Shanmuga Patro vs Ministry Of Finance
2012 Latest Caselaw 2592 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                        Date of decision: 20th April, 2012

+                        W.P.(C) No. 5174/2011

%      SHANMUGA PATRO                                          ....Petitioner
                  Through:            Petitioner in person.

                                  Versus

       MINISTRY OF FINANCE                              ..... Respondent
                    Through:          Mr. A.S. Chandhiok, ASG with Ms.
                                      Sweety Manchanda, Adv.
CORAM :-
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
                               JUDGMENT

RAJIV SAHAI ENDLAW, J.

1. This petition filed in public interest seeks a direction to the

respondent to appoint "Competent Authority" contemplated in Section 5 of

the Benami Transactions (Prohibition) Act, 1988 and to frame Rules in

relation to the procedure to be adopted by the said Authority for acquiring

benami properties. It is the plea of the petitioner that notwithstanding the

law having been enacted more than 20 years back in 1988, it has been

allowed to remain toothless.

2. Notice of the petition was issued and a counter affidavit has been

filed stating that during the process of formulating the Rules, it was found

that owing to the grave infirmities in the legislation, it would not be possible

to formulate the Rules without a comprehensive legislation by repealing the

Act; that the new legislation has been introduced in the Parliament in the

form of Benami Transactions (Prohibition) Bill, 2011; that the lacunas in the

law could not be filled merely by framing the Rules.

3. We have heard the counsel for the parties.

4. The Act as per its preamble, was enacted „to prohibit benami

transactions and to recover property held benami and for matters connected

therewith‟. Section 3 of the Act prohibits benami transactions and makes

the same punishable with imprisonment for a term extending to three years

or with fine or with both. Section 4 of the Act prohibits enforcement of

rights in any property held benami against the person in whose name the

property is held. Section 5(1) makes all properties held benami subject to

acquisition by „such authority, in such manner and after following such

procedure, as may be prescribed‟. Section 5 (2) of the Act provides that no

amount shall be payable for such acquisition.

5. The respondent in their counter affidavit has stated that the power

vested in the Central Government under Section 8 of the Act to make Rules

for carrying out the purposes of the Act was not found to be sufficient for

constituting the Authority and for prescribing the manner and procedure for

acquisition of the property held benami. It is pleaded that powers of a Civil

Court are required to be conferred on such an Authority and which could

not be conferred under the rule making powers. It is further pleaded that

there is no provision in the Act as to in whom, the property held benami so

acquired by the Authority, to vest and need was felt for providing for

vesting of such acquired property with the Central Government and which

also could not be done in exercise of Rule making powers. It is also argued

that in the absence of any appellate structure provided in the Act, it was felt

that the Rules would not stand the test of law. It is yet further argued that

there is no provision in the Act barring the jurisdiction of Civil Courts

against the action of the Authority under the Act and which lacuna also

could not be filled in exercise of the Rule making power.

6. The petitioner in rejoinder has contended, that the implementation of

a constitutionally valid legislation in force cannot be deferred owing to

pendency of some Bill in the Lok Sabha; Reliance in this regard is placed on

State of Punjab Vs. Dalbir Singh (2012) 3 SCC 346; that the approach of

the Government in the matter has been lackadaisical; that the attempt to

make the Rules was made only after the petitioner had made RTI queries

and in which it was stated that the efforts for making the Rules had been

commenced; the impact of non implementation of the aforesaid provisions

are highlighted; it is argued that there is a political unwillingness against

implementation of the Act.

7. The petitioner has also invited our attention to :

(i) Attorney General for India Vs. Amratlal Prajivandas (1994) 5

SCC 54 where it was observed that it is not possible for the

legislature to anticipate all facets and thus the Courts must

adjudge the constitutionality of legislation by the generality of

its provisions and not by its crudities or its inequities;

(ii) Para 47 of A.K. Roy Vs. UOI (1982) 1 SCC 271 observing that

amendments to statutes come into effect only when they are

brought into force;

(iii) Para 67 of Canbank Financial Services Ltd. Vs. The

Custodian (2004) 8 SCC 355 where observations were made of

the evil of benami transactions and the non- workability thereof

rued.

8. Howsoever laudatory the objective in filing this petition may be, we

cannot shut our eyes to the lacunas pointed out in the Act and to the

difficulties being faced in removing the same through the exercise of the

Rule making power. Though the delay in application of mind in this regard

may be unpardonable and there is merit in the argument of the petitioner of

the unwillingness of the Legislature and the Executive in this regard but the

reason now given cannot be brushed aside as frivolous. We therefore are of

the opinion that no purpose will be served in issuing a direction as sought,

for appointment of the Competent Authority under the Act and for framing

of the Rules. Any action of acquisition in pursuance thereto is likely to be

mired in unnecessary litigation, without serving any purpose whatsoever.

