JUDGMENT - B.H. MARLAPALLE, J.:---The petitioner M/s. Dhoot Agencies Private Limited was a dealer of Premier Automobiles Limited, a company manufacturing Premier Padmini Cars. On 3rd September, 1985 the Octroi Superintendent alongwith some inspectors was on general checking in the night and at about 3.00 a.m. they noticed that four brand new Premier Padmini Cars crossed the Naka without payment of octroi. The cars were chased and the squad caught hold of two cars near the Lohekapul, Cantonment, Aurangabad. The drivers were interrogated and they stated that under the instructions from the local dealer i.e. the petitioner, the cars were being rushed without payment of octroi. The squad also went to the Dealer's premises and noticed two more vehicles i.e. Premier Padmini Cars which had been brought in without payment of octroi. The drivers were interrogated and a written panchanama was made on 3rd September, 1985. 2. It appears that the Municipal Authorities called upon the petitioner to pay octroi in respect of these four vehicles and the petitioner agreed to pay octroi and he expressed his willingness to pay the penalty to the extent of ten times the octroi duty so as to avoid any prosecution. This proposal was accepted by the Municipal Corporation and accordingly on receiving an amount of Rs. 28,590/- towards octroi as well as penalty, the four cars were released. 3. The point of law that is raised for the consideration of this Court in the instant petition is in a very narrow compass and that is, whether the Municipal Corporation can impose penalty without prosecution resulting into a conviction. 4. The Corporation has filed its affidavit in reply and relied upon the provisions of section 398 of the Bombay Provincial Municipal Corporation Act, 1949. It would be relevant to reproduce the provisions of section 398 of the said Act. "398. 4. The Corporation has filed its affidavit in reply and relied upon the provisions of section 398 of the Bombay Provincial Municipal Corporation Act, 1949. It would be relevant to reproduce the provisions of section 398 of the said Act. "398. Where any vehicle, animal or goods imported into the limits of the city are liable to the payment of toll or octroi any person who, with the intention of defrauding the Corporation, causes or abets the introduction of or himself introduces or attempts to introduce within the limits of the city any such vehicle, animal or goods upon which payment of the toll or octroi due on such introduction has neither been made nor tendered, shall, on conviction, be punished with fine which may extend to ten times the amount of such toll or octroi or to two hundred and fifty rupees, whichever may be greater." 5. It is clear that though the Municipal Corporation has the power to impose penalty, the condition precedent for such penalty being imposed is conviction in a criminal prosecution and without there being a conviction there is no scope for levying the penalty for evading octroi. Admittedly, no criminal prosecution was initiated against the petitioner and the learned Counsel for the Corporation submitted that this was not done solely at the request of the petitioners' proprietor/partner. When a statute provides certain precondition for imposing penalty on account of evasion of octroi payment, it is mandatory that those conditions are followed before the penalty is levied and consequently if the Corporation failed to initiate criminal prosecution it had no authority in law to levy the penalty for evasion of octroi payment. There cannot be an agreement contrary to the provisions of law and it is high time that the Municipal Administration is awakened to follow the provisions of law meticulously. 6. From the affidavit-in-reply we have also noticed that the petitioner has been issued notice in Form No. V under Rule 24 of the Octroi Rules for recovery of octroi in respect of 29 vehicles. There is no denial to this demand till this date and, prima facie, it has to be accepted that there are some outstanding payments on account of octroi due to the Corporation from the petitioner. 7. There is no denial to this demand till this date and, prima facie, it has to be accepted that there are some outstanding payments on account of octroi due to the Corporation from the petitioner. 7. We allow the petition and hold that the imposition of penalty, without conviction, is illegal and the Municipal Corporation was not justified in either levying or accepting the said penalty amount. However, we make it clear that if the Corporation has any octroi recoveries from the petitioner the amount of penalty in question can be adjusted against such outstanding dues and the petitioner shall not claim recovery of this amount unless the alleged recoveries are finally decided and settled. 8. Rule made absolute in terms of the above order. No costs. Petition allowed.