Calcutta High Court
Klg Tradefin Private Limited vs Ashoka Hawai And Shoes Private ... on 15 July, 2022
APO 53/22 & 54/22 Page 1 of 21
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
ORIGINAL SIDE
Present:
THE HON'BLE JUSTICE HARISH TANDON
&
THE HON'BLE JUSTICE SHAMPA DUTT (PAUL)
APO NO. 53 OF 2022
With
CS No.41 OF 2022
IA GA NO.1 OF 2022
KLG TRADEFIN PRIVATE LIMITED
Vs.
ASHOKA HAWAI AND SHOES PRIVATE LIMITED
And
APO NO. 54 OF 2022
With
CS No. 40 OF 2022
IA GA NO.1 OF 2022
K.P. CREDIT AND TRADERS PRIVATE LIMITED
Vs.
ASHOKA HAWAI AND SHOES PRIVATE LIMITED
Appearance:
For the Appellant : Mr. Suresh Sahni, Adv.
Mr. Soumik Ghosh, Adv.
Ms. Karuna Bose, Adv.
For the Respondent : Mr. Anirban Ray, Adv.
Mr. VVV Sastry, Adv.
APO 53/22 & 54/22 Page 2 of 21
Mr. Tridip Bose, Adv.
Ms. Vidhi Sharma, Adv.
Judgment On : 15.7.2022
Harish Tandon, J.
The seminal point involved in the instant appeal is whether the Court
can pass an order directing the Income Tax authority to make an
investigation over the transactions between the parties to be unconscionable
and opposed to public policy and submit the report for further course of
action, in a suit simplicitor for recovery of money lent and advanced by the
plaintiff to the defendant.
The plaintiff has approached the Division Bench with an Intra-Court
appeal under Clause 15 of the letters patent assailing the said order
primarily raising an above point and not on the ground of refusal to pass an
appropriate interim orders which, according to the plaintiff may be dealt
with at the time of final disposal of the interlocutory application. Therefore,
the consideration is restricted to the above point and the competence and
jurisdiction of the Court to embark its journey to such so-called difficult
terrain beyond the conceivable limits and jurisdiction bestowed upon it
under the law.
The prelude to the litigation is required to be adumbrated and ensued
when the plaintiff-appellant advanced a sum of Rs. 65 lakhs through bank
transactions in favour of the defendant-respondent with clear stipulation
that the aforesaid amount is repayable together with an interest at the rate
of 12 per cent per annum. The aforesaid amount was lent and advanced on
diverse dates between 18th January, 2020 and 18th September, 2020
corroborated with the documentary evidence more particularly, the bank
statement of the plaintiff's bank account. It is undeniable that the part
payment to the tune of Rs. 1, 37, 650/- was made on 10th October, 2020 on
account of the repayment of interest and the TDS was also deducted of the
specified amount from time to time during the Financial Year 2019-2020
and 2020-2021. The suit was filed when the plaintiff-appellant demanded
the return of the said amount together with an interest and the defendant
neglected and failed to pay the said amount.
It is pertinent to record that the letter of demand for repayment of the
amount together with an accrued interest thereupon was called upon the
defendant-respondent which has been duly replied to. Interestingly, a plea
was taken by the defendant-respondent in the said reply that the alleged
transaction was not real but is an accommodated entry or "Jamma Kharji"
and, therefore, the claim is fraudulent and fictitious as the plaintiff-
appellant never actually gave the said amount from its own resources or the
income but the unaccounted money in cash was given by the defendant-
respondent to the plaintiff-appellant and, therefore, there was no real
transactions entered into by and between the parties. Even the same
defence has been projected and/or repleted in the written objection filed by
the defendant-respondent to an application of the plaintiff-appellant under
Order 39, Rule 1 and 2 read with Order 38, Rule 5 of the Code of Civil
Procedure.
