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Radhakishan Brijlal Vs. Union of India and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberMisc. Petn. No. 120 of 1957
Judge
Reported inAIR1959Bom102; (1958)60BOMLR748
ActsConstitution of India - Articles 19(1) and 226; Code of Civil Procedure (CPC), 1908 - Order 21, Rules 46, 63 and 64; Income-tax Act - Sections 23(5), 29, 34, 34(3), 46 and 46(2); Trusts Act - Sections 80, 82 and 95; Bombay City Land Revenue Act, 1876 - Sections 13A, 14, 15, 16 and 17; Specific Relief Act
AppellantRadhakishan Brijlal
RespondentUnion of India and ors.
Appellant AdvocateM.P. Laud and ;M.R. Modi, Advs.
Respondent AdvocateP.P. Khambatta, ;J.M. Thakore, ;M.L. Maneksha, ;F.S. Nariman and ;Kania, Advs.
Excerpt:
benamidar--shares belonging to respondent firm but standing in name of petitioner as benamidar of respondent--prohibitory orders regarding disposal of such shares issued by collector under order xxi, rule 46, of civil procedure code on certificate issued by income-tax officer under section 46(2) of indian income-tax act--petitioner filing petition under article 226 of constitution for writ directing withdrawal of orders--partners of respondent, representing half interest in firm, supporting, petition but remaining partners, representing the other half interest, opposing it--maintainability of petition--indian trusts act (ii of 1882), sections 13, 80, 82, 95.;the additional collector of bombay, on a certificate issued by the income-tax officer, issued prohibitory orders under order xxi,.....order1. this is a petition wherein the petitioner challenges two prohibitory orders, copies whereof are annexed as exd. a and b to the petition, passed by the 2nd respondent, the additional collector of bombay, on the ground that they are illegal and prays that a writ of mandamus or any other appropriate direction, order or writ be issued under article 226 of the constitution directing the 2nd respondent to withdraw or cancel the said orders and to prohibit him from proceeding further, thereunder or from taking any steps for recovering the sum of rs. 2,84,042-10-6, being the arreas of income-tax.2. the facts leading to the present petition may shortly be stated. at all material times the firm of bilasrai banarasilal and co. were the managing agents of the vishnu sugar mills ltd. the.....
Judgment:
ORDER

1. This is a petition wherein the petitioner challenges two prohibitory orders, copies whereof are annexed as Exd. A and B to the petition, passed by the 2nd respondent, the Additional Collector of Bombay, on the ground that they are illegal and prays that a writ of Mandamus or any other appropriate direction, order or writ be issued under Article 226 of the Constitution directing the 2nd respondent to withdraw or cancel the said orders and to prohibit him from proceeding further, thereunder or from taking any steps for recovering the sum of Rs. 2,84,042-10-6, being the arreas of income-tax.

2. The facts leading to the present petition may shortly be stated. At all material times the firm of Bilasrai Banarasilal and Co. were the Managing Agents of the Vishnu Sugar Mills Ltd. The ostensible partners in Messrs. Bilasrai Banarasilal and Co. were one Bilasari Joharmal and Banarasilal Meghraj. It is not in dispute and in fact it is admitted, that Bilasrai was the nominee of the 4th respondents and Banarasilal Meghraj was the nominee of the partnership of Messrs Narandas Kedarnath. Unit 1950-51 the firm of Bilasrai Banarasilal and Co. was assessed by the Income Tax authorities as a registered firm under Section 23(5)(b) of the Income-tax Act, and the tax assessed in respect of that firm was paid by the two firms of the 4th respondents and Messrs. Narandas Kedarnath upon the footing that Bilasrai Joharmal and Banarasilal Meghraj were the partners in the Managing Agency firm representing and as the nominees of those two firms. From and after 1951-52 the said Managing Agency firm was treated as an unregistered firm. It is not in dispute that the assessments for the years 1952-53 to 1955-56 remained unpaid. The result was that the Income Tax Officer issued the requisite certificates to the Additional Collector of Bombay to take steps for the recovery of the arrears of income tax under the provisions of Order 21 Rule 46 of the Civil Procedure Code. After these certificates were issued, the 2nd respondent called a meeting where the partners of the 4th respondents were present. The partners of the 4th respondent-firm represented by Mr. Manekshaw admitted the liability of the 4th respondents to pay the arrears of income tax and proposed that the shares in question which stood in the name of the petitioner should be utilised for the purpose of payment of these arrears on income tax. The rest of the partners represented by Mr. Kania appeared through their Attorneys, Messrs. Jeshtaram and Co., and opposed the proposal that the said shares should be used for the payment of arrears of income tax and protested that the 4th respondents were not liable to pay those arrears. The stand taken by them, it appears was that Messrs. Bilasrai Banarasilal and Co. being the assessees and not the 4th respondents, the latter were not liable to pay the said arrears of income tax. After this meeting was held the 2nd respondent issued the two prohibitory orders which are headed as having been issued under Order 21, Rule 46 of the Civil Procedure Code.

