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Vashist Bhargava Vs. Income-tax Officer, Salary Circle - Court Judgment

LegalCrystal Citation
Overruled ByIndian & Eastern Newpaper Society, New Delhi v CIT New Delhi
SubjectDirect Taxation
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 1098 of 1973
Judge
Reported inILR1975Delhi634; [1975]99ITR148(Delhi)
ActsIncome-tax Act, 1961 - Sections 147; Constitution of India - Article 266
AppellantVashist Bhargava
Respondentincome-tax Officer, Salary Circle
Advocates: N.D. Karkhami,; S.C. Manchanda,; Urmila Kapoor,;
Cases ReferredCourt. In Digamber Prasad v. S. L. Dhan.
Excerpt:
(i) income-tax act (1961) sections 147(b) and 148--jurisdiction under--exercise of--condition precedent for--'information'--meaning of.; that it is condition precedent to the issue of a notice under section 148 of the i.t. act that the income-tax officer should have come into the possession of 'information' under section 147(b) subsequent to the date of the assessment and from a source external to him.; that the object of these requirements is to prevent an abuse of power exercisable under section 147(b) by the income-tax-officer. in their absence, the income-tax officer would be able to change his opinion after making the assessment and the finality of the assessment would be destroyed not by any external causes but at the will of the income- tax officer himself. it is also necessary to.....v.s. deshpande, j. (1) two questions are raised by this writ petition. the first relates to the true meaning of the word 'information' in section 147(b) of the income-tax act, 1961 (hereinafter called 'the act' in short). this has received enough attention in judicial decisions to produce a conflict between them. the resulting uncertainty makes further discussion necessary. the second is so fundamental as to require careful consideration to reach a definitive conclusion. it is this :-can the writ court refuse to grant the relief to a petitioner on such grounds as (a) his conduct, or (b) he has not suffered any injustice, or (c) that the grant of the relief to him would result in injustice.(2) the petition raising these questions is filed by the petitioner who belonged to the former indian.....
Judgment:
V.S. Deshpande, J.

(1) Two questions are raised by this writ petition. The first relates to the true meaning of the word 'information' in section 147(b) of the Income-Tax Act, 1961 (hereinafter called 'the Act' in short). This has received enough attention in judicial decisions to produce a conflict between them. The resulting uncertainty makes further discussion necessary. The second is so fundamental as to require careful consideration to reach a definitive conclusion. It is this :-Can the writ Court refuse to grant the relief to a petitioner on such grounds as (a) his conduct, or (b) he has not suffered any injustice, or (c) that the grant of the relief to him would result in injustice.

(2) The petition raising these questions is filed by the petitioner who belonged to the former Indian Civil Service was a former Chief Justice of a High Court and is now a retired Judge of the Supreme Court on the following facts :-

The petitioner took a loan of Rs. 65,000 from his Provident Fund as a non-refundable advance in 1958-59 and spent it along with his own Rs. 13,000 in buying and re-constructing a house at Allahabad. He sold the said house in 1967 for Rs. 1,25,000 without obtaining the prior permission of the Government. As the petitioner parted with the possession of the house contrary to rule 7-E(1) of the Indian Civil Service Provident Fund Rules (hereafter called 'the Rules' in short), the sum withdrawn by him became payable together with interest thereon amounting to Rs. 27.932 by him as the subscriber to the Fund under rule 7-E(2). The petitioner paid the amount with interest to his Fund accordingly. In calculating income-tax payable on 'Capital gains' under section 48 of the Act, the petitioner deducted from the sale proceeds of the house the interest of Rs. 27,932 as expenditure incurred wholly and exclusively in connection with the transfer of the house in addition to the cost of acquisition of the said house. In doing so, the petitioner stated that on the sale of the house 'it became necessary to refund this Sum of Rs. 65,000 together with interest amounting to Rs. 27,932 as calculated by the Accountant-General, Central Revenues. Consequently, a total sum of Rs. 92,932.00 was paid to the Accountant- General, Central Revenues. The amount of interest of Rs. 27,932.00 is expenditure laid out wholly and exclusively in connection with the transfer of the house, because, under the terms of the advance from the Government, this interest was compulsorily payable on the sale of the house, so that the capital gain by selling the house could not possibly be earned without making this payment to the Government.' The Income-Tax Officer assessed the income-tax on 'capital gains' solely on the basis of the representation made by the petitioner on March 26, 1973, however a notice under section 148 of the Act was issued to the petitioner by the Income-Tax Officer staling that the latter had reason to believe that the petitioner's income chargeable to tax had escaped assessment within the meaning of section 147 of the Act. When the petitioner asked the Income-Tax Officer as to what was the subsequent information received on the basis of which the latter proposed to make a re-assessment, the Income-Tax Officer replied that the petitioner had 'claimed that this amount of interest was expenditure laid out wholly and exclusively in connection with the transfer of house because under the terms of advance, interest was compulsorily payable on the sale of the house. Subsequently, after 27-5-1969 (date of assessment) I got information that interest was not compulsorily payable. It became payable only because this house was sold in contravention of the provision of rule 7-E of the J. C. S. Provident Fund Rules.. ....Since deposit in the Provident Fund including the interest- accuring thereon belongs to the depositor only repayment is deferred, payment of this interest cannot be treated as expenditure.'