Such being the basic facts discerned from the restrictive pleadings of
the parties, the Trial Court not only refused to pass an interim order on an
application but upon noticing the startling facts emerged from the respective
stands of the parties directed the member (investigation), Central Board of
Direct Taxes to cause an investigation into the monetary dealing being the
subject matter of the suit to file a report on the returnable date. The sole
basis of passing the aforesaid direction as appeared from the findings
returned in the impugned order that the parties have precipitated an illegal
transaction expressly forbidden by law and the Court upon a prime facie
finding cannot act as a mute spectator.
Ironically not only the plaintiff-appellant appears to be critical on the
direction passed by the Trial Court in the impugned order but the
defendant-respondent also, though feebly, accepted the stand of the plaintiff
in supporting the arguments so advanced at the Bar.
Since the important and vital aspects over the competence and
jurisdiction of the Court in passing such directions are raised we feel that
such point should be decided and invited the parties to address the Court
thereupon.
Mr. Sahni, learned Advocate appearing for the plaintiff-appellant
vociferously submits that the pleading of the parties are the important facets
of adjudication of the disputes in adversial system and the Court cannot
travel beyond the four corners thereof in passing a direction which is
uncalled for and unwarranted. He further submits the field of public policy
originating from a common law cannot be expanded, more particularly in a
civil suit beyond the procedural law and the provisions contained therein.
According to him, public policy principles can only be expounded through a
judicial precedents as opposed to the expansion of his horizon based upon a
perception of a Judge having a larger impact both in a positive or negative
way.
In support of the aforesaid contention, Mr. Sahni relies upon a
Constitution Bench decision rendered in case of Gherulal parakh vs.
Mahadeo Das Maiya & Ors. reported in AIR 1959 SC 781. It is further
submitted that the doctrine of public policy can be activated only in case of
a breach of a common law and does not ipso facto invalidate the contract.
Mr. Sahni arduously submits that although the principles governing the
public policy is capable of an expansion or modification but such principles
are guided by the principles underlying the fundamental rights and the
directive principles enshrined in our Constitution and placed reliance upon
a judgment of the Apex Court in case of Central Inland Water Transport
Corporation Ltd. & Anr. Vs. Brojo Nath Ganguly & Anr. Reported in
(1986) 3 SCC 156 which is further reiterated in a subsequent decision
rendered in case of PASL Wind Solutions Pvt. Ltd. VS GE Power
Conversion India Pvt. Ltd. reported in (2021) 7 SCC 1. According to him,
the concept of public policy is not rigid and varies with the changing times
and needs of the society, more particularly in relation to a contract unless it
tends to injure the public interest or the public welfare as envisaged under
Section 23 of the Contract Act and relied upon a judgment of the Apex Court
in case of Gurmukh Singh Vs. Amar Singh reported in (1991) 3 SCC 79.
Mr. Sahni vociferously submits that both the parties knowing fully well the
antecedent of the transactions entered into a contract which cannot be said
to be perse illegal but later on the defendant-respondent tried to resile
therefrom taking a plea of invalidation and/or illegality which is
impermissible unless the Court after a full-fledged trial declared such
contract to be illegal and relied upon a judgment of the Supreme Court in
BOI Finance Ltd. Vs. Custodian & Ors. reported in (1997) 10 SCC 488.
It is further submitted that once the contract is clear and explicit and
exposes the intention of the parties without any ambiguity brought in it, the
Court cannot add or insert any word nor perceive omission if it conveys an
intelligible result and placed reliance upon judgment of the Supreme Court
in case of Raghunath Rai Bareja & Anr. Vs. Punjab National Bank
reported in (2007) 2 SCC 230. Mr. Sahni further submits that the Court
should not exercise the inherent power enshrined under Section 151 of the
Code of Civil Procedure when there is a specific provisions provided in the
statute and placed reliance upon a judgment of the Supreme Court in case
of National Institute of Mental Health and Neuro Sciences vs. C.
