Holding

The doctrine of res judicata applies to writ proceedings, barring the State from raising a fresh claim for supervision charges that were already adjudicated, leading to the quashing of the demand notices.

Summary

The appellant, a liquor manufacturer, challenged the State's demand for supervision charges with retrospective effect and interest, arguing that a prior High Court decision had already settled the issue. The High Court dismissed the later writ petition, holding that the demand notices were illegal. The Supreme Court examined whether the doctrine of res judicata applies in writ proceedings and whether the State could raise a fresh claim for the same supervision charges after the earlier decision became final. Relying on earlier judgments, the Court held that res judicata does apply, preventing the State from re‑asserting the same claim. Consequently, the demand notices and circulars were quashed and the appeals were allowed with costs.

Issues considered

Does the principle of res judicata apply to writ proceedings involving the same parties and the same cause of action?
Can the State recover supervision charges with retrospective effect and interest after a prior judgment declaring such recovery illegal?
Are the demand notices and circulars issued after the earlier decision void as they constitute a fresh claim?
Do the demand notices violate Articles 14 and 19(1)(g) of the Constitution and the Bombay Prohibition Act?

Legislation cited

Bombay Prohibition Act, 1949s. 58-A
Code of Civil Procedure, 1908s. 11
Constitution of Indias. Article 14, s. Article 162, s. Article 19(1)(g), s. Article 309

Subjects

res judicatawrit jurisdictionsupervision chargesretrospective effectBombay Prohibition Actconstitutional lawArticle 14interestdemand notices

Judgment

i
t
~

1272 SUPREME COURT REPORTS [2008] 17 S.C.R. I

\.
A contending that the dispute had already been settled
between the parties by the High Court. During pendency ...
I

~-
of the writ petition, respondents withdrew the demand,
stating that such demand was made erroneously. Despite r
the withdrawal of the demand, High Court dismissed the
writ petition on the basis of judgment in Deokar Distillery
.~

B case. Hence the present appeals.
Allowing the appeals, the Court
HELD:1.1. Appellant in the previous writ petition, >..-
indisputably questioned the right of the respondents to
C recover the supervision charges with retrospective effect. ,
It was contended therein that no interest was payable on
the said charges. The said writ petition was allowed
opining that the difference in payment of supervision
charges was not recoverable. The order of the High Court
attained finality. It would, therefore, operate as resjudicata.
D [Para 14] (1279-E-G]
1.2. It is not correct to say that the demands were for
different charges, namely, one in respect of pay and the
other in respect of leave salary etc. The basis for both the
claims was the same. The principle of res judicata applies
E in a writ proceeding. No fresh demand could have been
raised by the respondents. The demand notices,
therefore, are quashed. [Paras 15 and 18] (1279-H; 1280-
A; 1281-G]
/shwar Dutt v. Land Acquisition Collector and Anr. (2005)
F 7 SCC 190 and Swamy Atmananda and Ors. V. Sri
Ramakrishna Tapovanam and Ors. (2005) 10 SCC 51, relied
on
*Maharashtra and Ors. v. Deokar's Distillery (2003) 5
sec 669, referred to
G Case Law Reference:
(2003) 5 SCC 669 Referred to Para 8
(2005) 7 SCC 190 Relied on Para 15 \ .
(2005) 10 SCC 51 Relied on Para 16
CIVIL APPELLATE JURISDICTION : Civil Appeal ~os.
H 7412-7413 of 2008.
KOPARGAON S.S.K. LTD. v. STATE OF MAHARASHTRA 1273
& ORS.

