ivil Appeal No 4160 of 1989
From the Judgment and Order dated 2431988 of the Karnataka High Court in WA No 637 of 1985
section Ganesh AC Gulati and B B
Sawhney for the Appellants
TS Krishnamurthy Iyer and N Nettar for the Respondents
The Judgment of the Court was delivered by SABYASACHI MUKHARJI J
Leave granted
356 This is an appeal from the judgment and order of the Division Bench of the High Court of Karnataka dated 25th March 1988
There was a notification under section 982 of the City of Bangalore Municipal Corporation Act 1949 dated 4th March 1975 levying octroi inter alia on food drinks including milkfood brought into the municipal limits of Bangalore for sale consumption or use
On 8th October 1976 representation was submitted on behalf of the peti tioners HMM Limited protesting against levy of octroi on Horlicks milkfood powder brought into the municipal limits in bulk containers Large steel drums for being packed at the packing station in Bangalore in Unit containers glass bottles and thereafter exported outside the municipal limits
In respect of the quantity of the goods which were exported outside the municipal limits after being bottled the petitioners sought refund of the octroi duty as there was no use or consumption or sale of the said milkfood within the municipal limits
The respondent corporation rejected the claim on the ground that rule 24 of the Byelaw 45 framed by the Municipal Corporation had not been complied with and as such refund could not be given
The petitioners again sought on 4th February 1978 refund of octroi duty for the period 1974 75 to December 1977 amounting to Rs 133965292 enclosing computation of the duty collected for the aforesaid period
Again the  refund was refused by the respondents in March 1978
Petitioners thereafter filed writ petition in the High Court of Karnataka challenging the levyretention of octroi duty on Horlicks exported out of the municipal limits and seeking refund thereof
From 1st April 1979 levy of octroi on milkfood was totally abol ished in Karnataka
Learned Single Judge of the High Court on 1st February 1984 allowed the writ petition and direct ed that the amount of octroi duty collected for the period commencing three years prior to the filing of the writ petition be verified within 3 months and refunded within 45 days thereof
Learned Single Judge noted that the case of the petitioners was that it was engaged in the manufacture and sale of a malted milk product marketed under the brand name Horlicks
The petitioner used to manufacture the said product in its two factories situated at Nabha in the State of Punjab and Rajahmundhry in the State of Andhra Pradesh and marketed these throughout the country through its bot tling and marketing centers situated in different parts of the country
One such centre was situated in the city of Bangalore to which it brought its said product in bulk then rebottled the same in small bottles of different capacities like 800 gms 450 gms and 250 gms
It was the case of peti tioners that small portion of the product rebottled in small bottles alone was sold within the city of 357 Bangalore to its dealers and the rest was exported to its agents situated in different parts of the State and other nearby places of the country also
In this connection it may be mentioned that rules 24 to 27 of the relevant Bye laws were as follows 24
On all articles on which octroi duty has been paid and which are subsequently exported beyond the octroi limits without breaking bulk refunds shall subject to the following rules be granted at the rates originally charged at the time of import provided that no such refunds shall except in the case of timber imported and re exported in log be granted unless such goods are exported within three months from the date on which octroi was levied
Any person claiming refund under the above bye laws shall produce the goods to be exported at the Central Octroi Office togeth er with the Original receipt for octroi duty paid thereon and an application for refund prepared in triplicate in the form prescribed in Schedule V He shall fill up columns 1 to 10 of the application signing and dating the same before he presents it at the Central Octroi Office
He shall produce for record in office a certified copy of the invoice as per which duty was paid on the article at the time of its import
Any person who has been exempted under bye law No 10 from production of goods at the Central Octroi Office on import shall subject to the same conditions he exempted from the production of goods to be exported
The Octroi Superintendent of the Central Octroi Office on being satisfied as to the identity of the goods produced with those for which the receipt has been granted or the validity of the claim shall fill up columns 11 to 15 and also the coupon and handover the form to the exporter
 There is no dispute that on the entire quantity of the goods brought within the municipal limits octroi was col lected from the petitioner
It claimed for refund only in respect of those quantities which were rebottled and export ed from the city to outside places
This was refused
The contention of the petitioners was that only that portion of the goods which was imported in drums and was rebottled in 358 bottles and exported outside the city was not liable to duty of octroi
It was contended before the learned Single Judge that portion of the goods was not dutiable to octroi as these did not fall within the term sale consumption or use within the local area of the city of Bangalore
When the petitioner approached the High Court rule 24 aforesaid of the Bye law 45 was in force