3. It is not in dispute that the shares in question belong to the 4th respondents. It is equally not in dispute that the petitioner is a holder of these shares as the nominee and in fact in the petition itself he has stated that he is prepared to argue this petition of the footing that he is the benamidar and the nominee of the 4th respondents in respect of these shares. His plea in the petition is the same as the one taken by Mr. Kania's clients before the Additional Collector, viz. that the 4th respondents not being the assessees are not liable to pay these arrears and that therefore the shares in question being their property cannot be the subject-matter of the two prohibitory orders.

4. When the matter reached hearing Mr. Laud for the petitioner applied for the amendment of the petition. The draft amendment consists of two paragraphs. The first paragraph sought to add to the several grounds in the petition certain fresh grounds to establish that the two orders in question passed by the 2nd respondent were invalid and bad in law. Now the fresh ground sought to be added by the amendment was that inasmuch as no notice was served upon the 4th respondents under Section 29 of the Income-tax Act either at the time of the assessment or thereafter an order made on the 4th respondents is invalid. The amendment also sought to introduce a further ground that the orders issued by the 2nd respondent were in the nature of proceedings for recovery of the assets and property of the 4th respondents under Order 21 Rule 46 of the Civil Procedure Code and not under the Bombay City Land Revenue Act II of 1876 and that the 2nd respondent had no jurisdiction to proceed under any other law except the said Act. Paragraph 2 of the amendment sought to insert in the petition the averment that the petitioner was and still is one of the partners in the 4th respondents. It is obvious that by inserting these words the petitioner wanted now to plead that he not only held the said shares as the benamidar of the 4th respondents a position which he not only admitted in the petition but upon which alone he based his entire petition, but that he held these shares also in his capacity as a partner. In other words he now seeks to aver that he is also the real owner of these shares and therefore is entitled to maintain this petition.

5. Both Mr. Khambatta and Mr. Manekshaw have strenuously opposed the application. In my view, the grounds for resisting the application are both valid and substantial. Taking paragraph 2 of the draft amendment first, it is fairly obvious that this part of the amendment in the first place covers a fresh ground of fact involving title to the shares. If it were allowed at this stage, respondents 1 and 2 and the partners in the 4th respondents, for whom Mr. Manekshaw appears, would have to put in supplemental affidavits. It would, therefore, be reopening the entire case where pleadings by all parties are closed long ago, leading also to a conflict of facts between the parties as to whether the shares stand in the name of the petitioner as a mere benamidar or in his capacity as a partner. What is, however, more objectionable is that this part of the amendment would change the entire basis and tenor of the petition. The cause of action, as set out in paragraph 8 of the petition is that on the footing that the petitioner is the benamidar of the 4th respondents in respect of the shares in question, and the shares being the property of the 4th respondents they are not liable to attachment inasmuch as the 4th respondents were not the assessees and no part of the income of the said Managing Agency firm, the assessees, has been assessed as the income of the 4th respondents, and furthermore that the shares in question are not the property of the Managing Agency firm but are the property of the 4th respondents. As the petition is framed, it is clear that the entire basis thereof is that the petitioner is the benamidar of the 4th respondents, the real owners of these shares. The fresh plea sought to be inserted is not only not there in the petition but, is inconsistent with the case in the petition. It is now sought to be pleaded for the first time that the petitioner has an interest in the said shares as the owner thereof, not as the benamidar but by virtue of his being a partner in the 4th respondents. That obviously cannot be allowed as it is not only a fresh cause of action but also as inconsistent with his case until now and therefore against all settled rules of amendment.

6. As regards the first part of the amendment, it is true, as Mr. Laud says, that it contains fresh grounds of attack and mainly legal grounds. But even Mr. Laud conceded that a petition of this type where a high prerogative writ such as the Mandamus is sought is generally not amendable. Mr. Laud, however, argued that the new grounds the wants to insert by means of amendment would go to the root of the matter and that therefore the amendment should be allowed in the interest of justice.