(3) The petitioner prays that the abovementioned notice under section 148 of the Act be quashed. His learned counsel Shri N. D. Karkhanis assisted by Shri S. C. Manchanda supported the petition on the following grounds :-

(1) No income has escaped assessment within the meaning of section 147 of the Act because the interest paid by the petitioner on the loan taken from his Provident Fund was paid to the Government. It became a part of the Consolidated Fund of India, that is, the property of the Government, it was, thereforee, expenditure incurred wholly and exclusively in connection with the transfer of the house within the meaning of section 48(1).

(2) Even if the interest was paid into the petitioner's own account in the Provident Fund and thus continued to belong to the petitioner without becoming the property of the Government, this information was known to the Income-Tax Officer at the time of the assessment. It did not become known to him subsequently. The said Officer thus had no jurisdiction to make the re-assessment under section 147(b) of the Act.

(4) Both these contendons were repelled in the defense. It was pointed out that :-

(1) The interest paid by the petitioner did not become the property of the Government and did not become a part of the Consolidated Fund of India. It was paid to his own account in the Provident Fund and remained his own property. It did not, thereforee, amount to any expenditure by him muchless expenditure incurred in connection with the transfer of the house; and

(2) On the return and the representation made by the petitioner, ' it was not apparent that the interest which had been paid by the petitioner was in fact credited to his account and the true and correct interpretation of rule 7-E was brought to the notice of the I.T.O. by the Revenue Audit authorities as well as by the Ministry of Law that the petitioner was, in law, not entitled to deduction of the amount of interest paid.'

(5) We ourselves put the following further points to the counsel and heard them on the same, viz, (1) whether the conduct of the petitioner debars him from relief, (2) whether he has suffered no injustice by the issue of the impugned notice, and (3) whether positive injustice would result if the relief prayed for is granted to the petitioner.

(6) The first question is whether the notice under section 148 read with section 147(b) was issued with jurisdiction. It is a condition precedent to the issue of such a notice that the Income-Tax Officer should have come into the possession of 'information' subsequent to the date of the assessment. He has sworn an affidavit that he came to know of it after the date of the assessment. He has also sworn that 'as the time when original assessment was made, it was not apparent that the interest was in fact credited to his account.' This averment is substantiated by the representation made by the petitioner at the time of the original assessment. In the return he repeatedly stated that the interest was paid by him to the Government. This representation was contrary to rule 7-E (2) which states that 'the sum withdrawn by him shall forth with be repayable together with interest thereon at the rate determined under rule 4 by the subscriber to the Fund.' Neither in the petition nor in the argument was any Explanationn given as to why the petitioner told the Income-Tax Officer that the interest was paid to the Government when under rule 7-E(2) it was paid to the Fund. It has been seriously contested by and for the petitioner that the interest was paid to the Government and that it went to the Consolidated Fund of India. The Income-Tax Officer, out of regard, to the petitioner, made the assessment solely relaying on the representation and the return made by the petitioner. The information that the interest was paid to the Fund and not to the Government was not given by the petitioner to the Income-Tax Officer. It is true that the Income-Tax Officer could have himself found out from rule 7-E whether the interest was really paid to the Fund. The fact remains, however, that this vital information was not apparent to the Income-Tax Officer at the time of the assessment.

