LIFE INSURANCE CORPORATION OF INDIAversusSTATE OF RAJASTHAN AND ORS.

A                    LIFE INSURANCE CORPORATION OF INDIA
                                      v.
                         STATE OF RAJASTHAN AND ORS.

                                   FEBRUARY I, 2007

B                  [DR. ARIJIT PASA YAT AND S.H. KAPADIA, JJ.]


           Rajasthan Stamp Law (Adaptation) Act, 1952:

            Purchase of stamps from outside State-Causing revenue loss to State
C     Government-Order and notice of demand issued by Additional Collector-
      Validity of-Held, since matter is pending consideration of High Court, it
      would be appropriate if the High Court hears the mailer expeditiously
      considering importance of the issues involved regarding permissibility of the
      levy and the manner adopted
D           Several divisions of appellant-Corporation in State of Rajasthan
      purchased stamps from the State of Maharashtra. This was said to have caused
      revenue loss to the respondent-State. The Additional Collector accordingly
      issued a notice to the appellant raising the demand. The notice was challenged
      in a writ petition and on its dismissal a special appeal was filed before the
E     Division Bench of the High Court. The High Court disposed of the appeal
      and directed the State Government to constitute a High Power Committee to
      resolve the dispute. The Committee held the Corporation liable to pay the
      State Government a certain amount. The Corporation filed an application for
      revival of the special appeal and the interim order passed therein. Dealing
F     with the said application the High Court held that the demand did not exceed
      the loan advanced by the Corporation to the State Government and the latter
      may adjust the amount of demand against the said loan.

            In the appeal filed by the Corporation it was contended on its behalf that
      the Act did not authorize the demand as made by the respondent-State. On
G     the other hand, for the respondent-State it was contended that purchase of
      stamps from outside the State was against the provisions of the Act, and
      officers of the appellant-Corporation should purchase stamps from the
      Rajasthan treasuries only.

            Disposing of the appeal, the Court
I-I                                         114
         LIFE INSURANCE CORPN. OF INDIA r. STATE OF RAJASTHAN [PASAYA T,J.]   ] J5

     HELD: Since the matter is pending consideration of the High Court it            A
would not be proper for this Court to decide the issues on merits. It would be
appropriate if the High Court hears the matter expeditiously, considering the
importance of the issues involved regarding the permissibility of the levy and
the manner adopted. Needless to say the decision of the High Court shall be
 uninfluenced by the view taken by the High Power Committee. (Para 6 & 7]            B
                                                                (116-D-FJ

       CIVIL APPELLATE JURISDICTION : Civil Appeal No. 413 of 2007.

       From the Interlocutory Order dated 23.5.2005 of the High Court of
Judicature for Rajasthan at Jaipur Bench, Jaipur in D.B. Civil M.R.A. No. 204/       C
2005 in D.B.C.M.A. No. 214/2005 in D.B.S.A. (Writ) No. 670/2004.

      T.R. Andhyarujina and A.V. Rangam for the Appellant.

     Aruneshwar Gupta, A.S.G, Naveen Kumar Singh, Mukul Sood, Shashwat
Gupta and Shikha Tandon for the Respondents.
                                                                                     D
      The Judgment of the Court was delivered by

      DR. ARIJIT PASA YAT, J. I. Leave granted.

      2. Challenge in this appeal is to the order dated 23.5.2005 passed by a
Division Bench of the Rajasthan High Court, Jaipur Bench.                            E
      3. A brief reference to the factual aspect would suffice.

       The appellant filed the writ petition challenging the order dated 16.9.2004
 and notice dated 16.9.2004 issued by the Additional Collector (Stamps) Jaipur.
 The demand raised by the State of Rajasthan was in respect of alleged               F
revenue loss caused by the appellant to the State Government by its
purchasing stamps from other State i.e. Maharashtra. The writ petition was
dismissed by learned Single Judge on the ground of availability of alternative
remedy. Appellant filed the Special Appeal questioning correctness of the
order passed by the learned Single Judge. Along with Special Appeal an               G
application for stay was also filed. The Special Appeal was disposed of with
the direction to the respondent- State to constitute a High Power Committee
to resolve the dispute. The High Power Committee by its order dated 27 .4.2005
held that the appellant is liable to pay to the State of Rajasthan a sum of
Rs.576. 72 lakhs Appellant filed an application for revival of the Special Appeal
and revival of the interim direction passed in the said appeal. Though initially     H
    116                   SUPREME COURT REPORTS                    [2007] 2 S.C.R.

A the application was dismissed, subsequently the same was revived. Dealing
    with the said application it was noted by the High Court by order dated
    11.12.2004 that the demand of Rs. I, 19,75,000/- made against the appellant
    does not exceed the loan advanced by the appellant-Corporation to the State
    of Rajasthan. Liberty was given to the State of Rajasthan to adjust the
B   amount of its demand against the loan advanced by the appellant-Corporation
    to the State Government.

          4. Learned counsel for the appellant submitted that the Rajas than Stamp
    Law (Adaptation) Act, 1952 (in short the 'Act') does not in reality authorize
    the demand as has been made in the present case.
c          5. Learned counsel for the respondent-State on the other hand submitted
    that the provisions contained in the aforesaid Act clearly permit the action
    as taken by the authority.

          6. Since the matter is pending consideration of the High Court it would
D not be proper for us to decide the issues on merits though learned counsel
    for the parties made a request in that regard. It would be appropriate if the
    High Court hears the matter expeditiously, considering the importance to the
    issues involved regarding the permissibility of the levy and the manner
    adopted. Undisputedly several divisions of the appellant-Corporation in
    Rajasthan purchase stamps from Maharashtra. Stand of the State Government
E   is that purchase of stamps from outside Rajasthan was against the provisions
    of the Act and the Rules made thereunder. The view expressed was that
    officers of the appellant-Corporation would purchase stamps from the Rajasthan
    treasuries only.

        7. In the circumstances, the High Court is requested to take up the
F Special Appeal for disposal expeditiously. The High Court is also requested
  to explore the possibility to dispose of the matter by the end of August, 2007.
  Needless to say the decision of the High Court shall be uninfluenced by the
  view taken by the High Power Committee. The interim order dated 24.10.2005
  passed by this Court shall continue to be operative till disposal of the matter
G by the High Court. It is made clear that it shall not be construed that we have
  expressed no opinion on the merits by granting interim protection as afore-
  noted.

          The appeal is accordingly disposed of. No costs.

H R.P.                                                       Appeal disposed of.