7. There can be no doubt that the amendment is asked for after considerable delay especially in view of the fact that the petitioner is invoking the cetraordinary jurisdiction of this Court. The orders in question were served upon the petitioner of the 27th March 1957. On the 15th April the petitioner's Attorneys appeared before the 2nd respondent, protested against the orders and intimated to him that the petitioner was challenging them by filing the present petition. This petition was then filed on April, 17. The amendment, therefore, is asked for exactly after 11 months. In an unreported judgment delivered on the 24th of March 1955 in Appeal No. 22 of 1952 (A) the learned Chief Justice sitting with Desai J. has observed that such petitions are generally not amendable and that the Court should consider an application for amendment on the footing as if a fresh petition was filed on the day of such application and then the Court should consider whether it would allow such an application in spite of the delay in making it. It is no doubt true, as Mr. Laud pointed out, that the Division Bench also considered the amendment on merits and found that the amendment had no substance but that was after the learned Chief Justice and Desai J. had rejected it on the ground of delay. That decision is binding upon me, and is a sufficient authority to reject Mr. Laud's application. But then Mr. Laud pointed out that there were other decisions of this Court where amendments have been allowed. Now, it is true that in Fram Nusserwanji Balsara v. State of Bombay : AIR1951Bom210 (B), an amendment was asked for and though it was resisted on behalf of the State it was granted but at p. 812 of the report it is stated clearly that the amendment was allowed on the ground that it did not involve any change in the averments but only in the reliefs. The averments were left untouched and only the reliefs were sought to be changed when the petitioner found that even if everything that was states in the petition were to be held true he would still not been titled to the reliefs prayed for in the petition. That is not the position before me and therefore the decision in Balsara's case (B) would be no authority to support Mr. Laud's application. Another decision relied upon was the one in Unite Motors (India) Ltd. v. State of Bombay 55 Bom. L.R. 246 (C). There an amendment was no doubt allowed although it sought to introduce a new ground of attack. But from the report of the case in 55 Bom. L.R. 246 (C) and the decision of the Supreme Court reported in State of Bombay v. United Motors India Ltd. : [1953]4SCR1069 it appears that the application for amendment was not resisted and was therefore allowed. Neither of these two decisions, therefore, can be said to be an authority laying down any proposition contrary to the rule that a petition solemnly made to invoke the extraordinary jurisdiction of this Court and seeking a special remedy such as the issue of a writ of Mandamus is generally not amendable.

8. Mr. Laud, however, maintained that he could not have applied for the amendment earlier that he did as the decisions upon which he has based the application were given only recently and that therefore the petitioner cannot be charged of being guilty of delay. Now, the first decision that Mr. Laud relied upon is the one in Purshoutam Govindji v. B.M. Desai : 1956CriLJ129 . From this decision it was argued that upon the construction put there on Section 46(2) of the Income-tax Act, the arrears of income-tax are to be recovered as if they were arrears of land revenue, the 2nd respondent could proceed to recover them under the Bombay City Land Revenue Act only and that the decision had laid down that he had no jurisdiction to proceed under Order 21 Rule 46 of the Civil Procedure Code. Without going into the question at this stage whether Mr. Laud is right or not on his reading of the decision in Purshottam Govinji's case (E), the fact is that the Supreme Court delivered its judgment on October 14, 1955 and the decision was : 1956CriLJ129 in 1956 long before the present petition was launched. It cannot therefore be rightly said that the petitioner had notice of this decision for the first time now.

9. Reliance was laced next upon the decision in Gokuldas v. Kikabhai : [1958]33ITR94(Bom) (F) which was reported on the 20th of January 1958. Mr. Laud says that the latter part of Paragraph 1 of the draft amendment is grounded upon this decision and that this decision having only recently ben reported it could not be said that there was any delay in asking for the amendment. Now, the decision in : [1958]33ITR94(Bom) (F) lays down that a determination of the question that a particular individual is a partner or not in the assessee firm is not biding upon that individual unless he has had notice of the assessment and in any event at the time when that question is determined. No question of recovery of income-tax was involved there. But, says Mr. Laud, that if the respondents 1 to 3 wished to proceed against the properties of the 4th respondents on the footing that the income of the Managing Agency firm was really the income of the 4th respondents then notice of demand ought t have been served upon the 4th respondents and therefore he is entitled to take the ground that the prohibitory orders made against the 4th respondent without such notice under Section 29 would be invalid by virtue of the decision in : [1958]33ITR94(Bom) (F) apart from the question as to delay, there is, in my view, an obvious fallacy in this contention. In the first place, that decision merely lays down a principle of natural justice that if a liability for income-tax is to be imposed upon an individual on the allegation that he is a partner in the assessee-firm, he should be given a chance to be heard when the question as to whether he is a partner is determined. In the second place, the orders in this case are issued not by the Income-tax Officer but by the Additional Collector in recovery proceedings under Section 46(2) of the Income Tax Act, and Section 46 unlike Section 29 does not provide for any such notice. But on facts which cannot be in dispute the 2nd respondent did give a notice to the 4th respondents by calling them before him before he issued the orders, when the partners for whom Mr. Manekshaw appears agreed that the shares in question should be attached and the rest of the partners then represented by M/s. Jeshtaram & Co. disagreed and told the 2nd respondent that they would take out the present petition. This fact would indeed show that the partners in the 4th respondents, including the petitioner, had clear notice that the 2nd respondent intended to proceed against these shares for the recovery of the income-tax due by M/s. Bilasrai Banarasilal & Co. That being the position, it is clear that the decision in : [1958]33ITR94(Bom) (F) cannot help Mr. Laud. I do not also see besides how Mr. Laud can complain that the petitioner had no notice of the recovery proceedings against the 4th respondents. In these circumstances, it is impossible to hold that the decisions relied upon by the petitioner support him in providing an excuse for the delay in seeking the amendment. On the principle laid down in Appeal No. 22 of 1952 (A), a decision binding upon me, I must reject the application for amendment.