(7) The affidavit of the Income-Tax Officer further states that subsequently ' the true and correct interpretation of rule 7-E was brought to the notice of the I.T.O. by the Revenue Audit authorities as well as by the Ministry of Law.' This would mean that these two authorities pointed out to the Income-Tax Officer that on a true meaning of rule 7-E the interest went to the Fund and continued to belong to the petitioner. It was not, thereforee, an expenditure by the petitioner.

(8) It is mixed question of law and fact whether the interest paid by the petitioner was expenditure. The question of law is whether the payment of the interest to the Fund meant a payment to the petitioner himself or to the Government in considering the second question; we shall show that it amounted to the payment to the petitioner himself inasmuch as the account in the Provident Fund belonged to the petitioner and that the interest remained the property of the petitioner even after the payment to the Fund. The question of fact is whether the petitioner had made the payment to me Fund or to the Government. The representation by the petitioner that it was paid to the Government was not correct. As required by rule 7E(2) it was paid to the Fund. In Commissioner of Income-Tax v. A. Roman & Co. : [1968]67ITR11(SC) the Supreme Court has made it clear that the information could consist either of fact or of law. The fact that the payment was made to the Fund was not disclosed in the representation made by the petitioner and was not, thereforee, apparent to the Income-Tax Officer. The law that the payment amounted to the petitioner himself and not to the Government was pointed out to the Income-Tax Officer by the Revenue Audit and the Ministry of Law subsequent to the assessment. Thus information about the fact as well as the law came into the possession of the Income-Tax Oilicer after the assessment.

(9) It was contended by the learned counsel for the petitioner, on the authority of Kasturbhai Lalbhai v. R. K. Malhotra, I.T.O. : [1971]80ITR188(Guj) that 'information as to the state of law by any and every person cannot constitute 'information' so as to entitle the Income-Tax Officer to reopen the assessment.' We respectfully agree with this proposition laid down by P.N. Bhagwati, C.J., speaking for the Division Bench of the Gujarat High Court in the abovementioned decision. The objects of the requirements in section 147(b) that the information must be subsequent to the date of the assessment and that it should be from a source external to the Income-Tax Officer are meant to prevent an abuse of power exereisable under section 147(b) by the Income-Tax Officer. In their absence, the Income-Tax Officer would be able to change his opinion after making the assessment and the finality of the assessment would be destroyed not by any external causes but at the will of the Income-Tax Officer himself. It is also necessary to ensure that the Income-Tax Officer is, not able to ascribe the information about the law given to him subsequent to the assessment to any person whatever. It would then be difficult to know whether it was his own re-thinking or it really came to him from some person who either had the power or the duty to give such information in the form of an opinion to the Income-Tax Officer. The externality of the source of the information has to be understood in this manner with a view to achieve the object of section 147(b). Bhagwati, C. J. attempted to circumscribe the externality of the source of the income in the following words at page 193 of the report:-

'IT must be, as already stated by us, a statement or expression of the correct state of the law by a person, body or authority competent and authorised to pronounce upon the law, so that it is invested with some definitencss and authority.'

(10) With respect, we think that this test unless narrowly construed, is not materially different from the test of power and/or duty suggested by us above. It is in the light of this test that we have to decide whether the information coming from the Audit department and/or the Ministry of Law could amount to 'information' within the meaning of section 147(b). The question was answered in the negative by the Division Bench of the Gujarat High Court in the following words at page 194 of the report :-

'THE audit department is not an authority competent and authorised to declare the correct state of the law or to pronounce upon it.'

(11) If by the words 'declare the correct state of the law or to pronounce upon it' is meant the authoritative decision of law which is binding on parties, ^courts and other authorities, then such authority is possessed only by the courts or other statutory authorities empowered to decide questions of law. This raises the question whether the test of the externality of the source of information laid down by the Supreme Court in Raman & Co. referred to above, is not being unduly circumscribed by these words.