Parameshwara reported in (2005) 2 SCC 256. To sum up, Mr. Sahni
submits that the Court should restrict its order on the pleadings made in
the application filed by either of the parties and cannot resort to an
extraneous factor and pass a direction unconnected and/or unrelated with
the reliefs claimed therein. The public policy principles is not unbrindled
and/or unfettered but are guided by the precedents and may only apply in
case of the contract being forbidden by law or any incident perceived under
Section 23 of the Contract Act. Such power can be exercised with the
restricted modification and not on an individual's perception. He thus
submits that the impugned order so far as it relates to the direction upon
the authority to investigate and submit the report to the Court is illegal and
cannot be sustained.
Mr. Anirban Ray, the learned Government Pleader submits that the
inherent power contained under Section 151 of the Code of Civil Procedure
cannot be exercised to override the substantive rights of the litigant nor
should pass an order directing the Commissioner to seize the books of
accounts beyond the subject matter of the suit. He further submits the
inherent power cannot be exercised to invade the private rights of the
parties as held by the Supreme Court in case of Padam Sen & Anr. Vs.
State of UP reported in AIR 1961 SC 218. He further submits that power
exercised by the Court must be within the strict four corners of the
pleadings and not beyond it. He thus submits that in a civil suit the
pleading plays an important role and one of the cardinal principles in this
regard can be seen from a judgment of the Supreme Court in case of Sayed
Muhammed Mashur Kunhi Koya Thangal vs. Badagara Jumayath
Palli Dharas Committee And Others, reported in (2004) 7 SCC 708 and,
therefore, any reliefs de hors the pleading is impermissible.
On the conspectus of the above facts and the submissions so
advanced it would be apposite to record that both the Counsels of the
respective parties are ad idem to the stand that such direction was
unwarranted and should not have been passed in absence of any pleading
as well as the reliefs claimed in the suit yet we decided to proceed with the
hearing of the appeal after noticing the unusual stand taken by the
defendant-respondent that the transaction was not real and was mere
ostensible and, therefore, no right is created upon the plaintiff to seek
recovery of the said amount.
At the very outset we must record that such being the defence taken
and ultimately proved after full-fledged trial in the suit or otherwise, has a
larger impact on the society as well as the economic development of the
country. Precisely for such reason, we intend to decide the said issue
keeping in mind that whether the Court should remain a mute spectator
even if perceived a sinister attempt on the part of the parties to get away
with the offence having committed in other law and seeks blessing of the
Court to decide the issue within the circumference of the civil rights.
Apparently, the contract appears to be within the ordinary course of
the commercial dealings but have a hidden illegal objects and may amenable
to further action under the Fiscal Law. It is beyond the cavil of doubt that
evasion of the tax will impact the development and further progress of the
country or the society in particular and cannot be said to be not opposed to
a public conscience or a public policy. The economic development of the
country is dependent upon the contribution of the citizenry in the form of a
tax. An evasion cannot be dealt with the soft hands. The public policy
concept though traces its origin from common law yet capable of being
furthered and expounded with the necessary changes and the change in the
policy decided from time to time. The public policy is never considered to be
static or rigid or inflexible but since its advent to be dynamic and capable of
being moulded with the change in policy. The concept of the tax charged
from the citizenry is since the advent of the monarchy and have been
engulfed in a democratic polity as well as the Constitution adopted by the
people of this country. The broad concept of imposition of tax in a
commercial dealing or otherwise is to facilitate the Ruling Government in
development of the society or the country in many spheres. The public policy
varied with the political decisions and sometimes what may not be the
public policy at one point of time becomes a policy. Broadly the public policy
is considered to be the principles and standards regarded by the legislature
or by the Courts as being of fundamental concern to the state and whole of
the society and can be succinctly in a narrower sense may imbibe a
principle that a person should not be allowed to do anything that would
tend to injure the public at large.
The Apex Court in case of Gherulal Parakh (Supra) was considering
a matter whether the wagering contract can be struck down on the ground
of public policy. The Apex Court held that though the concept of public
policy is comprehensive and measured on a political, social and economic
policies of the welfare state as well as the traditions of the ancient history of
the country based on the philosophy of the philanthropists yet it forms a
treacherous and unstable ground for the legal decisions and, therefore,
unless the Court finds that the contract is a harmful thing and backed with
harmful tendencies, in unequal terms held that though the Judge stands of
a slippery ground but has a firm footing in the event the contract is called a
harmful thing and found on the harmful tendencies. The principles of the
public policy can be applied in a clear and incontestable cases of harm to
the public at large.