10. Coming now to the petition itself, three points have been raised on behalf of the respondents as and by way of preliminary objections. They are (1) that the petitioner has not been candid in his statements in the petition, that he is guilty of having made misleading statements and therefore is not entitled to a discretionary remedy, (2) that he has had an alternate adequate remedy and (3) that being admittedly a benamidar of the 4th respondents in respect of the shares in question the petitioner was not entitled to maintain this petition.

11. Both Mr. Khambatta and Mr. Maneksha did not press the first point and therefore no more need be said about it. They have, however, pressed the other two points. The first question that falls fro consideration is whether a person, who is admittedly a benamidar of the property in question, can maintain a writ petition of this kind. Mr. Manekshaw conceded at the very outset that a benamidar can file a suit to protect the property which he holds benami in certain circumstances. But Mr. Laud argues that under Sections 80, 82 and 95 of the Trusts Act, the position of a benamidar was in the nature of a trustee and urged that a benamidar has all the rights and obligations of a trustee. He argued therefore that under Section 13 of Trusts Act it would be the duty of a benamidar as a trustee to take steps to protect and preserve the trust property. Now, it is true that under Sections 80 and 82 of the Trusts Act a benamidar hold the property for and on behalf of the real owner in consequence of which there would be a resulting trust in respect of the property in favour of the real owner. But then it would be fallacies to urge from those sections that the legal ownership in such property vests in the benamidar as it does in the case of a trustee. What those sections really mean is that a benamidar is in a fiduciary relationship with the real owner and therefore has all the obligations of a person in such fiduciary position towards the real owner. A benamidar is no more than an ostensible owner of the property he holds benami though his acts in certain circumstances would be binding upon the real owner. That is because the real owner holds him out to third parties as an owner of the property. It is, however, impossible to say as in the case of a trustee that any rights in the popery either vest in him or that under Section 13 and the sections following thereafter of the Trusts Act any obligations therein set out fall on him. In Gur Narayan v. Sheolal Singh ILR 46 Cal. 566: (AIR 1918 PC 140) (G), their Lordships of the Privy Council stated that so long as a benami transaction did not contravene the provisions of law the Courts were bounds to give effect to it but they made it clear also that the benamidar has no beneficial interest in the property that stands in his name; he represents in fact the real owner and os far as their relative legal position is concerned, he is a more trustee for him. Their Lordships no doubt held that a benamidar would be entitled to maintain a suit against a third party though he had no beneficial interest in it,and that a suit filed by such a benamidar would be binding upon the real owner and the person beneficially entitled would be fully affected by the rules of res judicata. At p. 575 of the report (of ILR Cal): (at p. 143 of AIR) their Lordships, however, took care to observe that in case of a contest between a benamidar and a real owner, other considerations would arise with which they were not concerned in the case before them. Even if therefore a benamidar is entitled to sue or take out a writ petition of this type, in the event of a contest between him and the real owner the real owner can always take control of the proceedings and can even put an end to such proceedings if he so desired. Mr. Laud, however, went one step further and said that even if there was a conflict amongst the real owners, such as in this case, the benamidar would be entitled to take action for preservation of the property. In my view, that is not a correct position; for if it were to be otherwise, the result would be that any order passed in a proceeding taken out by a benamidar against the wishes of the real owners would be binding upon and would work as res judicata against the real owners. In a case where there is a conflict amongst the partners, as there is in this case, where there are certain partners who do not wish to enforce a particular claim in respect of which the benamidar files a proceeding if Mr. Laud were to be right, it would result into an anomalous position inasmuch as such a decision in a proceeding, to which some of the partners are opposed to, would still be binding upon them and a subsequent proceeding lodged by them would be barred by res judicata. Another equally anomalous result that would follow from the proposition urged by Mr. Laud would be that although a benamidear stands in the position analogous to that of a trustee he would necessarily have to take sides with one party or the other amongst the partners amongst whom there is a conflict of opinion. The next question is can a benamidar file a suit or a proceeding when the real owners are before the Court? In other words, can he file a suit or a proceeding when he is not supported by the real owners and where the ral owners are opposed to maintaining it? The answer to these question must be found in the negative for the obvious reason, such as the one I have already staed, that such a situationi would be an anomalous one, a situation would be an anomalous one, a situation where a mere ostensible owner is opposed in interest to the real owners in whom only all the rights in the property vest. In those circumstances it cannot be said, as Mr. Laud tried to do, that a benamidar was trying by such an action to preserve the property he holds in benami. In Maung San Da v. Maung Chan Tha ILR 7 Rang 797: (AIR 1930 Rang 130) (H) it was held that whilst a benamidar may, as against a stranger, maintain a suit in respect of property he holds benami, he may not do so when the real owner is not willing to maintain, it to enforce a certain claim. The reason for this principle is that a benamidar is not exactly in the same position as a trustee; he is only the ostensible owner, an alias for the real owner, his name being held out to the outside world by the real owner for a particular purpose. Obviously therefore he cannot maintain an action or a proceeding against the wishes of the real owner. Mr. Laud, however, pointed out that in a decision of the Madras High Court in Muhammad Sheriff v. Sayyed Kasim : AIR1933Mad635 it has been said that a mere inference from the evidence of the real owner would not justify non-suiting the benamidar. The disagreement, however, which the learned Judge in the Madras decision expressed was only limited to the proposition that a mere inference drawn from the evidence given by the rela owner would not justify the dismissal of the suit filed by a banamidar. The Madras decision, however, does not at any stage express any disagreement with the principle laid down in the Rangoon case that a benamidar cannot file a suit in the teeth of opposition by the real owner.

