Holding

The Supreme Court held that the officer’s acts were performed in discharge of duties under the Act and therefore Section 48 applies, making the suit non‑maintainable without prior government sanction.

Summary

The brothers Bachha Lal and others sued a Sales Tax Officer of the State of Madhya Pradesh alleging that he abused his powers to conduct illegal searches, revoked their sales‑tax registration and lodged a false criminal complaint under Section 353 IPC, leading to a malicious prosecution claim. The trial court held the suit barred under Section 48 of the Madhya Pradesh General Sales Tax Act, 1958, which requires prior government sanction for any proceeding against a public officer acting under the Act. The High Court reversed, contending that the claim was for malicious prosecution and that Section 48 did not apply, invoking the analogy of Section 197 CrPC. On appeal, the Supreme Court affirmed the trial court’s view, observing that the officer’s actions were performed in the discharge of duties under the Act and therefore fell within the protection of Section 48. Consequently, the appeal was allowed and the High Court judgment set aside, directing that the suit could be reinstated only after obtaining the requisite sanction.

Issues considered

Whether a civil suit for malicious prosecution against a Sales Tax Officer is barred by Section 48 of the Madhya Pradesh General Sales Tax Act, 1958 requiring prior sanction of the State Government.
Whether the analogy of Section 197 of the Code of Criminal Procedure applies to bar the requirement of prior sanction.

Legislation cited

Code of Civil Procedure, 1908s. Order 23 Rule 1(3)(a)
Code of Criminal Procedure, 1973s. 197
Indian Penal Code, 1860s. 353

Subjects

malicious prosecutionsales tax officerSection 48prior sanctionadministrative immunitygood faithM.P. General Sales Tax ActCPC Order 23Section 197 CrPC

Judgment

I
- . STATE OF MADHYA PRADESH & ANR.
v.
A

BACHHA LAL & ANR.

JUNE 21, 2007

[DR. ARlJIT PASA YAT AND ALTAMAS KABIR, JJ.] B

M.P. General Sales Tax Act, 1958; S.48/Code of Civil Procedure, 1908;
0.23 R.1(3)(a)/Penal Code, 1860; S.353/Code of Criminal Procedure, 1973;
S.197:
c
11/egal gratification-Sales Tax Officer allegedly harassing respondents-
businessman in order to extract illegal gratification-Filing of suit against
the officer without obtaining permission from the State Government in terms
of S.48of1958 Act-Maintainability of the suit-Held: The acts done by the
Officer were in discharge of duties entrusted to him under the Act-Hence, D
Trial Court was justified in holding that in the absence of previous sanction
of the State Government to prosecute the Officer, the suit was not
maintainable-The High Court has not considered the provisions of law in
the proper perspective.

Plaintiffs/respondents are brothers carrying on a business. Appellant E
No.2 at the relevant time was Sales Tax Officer in the employment of appellant
No. I, State of Madhya Pradesh. Respondents alleged that appellant No.2 in
order to extract illegal gratification from them conducted illegal search and
seizure under the provisions of M.P. General Sales Tax Act, 1958 and also
raised heavy demands of tax, got their Sales Tax registration certificate F
revoked and also lodged a report under Section 353 of Indian Penal Code,
1860 with the police, resulting in prosecution of respondent No.2. However,
he was acquitted thereafter. The respondents claimed damages on account of
malicious prosecution. They averred that the report lodged by appellant No.2
was not true; and that the suit was barred in view of provisions of Section 48
of the 'Act'. G
Trial Court held that the suit was not maintainable since permission of
the State Government is required under Section 48 Of the Act. Accordingly
the trial court directed that suit be permitted to be withdrawn under Order

1169 H
1170 SUPREME COURT REPORTS (2007] 7 S.C.R.

A 23 Rule 1(3)(a) of the Code of Civil Procedure, 1908 with a liberty that they J -
may institute fresh suit after obtaining necessary permission from the State
Government in terms of S.48 of Act. Respondents challenged the order of
the trial court on the ground that the cause of action as has been shown in
the plaint was based on malicious prosecution on the basis of the report of
B the appellant No.2 under Section 353 IPC and, therefore, the question of
seeking permission under Section 48 of the Act does not arise. The petition
was allowed by the High Court. Hence, the present appeal.

Respondent submitted that in a case relating to malicious prosecution
the analogy of Section 197 Cr.P.C. had to be applied and the Act has nothing
C to do with the jurisdiction.

Allowing the appeal, the Court

HELD: 1.1. The language of Section 197 Cr.P.C. is somewhat different.
The language used in Section 48 of the M.P. General Sales Tax Act relates to
D acts done or intended to be done under the Act. Further sub-section l(a) of
Section 48 provides that no officer or servant of the State Government would
be liable in respect of any such Act referring to acts referred to in sub-
section (1) for which act was done in good faith in the course of execution of
duty imposed on him or discharge of function entrusted to him by or under
the Act, and the power relates both to Civil and Criminal proceedings.
E (Para 121 (1173-B, CJ

1.2. The acts done by appellant No.2 were in discharge of duties entrusted
to him under the Act. That being so the trial court was justified in holding
that Section 48 of the Act is clearly applicable. The High Court has not
considered the relevant provisions of law in the proper perspective.
F (Para 12) (1173-E, F)

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2904 of2007.

From the Final Judgment and Order dated 04.07.2002 of the High Court
of Madhya Pradesh at Jabalpur (M.P.) in M.A. No. 1674 of 1997.
G
Siddhartha Dave, Vibha Datta Makhija and Dhannendra Kumar Sinha for

-
the Appellants.

B.K. Satija for the Respondents.