Octroi was however abol ished with effect from Ist April 1979
The question that was canvassed before the learned Single Judge of the High Court was that when the product was imported in bulk in the city only for rebottling and rebottled in small bottles for the consumer requirements and marketed there could not be consumption or sale of that product
On the other hand it was contended that in any event it is a case of use  to attract levy of octroi
The Horlicks powder remains the same even after packing as was held by Mittal J of the High Court of Punjab in CWP No 19873 of 1977
In that case the Horlicks powder in drums was sold direct to bulk consum ers
It was held that the Horlicks powder remains the same after packing
It does not become different commodity
It also cannot be held that it acquired distinct commercial utility according to Mittal J Therefore in that context Mittal J held that the packing of the Horlicks powder in small bottles does not fall within the ambit of the word use  and therefore the petitioner in that case was not liable to the charge of octroi for its import within the limits of the city
This decision was affirmed by the Divi sion Bench
It was contended that in the judgment before Mittal J packing was entrusted to a separate agency but it does not make any difference according the learned Single Judge of Bangalore
Therefore the learned Single Judge in this case found that only on that quantity of milk product imported by the petitioner in bulk but rebottled in small bottles at its Bangalore bottling station and export ing from the city to other places for sale in those places and not using the same in Bangalore city was not dutiable to octroi till that levy was in force
The learned Single Judge therefore held that the amounts so levied and col lected as octroi for a period of three years prior to the presentation of the writ petition only and not beyond that are refundable by the respondents to the petitioner
He directed refund and pursuant to this direction the learned Single Judge further directed that the same may be verified
We were informed that the same has been verified
There was an appeal to the Division Bench of the High Court
The question before the Division Bench was whether the Corporation was liable to refund that part of the amount of octroi duty paid by the petitioners on the quantity of the Horlicks powder imported into the city of Bangalore on the petitioners  informing the Corporation that 359 they had despatched that part of the same from time to time by filing the same in bottles to places outside the city of Bangalore even though petitioners had not followed the procedure prescribed in rules 24 and 25 of Bye law No 45 flamed by the Corporation and even though they had not even informed of such despatches as and when these were made Item 17 of the notification dated 4th March 1975 as mentioned before so long as it continued was as follows 17
Confectionary biscuits toffee chocolates food essence food coloured aerated water and soft drinks food drinks other than milk in condensed form bottled or canned arecounts both scomted or plain
2 006 ps
ad valorem 10 Kg
 The Division Bench noted that in terms of the aforesaid levy the petitioners were paying octroi on the basis of the total quantity of Horlicks imported into the city of Banga lore
Then a letter was addressed on the 8th October 1975 to the Corporation of the city of Bangalore which was set out in the judgment of the Division Bench
In the said letter it was inter alia stated that the petitioners were not bringing the goods within the municipal limits for use or consumption therein and as such the imposition of octroi was illegal and unwarranted and that the petitioners had paid under protest the amount and claimed the refund
The petitioners claimed only the octroi paid on the goods which were exported outside the city of Bangalore and not used or consumed within the city
The petitioners further stated inter alia as follows The petitioner is willing to differentiate the goods intended to be used consumed within the octroi limit of Bangalore and the goods which are exported out of the limits of Banga lore and not used or consumed therein appro priately in order to facilitate movements of goods and avoid difficulties to the octroi incharge The Corporation turned down the demand
The Division Bench noted that the petition was resisted by the respondent on to grounds 1
The transferring of Horlicks imported in bulk into the 360 city of Bangalore into bottles amounts to use of the Horlicks within the city of Bangalore notwithstanding the fact that a part of the total number of bottles were despatched out side the city of Bangalore
The octroi collected on the Horlicks im ported into the city of Bangalore was in accordance with law and unless the procedure prescribed under rules 24 and 25 of Bye law 45 was followed no obligation or duty was cast on the part of the Corporation to refund any part of the octroi collected
 The Division Bench of the High Court in the decision under appeal observed that as far as the first ground raised was concerned the learned Single Judge had rejected the claim and held that when the Horlicks powder was transferred into bottles of different sizes it did not use Horlicks within the city of Bangalore
In this connection the Divi sion Bench referred to the decision of Burmah Shell Oil Storage  Distributing Co of India Ltd Belgaum vs Belgam Borough Municipality Belgaum 1963 2 Supp
SCR 2 16
This Court in that case held that mere transferring of a bulk product into small containers like packets or bottles for the purpose of sale does not amount to use of the goods in the sense the word is used in relation to levy of octroi
