TMI Blog1984 (11) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... note should prepare in the form set out in the schedule, three copies of declarations signed by him giving full particulars in that form and hand over the same not later than 19th Jan., 1978 together with the high denomination bank notes either to the office of the Reserve Bank Head Office at Bombay or its sub-offices or to the main office or branch of the State Bank or to any other public sector bank notified by the Reserve Bank. Unless it appeared that the declaration has not been complete in all material particulars, the Reserve Bank, State Bank or any bank notified, as the case may be to which an application for exchange of high denomination bank note has been made shall pay the exchange value of the said notes either by crediting the account of the owner or if the owner did not have the bank account by tendering exchange value on proper identification. But where it appeared that the declaration had not been completed in all material particulars, the bank concerned would refuse to accept and pay for the bank notes and shall return one copy of declaration to the declarant after entering the date on which it was presented and shall refer the matter to the Bank concerned forwardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only that but his son was also not spared of raids, summonses etc. The petitioner contended that the respondent bank had no authority to inform the Income-tax department and supply with such particulars. The petitioner had paid his income-tax dues for years together and the books of account of his business showed a cash balance in excess of ₹ 2,61,000/-. His books had all along been produced before the I.T. Authorities, assessments had been made and accepted by the department for such assessment. No income-tax was due and payable by the petitioner to the department, on the contrary a sum of ₹ 3,245/- became refundable to the petitioner by the I.T. Department. Hence neither there was any income-tax proceeding pending against the petitioner, nor there could be any. There was no case of any penalty proceedings nor any arrears of tax were due from the petitioner. 3. The respondent 2, the I.T. Authorities had issued two notices under Section 226(3) dt. 15th Feb., 1978 and under Section 281(b) dt. 20th Feb., 1978 of the Income-tax Act attaching the said sum of ₹ 2,61,000/- lying deposited with the State Bank of India. By subsequent two several notices both dt. 18th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bank. He was further directed to hand over to an Assistant Director of Inspection of the I.T. Department all the forms lodged by the bank but rejected by the bank in the month of Jan., 1978. By a letter dt. 19th Jan., 1978 the Commissioner of Income-tax, West Bengal wrote a letter to the Manager, State Bank of India that all the declaration forms lodged with the bank in respect of high denomination bank notes and to hand over all such declaration forms lodged on 17th and 18th Jan., to the officer of the I.T. Department upon proper receipt with a further direction to hand over the forms which would be submitted on 19th Jan. Hence it was the case of the respondent bank that it had no alternative but to submit the forms to the Income-tax Authority. 7. The respondent 2 I.T. Department contended that the attachment order was issued for the purpose of protecting the interest of the revenue pending the assessment or re-assessment of the income of the assessee. They admitted that the house and the office of the petitioner had been raided. It further contended that a sum of ₹ 2,16,827/- was due from the petitioner on account of income-tax hence the notice dt. 15th Feb., 1978 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment. In any event, the money had been withheld for one month without any rhyme or reason inasmuch as the attachment order was made almost one month after the deposit. The declarations had been complete in all material particulars, as such the bank did not reject the same. Hence there was no ground for withholding payment. This delay of one month had been deliberately made to suit the convenience of the I.T. department. In spite of that the I.T. Department could not justify such action as no case followed against the petitioner after such attachment. 10. The banker is under an obligation to secrecy. According to Lord Halsbury's Laws of England 4th Edn. Vol. 3 p. 72 Article 97. It is an implied term of the contract between a banker and his customer that the banker will not divulge to third person without the express or implied consent of the customer either the state of the customer's account or any of his transactions with the bank or any informations relating to the customer acquired through the keeping of his account unless the banker is compelled to do so by order of a Court or the circumstances give rise to a public duty of disclosure or protection of the banker ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f enforcement of fundamental rights and statutory rights to give consequential relief by ordering repayment of money realised by the Government without the authority of law. At the same time the special remedy provided in Article 226 is not intended to supersede completely the modes of obtaining relief by an action in a civil Court or to deny defence legitimately open in such actions. . The power to give relief under Article 226 is a discretionary power. This is specially true in the case of power to issue writs in the nature of mandamus. Among the several matters which the High Courts rightly take into consideration in the exercise of that discretion the delay made by the aggrieved party in seeking this special remedy and what excuse there is for it. Another is the nature of controversy of facts and law that may have to be decided as regards the availability of consequential relief. Thus, where a person comes to the Court for relief under Article 226 on the allegation that he has been assessed to tax under a void legislation and having paid it under a mistake is entitled to get it back, the Court, if it finds that the assessment was void, being made under a void provision