From the final Judgment and Order dated 23.9.2003 and A
13.11.2003 of the High Court of Judicature at Bombay Bench
• ~ at Aurangabad in Writ Petition No. 3050 of 2003.
WITH
..
C.A.Nos. 7414-7415 of 2008.
Arvind V. Savant, Arvind S. Avhad, S.D. Autade, Chandan B
, Ramamurthi and Shivaji M. Jadhav for the Appellant.
Chinmoy Khaladkar, Asha Gopalan Nair and T. Raja for the
,.. > Respondents.
The Judgment of the Court was delivered by c
S.B. SINHA, J. 1. Leave granted.
2. This appeal is directed against a judgment and order
dated 23.9.2003 passed by the High Court of Bombay at
Aurangabad in Writ Petition No.3050 of 2003 declining to
entertain the writ petitions filed before it. o
3. Appellant has been granted licence for manufacturing
spirit and potable liquor in terms of the provisions of the
Bombay Prohibition Act, 1949 and the Rules framed
thereunder. Respondents, indisputably, posted some of its
employees for supervision of the manufacure or sale of country E
liquor from the said factory. -
4. A demand was raised for a sum of Rs.7,43,686/-.
Admittedly, such supervision charges have been paid in
advance. The State, however, revised the salary of its
employees with retrospective effect from 1.1.1996 by F
Notification dated 10.12.1998 for the period 1.1.1996 to
31.12.1998. A communication dated 17.6.2000 was issued
calling upon the appellant to pay the arrears of supervision
charges for the period 1.4.1996 to 31.12.2000 amounting to
Rs.7,43,666/-
G
5. Questioning the legality and/or validity of the said claim,
a writ petition (No.4092 of 2000) was filed before the Bombay
High Court by the appellant praying for, inter alia, the following
reliefs:
"(B) Hold and declare that the demand notice dated H
1274 SUPREME COURT REPORTS [2008] 17 S.C.R.

A 17.6.2000 and August 2000 and the circular dated
17.6.1999, 30.7.1999 issued by the Respondents
\-- .. '>
,
2, and the demand notice issued by the
Respondent No.3 dated 17.6.2000 towards the
difference in the salary and wages, w.e.f'. 1.1.1996
i.e., retrospective effect towards the supervision
B
charges is therefore illegal, arbitrary and violative
of Article 14, 19(1)(g) of the Constitution of India;
and therefore strike down the same.
A-_..
(C) Issue a Writ prohibition or any other appropriate
Writ, order or directions in the nature of Writ of
c Prohibition prohibiting the Respondent Nos. 1 to 4,
their officers and subordinates from demanding
and/or recovering any amount towards the salary
and wages with retrospective effect from 1.1. 1996
as per the circular dated 30.7.1999 as per the
D demand notices dated 17.6.2000 and August 2000
and for that purpose issue necessary orders."
6. Similar other writ applications before the said court were _, ........
also filed. A learned Single Judge of the Bombay High Court,
by a judgment and order dated 7 .12.2000 passed in Writ
E Petition No.3501 of 2000 opined as under :
"We are also amazed to note that in spite of the fact that
the Government ·Of Maharashtra by notification dated
10.12.1998 decided to implement the Fifth Pay
Commission's recommendations, the respondents did not
F diligently and failed to claim the supervision charges at the
revised rates at least from 1.1.1999. For the first time,
such a demand has been raised on 30.5.2000."
, -...

7. The demand was held to be illegal. Following the said
decision, the writ petition filed by the appellant was allowed,
G holding:
"In view of our detailed judgment passed today on Writ
Petition No.3501/2000, we allow the petition. Karkhana is
liable to pay the supervision charges at the revised rates
from 1.7.2000 as the first demand notice for arrears for
the period from 1.1.1996 onwards was issued on
'
H
KOPARGAON S.S.K. LTD. v. STATE OF MAHARASHTRA 1275
& ORS. [S.B. SINHA, J.]