On this aspect the Division Bench agreed with the learned Single Judge
So far as the second contention raised by the Corporation was concerned the Division Bench noted that the relevant provision of the rules was not considered
We have set out hereinbefore the said rules
In the Schedule there is a form for refund
The contention of the petitioners was that rule 24 did not apply
Rule 24 as we have noticed hereinbefore provided that in respect of articles on which octrio has been paid and which are subsequently exported beyond the octroi limits without breaking bulk  refunds shall be subject to the rules indicated therein
So accord ing to the petitioners after opening or breaking open the drums and putting the powder in the bottles as in this case amount to breaking bulk and as such there was no scope of applying for refund under Rule 24
But the Corporation contended that it was not so
The Division Bench however accepted the contention of the Corporation
It is indubita bly true that the petitioners had not claimed the refund in accordance with the law because according to the petitioners the said rules would have no application as the bulk was broken
The Division Bench however observed that the petitioners in their letter addressed to the Commissioner have specifically stated that the goods were subsequently exported outside the city of Banga 361 lore as envisaged by Bye law 24 of notification No NAI53 of 1952 53 dated 5th April 1954
Regarding the expression without breaking bulk the Division Bench of the High Court was unable to accept the contention that the bulk of the goods on which the octroi has been paid was transferred to containers of small sizes and despatched outside the city the bulk was broken
But the question was whether in such a situation it can be said that it was done without breaking the bulk
The Division Bench was of the view that having regard to the rule and having regard to the fact that it was imported into the city of Bangalore and was to be despatched outside the city of Bangalore in the same form ie without the same having been used or sold or consumed in the production or manufacture other goods the person concerned can only claim refund in accordance with the rules
Therefore according to the Division Bench no importance can be attached to the expression without breaking bulk on despatches of the goods
Refund could be claimed only on despatches of the goods outside the city for octrio is leviable only if the goods imported into the city are consumed used or sold within the city
Therefore bulk  in the view of the Division Bench was in fact broken and the petitioner not having applied in accordance with rules 24 and 25 no amount could be refunded to the appellant
In that view of the matter the appeal was al lowed by the Division Bench and the judgment of the learned Single Judge was reversed
It may be mentioned that there is no dispute that the Horlicks powder was brought in bulk in drums
At the rele vant time there was levy of octroi at the entry of such goods
After being imported it has been found that the entirety of the Horlicks powder had not been sold
A part of the powder has been put in the bottles and exported outside the city of Bangalore
It has been found by the Division bench that putting powder from the drums to the bottles inside the city is not user or consumption as contemplated by the rule
And on that no octroi duty was leviable
In this case also it has been found pursuant to the order of the learned Single Judge how much octroi will be refundable on account which has been paid by the petitioners
The only ground on which the Division Bench had resisted the refund was that the petitioners did not apply in accordance with the procedure envisaged by rules 24 and 25 of the aforesaid Bye laws
Mr Krishnamurthi Iyer learned counsel for the respondent contended that the High Court was right in the view it took on the construction of rules 24 25 and 26
We are unable to agree with this submission
As we have indi cated before without breaking bulk is not an expression of art nor is it an expression defined in the Act or the rules
It has therefore to be construed 362 in its literal and ordinary sense to the extent possible and construed as it is in our opinion transferring the product from the drums by breaking seal of the drums to bottles cannot be said to be without breaking bulk
Breaking bulk is an expression not unknown to legal termi nology especially in England
In the Cyclopedic Law Diction ary 3rd Edn breaking bulk has been stated to mean that for a bailee to open a box or packaging entrusted to his custody and fradulently appropriate its contents
In Stroud s Judicial Dictionary 4th Edn Vol 1 it has been stated that to break bulk  is not now necessary to consti tute larceny or theft by a bailee
It is stated that the cases were very numerous and turned on nice distinctions as to what amounted to breaking bulk
In the Dictionary of English Law by Earl Jowitt breaking bulk has been defined as that at common law there could be no larceny of goods which had originally been lawfully obtained by a person who subsequently wrongfully converted them to his own use unless such conversion was preceded by some new act of taking
It that is so we are unable to agree with the construction suggested by the Division Bench
