Confiscated goods and retained sale proceeds: suit not barred, conversion claim fails, but money had and received may be recovered.

Section 40 of the Central Excise and Salt Act did not bar the suit because the officers had already received redemption fine, penalty and duty, and the later sale of confiscated tobacco was treated as outside acts done under the Act. A claim framed as damages for conversion against the Union of India was not maintainable. However, because the sale proceeds were deposited in the Government Treasury and retained by the State, the owner could recover that amount as money received for his use on equitable principles, within Article 62 of the Limitation Act. The decree was therefore reduced to the sale proceeds actually retained.

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Issues: (i) whether the suit was barred by section 40 of the Central Excise and Salt Act, 1944; (ii) whether a suit for damages for conversion of confiscated tobacco was maintainable against the Union of India; (iii) whether the plaintiff was entitled to recover the sale proceeds deposited in the Government Treasury.

Issue (i): Whether the suit was barred by section 40 of the Central Excise and Salt Act, 1944.

Analysis: Section 40 bars suits in respect of acts done under the Act, but the officers had already received the redemption fine, penalty and duty and thereafter sold the confiscated goods. On that footing, the sale was treated as without jurisdiction and outside the scope of acts done under the Act.

Conclusion: The suit was not barred by section 40.

Issue (ii): Whether a suit for damages for conversion of confiscated tobacco was maintainable against the Union of India.

Analysis: The claim, as framed, was for damages for the tort of conversion. Such a claim against the Union of India was held not maintainable, following the principle that liability for such a tort could not be enforced in that form against the State.

Conclusion: The suit for damages for conversion was not maintainable.

Issue (iii): Whether the plaintiff was entitled to recover the sale proceeds deposited in the Government Treasury.

Analysis: The sale proceeds of the confiscated tobacco had been deposited in the Treasury and the Government had been benefited to that extent. The amount was treated as money received by the defendant for the plaintiff's use, recoverable on equitable principles and within the scope of Article 62 of the Limitation Act.

Conclusion: The plaintiff was entitled to recover the sale proceeds of Rs. 650.

Final Conclusion: The appeal succeeded only to the extent of reducing the decree to the amount of sale proceeds deposited in the Treasury, with proportionate costs.

Ratio Decidendi: Where confiscated goods are sold after the statutory purpose has been satisfied and the proceeds are retained by the Government, the owner cannot sue in conversion against the Union, but may recover the amount actually received and retained for his use as money had and received.

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