(12) The legal work is done not only by lawyers and judges but also by other qualified persons particularly in the working of the Government on cases many of which do not come to courts at all. Legal advisers of the Government advise the Government. In performing the function of assessment, the Income-Tax Officer acts partly as an administrator and partly as a quasi-judicial authority. His position is different from that of the Court. He is required statutorily to obey the instructions and directions issued by the Central Board of Revenue under section 119 of the Act (Ellerman Lines Ltd. v Commissioner of Income-tax, : [1971]82ITR913(SC) . Such a direction by the Central Board of Revenue would constitute an 'information' under section 147(b) even though it may not have been given by a Court of law and an appellate authority under the Act.

(13) Under Article 74 of the Constitution the President exercises his functions on the aid and advice of the Council of Ministers. Under Article 77(3) the President has made rules for the more convenient transaction of the business of the Government of India and for the allocation among Ministers of the said business. Under the said rule the function of advising the Government on all questions of law is given to the Ministry of Law. In his executive capacity, an Income-Tax Officer is a part of the Government. The Ministry of Law has, thereforee, the power and/or duty to give advice on questions of law for the guidance of the Income-Tax department. The opinion of the Ministry of Law becomes the opinion of the Government in view of these rules of business. The Income-Tax Officer has, thereforee, to pay due regard to the said opinion.

(14) Under Article 148 of the Constitution the Comptroller and Auditor General of India is appointed as an independent authority not removeable from office except in the manner and on the grounds as a Judge of the Supreme Court would be removed. It is well known that his department is divided into two parts, namely, Accounts and Audit. The function of the auditors is to examine and check the work of the Government officers, point out mistakes, if any, committed by them and lay down instructions for their correct working. The report of the Comptroller and Auditor-General of India on the functioning of the departments of the Government is submitted to the President under Article 151 and is laid before each House of Parliament. The Public Accounts Committee of the Parliament sees to it that this report is complied with by the Government as far as possible. The Revenue Audit is a part of this Audit department. The officers of the Revenue Audit must be experts who can examine and check upon the work of Income-Tax Officers. They are presumed to know the work of the Income-Tax Officers including the law of income-tax. The Income-Tax Officer has, thereforee, to pay due regard to the notes of such auditors. As the Revenue Audit and the Ministry of Law have the power and duty to guide the functioning of the Income-Tax Officers in this respect, advice and instructions given by them have to be regarded as 'information' within the meaning of section 147(b) as being external to the Income-Tax Officer but at the same time not coming from a mere interloper not connected with the work of the Income-Tax Officer. In regard to the audit notes being 'information' we are supported in our conclusion by all the other decisions of the High Courts placed before us, viz., Canara Industrial and Banking Syndicate Ltd., v. Commissioner of Income-Tax : [1964]51ITR479(KAR) , per Hegde and Ahmed Ali Khan, JJ., Commisioner of Income-Tax v. Ketakutty : [1972]85ITR102(Ker) per Mathew and Krishnamoorthy lyer, JJ., Muthukrishna Reddiar v. Commissioner of Income-Tax : [1973]90ITR503(Ker) per Govindan Nair and Sadasivan, Jj, and Commissioner of Income-Tax v. H. H. Smt. Chand Kanwarji : [1972]84ITR584(Delhi) , per Hardayal Hardy and M.R.A. Ansari, JJ. of this Court .

(15) On the first question, thereforee, our finding is that the Income- Tax Officer received 'information' within the meaning of section 147(b) of the Act when subsequent to the assessment the Ministry of Law and the Revenue Audit pointed out that as a question of fact the payment of interest by the petitioner was made to his own account in the Provident Fund and as a question of law the money so paid did not vest in the Government but continued to belong to the petitioner and, thereforee, the income of the petitioner had escaped assess- ment which was made on the basis that such payment of interest had amounted to an expenditure incurred by the petitioner in connection with the transfer of his house. The Income-Tax Officer had, thereforee, jurisdiction to issue the impugned notice under section 148 read with section 147(b) of the Act.