"The same view is confirmed in Bhagwant Genuji v. Gaugabisan
Ramgopal, ILR (1941) Bom 71: (AIR 1940 Bom 369) and Gopi
Tihadi v. Gokhei Panda, ILR (1953) Cut 558: (AIR 1954 Orissa
17). The doctrine of public policy may be summarized thus:
Public policy or the policy of the law is an illusive concept; it
has been described as "untrustworthy guide", "variable quality",
"uncertain one" "unruly horse", etc; the primary duty of a Court
of Law is to enforce a promise which the parties have made and
to uphold the sanctity of contracts which form the basis of
society, but in certain cases, the Court may relieve them of their
duty on a rule founded on what is called the public policy; for
want of better words Lord Atkin describes that something done
contrary to public policy is a harmful thing, but the doctrine is
extended not only to harmful cases but also to harmful
tendencies; this doctrine of public policy is only a branch of
common law, and, just like any other branch of common law, it
is governed by precedents; the principles have been crystallized
under different heads and though it is permissible for Courts to
expound and apply them to different situations, it should only
be involved in clear and incontestable cases of harm to the
public; though the heads are not closed and though theoretically
it may be permissible to evolve a new head under exceptional
circumstances of a changing world, it is advisable in the
interest of stability of society not to make any attempt to
discover new heads in these days."
Ironically, neither the "public policy" nor "opposed to public policy"
have been given a definite meaning in the Indian Contract Act. In absence of
such definition, it would be very difficult to give precise meaning to such
expressions. It is equally true that such concept is well recognised in the
Indian judicial parlance and, therefore, have expanded his horizon through
a judicial precedents or a common law.
The Apex Court in Central Inland Water Transport Corporation
(Supra) succinctly held that the public policy connotes such matter which
concerned the public good and the public interest capable of being varied
from time to time depending upon the policies of the welfare state. There has
been a divergence of views on the concept of public policies as one school of
thought perceived such policy in a narrower way; the other have expanded it
in a more broader manner. The Apex Court held that underlining the public
policy must be capable of expansion or modification on the proper occasions
and in absence of any legal precedent the only guiding factor that should
weigh to the Court is the principle underlying the fundamental rights and
the directive principles enshrined in the Constitution in these words:
"It is thus clear that the principles governing public policy must
be and are capable, on proper occasion, of expansion or
modification. Practices which were considered perfectly normal
at one time have today become obnoxious and oppressive to
public conscience. If there is no head of public policy which
covers a cage, then the court must in consonance with public
conscience and in keeping with public good and public interest
declare such practice to be opposed to public policy. Above all,
in deciding any case which may not be covered by authority our
courts have before them the beacon light of the Preamble to the
Constitution. Lacking precedent, the court can always be guided
by that light and the principles underlying the Fundamental
Rights and the Directive Principles enshrined in our
Constitution.
93. The normal rule of Common Law has been that a party who
seeks to enforce an agreement which is opposed to public policy
will be non-suited. The case of A. Schroeder Music Publishing
Co. Ltd. v. Macaulay, however, establishes that where a contract
is vitiated as being contrary to public policy, the party adversely
affected by it can sue to have it declared void. The case may be
different where the purpose of the contract is illegal or immoral.