12. The situation in this petion, however, is not a simple one as it was in the Rangoon case, for there was only one real owner, the mother of the plaintiff and she in her evidence seems to have opposed the suit. The complication in this petiton, arises because the real owners are several and are equally divided amongst themselves. The partners representing one half interest in the 4th respondents are in favour of this petition whilst the rest representing the other half are opposed to it. Now, it is admitted that the shares in question belong to the 4th respondents and that the petitioner holds them as their nominee. The petition is based, as I have already said, on this footing and the petitioner has also stated that he is prepared to argue this petition on that footing that he is no more than a mere benamidar of these shares. On that footing on the authority of ILR 7 Rang 797 : (AIR 1930 Rang 130) (H), with which I with respect concur, the petitioner would be out of Court once it were found that the 4th respondents as a whole, who are the real owners and whom he has joined as respondents in this petition, are opposed to the petiton.

13. But there are tow other factors, which I think, I should take into account before any decision is arrived at. The first is, that the partners in the 4th respondents are divided among themselves; and the second is that although the petitioner has admitted that he is a mere nominee, it is clear from the affidavit of Gopikison Naraindas a dissenting partner represented by Mr. Manekshaw that the petitioner was at all matrial times a partner in the 4th respondents. Though the firm is already dissolved, the winding up is not yet complete and therefore it cannot be gainsaid that he has an interest, unascertained though it is, in the assets of the 4th respondents, which would include the shares in question. It is no doubt true that such an admission is not to be found in the affidavit filed on behalf of respondents 1 to 3, but in the affidavit filed on their behalf it is staed that the undivided Hindu family of which the petitioner is a member was a partner in the 4th respondents. That being so, even according to that affidavit, it cannot be said that the petitioner has no beneficial interest whatsoever in the assets of the 4th respondents whihc would include these shares.

14. Even then can Mr. Laud urge that the petitioner can launch such a petition upon the footing that his rights under Article 19(1)(g) of the Constitution are intriged, however unascertained and however slight his interest might be in the shares in question? In Charanjit Lal v. Union of India : [1950]1SCR869 (J), Fazal Ali J. observed that non one except those whose rights are directly affected by a law can raise the question of the Constitutionality of that law. He held on the facts in that case that a shareholder in a company whose property rights are alleged to have been infringed without compensation cannot maintain a petition challenging the impugned statute and that only the company can be said to be the party whose rights are affected. That decision was it is true, grounded on the principle that a shareholder and a company are two distinct entities and therefore the rights alleged to be infringed would be those of the company and not of the shareholder. It is also true that a partnership firm is no legal entity as a corporate body is. But then the question would still be whether one of the partners in a firm can maintain a petition where the partners do not see eye to eye with each other and where some of them representing half the interest in the firm are opposed to its filing. Even assuming, though the petitioner himself is prepared to base his claim on the footing that he is a mere benamidar, that he has however an interest in the property in question, it is not right nor proper to allow him to take out a petition which invokes the extraordinary jurisdiction of this Court, and to make that petition an arena to resolve the differences between the partners inter se. In my view, the conflict amongst the partners to prosecute the present petition is by itself a good ground to refer the petitioner to a comprehensive and, in the circumstances, to a more appropriate and efficious remedy as a suit where questions of disputed facts can be gone into.

