
regarding recovery of Supervisory charges with
retrospective effect. As Superintendent I am
withdrawing the said letter.
You are requested to arrange to bring this to
the notice of the High Court, Aurangabad Bench
on 12.11.2003.”
11. Despite the same, a Division Bench of the High Court, in view of this
Court’s judgment in Deokar’s Distillery (supra), dismissed the appellants’
writ application, opining :
“When the matter comes up for hearing, on behalf
of the respondents, learned G.P. produces a letter
dated 12.11.2004 setting out therein that demand
letter dated 20.5.2003 for recovery of supervision
charges with retrospective effect has been
withdrawn vide letter No.SUP/112003/7553 dated
12.11.2003 and that the officer would be
recovering the supervision charges as per the order
of this Court dated 28.9.2000 as passed in Writ
Petition No.4092/2000. In other words, the
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demand for interest has been withdrawn and
consequently the Respondents cannot demand
interest from the Petitioners. The only demand
can be in respect of the supervision charges, which
has been upheld by this Court by the impugned
order referred to earlier. Considering that the
letter dated 20.5.2003 has been withdrawn,
nothing further survives. In so far as to claim any
charge with retrospective effect and interest
thereon, nothing further survives in this petition.
Rule in both the Petitions discharged. There shall
be no order as to costs.”
12. Mr. Savant, learned senior counsel appearing on behalf of the
appellant, would contend that keeping in view the earlier decision of this
Court, the impugned judgment cannot be sustained.
13. Mr. Chinmoy Khaladkar, learned counsel appearing on behalf of the
respondent, on the other hand, urged that the cause of action for which the
earlier writ petition was filed was different from that of the writ petition
filed later.
Indisputably, the claim of the respondent was based on the
notification implementing recommendations of the Fifth Pay Revision
Commission, pursuant whereto and in furtherance whereof, the pay of the
concerned employees had been revised with retrospective effect from
1.1.1996. Admittedly, the matter relating to payment of supervision charges
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is governed by the provisions of Section 58-A of the Bombay Prohibition
Act and the Rules framed by the State known as Country Liquor Rules.
According to the appellants, the supervisory staff had been employed under
sub-rule (12) of Rule 6; the supervisory charges were required to be paid to
the State Government quarterly in advance. Under sub-rule (2) of Rule (2)
of the Liquor Rules, 1976, the superivision charges are to be paid annually
in advance. It is also not in dispute, although not very relevant for our
purpose, that the appellant is entitled to recover the supervision charges or
other charges from its customers by including such sum in the price of the
liquor.
14. Appellant in Writ Petition No.4092 of 2000, indisputably questioned
the right of the respondents to recover the supervision charges with
retrospective effect. It was furthermore contended therein that in any event
no interest was payable on the said charges, particularly in view of the fact
that although the notification was issued in the year 1998 the demand was
made in the year 2000. The said writ petition was allowed opining that the
difference in payment of supervision charges was not recoverable. The said
order of the High Court dated 7.12.2005 attained finality. It would,
therefore, operate as res judicata.
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15. Submission of Mr. Khaladkar that the demands were for different
charges, namely, one in respect of pay and the other in respect of leave
salary etc. cannot be accepted. The basis for both the claims was the same.
If the principle of res judicata applies in a writ proceeding, no fresh demand
could have been raised by the respondents. We may notice that even the
Commissioner of Excise, only keeping in view that aspect of the matter,
issued a circular only in respect of those distilleries from whom the charges
were yet to be realized. The said circular had not and, in fact, could not
have any application in respect of those cases where the dispute between the
parties had attained finality. It is no longer res integra that the principles of
res judicata apply in writ proceedings. It was so held in Ishwar Dutt v. Land
Acquisition Collector & Anr. [(2005) 7 SCC 190], wherein this noticed :
“23. Yet recently in Swamy Atmananda and
Ors. v. Sri Ramakrishna Tapovanam and Ors.
[(2005) 10 SCC 51] one of us was a party, this
Court observed :
"The object and purport of principle of res
judicata as contained in Section 11 of the
Code of Civil Procedure is to uphold the
rule of conclusiveness of judgment, as to the
points decided earlier of fact, or of law, or
of fact and law, in every subsequent suit
between the same parties. Once the matter
which was the subject-matter of lis stood
determined by a competent court, no party
thereafter can be permitted to reopen it in a
subsequent litigation. Such a rule was
brought into the statute book with a view to
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bring the litigation to an end so that the
other side may not be put to harassment.
The principle of res judicata envisages that a
judgment of a court of concurrent
jurisdiction directly upon a point would
create a bar as regards a plea, between the
same parties in some other matter in another
court, where the said plea seeks to raise
afresh the very point that was determined in
the earlier judgment."
24. It was further noticed:
"In Ishwardas v. the State of Madhya
Pradesh and Ors. [AIR 1979 SC 551], this
Court held:
"...In order to sustain the plea of res
judicata it is not necessary that all the
parties to the two litigations must be
common. All that is necessary is that
the issue should be between the same
parties or between parties under
whom they or any of them claim..."
16. Yet again in Swamy Atmananda & Ors. V. Sri Ramakrishna
Tapovanam & Ors. [(2005) 10 SCC 51], this Court held :
“The object and purport of the principle of res
judicata as contended in Section 11 of the Code of
Civil Procedure is to uphold the rule of
conclusiveness of judgment, as to the points
decided earlier of fact, or of law, or of fact and
law, in every subsequent suit between the same
parties. Once the matter which was the subject-
matter of lis stood determined by a competent
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court, no party thereafter can be permitted to
reopen it in a subsequent litigation. Such a rule
was brought into the statute-book with a view to
bring the litigation to an end so that the other side
may not be put to harassment.
The principle of res judicata envisages that a
judgment of a court of concurrent jurisdiction
directly upon a point would cleate a bar as regards
a plea between the same parties in some other
matter in another court, where the said plea seeks
to raise afresh the very point that was determined
in the earlier judgment.”
17. It was, however, contended that the question of applicability of the
principles of res judicata was not raised before the High Court. We have
noticed hereinbefore that the said questions were clearly raised even in the
responses to the notices of demand.
18. For the reasons aforementioned, the impugned order dated
23.09.2003 and judgment dated 13.11.2003 cannot be sustained which are
set aside accordingly. The demand notices impugned in W.P.No.3050 of
2003 are quashed. The appeals are allowed with costs. Counsel’s fee
assessed at Rs.25,000/-.
……………….…..………….J.
[S.B. Sinha]
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..………………..……………J.
[Cyriac Joseph]
New Delhi;
December 18, 2008.
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