TMI Blog1958 (2) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 extraordinary 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 placed 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 been reported it could not be said that there was any delay in asking for the amendment. Now, the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 for consideration is whether a person, who is admittedly a benamidar of the property in question, can maintain a wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected 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 pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited to the proposition that a mere inference drawn from the evidence given by the real 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 petition 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 petition, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore 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 efficacious 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 levi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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