of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioner failed to earn for not receiving the exchange value immediately. The petitioner deposited the money on 15th Jan., 1978 and the bank having accepted the declaration forms tendered by the petitioner along with the currency notes in terms of Section 7 Sub-section (5) and the bank not having refused to accept the same the bank was under an obligation under Section 7 Sub-section (4) to pay the exchange value to the credit of the petitioner's account as desired by him. By not having paid the money but by giving wrongful information to the I.T. Authorities the respondent 1 thereby deprived the petitioner of the utilisation of the said money under the circumstances the petitioner prayed for refund of the said sum which he could have so earned. The petitioner's such claim not only had been disputed inasmuch as the claim for such interest did not arise under the statute, nor there was an agreement by and between the parties for payment of interest. No notice under Section 1 of the Interest Act had been served, nor the petitioner could rely upon any custom or usuage under which such interest was payable. As such the question of awarding interest in a proceeding under Arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t whether there has been delay depends on the facts of each case. The provisions of the Limitation Act do not as such apply to the granting of relief under Article 226. However, the maximum period fixed by the legislature as to the time within which the relief by a suit in a civil Court must be brought may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under Article 226 can be measured. The Court may consider the delay unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy but where the delay is more than this period, it will almost always be proper for the Court to hold that it is unreasonable. 17. The respondent contended that the petitioner was not a constituent of the bank. Paget in Banking Laws 9th Edn. Page -- 5 observed on banking business. Three criterions had been laid down to indicate the creation of relationship of the banker and its constituent i.e. such as conduct of account, payment of cheques drawn by the constituent, and thirdly collection of cheques on behalf of the customer. Whereas in the instant case there was no such relationship of a banker and a customer between the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t after the expiry of a period of six months from the date of the order made provided that the Commissioner may for reasons to be recorded in writing extend the aforesaid period by such period or periods as he thinks fit. However, the total period of such extension should not exceed 2 years. The petitioner contended such opinion must not be objective but subjective satisfaction on proper materials. The petitioner contended that the respondent had no materials whatsoever hence any such formally (sic) of opinion amounted to malice in law. In that respect the petitioner referred to the case Smt. S.R. Venkataraman v. Union of India where it was held that malice in its legal sense meant such malice as may be assumed from the doing of a wrongful act intentionally but also without just cause or execuse or for want of reasonable or probable cause. Any use of discretionary power exercised for an unauthorised purpose amounts to malice in law. It is immaterial whether the persons acted in good faith or in bad faith. The petitioner relied upon the case Smt. S.R. Venkatraman v. Union of India, where it had been held : -- There will be an error of fact when a public body is prompted by a mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what constitutes a customer Paget on Law of Banking 9th Edn. at Page 21 observed that it has been thought difficult to reconcile the idea of a single transaction with that of a customer; that the word predicates even grammatically, some minimum of custom antithetic to an isolated act. This view has generally been over thrown in favour of the view which records 'duration' is not of essence and an intention, other things equal to enter upon a course of dealing is probably sufficient to establish the relationship of banker and customer. Under the Act itself bank had been defined under Section 2(a). 23. The learned lawyer appearing on behalf of the petitioner strongly relied upon the case Shiv Shanker Dal Mills v. State of Haryana where it has been held :-- Where public bodies, under colour of public laws, recover people's money, later discovered to be erroneous levies, the Dharma of the situation admits of no equivocation. There is no law of limitation, especially for public bodies, on the virtue of returning what was wrongly recovered to whom it belongs. 24. The learned lawyers further relied upon the observation made in Gujrat Steel Tubes Ltd. v. Its Mazdoor S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est. As observed by Lord Tomlin in Maine and New Brunswick Electrical Power Co. v. Hart, (AIR 1929 PC 185), In order to invoke a rule of equity it is necessary in the first instance to establish the existence of a state of circumstances which attracts the equitable jurisdiction, as for example, the non-performance of a contract of which equity can give specific performance . The present case does not. however, attract the equitable jurisdiction of the Court and cannot come within the purview of the proviso. The learned Judges of the High Court have allowed interest by way of damages caused to the plaintiffs for the wrongful detention of their money by the railway, but the question is whether this view can be sustained. There is a considerable divergence of judicial opinion in India on the question of whether interest can be recovered as damages under Section 73 of the Indian Contract Act (IX of 1872), where it is not recoverable under the Interest Act. 26. In the case Shanti Prasad Jain v. Director of Enforcement Foreign Exchange Regulation Act it was held that although there might be special arrangement whereunder a banker might be consiituted a trustee but spared from su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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