Soft drinks giant loses battle against Municipal Corporation
May 22, 2010 Leave a comment
The octroi vigilance wing of the Thane Municipal Corporation (TMC) has won the first legal bout against M/S Pepsico Company, the multinational soft drinks giant. The firm lost the writ petition it filed against the corporation before the Bombay High Court and with it the path is clear for the TMC to seize movable and immovable properties of the soft drinks giant.
The soft drink firm got a rude legal shock on Wednesday evening when the high court rejected the requests of the MNC to stay the civic move to seize its Mumbai and New Delhi based properties. The court had earlier admitted the petition and issued notices to the corporation. Hearing in the petition was to be held on May 6 but was adjourned to May 12, after the case could not come up for hearing on May 6.
The legal counsel for the corporation informed the court on May 12 that the soft drinks giant had been served demand notices in October last year for payment of Rs 2.07 crore by way of due octroi amount of Rs 18.85 lakh coupled with ten times penalty by its distributor M/s Sana Agency. The MNC however did not respond to the notice even though the hearing in the notice was to be held before civic commissioner Nandkumar Jantre.
The civic department then followed up on the notice by slapping notice of seizure of properties of the MNC. The notice was issued on the Chembur office of the company on February 17 this year. Pepsico however did not respond to the notice of seizure as well and only raised questions over the legality of the notice.
The civic counsel also told the court that the TMC had begun taking action of seizure on the properties of the MNC as the next step to the seizure notice. The civic authorities seized four trucks loaded of the company loaded with soft drinks on May 10 and 11 as they entered the limits of the TMC en route to their destination elsewhere. The value of the seized items is estimated at around Rs 11 lakh. The civic counsel claimed that in such a situation the request for stay on seizure notice was meaningless.
The court upheld the argument of the corporation and rejected the requests of the petitioner to grant a stay on the process of the property seizure notice. “The petitioner has been directed to follow the due process of law with the municipal commissioner in the matter”, Arvind Akashi, the Assistant Municipal Commissioner (AMC) in charge of the octroi vigilance wing told Thane Plus. He added that the corporation would now seek details of transaction of the petitioner with Sana Agency for the last five to six years.
With the rejection of the petition the path of the TMC to take further steps of property seizure of the company is clear. The civic department has even issued guidelines to its staff posted at octroi nakas to seize vehicles laden with soft drinks coming from the company even if the vehicles are simply crossing the civic jurisdiction to reach their destination elsewhere.
In the wake of the civic action and its reversal in the high court the MNC is likely to move the Supreme Court (SC) against the HC order. The TMC is bracing up for the legal battle in the SC as well.
The dispute pertains to alleged evasion of octroi of Rs 18.85 lakh by the agency on import of goods worth Rs 4 crore from the giant in the previous year. The agency allegedly used forged TMC octroi payment receipts and got the amount reimbursed from the MNC. Ten such receipts were seized by the TMC. Firoz Shaikh, the owner of the agency is in jail since August last year on charges of cheating and forgery.
The civic administration subsequently alleged that ten officials of Pepsico were also involved in the crime but the Daighar police did not proceed against them. The TMC moved the high court with a criminal writ petition against the city police and the court directed the cops to record supplementary statements of Akashi, the complainant.
The police have recorded the supplementary statement of the complainant against ten officials of the MNC but no arrests have been made. A source in the Daighar police station told Thane Plus that no further action could be taken in the case as the charge sheet is already filed against Sana Agency and trial is going on.