(16) On this finding, we need not have answered the second question but we would prefer to do so to completely deal with the points raised by the petitioner and argued before us. Under Article 266 of the Constitution, the Consolidated Fund of India is constituted of only three elements, namely, (1) revenues received by the Government of India, (2) loans raised by that Government by the issue of treasury bills, loans or ways and means advances, and (3) all moneys received by that Government in repayment of loans. Learned counsel for the petitioner argued that: the repayment of a loan taken from the provident Fund along with interest on it would come under the last element of the Consolidated Fund of India. This argument ignores not only the true interpretation of Article 266 but also of the other connected provisions of the Constitution. Under Article 284 all moneys received by or deposited with (a) any officer connected with the affairs of the Union or of a State in his capacity as such, other than revenues or public moneys raised or received by the Government of India or the Government of the State, as the case may be, or (b) any court within the territory of India to the credit of any cause, matter, account of persons, shall be paid into the public account of India or the public account of the State as the case may be. It is to be noted that as contrasted with the Consolidated Fund of India, the public account of India contains moneys which are received by the Government officers or courts but which continue to belong to persons to whom such moneys are payable. They do not belong to the Government. The contrast between the Consolidated Fund of India and the public account of India is brought out by the following features, namely :-

(1) Under Article 266(2) all other public moneys received by or on behalf of the Government of India shall be credited to the public account of India. That is to say, all moneys other than the revenues, loans and repayments of loans are credited to the public accounts and not to the Consolidated Fund.

(2) Under article 266(3) no moneys out of the Consolidated Fund of India shall be appropriated except in accordance with law and for the purposes and the manner provided in the constitution.

(3) The annual appropriation Act is passed and then only the Government can spend the money out of the Consolidated Fund of India after the budget is voted upon by Parliament. There is no such: requirement for payment of the moneys from the public account. The reason is that the former Fund belongs to the Government while the latter account contains moneys which do not belong to the Government.

(4) It is a matter of common knowledge that the instances of 'other public moneys' which go to the public account under Article 266(2) and 284 include deposits, remittances and service -funds C. D. Basu's Commentary on the Constitution of India 5th Edn. Volume 4, pages 261-262). Instances of moneys deposited in the public account are the Provident Funds, Postal Savings Bank Accounts, Life Insurance Funds, etc. Under Article 283. the operation of the Consolidated Fund of India, the public account and the Contingency Fund of India can all be regulated by law. This does not mean, however, that like the Consolidated Fund and the Contingency Fund, the ownership of the moneys in the public account must belong to the Government of India.

(17) That the money in the petitioner's account in the Provident Fund continued to belong to the petitioner and not to the Government of India is also clear from the following :-

(1) The object of constituting a Provident Fund is to provide for the eventuality of retirement or the death of the subscriber. This is why the moneys paid into the Fund are not repayable to the subscriber ordinarily till those eventualities occur.

(2) The very fact that a Provident Fund is constituted would show that the Fund is different from the Consolidated Fund or the Contingency Fund. As the Government has to keep the custody of the money and manage it, the Provident Fund formed part of the public account of the Government.

(3) A person subscribes to the Provident Fund or contributes to it. He does not give away his money thereby.

(4) The money and the interest on it is credited into the Fund.

(5) Such money is credited to the account of the subscriber.

(6) Such money may be withdrawn by the subscriber ordinarily on his retirement or be paid to his nominees or heirs on his death or in certain circumstances even earlier but in all events it remains his money payable to him or .his nominees or heirs.

(7) The language of the Indian Civil Service Provident Fund Rules shows that the money continued to belong to the subscriber and does not vest in the Government.

(8) The Provident Funds Act, 1925 is applicable to this as well as other Provident Funds. It defines 'compulsory deposit' in section 2(a) as one which is not 'repayable on demand'. But for this provision, the money would have been repayable on the demand of the subscriber which means that it belongs to the subscriber. The repayment is deferred only because the money is held in the Fund to provide for the eventualities of death and retirement.