15. Assuming I am not right in that conclusion, there is still another hurdle that Mr. Laud would have to cross. It is urged by Mr. Manekshaw that the petitioner has had other appropriate and efficacious remedies available to him and yet he has rushed to this Court to invoke its extraordinary jurisdiction. In these circumstances Mr. Manekshaw argues the petitioner is not entitled to an issue of the writ he has asked for. According to both Mr. Manekshaw and Mr. Khambatta the remedies available to the petitioner were (1) an application to the Collector and thereafter an appeal to the Bombay City Land Revenue Act of 1876, (2) a substantive suit for a declaration that the steps taken by the 2nd respondent under the provisions of that Act were invalid and (3) also a suit under Order 21 Rule 63 of the Civil Procedure Code to establish the illegality of the orders in question and to establish the fact that assets were not amenable for the recovery of the arrears of income-tax under Section 46(2) of the Income Tax Act. It was argued, however, by Mr. Laud at one stage in support of his application for amendment that in : 1956CriLJ129 the Supreme Court has held that on a certificate being issued under Section 46(2) of the Income-tax Act the Collector can proceed only under the Bombay City Land Revenue Act and not under Order 21 Rule 46 and that therefore the orders issued the Civil Procedure Code by the 2nd respondent were bad in law. With respect, that is not a correct reading of that decision. The question that arose before the Supreme Court was whether it was right to say as was done in Ali Ahmed v. Collector of Bombay : AIR1950Bom33 (K) that the Collector had an alternative mode of recovery of the certified amount of tax, one under the City Revenue Act and the other under the Civil Procedure Code, and the Supreme Court disagreeing with the Bombay view held that that decision did not appear to be right. At p.501 of the report (58 Bom. LR): (at p. 23 of AIR), their Lordships in fact observed that the proviso to Section 46(2) of the Income-tax Act does not indicate a different and an alternative mode of recovery of the certified amount of tax but that it confers 'additional powers' on the Collector for the better and more effective application of the only mode of recovery authorised by the body of Sub-section (2) of Section 46. Now, the words 'additional powers' used in this context by Their Lordships would seem to negative the contention of Mr. Laud. But then assuming that he is right even then he would have a right to file a suit under Order 21 Rule 63 of the Civil Procedure Code to establish that the Collector had no jurisdiction to pass the orders Order 21 Rule 46 and that in any event the 4th respondents, not being the assesses, the Collector had no right of recovery from the property of the 4th respondents. In the alternative if the prohibitory orders in question were held to have been issued under the City Land Revenue Act, the petitioner had a right to file an application before the Collector and an appeal before the Bombay Revenue Tribunal.

16. On behalf of the respondents reliance was placed on the decision in Walchandnagar Industries Ltd. v. State of Bombay : AIR1953Bom195 (L), where after considering the views of the Calcutta and Allahabad High Courts the learned Chief Justice and Bhagwati J. held that the jurisdiction that the High Court exercised under Article 226 was an exceptional and a discretionary jurisdiction and this jurisdiction must be sparingly used. If a citizen can obtain an equally adequate, an equally efficacious, & an equally prompt remedy in the ordinary Courts of law, ordinarily the High Court would not exercise its discretion in his favour under Article 226. They, no doubt also observed that there may be cases where even though an alternative adequate remedy may exist, the High Court under special circumstances may issue a writ or order or direction under Article 226. But on the particular facts before them they declined to issue the writ upon the ground that the petitioners could have paid under protest the tax challenged and then could have filed a suit for the recovery of the amount so paid. They also said that no prejudice was likely to be caused to the petitioners by the delay by ordinary procedure rather than under Article 226. This principle has now been again affirmed by the Supreme Court in the State of U.P. v. Mohammad Nooh, AIR 1958 SC 86 (M), where a sharp distinction is drawn between a petition for certiorari and one for mandamus. It has there been observed that there is no rule, with regard to certiorari as there is with mandamus, that it will lie only where is no other equally effective remedy, and that provided all the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by the statute. Even in a case for a writ of certiorari, their Lordships remarked that the fact that the aggrieved party has another and adequate remedy may be taken into consideration by the Superior Court in arriving at conclusion a to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of the inferior Courts subordinate to it, and that ordinarily the Superior Court will decline to interfere until the aggrieved party has exhausted his other statutory remedies, if any. Now, it is true that in the case of Walchandnagar Industries Ltd. (L) the petitioners had been paying the tax or cess in question since 1949 and they had filed the petition as late as 1952. It may perhaps, be that fact might have weighed in the minds of the Division Bench but that fact could not have made any difference to the principle laid down in that case.