In Kedar Nath Motani v. Prahlad Rai, reversing the High Court
and restoring the decree passed by the trail court declaring the
appellants' title to the lands in suit and directing the
respondents who were the appellants' benamidars to restore
possession, this Court, after discussing the English and Indian
law on the subject, said (at page 873) :
The correct position in law, in our opinion, is that what
one has to see is whether the illegality goes so much to the
root of the matter that the plaintiff cannot bring his
action without relying upon the illegal transaction into
which he had entered. If the illegality be trivial or venial,
as stated by Williston and the plaintiff is not required to
rest his case upon that illegality, then public policy
demands that the defendant should not be allowed to take
advantage of the position. A strict view, of course, must be
taken of the plaintiff's conduct, and he should not be
allowed to circumvent the illegality by resorting to some
subterfuge or by misstating the facts. If, however, the
matter is clear and the illegality is not required to be
pleaded or proved as part of the cause of action and the
plaintiff recanted before the illegal purpose what
achieved, then, unless it be of such a gross nature as to
outrage the conscience of the court, the plea of the
defendant should not prevail.
The types of contracts to which the principle formulated by us
above applies are not contracts which are tainted with illegality
but are contracts which contain terms which are so unfair and
unreasonable that they shock the conscience of the court. They
are opposed to public policy and require to be adjudged void."
In Gurmukh Singh vs. Amar Singh reported in (1991) 3 SCC 79
the Apex Court taking aid of Section 23 of the Contract Act held that if the
Court finds that the agreement is opposed to public policy it is void under
the aforesaid provision. The Apex Court succinctly held that the word
'object' appearing in the said section would mean the purpose and design
being the object of the contract if opposed to public policy tending to defeat
the provision of law or the purpose of law for which it becomes unlawful.
Even after having said so, the Apex Court held if the intention is to defeat
the right of a third party or a Government, such contract would fall under
the mischief of the aforesaid provision and there is no fetter on the part of
the Court in applying the principle of the public policies in the following:
"3. In Chandra Sreenivasa Rao v. Korrapati Raja Rama Mohana
Rao, Subba Rao, J., as he then was, while considering the word
"object" in Section 23 of the Contract Act in the context of
enforceability of the debt secured to celebrate the marriage of
the minor which was prohibited by the Child Marriage Restraint
Act, held that the word "object" in Section 23 meant "purpose"
or "design" of the contract. The purpose of borrowing was
unlawful as it was opposed to the public policy of celebrating
the marriage of a minor in violation of the statutory provisions,
and therefore, the promissory note was held to be unenforceable.
An agreement between A and B to purchase property at an
auction sale jointly and not to bid against each other at the
auction is perfectly lawful, though the object may be to avoid
competition between the two. But if there is an agreement
between all the competition between the two. But if there is an
agreement between all the competition bidders at the auction
sale, but it of the court sale or revenue sale, or sale by the
government of its property or privilege and formed a ring to peg
down the price and to purchase; the property at knock out price,
the purpose or design of the agreement is to defraud the third
party, namely the debtor or government whose property is sold
out at the court auction or revenue sale, or public welfare. The
object or consideration of the contract, oral or written, to share
such property is unlawful. There is also implied "injury to the
debtor" within the meaning of Section 23. Thereby the contract
was fraudulent. The contract thus is also opposed to public
policy and is void. Take for instance four persons participated
at an auction sale; pursuant to their previous agreement, they
made a pretext of participation in the auction; bid up to an
agreed price though the real value of the property is much more
than what they had offered for. Here the design or object of
their forming a ring is to knock out the property for a song to
defraud the debtor or public. What is the object of the public
policy in this regard? The scope of public policy was classified
into five groups in paragraph 1134 at p.686 of Chitty on
Contract (26th edn., Vol. I) thus:
'Objects which on grounds of public policy invalidate
contracts may, for convenience, be generally classified into five
groups; first, objects which are illegal by common law or by
legislation; secondly, objects injurious to good government either
in the field of domestic or foreign affairs; thirdly, objects which
interfere with the proper working of the machinery of justice;
fourthly, objects injurious to marriage and morality; and,
fifthly, objects economically against the public interest.' "
In Paragraph 7 of the said report the Apex Court held that the concept
of public policy is not static or rigid but varied with the changing times and
the need of the society in these words:
"7. The ratio in Kayjay Industries (p) Ltd. v. Asnew Drums (P) Ltd.
is of no assistance to the appellant. Therein the executing
court, on the previous occasion, with a view to secure better
price did not confirm the sale, the conduct of the second sale,
therefore, was held not to be vitiated by any material
irregularity. The general principles of public policy discussed
by this Court in Central Inland Water Transport Corpn. Ltd. v.