H
)

ST ATE OF MAD HY A PRADESH i·. BACHHA LAL (PASA YAT. J. J 1171

- . The Judgment of the Court was delivered by

DR. ARIJIT PASAYAT, J. 1. Leave granted.
A

2. Challenge in this appeal is the order passed by a learned Single Judge
of the Madhya Pradesh High Court. Challenge before the High Court was in
a Misc. Appeal in Civil Revision which has later converted to the Misc.. B
Appeal relating to the judgment dated 15.11.1995 in Civil Suit No. 4-B/92
passed by a learned Second Additional District Judge, Shahdol deciding
issue No. 7 framed in the suit.

3. Background facts in a nutshell are as follows:
c
Plaintiffs/respondents are brothers carrying on business in partnership
at Shahdol. Appellant No.2 at the relevant time in the year 1981 was Sales Tax
Officer in the employment of appellant No. I State of Madhya Pradesh. It was
averred by the plaintiffs respondents that the appellant No. I in order to
extract illegal gratification and to pressurize the respondents, misusing the D
office, conducted illegal search and seizure under the provisions of M.P.
General Sales Tax Act, 1958 (hereinafter referred to as 'Act' for short). He als_o
raised heavy demands of tax and penalty and also got revocation of the Sales
Tax registration certificate of the appellants. The respondent No. I also lodged
a report under Section 353 of Indian Penal Code, 1860 (in short 'l.P.C.') with
the police, resulting in prosecution of respondent No.2. E
However, he was subsequently acquitted. The respondents, therefore,
claimed damages on account of malicious prosecution, as would be clear from
para I 0 of the plaint.

The defendants/appellants resisted the claim. They averred that the F
report lodged by defendant/appellant No. I was not true. It was based on
falsehood. It was also pleaded that the suit was barred in view of provisions
of Section 48 of the 'Act'

4. The learned trial Court framed several issues inc_luding Issue No. 7 as
to whether the suit was not maintainable as against the defendant No.2 in G
view of Section 48 of the Act.

)
5. Initially the case was fixed for recording evidence on all the issues.
However, subsequently the prayer of the appellants to try Issue No.7 as
above a preliminary issue, was accepted and after hearing the parties on the
H
1172 SUPREME COURT REPORTS (2007) 7 S.C.R.

A said issue trial court held that the suit to be not maintainable.
t -
6. The trial court held that the basic grievance of the present respondents
related to action of the present appellants' officials in making search and
alleged obstructions in the official duties. It was therefore held that the suit
was not maintainable since pennission of the State Government is required
B under Section 48 of the Act. Accordingly the trial court directed that suit be
permitted to be withdrawn under Order 23 Rule 1(3)(a) of the Code of Civil
Procedure, 1908 (in short the 'CPC') with a liberty that they may institute
fresh suit after obtaining necessary permission from the State Government.

7. There was a challenge by respondents on the ground that the cause
C of action as has been shown in the plaint was based on malicious prosecution
on the basis of the report of the defendant No. 2 under Section 353 IPC and,
therefore, the question of seeking permission under Section 48 of the Act
does not arise.

D 8. The High Court accepted the plea and held that Section 48 had no
·application.
·~
9. In support of the appeal it is submitted that a bare reading of Section
48 makes the position clear that the High Court's judgment is unsustainable.

E 10. Learned counsel for the respondent on the other hand submitted
that in a case relating to malicious prosecution the analogy of Section 197
Cr.P.C. had to be applied and the Act has nothing to do with said jurisdiction.

11. Section 48 of the Act reads as follows:

"(I) No suit, prosecution or other proceedings shall lie against
F
any officer or servant of the State Government for any act done or
purporting to be done under this Act, without the previous sanction
of the State Government.

(I-a) No officer or servant of the State Government shall be liable
G in respect of any such act in any civil or criminal proceeding if the
act was done in good faith in the course of the execution of duties.
imposed on him or the discharge of function entrusted to him by or
under this Act.

(2) No suit shall be instituted against the State Government and
H no prosecution or suit ·shall be instituted against any servant of the
STATEOFMADHYAPRADESH v.BACHHALAL[PASAYAT.J.) 1173

State Government in respect of any thing done or intended to be done A
- ·- under this Act unless the suit or prosecution has been instituted
within three months from the date of the act complained of:

(Provided that in computing the period of limitation under this
sub-section, the time taken for obtaining sanction under sub-section
(I) shall be excluded.)" B
12. The language of Section 197 Cr.P.C. is s0mewhat different. The
language used in Section 48 of the Act relates to acts done or intended to
be done under the Act Further sub-section l (a) of Section 48 provides that
no officer or servant of the State Government would be liable in respect of
any such Act referring to acts referred to in sub-section (l) for which act was C
done in good faith in the course of execution of duty imposed on him or
discharge of function entrusted to him by or under the Act, and the power
relates both to Civil and Criminal proceedings. Undisputedly a raid was
conducted. It appears that the raid was purportedly conducted under Section
29 of the Act. It is to be noted that the requirements are absolute in terms D
of Section 48 of the Act. It was highlighted by learned counsel for the
respondent that a bare perusal of the order of acquittal passed shows that
the acquittal was purportedly recorded on the basis of findings that the
accused prevented the officials to make search and he abused the Sales Tax
Officer and its subordinates. Only on the basis of alleged abuse and threat
to him Section 353 IPC was invoked. The reasoning related to non-recording E
of reasons before the search. Correctness of such a view is open to doubt
but that has really no relevance so far as present dispute is concerned.
Undisputedly the acts done were in discharge of duties entrusted under the
Act. That being so the trial court was justified in holding that Section 48 of
the Act is clearly applicable. The High Court has not considered the relevant F
provisions of law in the proper perspective. The judgment of the High Court
is accordingly set aside.

13. Appeal is allowed. Costs made easy.

S.K.S. Appeal allowed.

'