17.6.2000. Rule made absolute accordingly." A
Concededly, the said orders were not appealed against.
They attained finality.
8. One matter involving similar question, however, was
brought to this Court. The decision of this Court is since
reported in Government of Maharashtra & Ors. v. Deokar's B
Distillery [(2003) 5 SCC 669]. The majority opinion rendered
in the said decision, inter alia, reads as under:
"This apart, the High Court was also not right in rejecting
the writ petition of the respondents at the threshold. The
High Court has failed to notice another important factor that C
the statutory provision under Article 309, namely, the
Notification dated 10.12.1998 and the consequential
administrative instructions/orders issued for carrying out
the executive function under Section SSA of the Prohibition
Act and Article 162 namely, the circular letter dated 0
30. 7.1999 had not been challenged by the respondents
herein and, therefore, they were not entitled to challenge
the demand notice which was merely a consequential
communication. The High Court, therefore, is not right in
quashing the demand notice issued by appellant No. 4,
namely, the Sub-Inspector of State Excise, in charge of the E ·
manufactory of the respondent, without examining the
validity of or quashing the Rules of 1988 and the
consequential circular letter dated 30.7.1999 issued by
appellant No. 2, namely, the Commissioner, since the
demand notice was merely a consequential F
communication issued in furtherance of the Rules of 1998
and the circular letter dated 30.7.1999."
Pursuant to the said decision, the Commissioner of Excise
issued a circular letter, operative portion of which reads as
under: G
"Mis. Polychem Ltd. & Ors. v. Govt. of Maharashtra, the
Supreme Court had ruled in their decision on appeal
• :I No.3494/1991 that recovery of outstanding of supervision
charges with retrospective effect is illegal. Considering the
said decision the units who were provided supervision H
1276 . SUPREME COURT REPORTS [2008] 17 S.C.R.

A were informed vide above circular of this office that
presently the difference of enhanced supervision charges
with retrospective effect not be recovered. Further taking 'I-- ., .
support of Supreme Court above decision some units had
filed petitions in Mumbai High Court, Aurangabad and
Nagpur Bench and the decision on some of them was in
B
the favour of the units. A special petition is being filed in
Supreme Court against that decision. If the decision of it
is in favour of Govt. all the Superintendants were informed
that the outstanding amounts should be n~cessarily ,l ~
recovered with interest, vide above referred circular and
c instructions were issued to recover the difference of
outstanding.
Now Supreme Court has ruled that the orders to recover
outstanding of supervision charges with retrospective effect
are legal. This was the decision of Supreme Court on the
D Civil Appeal No. 7399/2001, 7400/2001 and 1302/2003
and Special Leave Petition No.22942/2001 in-Mis. Deokar
Distillery and others case on 10.3.2003.
1"' -.r-
Considering the above decision of Supreme Court, it is
necessary to recover from those units with whose
E difference in supervision charges with retrospective effect
are pending. Therefore, you are required to submit in the
attached format the details of suit outstanding from units
in your district and submit action taken report. Copy of
Supreme Court decision is sent to all Divisional Dy.
Commissioner along with this letter."
F
In terms of the said circular letter, the appellant was asked
to pay the dues of the supervision charges along with interest
,, ~

by the Deputy Superintendent, State Excise Duty, Kosaka by
a letter dated 26.6.2003. Appellant denied and disputed its
liability, inter alia, contending that the dispute between the
G
parties has been settled by the Bombay High Court in the
aforementioned Writ petition No.4092 of 2000. It was stated :
"The basis on which you demanded the recovery of the
difference amount that is wrong, as the said decision is
not applicable to us. By filing independent petition against
~ .
H
KOPARGAON S.S.K. LTD. v. STATE OF MAHARASHTRA 1277
& ORS. [S.B. SINHA, J.]

your demand notice, your demand is cancelled. You have A
no right to recover the said amount. This is the ruling of
the Supreme Court, which is still valid. Therefore, you
cannot demand the difference amount. This is our position, -
which we have put forward in our letter dated 12.6.2003.
It is for you to decide what to do. In spite of this, your office
8
is repeatedly issuing warning that action would be taken
if the amount is not paid immediately. This is not proper."
9. Notwithstanding the said contention, several other
demands were raised. It is in the aforementioned situation,
appellant filed another writ petition marked as W.P.No.3050 of C
2003, inter alia, praying for the following reliefs :
"(B) Hold and declare that, the said Maharashtra Civil
Services (Revised Pay) Rules, 1998 dated
11.12.1998 namely sub-section (ii) of Rule (1) is not
applicable to the Petitioners along with circular
dated 17.6.1999 and 30.7.1999 being illegal, D
arbitrary and violative of Articles 14, 19(1)(C) and
19(1 )(G) of the Constitution of India and quash and
set aside the same along with circular dated
17.6.1999, 30.7.1999, 17.6.2000 and 29.4.2003
and for that purpose issue necessary orders; E
(C) Hold and declare that, the demand notices dated
20.5.2003, 10.6.2003 and 26.6.2003 are illegal,
arbitrary and violative of Articles 14, 19(1)(C) and
19( 1)(G) of the Constitution of India and therefore
same are liable tO be quashed and set aside and F
for that purpose issue necessary orders;
(0) Hold and declare that the said demand notices are
illegal, arbitrary and violative of Articles 14, 19(1)(C)
and 19(1 )(G) of the Constitution of India and
Section 114 of the Bombay Prohibition Act, 1949 G
and further declare that the State is not entitled to
charge the said interest in pursuance of the
demand notices dated 20.5.2003, 10.6.2003 and
=- I
I
26.6.2003 and for that purpose issue necessary
orders."
H
1278 SUPREME COURT REPORTS [2008] 17 S.C.R.