Brojo Nath Ganguly and one of us (K. Ramaswamy, J.) in Delhi
Transport Corporation v. D.T.C. Mazdoor Congress are of no
assistant on the facts in this case. The public policy is not
static. It is variable with the changing times and the needs of
the society. The march of law must match with the fact
situation. A contract tending to injure public interest or public
welfare or fraudulent to defeat the rights of the third parties is
void under Section 23 of the Contract Act."
In a recent judgment the Apex Court in PASL Wind Solutions Pvt.
Ltd. (Supra) accepted the principles on public policy laid down in Central
Inland Water Transport Corporation (Supra) and held that it is capable
of being modified and/or varied and may be expanded depending upon the
public conscience, public good and the public interest and, therefore, is not
a rigid principles solely based on the common law or the precedents in past.
It would be profitable to quote the relevant observations made in Paragraph
71 of the said report which runs thus:
71. This Court's judgment in Central Inland Water Transport
Corpn. V. Brojo Nath Ganguly, after referring to the case law on the
subject, then held:
"92. The Contract Act does not define the expression "public
policy" or "opposed to public policy". From the very nature of
things, the expressions "public policy", "opposed to public
policy", or "contrary to public policy" are incapable of precise
definition. Public policy, however, is not the policy of a
particular government. It connotes some matter which concerns
the public good and the public interest. The concept of what is
for the public good or in the public interest or what would be
injurious or harmful to the public good or the public interest has
varied from time to time. As new concepts take the place of old,
transactions which were once considered against public policy
are now being upheld by the courts and similarly where there
has been a well-recognised head of public policy, the courts have
not shirked from extending it to new transactions and changed
circumstances and have at times not even flinched from
inventing a new head of public policy. There are two schools of
thought - "the narrow view" school and "the broad view" school.
According to the former, courts cannot create new heads of
public policy whereas the latter countenances judicial law-
making in this area. The adherents of "the narrow view" school
would not invalidate a contract on the ground of public policy
unless that particular ground had been well-established by
authorities. Hardly ever has the voice of the timorous spoken
more clearly and loudly than in these words of Lord Davey in
Janson v. Driefontein Consolidated Mines Ltd., AC at p. 500:
'Public policy is always an unsafe and treacherous ground for
legal decision.' That was in the year 1902. Seventy-eight years
earlier, Burrough, J., in Richardson v. Mellish, Bing at p. 252;
ER at p. 303; All ER Rep at p. 266 described public policy as 'a
very unruly horse, and when once you get astride it you never
know where it will carry you'. The Master of the Rolls, Lord
Denning, however, was not a man to shy away from
unmanageable horses and in words which conjure up before our
eyes the picture of the young Alexander the Great taming
Bucephalus, he said in Enderby Town Football Club Ltd. v.
Football Assn. Ltd., Ch p. 660: 'With a good man in the saddle,
the unruly horse can be kept in control. It can jump over
obstacles.' Had the timorous always held the field, not only the
doctrine of public policy but even the common law or the
principles of Equity would never have evolved. Sir William
Holdsworth in his History of English Law, Vol. III, p. 55, has
said:
'In fact, a body of law like the common law, which has
grown up gradually with the growth of the nation,
necessarily acquires some fixed principles, and if it is to
maintain these principles it must be able, on the ground of
public policy or some other like ground, to suppress
practices which, under ever new disguises, seek to weaken
or negative them.'
It is thus clear that the principles governing public policy
must be and are capable, on proper occasion, of expansion
or modification. Practices which were considered perfectly
normal at one time have today become obnoxious and
oppressive to public conscience. If there is no head of
public policy which covers a case, then the court must in
consonance with public conscience and in keeping with
public good and public interest declare such practice to be
opposed to public policy. Above all, in deciding any case
which may not be covered by authority our courts have
before them the beacon light of the Preamble to the
Constitution. Lacking precedent, the court can always be
guided by that light and the principles underlying the
Fundamental Rights and the Directive Principles enshrined
in our Constitution."