(9) Under section 3 of the said Act as also under section 60 of the Code of Civil Procedure the money in the account of the subscribers to the Provident Fund is exempt from attachment. The necessity to provide for such exemption arose because the moneys belong to the depositors and not to the Government and would have been liable to attachment by their creditors as the judgment-debtor's property in execution of a decree or order against him.

(10) Under certain circumstances the moneys in the Provident Fund account can be assigned by the subscribers and can be made payable to nominees by them. This also shows that the moneys belong to the subscribers.

(11) Part Xii of the Income-Tax Rules, 1962 deal with recognised Provident Funds. Section 10(12) of the Income-Tax Act states that the accumulated balance due and becoming payable to an employee participating in a recognised Provident Fund to the extent provided in rule 8 of Part A of the Fourth Schedule would not be included in the total income of an asscssee.

(12) Lastly, the contributions made by the employees and the eir'ployers to the Labour Welfare Fund which is in the nature of a Provident Fund were held to be payable to the employees for whose benefit the contributions were made and not to the Government or any other authority (The State of Gujarat v. The Arvind Mills Ltd., Ahmedabad, : [1974]3SCR760 , and Bombay Dyeing and Mfg. Co. Ltd., v. State of Bombay, : (1958)ILLJ778SC ).

(18) We, thereforee, find that the petitioner continued to be the owner of the interest paid by him on the amount withdrawn by him from the Provident Fund. An amount so withdrawn may have been called an advance only because ordinarily the money in the account of the subscriber is not payable to him till his retirement. It is significant that it was not an ordinary advance but an no-retundable advance or loan. An ordinary advance or loan is repayable but this was not repayable because the money had already belonged to the petitioner.

(19) Our finding of fact on this second question, thereforee, is that the money paid by the petitioner by way of interest went into his own account in the Provident Fund and remained his own money. There was thus no expenditure at all incurred by him in making the said payment. The finding of law is that the payment into the petitioner's account in the Provident Fund does not amount to a payment to the Government and is not an expenditure incurred in connection with the transfer of his house within the meaning of section 48 of the Act.

(20) The finding on this second question means that even if it is assumed for the sake of argument that our finding on the first question is incorrect and section 147(b) does not cover the proposed reassessment, still the Court would have the discretion to refuse relief to the petitioner.

(21) The law is well settled that the issue of a writ or order in the nature of certiorari by this Court under Article 226 is not of course. It does not follow as soon as some legal infirmity is shown by the petitioner in the impugned order. This Court has the discretion to abstain from interference if (a) the conduct of the petitioner is such as to disentitle him to the relief, (b) he has not suffered any injustice, or (c) that the grant of the relief to him would result in injustice. All these three reasons are present in this case. The deduction was allowed to the petitioner without further inquiry because of his statement that the interest was paid to the Government while in fact it was paid to his account in the Fund. The petitioner has been upjustly enriched at the cost of the public interest. To allow the petitioner to retain the undeserved advantage would me&n; that the burden of taxation which he should have legally borne is being misplaced. (The dicta of Lord Greene in Howard de Walden v. Inland Revenue Commissioners. (1942) 1 K. B. 389, and of Lord Chancellor Viscount Simon in Latilla v. Inland Revenue Commissioners, (1943) A.C. 377 are instructive in this respect).

(22) In A.M. Alison v. B. L. Sen, : (1957)ILLJ472SC , , the order of the Deputy Commissioner, Sibsagar, purporting to fix minimum wages was challenged as being without jurisdiction. On the facts stated there was a prima facie case to show that the said order might not be supported by section 20 of the Minimum Wages Act, 1948. But their lordships observed in paragraph 16 of the judgment :-

'WE do not propose to decide this question of jurisdiction. ... Whatever infirmities might possibly have attached to the orders passed by the Deputy Commissioner, Sibsagar, on the score of want of jurisdiction, we feel that . . . . no useful purpose will be served by our interfering at this stage.'

