Case Note & Summary
The Supreme Court heard two criminal appeals by special leave arising from a common judgment of the Madras High Court dated 21 November 1968. The appeals challenged the High Court's dismissal of State appeals against acquittals in prosecutions under the Central Excises and Salt Act, 1944 and the Indian Penal Code. The core dispute concerned the interpretation of Section 40(2) of the Central Excises and Salt Act, 1944, which prescribes a six-month limitation for suits, prosecutions or other legal proceedings for anything done or ordered to be done under the Act. In Criminal Appeal No. 194 of 1969, a factory inspection on 25 July 1964 at Paulraj Match Works revealed affixing of cut and torn banderols, non-maintenance of registers, shortage of banderols, and an attempt to deprive the Central Government of Rs 577.42. The complaint was filed on 18 May 1965. The Sub-Divisional Magistrate acquitted the accused on 30 November 1965 on the ground of limitation. In Criminal Appeal No. 195 of 1969, an inspection on 20 June 1964 at Meenachi Match Works found cut banderols, unauthorized night working, and unrecorded clearances during 1963-64 and 1964-65 upto 20 June 1964, with an attempt to deprive the Government of Rs 2437.50. The complaint was filed on 15 January 1965. The Sub-Divisional Magistrate initially convicted on 6 July 1965, but the Sessions Judge, Ramanathapuram, acquitted on 16 November 1965, and the High Court affirmed the acquittal. The legal issues were whether Section 40(2) applies only to government servants, whether the phrase 'anything done or ordered to be done under the Act' includes acts in violation of the Act and omissions, and whether malicious or deliberate acts are excluded from the limitation bar. The State argued that the section applied only to government servants, that it did not cover deliberate or malicious violations, and that 'anything done or ordered to be done' did not include acts in violation of the Act. The respondents contended that the section applied to their prosecution for violation of the Rules and Act, and that since the prosecutions were instituted after six months from the date of alleged offences, the acquittal was correct. The Court analysed Section 40(1) and Section 40(2). Section 40(1) protects the Central Government or officers for acts done in good faith, while Section 40(2) contains no qualifying words as to persons. The Court compared Section 20 of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955, where the Legislature expressly restricted protection to Government officers, and concluded that Section 40(2) is applicable to any individual or person. On the phrase 'anything done or ordered to be done', the Court relied on the definition of 'act' in the General Clauses Act and prior decisions, holding that non-compliance with statutory provisions by omitting to do what the Act requires is included. The alleged acts of evasion, affixing cut banderols, incorrect accounts, and shortages were all infractions in respect of things done or ordered to be done under the Act. The Court further held that Section 40(2) does not introduce a good faith test; good faith is relevant only under Section 40(1), so malicious or deliberate acts are not excluded from the limitation bar. The Supreme Court dismissed both appeals and upheld the judgments of the High Court, holding that the prosecutions were barred by the six-month limitation under Section 40(2) of the Central Excises and Salt Act, 1944.
Headnote
A) Limitation - Bar of Suits, Prosecutions and Legal Proceedings - Applicability to All Persons - Central Excises and Salt Act, 1944, Section 40(2) - Section 40(2) contains no qualifying words as to persons, unlike Section 40(1) and comparable protective statutes; it prescribes six months from accrual of cause of action or date of act/order complained of - Court rejected State's contention that it applies only to Government servants and held the prosecution against private accused was within its wide amplitude - Held High Court rightly barred prosecution (Paras Not mentioned). B) Statutory Interpretation - Phrase 'Anything Done or Ordered to Be Done' - Includes Non-Compliance and Violations - Central Excises and Salt Act, 1944, Section 40(2) read with General Clauses Act, 1897 - The definition of 'act' in General Clauses Act and prior decisions establish that omission to do what the Act enjoins is included; evading duty, affixing cut/torn banderols, incorrect accounts and shortages are infractions - Court held these violations were 'anything done or ordered to be done under the Act' and therefore subject to limitation - Held High Court conclusion upheld (Paras Not mentioned). C) Criminal Law - Malicious or Deliberate Acts - Good Faith Not Required - Central Excises and Salt Act, 1944, Section 40(2) - Section 40(2) does not introduce test of good faith; good faith is aspect of Section 40(1); protection/limitation is not limited to inadvertent or mistaken acts - Court rejected contention that malicious acts excluded from bar - Held even deliberate violations are covered by six-month limitation under Section 40(2) (Paras Not mentioned).
Issue of Consideration
Whether Section 40(2) of the Central Excises and Salt Act, 1944 applies only to government servants; whether 'anything done or ordered to be done under the Act' includes acts in violation of the Act and omissions; whether malicious or deliberate acts are excluded from the limitation bar under Section 40(2)
Final Decision
Supreme Court dismissed both appeals, holding High Court correctly concluded prosecution was barred by Section 40(2) of Central Excises and Salt Act, 1944. Section 40(2) applies to any person, not only Government servants, and 'anything done or ordered to be done' includes violations and omissions, without requiring good faith; therefore complaints filed beyond six months from date of alleged offences were time-barred.
Law Points
- Section 40(2) Central Excises and Salt Act
- 1944 applies to any person
- not only government servants
- 'anything done or ordered to be done under the Act' includes acts in violation of the Act and non-compliance by omission
- good faith is not a test under section 40(2)
- malicious or deliberate acts do not exclude limitation
- six-month limitation runs from accrual of cause of action or date of act/order complained of
