2007 PLP 274 (SCMR)

IFTIKHAR MUHAMMAD CHAUDHARY, C.J.

Fact of the above noted cases are narrated separately:-- Civil Appeal No.1301 of 2006. This appeal is by leave of the Court against the judgment dated 25th March, 2003 passed by Lahore High Court, Lahore.

2. Facts relevant for disposal of the case arc that petitioner paid Rs.6,300 per container (containing a harvester each) from 13th January, 1997 to 8th April, 1997 vide receipts dated 13-1-1997, 25-1-1997, 28-1-1997, 2-2-1997 and 8-4-1997 totalling Rs.31,500 to Zila Council Lahore, instead of Rs.100 each as per approved schedule. Subsequent thereto appellant lodged claim before Chief Minister, Punjab who referred it to the Secretary, Local Government and Rural Development.

3. Similarly Rs.840 per container was charged from appellant by the Zila Council, Sialkot while returning from Sialkot after delivery of goods. The petitioner submitted an application to the Chief Minister Punjab and ultimately Secretary Local Government and Rural Development ordered that overcharged amount be refunded to the appellant. In pursuance of such directions, the amount overcharged was refunded to appellant, but the penalty imposed upon the Zila Council was not paid to him. Therefore, he approached the Office of Ombudsmen Punjab for direction to pay 11 times penalty as provided under Rule 8(2), Punjab Local Councils (Lease) Rules, 1990 (hereinafter referred to as, the Rules, 1990) as amended but the request so made was not considered. As such he filed Constitution petition before the High Court but without any success. Learned High Court in the following para. concluded that it is the contractor but not the Zila Council who is liable .to pay 11 times penalty of the overcharged the tax: "(5) The relevant rule reads as under:-- If the lessee is found overcharging any tax, rate, fee, toll, cess or any other charge he shall be liable to refund the excess amount with an amount equal to eleven times the excess amount as penalty to the person from whom overcharging had been made." A perusal of the above rule shows that it is the contractor, who in case of misconduct is penalized and is bound to pay eleven times penalty of the overcharged amount to the aggrieved person. The petitioner cannot call upon Zila Council to reimburse the overcharged amount to him as Zila Council had not received the amount from the contractor itself. The liability, if any in this context, is that of the contractor only. Petitioner may, if so advised, enforce his claim against the contractor. Zila Council is not under any obligation to pay eleven times penalty to the petitioner. The petition has been submitted under misconception of germane law on the subject and is considered to be without merit." Civil Appeals Nos.1305 and 1306 of 2006 These appeals are by the leave of this Court against the judgment, dated 11th March, 2004 passed by Lahore High Court, Lahore in Writ Petition No.3437 of 2004.

4. The appellant-Company imported raw material for use in manufacturing plants located within the territorial limits of District Sheikhupura. The Zila Council Lahore overcharged the Zila Tax during transit of trade from the local limits of Lahore. Later on appellant filed its claim for refund of excess charged amount from the appellant but its claim remained pending, therefore, the Ombudsmen Punjab, Lahore was approached who on 31-12-2002 issued direction to D.C.O. and E.D.O. to refund the amount within three months. Ultimately it was found by the authorities that the amount is due against the different contractors, as such his claim was not satisfied. Under the circumstances a writ petition was filed by the appellant on the premises that after the termination of the contract it is the liability of the principal to make the payment and the principal cannot escape from his liability. Learned High Court on having examined the case of the appellant declined to grant relief.

5. Learned counsel for the appellants contended that under Rule 8(2) of the Rules, 1990 it is the lessee who is liable to refund excess charged amount and the penalty on it but after the termination of the lease period, Zila Council, Lahore being the principal has no legal obligation to discharge the liability of its agent. Reliance in this behalf has been placed by in the case of Shivlal Motilal v. Birdichand Jivraj and another AIR 1917 Bom. 268.

6. On the other hand learned counsel contended that appellant had not joined the lessee (contractor) as party before the High Court, therefore, in view of provision of Rule 8(2) of Rules, 1990, the respondent-Government is not bound to discharge the liability of the contractor. Similarly appellant should have put up his claim within the prescribed period under the rules to recover 11 times penalty on overcharged amount otherwise the claim was not liable to be entertained.

7. We have heard learned counsel for the parties and have gone through the relevant rule which has also been reproduced by the learned High Court in the para. which has been reproduced hereinabove. On having gone through the said rule no second opinion can be formed A except that it is the lessee who would be liable to make payment of 11 times penalty on overcharged amount. A perusal of sub-rule (3) of Rule 8 of the Rules, 1990 suggests that "if, due to any miscalculation or error any amount has been charged in excess from any person such person may within two days of such payment, apply to the Taxation Officer of the Local Council for the refund of the amount charged in excess." It is admitted fact that against the overcharged exit tax, datewise detail of which has been mentioned hereinabove, first application was submitted much beyond the period of limitation. Secondly the applications submitted for recovery of 11 times penalty on overcharged amount was not claimed as per the provisions of rules. Statedly on the recommendations of competent authority overcharged amount was paid from securities of the contractors, available with the departments. Later on appellants re-agitated their claim for the recovery of the amount of penalty much after the period of termination of the contract obviously beyond the period of limitation i.e. two days under rule 8(3), therefore, their claims were rightly declined. Besides in the meantime the securities retained by the principal were released, because till then the appellants had not succeeded in getting their claim registered for recovery of the amount of penalty but despite of it, department had taken steps for effecting the recovery of this amount as land revenue for which statedly proceedings are still pending without any positive result. As far as the contention of learned counsel for the appellant (Maj. (Rtd.) Khawar Muhammad Yousaf) that after the termination of the lease contract awarded by the Zila Council to the contractor, it is the principal who had to pay the amount. It may be noted that according to section 233 of the Contract Act in cases where the agent is personally liable, a person dealing with him may hold either him or his principal, or both of them, liable. Admittedly the contractor was authorized to collect export tax on behalf of Zila Council and appellant can press his claim against Zila Council but he should file his claim within prescribed time by joining the contractor as party as well. In the instant case he himself had not demanded 11 times penalty on the overcharged amount originally and subsequently on having accepted the overcharged amount submitted a time-barred claim not to the relevant quarters but to the Chief Minister C who otherwise has no jurisdiction to adjudicate upon the matter. Under the circumstances of the case it was imperative upon the appellant to have joined contractor as a party as well. More particularly when he was aware that the claim is being lodged much beyond the period of limitation of two days for making such recovery from the contractor as per rule 8(3) and also for an added reason that after the termination of his contract securities have been released to him. Had appellant put up his claim strictly according to rules, then there would have been no impediment for him in getting relief. In the judgment which has been relied by the learned counsel it has also been held that section 233, Contract Act, enacts substantive law, laying down who shall be held liable, and does not merely lay down the procedure by which the liability may be enforced. It is further observed that this section merely creates a joint liability so that judgment may be obtained against both principal and agent. Therefore, it has not advanced the case of appellants in any manner.

8. Thus, for foregoing reasons, appeals are dismissed with no order as to costs. S.A.K./M-176/SC?????????????????????????????????????????????????????????????????????????????? Appeals dismissed.