Their Lordships further observed in paragraph 17 :-

'THERE are moreover special reasons why we should not interfere with the orders of the Deputy Commissioner, Sibsagar. They were the subject, in the first instance, of proceedings under Article 226 of the Constitution in the High Court of Assam. Proceedings by way of certiorari are not of course. (Vide Halsbury's laws of England, Hailsham Edition, Vol. 9, paras 1480 and 1481, pp. 877-878, corresponding to 11, Halsbury's Laws of England, 3rd Edition, paragraph 265). The High Court of Assam had the power to refuse the writs if is was satisfied that there was no failure of justice, and in these appeals which are directed against the orders of the High Court in applications under Article 226, we could refuse to interfere unless we are satisfied that the justice of the case requires it. But we are not so satisfied.'

(23) The same view was expressed by Gajendragadkar, CJ' speaking for the Constitution Bench in Smt. Narayani Debi Khaitan v. State oi Bihar, (Civil Appeal No. 140 of 1964 decided on September 22, 1964) as follows :-

'IT is well settled that under Article 226, the power of the High Court to issue an appropriate writ is discretionary. There can be no doubt that if a citizen moves the High Court under Article 226 and contends that his fundamental rights have been contravened by any executive action, the High Court would naturally like to give relief to him, but even in such a case, if the petitioner has been guilty of laches, and there are other relevant circumstances which indicate that it would be inappropriate for the High Court to exercise its high prerogative jurisdiction in favor of the petitioner, ends of justice may require that the High Court should refuse to issue a writ. There can be little doubt that if it is shown that a party moving the High Court under Article 226 for a writ is, in substance, claiming a relief which under the law of limitation was barred at the time when the writ petition was filed, the High Court would refuse to grant any relief in its writ jurisdiction. No hard and fast rule can be laid down as to when the High Court should refuse to exercise its jurisdiction in favor of a party who moves it after considerable delay and is otherwise guilty of laches. That is a matter left to the discretion of the Court, in this matter too discretion must be exercised judiciously and reasonably.'

(24) These observations were followed by S.M. Sikri and K. S. Hegde Jj (in Durga Prasad v. The Chief Controller of Imports and Exports : [1969]2SCR861 , to make the point that the relief under Article 226 is discretionary.

(25) High Courts have refused to interfere in their writ jurisdiction when not called upon to do so in the interests of justice. The reason is that the remedy sought by the petitioners under Article 226 is not as of right but is in the discretion of this Court. (State of U.P. v. Dr. Vijay Anand Maharaj, : [1962]45ITR414(SC) . The discretion is to be exercised to further the interests of justice and not to do injustice (Vide Verrappa v. Roman : [1952]1SCR583 D. N. Banerjee v. P. R. Makherjee : [1953]4SCR302 and Sangram Singh v. Election Tribunal, : [1955]2SCR1

(26) A learned commentator (Basu's Commentary on the Constitution of India, 5th Edition, Volume 3, pp. 375-377) has observed that manifest injustice is not a condition precedent to the grant of relief under Article 226. He relies on the decision of the Supreme Court in Bhopal Sugar Industries v. I. T. 0., : [1960]40ITR618(SC) . But the said decision does not deny such discretion to the High Court. On the contrary, the Supreme Court found that the writ of mandamus had to issue in that case because the respondent 'failed to carry out a legal duty imposed on him and such failure was destructive of a basic principle of justice'. It is to be noted that the expression 'ex debito justitiae' used in this connection only means that the petitioner has a locus standi and is an aggrieved person (The King v. Richmond Confirming Authority, 19211 K. B. 248. It in no way denies discretion to the Court. In Digamber Prasad v. S. L. Dhan. (1969) Delhi 1016, a Full Bench of this Court refused to quash at the instance of the tenant, the order of the competent authority under the Slum Areas (Improvement and Clearance) Act, 1956 passed without jurisdiction because the tenant had not paid the rent due from him. This Court refused to exercise the discretion in favor of the tenant for this reason.

(27) Even if, thereforee, this Court has the option to grant or refuse relief to the petitioner, considerations of justice have to be taken into account in exercising the option. There is nothing surprising in the doctrine. As Lord Macmillan writes 'in almost every case, except the very plainest, it would be possible to decide the issue either way with reasonable legal justification' and that in such cases, ethical considerations operate and ought to operate (Law and other Things, page 48). For the above reasons, we dismiss the writ petition with costs.


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