17. Now, the facts before me are that up to the year 1950-51 assessments were made from year to year against the Managing Agency firm on the footing of a registered firm. It is in the affidavit of the 3rd respondent, and I must take for the purposes of this petition the facts stated there as being correct, that the Income Tax Department was told that though the ostensible partners in the assessee-firm were Bilasrai Johanmal and Banarasilal Meghraj, they were only the nominees of the 4th respondents and M/s. Narandas Kedarnath. Up to the year 1950-51 therefore although the assessments were made in the name of Bilasrai Banarasilal & Co., the two firms, viz. the 4th respondents and M/s. Narandas Kedarnath paid their respective shares of the income-tax. The 4th respondents did not at any time protest against half the income of the Managing Agency firm as being treated as forming part of the total income of the 4th respondents. Even after year 1950-51 when the assessee firm was treated as an unregistered firm, in the assessment orders, as stated in the affidavit of Govindram Shivnarayan, the half share in the income of M/s. Bilasrai Banarasilal & Co., viz. Rs. 91,525/- was considered for the purpose of determining the rate in the assessments of the 4th respondents. Disputes and differences since then arose amongst the partners of the 4th respondents which are the subject-matter of several litigations. It seems to me that the present petition is a result of these disputes rather than a protest against the prohibitory orders in question. As I have said, the partners represented by Mr. Manekshaw have all along and are still agreeable that the shares in question should be utilised for the satisfaction of the arrears of income-tax in question. So far as the other partners are concerned it was in August 1956 for the first time that they denied the liability of the 4th respondents to pay these arrears.

18. Mr. Manekshaw has urged relying upon the decision in : AIR1953Bom195 (L) that there being an alternative remedy available to the petitioner and also to those partners of the 4th respondents represented by Mr. kania, the petitioner is not entitled to a remedy by way of a high prerogative writ. Mr. Laud, on the other hand, has urged that even those remedies pointed out by Mr. Manekshaw either under Order 21 Rule 63 or a suit under the Specific Relief Act would not be either an adequate or a prompt remedy. Relying upon Sections 13A and 14 of the City Land Revenue Act Mr. Laud argued that if the petitioner had had a recourse to an application and thereafter an appeal provided therein, he would be required to furnish security and observe the conditions laid down in those sections such as, for instance, depositing the amount of the arrears of tax. He, therefore, urged that such a remedy would be both an onerous and a restrictive remedy and, therefore, not an adequate remedy. He also urged that if the petitioner were to file a suit he would be required to give notice under Section 80 of the Civil Procedure Code and within the period of two months prescribed therein it was possible that the shares would be sold away by the 2nd respondent and that therefore even a suit would not be an adequate remedy. It must, however, be remembered that the orders challenged by the petitioner are orders thereby restraining the petitioner, the 4th respondents and the Vishnu Sugar Mills Ltd. from transferring the shares in question to any party. It is clear from the provisions of Order 21 Rule 64 of the Civil Procedure Code that even if the 2nd respondent wished to dispose of these shares he must follow the procedure prescribed in that Order. He would have fist to issue an order for sale and then give the necessary proclamation as regards the proposed sale. Even if, therefore, the petitioner has to give a notice under Section 80 of the Civil Procedure Code, the orders being merely prohibitory orders, there is no possibility of the shares in question to be in any immediate jeopardy of being disposed of at a public auction. For that reason Mr. Laud is not justified in contending that by reason of Section 80 and the necessity of giving a notice thereunder a suit would not be an adequate remedy.

19. Mr. Laud relied upon the case of Himmatlal Harilal v. State of Madhya Pradesh : [1954]1SCR1122 . There it has been observed that a threat to realise tax from the assessee without the authority of law by using the coercive machinery of the impugned Act is sufficient infringement of the fundamental right under Article 19(1)(g) and gives him a right to seek relief under Article 226 of the Constitution. It has also been observed there that the Act which requires a deposit to be made before a citizen can get relief provided thereunder cannot be said to be an adequate remedy, the remedy therein provided being onerous and burdensome. The decision in Himmatlal's case (N) was however one where the Act under which the tax was levied was declared by the Supreme Court to be ultra vires. The impugned Act, therefore, having been held to be ultra vires the Legislature, a fortiori the tax sought to be levied thereunder was also invalid. It follows therefore that a remedy provided for by such a statute would obviously be neither a proper nor an adequate remedy for the simple reason that the provisions of the Act under which the tax was sought to be levied were themselves declared to be invalid. Before me, however, the fact is that neither the assessments made nor the procedure followed by the 2nd respondent in the recovery proceedings of the arrears of income-tax have been challenged as invalid. No question, therefore, of any infringement of any fundamental right by reason of any law being held ultra vires would seem to arise on the facts before me. The only objection is that these proceedings cannot be against the property of the 4th respondents. The case before me, on the contrary, is one of a benamidar who on his own showing has no beneficial interest in the shares in question. No question of any infringement of any fundamental right of the petitioner can arise especially when in the petition he admits of not having any beneficial interest but states categorically that he is no more than a benamidar of the 4th respondents. In these circumstances it is somewhat difficult to understand as to how the decision in Himmatlal v. State of Madhya Pradesh (N) can assist the petitioner.

