STATE OF UTTAR PRADESH Vs. HINDUSTAN LEVER LTD

JUDGEMENT

(1.) THIS is a defendant's appeal. It arises out of a suit for recovery of money.

(2.) HINDUSTAN Lever Limited, the plaintiff-respondent, is a public limited com pany carrying on the business of manufac ture and sale of, inter alia, vegetable oil products. It had to pay large amount of ex cise duty on these products to the Excise Department of the Union of India. In Janu ary, 1953, the plaintiff-company obtained sanction of the Assistant Collector, Central Excise, Meerut, to open an account with the Sub-treasury maintained by the State Government of U. P. at Ghaziabad in order to pay excise duty to the credit of the Col lector of Central Excise, Allahabad. The plaintiff-company maintained a current ac count with the Punjab National Bank, de fendant No. 1. On 14th July, 1955, the plaintiff instructed the defendant bank to deposit on behalf of the plaintiff and to the debit of the plaintiff's current account with the bank, a sum of Rs. 50,000/- in the sub-treasury, Ghaziabad, to the credit of the Collector, Central Excise, Allahabad. On 18th July, 1955, the defendant bank addres sed a letter to the plaintiff confirming depo sit of Rs. 50,000/- in the sub-treasury at Ghaziabad to the credit of the Collector, Central Excise, Allahabad. The bank an nexed to the letter a challan No. 3 in dupli cate dated 18th July, 1955, purporting to have issued by the sub-treasury and ac knowledging the receipt of Rs. 50,000/- on 18th July, 1955. The plaintiff-company for warded the duplicate of this challan to the Inspector, Central Excise, Ghaziabad, in forming him of the payment of Rupees 50,000/- towards Central Excise. On 28th July, 1955, the Inspector Cen tral Excise, informed the plaintiff that the account of the Collector, Central Excise, at the Sub-treasury does not stand credited with the sum of Rs. 50,000 alleged to have been deposited on 18th July, 1955. There after the plaintiff corresponded with the defendant bank, the Central Excise authori ties as well as the Government of U. P. in respect of the payment made into the sub-treasury at Ghaziabad. Since the Central Excise authorities did not acknowledge the payment, the plaintiff-company was forced to pay the Collector, Central Excise, a sura of Rs. 50,000/- all over again. Having made this payment, the plaintiff called upon the defendant bank to reimburse them of the sum of Rs. 50,000/- and to credit their cur rent account with the bank accordingly. The defendant bank, however, refused to com ply on the ground that it had made a valid and effective payment into the sub-treasury, Ghaziabad, and by doing so it had perform ed its obligations entirely. The challan issu ed by the sub-treasury bore the seal of the sub-treasury as well as the signatures of the accountant and the treasurer thereof. The challan represented valid deposit of Rupees 50,000/-. Thereupon the plaintiff company serv ed the statutory notice under Section 80, Civil Procedure Code upon the Union of India as well as the State Government and the Sub-Treasury Officer, Ghaziabad, and on llth July, 1958, instituted the present suit praying that the defendant bank be ordered to repay to the plaintiff or credit to the plaintiff's current account with the bank Rs. 50,000/-as well as Rs. 10.9 the incidental charges debited to the plain tiff's account by the bank, and also a sum of Rs. 8,935.03 as interest by way of dama ges on the principal sum at 6 per cent per annum. It claimed future interest at 6 per cent by way of damages till payment. It was also prayed that if it was held that the de- fendant bank made a valid payment into the sub-treasury, the State Government be ordered to pay to the plaintiff the sum of Rs- 50,000/- together with interest by way of damages at 6 per cent.

(3.) THE State Government in its written statement stated that the alleged payment of Rs. 8000/- on 18th July, 1955, is not entered in the sub-treasury ac count books. The challan issued by the sub-treasury does not bear the signature of the Sub-Treasury Officer, Ghaziabad, which is necessary under the treasury rules. On investigation it was found that the tehvildar (accountant) of the Government treasurer Reoti Raman had embezzled and misappro priated the sum of Rs. 50.000/-. He func tioned to discharge ... duties imposed by law. The State Government was not vicariously responsible for the tortious acts of its officers. It was also pleaded that the suit was barred by time. It was urged on behalf of the defendants that Article 62 of the Limitation Act applied to the suit, under which the suit ought to have been filed within three years from 18th July, 1955, the date when the money was alleg ed to have been deposited.