It was con tended that the octroi was leviable on the entry of the goods in the municipal limits of the city but the Horlicks powder had not entered into the local limits of Bangalore for the purpose of use or consumption as understood in the decision of the Burmah Shell s case supra and as found both by the learned Single Judge and the Division Bench that putting the powder from the drums to the bottles for the purpose of exporting or for taking this out of the city is neither use nor consumption of the Horlicks powder attract ing the levy of octroi
Certainly the bulk was broken in the procedure followed
The High Court was wrong in putting the construction on the expression as it did
Mr Iyer sought to raise before us the plea that in a case where refund is due in respect of the duties like this whether petitioners would be entitled to refund on the basis that refund cannot be given because there was possibility of undue enrichment of the claimant is pending before the Seven Judge Constitution Bench in this Court
Therefore it was submitted that we should await the said decision or refer the matter to the Constitution Bench
Octroi in this case is a duty on the entry of the raw materials for coming in
It is the duty on the coming in of the raw materials which is payable by the producer or the manufacturer
It is not the duty on going out of the finished products in re spect of which the duty might have been charged or added to the costs passed on to the consumers
In such a situation no question of undue enrichment  can possibly arise in this case
If that is the position then the pendency of the question before the Constitution Bench should not deter us from proceeding with this adjudication
363 Shri Ganesh drew our attention to a decision of this Court in Kirpal Singh Duggal vs Municipal Board Ghaziabad  There the appellant had transported between August 1953 and March 1955 certain materials in execution of a contract to supply goods for use by the Government of India
The respondent Municipality collected toll while the appellant s trucks were passing through the toll barrier
The appellant in that case obtained in June 1955 a certificate from the authority concerned that the goods transported were meant for Government work and had become the property of the Government
The appellant then applied to the Municipality for refund of the amount paid pursuant to the exemption granted by the Government of India under the UP Municipalities Act 1916
The respondent declined to refund the amount
In an action against the respondent the trial court decreed the claim
The High Court affirmed the order of the Civil Judge
Both the Civil Judge and the High Court took the view that by the rules framed under the Act an application for refund within six months from the date of actual payment is a condition prece dent for refund of the toll
The party appealed to this Court
This Court was unable to accept this contention Shah 3 as the learned Chief Justice then was speaking for this Court noted that the respondent therein had contended that the rules framed by the Government regarding the procedure constituted a condition precedent to the exercise of the right to claim refund and recourse to the civil court being conditionally strict compliance to that procedure was necessary for obtaining any decree in civil court
Allowing the appeal this Court held that this contention was untena ble
Shah J observed at p 555 of the report as under The rules framed by the Government merely set up the procedure to be followed in preferring an application to the Municipality for obtain ing refund of the tax paid
The Municipality is under a statutory obligation once the procedure followed is fulfilled to grant refund to the toll
The application for refund of the toll must be made within fifteen days from the date of the issue of the certificate and within six months from the date of payment of the toll
It has to be accompanied by the original receipts
If these procedural re quirements are not fulfilled the Municipality may decline to refund the toll and relegate the claimant to a suit
It would then be open to the party claiming a refund to seek the assistance of the court and to prove by evidence which is in law admissible that the goods transported by him fell within the order issued under section 1573 of the Act
364 The rules framed by the Government relating to the procedure to be followed in giving effect to the exemptions on April 15 1939 do not purport to bar the jurisdiction of the civil court if the procedure is not followed
In our judgment the Civil Judge and the High Court exalted what were merely matters of procedure which the Municipality was entitled to require compliance with in granting refund into conditions precedent to the exercise of juris diction of the civil court
It is impossible on a bare perusal of the order issued by the Government and the rules framed by it to give to the order and the rules that effect These observations in our opinion in view of the contentions raised on behalf of the Municipality here are apposite in this case
The aforesaid Rule 24 does not apply
In that view rules 25 and 26 have no scope of application
Indubitably amounts have been realised as octroi on the entry of the goods on which octroi was not leviable because these were not for use or consumption within the municipal limits
Mere physical entry into the city limits would not attract the levy of octroi unless goods were brought in for use or consumption or sale
In this case putting the powder from the drums to the bottles for the purpose of exporting or taking these out of the city is neither use nor consump tion of the Horlicks powder attracting the levy of octroi
Such amounts therefore cannot be retained by the respond ent Corporation
There is no dispute as to the quantum in view of the fact that the amount has now been found to be certified to be credited pursuant to the direction of the learned Single Judge of the High Court