20. The next decision relied upon by Mr. Laud was the one in S. C. Prashar v. Vasantsen Dwarkadas : AIR1956Bom530 (O). There the Income-tax Officer issued a notice under Section 34 of the Income-tax Act calling upon a firm to submit a return of its total income for the year ending 31-3-1943. The Income-tax Officer purported to issue this notice under the amended second pro-viso to Section 34(3) of the Act, which came into operation on 1-4-1952. The firm challenged the notice by a petition for a writ under Article 226 to restrain the Income-tax Officer from proceeding further pursuant to the notice, alleging inter alia that the notice was invalid, that the Income-tax Officer had no authority or competence to issue the notice and that the assessment proceedings which he proposed to initiate pursuant to the notice would be proceedings without any jurisdiction at all. The Income-tax Officer inter alia contended that the petitioner had no right to maintain the petition and obtain an appropriate writ against him. It was held that as the right to issue a notice to the petitioner under Section 34 of the Act was already barred to the Income-tax Officer at the date when the amended second pro-viso to Section 34(3) came into operation, that this amended proviso could not revive the remedy by providing an extended period of limitation, that, therefore, the notice issued under Section 34 was one that was out of time and was, therefore, invalid, and further that as the Income-tax Officer had exceeded his authority in issuing the notice, the want of jurisdiction pleaded by the petitioner was a patent one and the Court under Article 226 could prevent the Officer from assuming jurisdiction which he patently did not possess. The learned Chief Justice, who delivered the judgment, pointed out that there were two exceptions to the rule that the Court would not grant relief by means of a writ when the petitioner can get the same relief by ordinary legal remedies available to him. One was that the threat involved an encroachment upon the fundamental right of the petitioner, the Court would interfere and would not compel him to exhaust his legal remedies. The other exception which was equally well established was that if the authority against whom a complaint was made had violated rules of natural justice, the Court would interfere and protect the petitioner and not insist upon his going to a higher Tribunal for relief. It is clear from the facts of this case that there was a threat to assess income-tax under Section 34 by an Officer who patently had no jurisdiction and whose authority to do so had already been exhausted, such a question does not arise before me. On the other hand, as I have already pointed out, there is no question of any infringement of any fundamental right of the petitioner arising in this case inasmuch as the very basis of his petition is that he is merely a benamidar having no beneficial rights in the property in question. It is obvious, therefore, that neither of the two exception stated in : AIR1956Bom530 (O) can apply to the facts before me. Besides, the decision reported in : AIR1953Bom195 (L) is binding upon me. As I have said this Court cannot by way of a petition be made a ground for the resolution of disputes amongst the partners of the 4th respondents. It is obvious that no prejudice is likely to be caused to the 4th respondents or the petitioner filing a regular suit to ventilate any grievances that they might have. It is not as if the 4th respondents or even the petitioner are not in a position to pay the arrears of income-tax under protest and then file such a suit to recover it if they so desire. It may be that some delay might ensue by their resorging to the ordinary procedure but then it is clear that that delay is not likely to result in any prejudice either to the 4th respondents or the petitioner. In these circumstances I am not prepared to agree with Mr. Laud's contention that by virtue of any statutory provision or by any of the decisions relied upon by him, the remedy by way of a suit would not be either an adequate or an efficacious remedy. The very fact there has been and still is a radical conflict between the partners inter se, whose property the petitioner is alleged to be seeking to preserve and protect, coupled with the fact that the partners representing one half interest in the 4th respondents are opposed to the present petition would be a sufficient ground to hold that the proper remedy for the petitioner or the partners represented by Mr. Kania would be an ordinary suit.

21. For these reasons the preliminary contentions raised by Mr. Khambatta and Mr. manekshaw must be upheld. The result therefore, is that the petition fails and is dismissed. Since the parties are agreed that there should be no order as to costs, I make no order.

22. Petition dismissed.


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