A 10. During the pendency of the said writ application, the
respondents withdrew the said demand letter, stating :
"With reference to above subject, it is informed that Dy.
Superintendent, State Excise Duty, officiating Kopargaon
,.,_
•
S.S.K. Ltd., Kolpewadi, Tai. Kopargaon had erroneously
B issued demand letter No.Supervision 112003/333 dated
20.5.2003 regarding recovery of Supervisory charges with
retrospective effect. As Superintendent I am withdrawing
the said letter.
You are requested to arrange to bring this to the )_-
c notice of the High Court, Aurangabad Bench on
12.11.2003."
11. Despite the same, a Division Bench of the High Court,
in view of this Court's judgment in Deokar's Distillery (supra),
dismissed the appellants' writ application, opining :
D "When the matter comes up for hearing, on behalf of the
respondents, learned G.P. produces a letter dated
12.11.2004 setting out therein that demand letter dated
20.5.2003 for recovery of supervision charges with .., '<""'
retrospective effect has been withdrawn vide letter
E No.SUP/112003/7553 dated 12.11.2003 and that t.De
officer would be recovering the supervision charges as per
the order of this Court dated 28.9.2000 as passed in Writ
Petition No.4092/2000. In other words, the demand for
interest has been withdrawn and consequently the
Respondents cannot demand interest from the Petitioners.
F The only demand can be in respect of the supervision
charges, which has been upheld by this Court by the
; ~·
impugned order referred to earlier. Considering that the
letter dated 20.5.2003 has been withdrawn, nothing further
survives. In so far as to claim any charge with retrospective
G effect and interest thereon, nothing further survives in this
petition. Rule in both the Petitions discharged. There shall
be no order as to costs."
12. Mr. Savant, learned senior counsel appearing on behalf
of the appellant, would contend that keeping in view the earlier
H decision of this Court, the impugned judgment cannot be
" .....
KOPARGAON S.S.K. LTD. v. STATE OF MAHARASHTRA 1279
& ORS. [S.B. SINHA, J.]

sustained. A
13. Mr. Chinmoy Khaladkar, learned counsel appearing on
-...._
., _J behalf of the .respondent, on the other hand, urged that the cause
of action for which the earlier writ petition was filed was different
from that of the writ petition filed later.
Indisputably, the claim of the respondent was based on the B
notification implementing recommendations of the Fifth Pay
Revision Commission, pursuant whereto and in furtherance
whereof, the pay of the concerned employees had been revised
-- 1,
with retrospective effect from 1.1.1996. Admittedly, the matter
relating to payment of supervision charges is governed by the c
provisions of Section 58-A of the Bombay Prohibition Act and
the Rules framed by the State known as Country Liquor Rules.
According to the appellants; the supervisory staff had been
employed under sub-rule (12) of Rule 6; the supervisory charges
were required to be paid to the State Government quarterly in
advance. Under sub-rule (2) of Rule (2) of the Liquor Rules,
D
1976, the superivision charges are to be paid annually in
advance. It is also not in dispute, although not very relevant for
our purpose, that the appellant is entitled to recover the
"" ~ supervision charges or other charges from its customers by
including such sum in the price of the liquor. E
14. Appellant in Writ Petition No.4092 of 2000, indisputably
questioned the right of the respondents to recover the
supervision charges with retrospective effect. It was furthermore
contended therein that in any event no interest was payable on
the said charges, particularly in view of the fact that although F
the notification was issued in the year 1998 the demand was
..,. ~ made in the year 2000. The said writ petition was allowed
opining that the difference in payment of supervision charges
was not recoverable. The said order of the High Court dated
7.12.2005 attained fir:iality. It would, therefore, operate as res
G
judicata.
15. Submission of Mr. Khaladkar that the demands were
for different charges, namely, one in respect of pay and the
~ other in respect of leave salary etc. cannot be accepted. The
- basis for both the claims was tne same. If the principle of res
H
1280 SUPREME COURT REPORTS [2008] 17 S.C.R.

