UNION OF INDIA Vs. AYED RAM

JUDGEMENT

(1.) In the suit out of which this appeal arises the plaintiff alleged that on 3-7-1947, the Range Officer of the Central Excise Department seized an excess quantity of 1358 lbs. of non-duty paid tobacco from the shop of the plaintiff and that he also submitted a report against the plaintiff to the Collector of Central Excise, Calcutta, through the Superintendent, Central Excise, Ranchi, and the Assistant Collector of Central Excise, Patna. On the 26th June, 1948, the Collector of Central Excise, Calcutta, confiscated the seized tobacco & ordered that the same be released on payment of the duty imposed and a redemption fine of Rs. 200.00 in lieu of confiscation. The Collector of Central Excise imposed a further penalty of Rs. 100.00 upon the plaintiff. This order was communicated to the plaintiff on 6-7-1948. The plaintiff alleged that he deposited the amount by two challans on 20-4-1949. Thereafter the plaintiff sent letters to the Department of Central Excise for, delivery of the seized tobacco to him, but the tobacco was not returned. The plaintiff has, accordingly, brought the suit against the Union of India for return of the seized tobacco or in the alternative for a sum of Rs. 2400.00 being the market price of the tobacco at the material point of time. The defence to the suit was that the plaintiff did not deposit the redemption fine and the penalty within the period of three months as required by the rules and, therefore, the confiscation was complete. It was also contended that the suit was barred by limitation under section 40 of the Central Excise and Salt Act, 1944 (Act I of 1944). Both the lower Courts have held that the deposit made' by the plaintiff was valid and the plaintiff was, therefore, entitled to return of the quantity of seized tobacco. The lower courts have, therefore, granted a decree to the plaintiff for a sum of Rs. 24007-, as claimed.

(2.) In support of this appeal it was argued by the learned Government Pleader that section 40 (2) of Act I of 1944 operated as a bar. Section 40 of the Act is in the following terms:

(3.) In view of the principle laid down in the above mentioned authorities, we hold that the plaintiff cannot sue the Union of India for damages for the tort of conversion of the confiscated tobacco. But since there is proof in the present case that the sale proceeds of the seized tobacco amounting to Rs. 650.00 was deposited in the Government Treasury on 21-6-1950, and the Union Government was benefited to that extent, there is a duty cast upon the Union Government to return the proceeds of the sale of the confiscated tobacco. That is the view expressed by a Division Bench of the Calcutta High Court in Kailash Chandra v. Secy, of State, ILR 40 Cal 452 (C).