We see no ground as to why amount should not be refunded
Realisation of tax or money without the authority of law is bad under Article 265 of the Constitution
Octroi cannot be levied or collected in respect of goods which are not used or consumed or sold within the municipal limits
So these amounts become collec tion without the authority of law
The respondent is a statutory authority in the present case
It has no right to retain the amount so far and so much
These are refundable within the period of limitation
There is no question of limitation
There is no dispute as to the amount
There is no scope of any possible dispute on the plea of undue en richment of the petitioners
We are therefore of the opinion that the Division Bench was in error in the view it took
Where there is no question of undue enrichment in respect of money collected or retained refund to which a citizen is entitled must be made in a situation like this
We therefore hold that amounts should be refunded subject to 365 the verification directed by the learned Single Judge of the High Court of the amount of refund
The appeal is thus allowed
The Judgment and the order of the Division Bench of the High Court are therefore set aside
In the facts and the circumstances there will be no orders as to costs
RSS Appeal allowed


Summary:
The appellant company is engaged in the business of transport of goods and parcels in Southern India and for that purpose has appointed agents at various stations
The respondent was one such agent appointed at Madras
As pro vided in clause III of the Contract the respondent was to arrange a suitable godown and engage employees
The Company took on lease a godown at No 10 Srinivasan Road T Nagar Madras and the same was put in possession of the respondent for the purpose of carrying on his agency business of the Company
During the course of the Company s audit it transpired that the Respondent not only mismanaged the business but had misappropriated some of the income of the company
The appellant therefore terminated his agency with effect from 14101988 in terms of clause XI of the Contract and in formed him that the company would be taking possession of the Godown premises for carrying on the business on its own as provided in the contract
Thereafter the respondent was informed by a letter that the company has taken possession of the Godown on 151088 and another agent R Sundarajan had been appointed in his place
But the respondent prevent ed R Sundarajan and also the company from carrying on the business at the godown premises
The company therefore filed a suit for declaration of its right to carry on the business in the premises and for a permanent injunction restraining the respondent from interferring with its pos session on the ground that after the termination of the agency of the respondent the company acquired a right to carry on the business of the company and further the company had since acquired the possession of the premises on 151088
Pending decision of the suit the appellant prayed for the issuance of a temporary injunction
The Trial Judge of the Madras High Court granted temporary injuction re straining the 411 respondent from interfering with the appellant s business but on appeal by the respondent the Division Bench of the Madras High Court vacated that temporary injunction
Hence this appeal by the appellant company
Allowing the appeal this Court HELD Under law revocation of agency by the Principal immediately terminates the agent s actual authority to act for the Principal unless the agent s authority is coupled with an interest as envisaged under section 202 of the 
When agency is revoked the agent could claim compensation if his case falls under section 205 or could exercise a lien on the Principal s property under section 221
The agent s lien on Principal s property recog nised under section 221 could be exercised only when there is no agreement inconsistent with the lien
416B C In the present case the terms of the agreement by which the respondent was appointed as agent expressly authorise the company to occupy the godown upon revocation of agency
Secondly the lien in any event cannot be utilised or taken advantage of to interfere with Principal s business activi ties
416C D An agent who receives property or money from or for his Principal obtains no interest for himself in the property
When he receives any such property he is bound to keep it separate from his own and that of others
416E See Foley vs Hill All ER Reprint 16 at 198 It is not every agent who is in a fiduciary position vis a vis his principal
For example if A  appoints B  to be his agent merely to sign a memorandum and places no particular trust in B  the doctrine of fiduciary relations would not apply
Likewise where the Principal authorises an agent to do particular and specified acts the doctrine of fiduciary relation may not arise
418C D In this case the respondent s possession of the suit premises was on behalf of the company and not on his own right
It is therefore unnecessary for the company to file a suit for recovery of possession
The respondent has no right to remain in possession of the suit premises after termination of his agency
He has also no right to interfere with the Company s business
The case therefore deserves the grant of temporary injunction
419F G 412 Smt
Chandrakantaben and Anr
vs Vadilal Bapalal Modi and Ors 1989 2 SCC 630 at 643 Narayani Amma vs Bheska ran Pillai AIR 1969 Kerala 214 Abdul Nabi Sahib vs Bajab Sahib  Anr AIR 1944 Mad 221 and Jamma vs Reghu AIR 1977 Orissa 12 referred to