A judicata applies in a writ proceeding, no fresh demand could
have been raised by the respondents. We may notice that even
the Commissioner of Excise, only keeping in view that aspect - ,,...
\.- •
of the matter, issued a circular only in respect of those
distilleries from whom the charges were yet to be realized. The
said circular had not and, in fact, could not have any application
B
in respect of those cases where the dispute between the parties
had attained finality. It is no longer res integra that the principles
of res judicata apply in writ proceedings. It was so held in
/shwar Dutt v. Land Acquisition Collector & Anr. [(2005) 7 SCC
)._--.
190], wherein this noticed :
c "23. Yet recently in Swamy Atmananda and Ors. v. Sri
Ramakrishna Tapovanam and Ors. [(2005) 10 SCC 51]
one of us was a party, this Court observed :
"The object and purport of principle of res judicata
as contained in Section 11 of the Code of Civil
D Procedure is to uphold the rule of conclusiveness
of judgment, as to the points decided earlier of fact,
or of law, or of fact and law, in every subsequent suit
between the same parties. Once the matter which ~ '<"

was the subject-matter of lis stood determined by
E a competent court, no party thereafter can be
permitted to reopen it in a subsequent litigation.
Such a rule was brought into the statute book with
a view to bring the litigation to an end so that the
other side may not be put to harassment.
F The principle of res judicata envisages that a
judgment of a court of concurrent jurisdiction directly
upon a point would create a bar as regards a plea, f ....
between the same parties in some other matter in
another court, where the said plea seeks to raise
afresh the very point that ·was determined in the
G earlier judgment."
24. It was further noticed: ,
"In /shwardas v. the State of Madhya Pradesh and Ors.

H
[AIR 1979 SC 551], this Court held:
'
KOPARGAON S.S.K. LTD. v. STATE OF MAHARASHTRA 1281
& ORS. [S.B. SINHA, J.]

" ... In order to sustain the plea of res judicata it is A
not necessary that all the parties to the two
_) litigations must be common. All that is necessary
is that the issue should be between the same
parties or between parties under whom they or any
of them claim ... "
B
16. Yet again in Swamy Atmananda & Ors. V. Sri
Ramakrishna Tapovanam & Ors. [(2005) 10 SCC 51], this
Court held:
;.-J "The object and purport of the principle of res judicata as
contended in Section 11 of the Code of Civil Procedure c
is to uphold the rule. of conclusiveness of judgment, as to
the points decided earlier of fact, or of law, or of fact and
law, in every subsequent suit between the same parties.
Once the matter which was the subject-matter of lis stood
determined by a competent court, no party thereafter can
be permitted to reopen it in a subsequent litigation. Such D
a rule was brought into the statute-book with a view to bring
the litigation to an end so that the other side may not be
..- ""' put to harassment.
The principle of res judicata envisages that a judgment of
a court of concurrent jurisdiction directly upon a point would E
cleate a bar as regards a plea between the same parties
in some other matter in another court, where the said plea
seeks to raise afresh the very point that was determined
in the earlier judgment."
,... 17. It was, however, contended that the question of F
applicability of the principles of res judicata was not raised
~ ~
before the High Court. We have noticed hereinbefore that the
said questions were clearly raised even in the responses to the
notices of demand.
18. For the reasons aforementioned, the impugned order G
dated 23.09.2003 and judgment dated 13.11.2003 cannot be
sustained which are set aside accordingly. The demand notices
-! impugned in W.P.No.3050 of 2003 are quashed. The appeals
are allowed with costs. Counsel's fee assessed at Rs.25,00/-.
K.K.T. Appeals allowed. H