The law as expounded in the above noted report can be succinctly
summarised that though the principle of public policy traces its origin from
the common law yet the said principles have been expanded in the judicial
parlance and may apply in deserving cases. It is inconceivable that the
Court would remain a mute spectator where the contract between the
parties is a harmful thing, having harmful tendencies, having ramification
on the interest of the welfare state in the realm of a freedom of contract. The
concept of public policies broadly is founded on public good or public
interest and in the changing times may extend it to any transaction which
affects the public at large. It is sometimes regarded as an unruly horse and
the Judges remained on a slippery road, yet had a firm footing in a patent
case of injury to a public at large. It cannot be said to be a rigid or a static
principles but capable of being expanded or modified on a proper occasion
in consonance with the public conscience and in keeping with the public
good and the public interest. It may apply to a case where the contract
shocked the conscience of the Court being unfair and unreasonable having
a large impact on the society or the development of the society and/or a
country.
In the backdrop of the aforesaid enunciation of law let us consider
whether the Trial Court was justified in directing Central Board of Direct
Taxes to investigate into the monetary dealing and submit the report before
the Court. At the very outset, we must record that there is no reflection of
any extraneous facts in the plaint or an application filed by the plaintiff-
appellant. However, the defendant took a very unusual defence that it was
not a real transaction but ostensible one in the guise of the accommodated
entry or a "Jamma Kharji". Such defence can be viewed as an evasion of the
tax and conversion of an illegal thing to a legal. Broadly, concept of
imposition of tax by the welfare state and providing facilities and amenities
as well as the development of the society and the country largely depend
upon the same whether the defendant would be able to prove such fact is a
matter to be decided after a full-fledged trial. Equally this Court cannot
overlook such defence if taken to be prima facie correct having an impact on
the public at large and invasion impacted the welfare state and its resources
required for development of the country both economically and otherwise.
Will the Judge still confine to a pleading and the reliefs claimed
therein having noticed the aforesaid fact discerned from the record traces its
answers under the public policy and repository of the powers assumed by
the Court under the Constitution. There is no fetter on the part of the Court
after noticing the startling facts discerned from the record to activate the
process of law and directing the authorities to investigate into the matter.
The report as called for may not be a sole basis for deciding the issues
involved in the suit yet it is as good as a piece of evidence in juxtaposition
with the other evidence that may be brought by the respective parties.
It is no longer res integra that Court should seldom exercise the
inherent powers enshrined under Section 151 of the Code when there is a
specific provision contained in the Code yet sometimes the Court for
securing the ends of justice i.e. ex-debito justitiae may invoke such power
necessitated by circumstances. Ordinarily, the Court decides the cause
pleaded in the respective pleadings and the reliefs claimed therein, yet it has
not brindled the power of the Court after noticing the special facts in
passing an order under the public policy to secure the interest of the welfare
state.
We thus do not find any infirmity and/or illegality in the impugned
order. The appeal is dismissed.
Urgent photostat certified copies of this judgment, if applied for, be
made available to the parties subject to compliance with requisite
formalities.
(Harish Tandon, J.)
I agree.
(Shampa Dutt (Paul), J.)
Later:
After the judgment is delivered in open Court, Mr. Sahni, learned
advocate appearing for the appellant, makes an oral prayer for the certificate
for appeal to the Supreme Court.
According to Mr. Sahni, the point which is raised in the instant appeal
has a larger impact and, therefore, assumes the character of a substantial
question of law of general importance.
After hearing Mr. Sahni and after going through the questions that
have been raised, we do not find that it is a fit case where a certificate under
Article 134A of the Constitution of India can be issued.
Accordingly, the prayer for certificate is hereby refused.
(Harish Tandon, J.)
(Shampa Dutt (Paul), J.)
