J K SYNTHETICS Vs. MUNICIPAL COUNCIL KOTA

JUDGEMENT

(1.) This second appeal is directed by the plaintiff-Company against the decree of the Additional District Judge, Kota, dated May 7, 1976 whereby the decree of the Munsif (South) Kota, dated December 16, 1974, dismissing the suit of the plaintiff-Company for permanent injunction as against the respondent was confirmed.

(2.) Facts leading of the filing of the second appeal are that M/s. J.K. Synthetics Ltd., Kota, is a public limited company, with its factory at Kota. The plaintiff-Company, manufactures nylon yarn in its factory. The nylon yarn manufactured is winded around the metallic cops and the nylon yarn is sent in this state outside municipal Limits of Kota to its customers. According to the plaintiff-Company, the purchasers of nylon yarn after using the yarn return the cops to the Company. The returned cops are again utilised for winding up the nylon yarn for re-sale of the yarn. It was pleaded that it is a condition of sale with the customers that they would return the cops after using the yarn and for that purpose a security amount is also taken in deposit by the plaintiff-Company so that the purchasers may return the cops in time. It was pleaded that the cops are mostly imported from outside India. The plaintiff-Company paid octroi duty to the Municipal Council Kota when it brought the cops for the first time within the Municipal Limits and therefore, octroi could not be demanded twice over by the respondent Municipal Council when they were received back from the customers after the latter had used the nylon yarn sold to them. However, the respondent Municipal Council on Dec. 18, 1962 for the first time demanded payment of octroi duty on the cops returned by the customers. The plaintiff-Company made an application to the Collector, Kota, under S.285 of the Rajasthan Municipalities Act, 1959 (hereafter referred to as 'the Act'). Before the Collector, the Municipal Council showed its willingness to enter into a mutual agreement with the plaintiff-Company in this matter. It was represented on behalf of the Municipal Council before the Collector that all that it wanted was to be informed of the quantity of cops and their movement outside Kota Municipal limits so that it may be ensured that no cops are imported for use in Kota town. The Collector, therefore, remanded the matter to the Municipal Council for raking action in the light of the above observations. Consequently, the respondent Municipal Council and the plaintiff-Company entered into an agreement on June 17, 1963, whereby it was agreed that the respondent will not charge octroi duty on cops which were returned by the customers of the company after using the nylon yam purchased by them. The plaintiff-company was acting in accordance with the agreement. It used to pay octroi duty on new cops brought within the Municipal limits and used to send statements to the Municipal Council with respect to the cops returned by the customers. Originally it was agreed that the customers should return the cops within six months of the purchase of nylon yarn by them but later on this period was extended to one year. However, on Dec., 26, 1967 the respondent Municipal Council sent a letter to the plaintiff-Company that octroi duty will be charged on cops and terminated the agreement entered into on June 17, 1963. The plaintiff challenged the termination of the agreement and also the fight of the respondent to levy octroi duty on the cops which were returned by its customers after using of the nylon yarn sold to them and instituted Civil Suit No. 238 of 1968 for the grant of permanent injunction against the respondent restraining the latter from levying and charging octroi duty on cops returned to the plaintiff-company by its customers after using of the nylon yarn sold by it.

(3.) Municipal Council, Kota, filed its written statement on Jan. 20, 1973. The Municipal Council admitted that there had been agreement between the parties on June 17, 1963. However, it pleaded that the plaintiff-company itself did not comply with the terms of the agreement. It was alleged that under the shelter of the agreement the plaintiff-company started bringing new cops within Municipal limits. The Municipal Council, therefore, did not remain bound by the agreement. Apart from that it was also pleaded that the Municipal Council was entitled to charge octroi duty even when cops were brought back again within the Municipal Council limits. Pleas regarding jurisdiction and necessity of statutory notice to the Municipal Council were also raised.