We rather are of the opinion that the exercise, of amendment to the Act /

new legislation which has now been commenced, be expedited.

9. We may however notice that this Court in Common Cause Vs. Union

of India AIR 2001 Delhi 93 upheld in (2003) 8 SCC 250 has held that Court

cannot issue a direction for notifying of a law. The Supreme Court in A.K.

Roy (supra) itself has held that neither it is for the Courts to censure the

Executive nor is it for the Courts to take over the function of Parliament. To

the same effect is the State of Himachal Pradesh Vs. A Parent of a Student

of Medical College, Simla (1985) 3 SCC 169 holding the directions of the

High Court of Himachal Pradesh in a public interest litigation for

implementation of the recommendations contained in the report of the Anti

Ragging Committee to be wholly unsustainable. It was held that though the

direction of the High Court ostensibly did no more than call upon the Chief

Secretary to inform the Court as to what action the State Government

proposed to take on the recommendations to initiate legislation for curbing

ragging, it was, in fact and substance, intended to require the State

Government to initiate legislation on the subject. It was held that such a

direction was nothing short of an indirect attempt to compel the State

Government to initiate legislation and which the Court was not entitled to

do. It was further held that it is entirely a matter for the Executive Branch

of the Government to decide whether or not to introduce a particular

legislation and is not a matter which is within the sphere of the functions

and duties allocated to the judiciary under the Constitution. The Supreme

Court held that the Court cannot group the function assigned to the

Executive and the Legislature under the Constitution and it cannot even

indirectly require the Executive to introduce a particular legislation or the

Legislature to pass it or assume to itself a supervisory role over the law

making activities of the Executive and the Legislature.

10. In State of Himachal Pradesh Vs. Umed Ram Sharma (1986) 2 SCC

68, the High Court had directed the State Government to allot a particular

sum for expenditure on account of a particular project. The Supreme Court

posed the questions, how far the Court could give directions which are

administrative in nature and whether any direction could be given to build

roads where there are no roads and whether the Court could direct that the

administration should report from time to time so that action taken can be

supervised by the Court. The Supreme Court found that the Executive was

not oblivious of its obligation though in its sense of priority there may have

been certain lethargy and inaction. It was observed that there had been at

the highest a slow application of energy in the action by the Executive. In

these circumstances, it was held that by the process of judicial review, if the

High Court activates or energizes executive action, it should do so

cautiously.

11. The aforesaid dicta squarely applies to the situation before us. Maybe,

there has been some lethargy or even unwillingness in framing the Rules.

However, now the matter has been studied and the difficulties expressed, are

found to be genuine; that is why, process of enacting a new legislation has

been commenced. In such situation, this Court must know its limitations;

the Court should remember that the Judges are not to innovate at pleasure

and are to exercise discretion informed by tradition.

12. A seven-Judge Bench of the Supreme Court in P. Ramachandra Rao

Vs. State of Karnataka (2002) 4 SCC 578 held that instances of judicial

excessivism that fly in the face of the doctrine of separation of powers

which envisages that the legislature should make law, the Executive should

execute it and the judiciary should settle disputes in accordance with the

existing law; the Court went to the extent of holding various dictas of two-

Judge and three-Judge Benches of the Supreme Court in Public Interest

Litigations to be not legitimate exercise of judicial power. It was observed

that giving directions of a legislative nature is not a legitimate judicial

function.

13. Reference may also be made to Common Cause (A Regd. Society) v.

Union of India (2008) 5 SCC 511 holding that Courts cannot create rights

where none exist nor they can go on making orders which are incapable of

enforcement or direct legislation or proclaim that they are playing the role

of a law maker merely for an exhibition of judicial valour.

14. Division Benches of this Court in Bhagwat Dayal Sharma Vs. UOI

ILR (1974) Del 847 and Peoples Union for Democratic Rights Vs. Ministry

of Home Affairs ILR (1987) Del 235 have held that where the power to do

or not to do a thing is optional and discretionary and there is no statutory

obligation, direction to the Executive to do a particular thing cannot be

given even where matter is of public importance.

15. In the present case also, no obligation on the part of the respondents

to frame the Rules, notwithstanding the impracticality thereof, is

established. It is purely a policy matter. The Supreme Court in Kanhaiya

Lal Sethia Vs. UOI (1997) 6 SCC 573 held that it is not open to a petitioner

to seek a direction to the Union of India to introduce an official Bill in the

Parliament or to sponsor a Private Member‟s Bill to be introduced on the

subject. It was held that Courts do not interfere in policy matters of the

State unless the policy violates the mandate of the Constitution or any

statutory provision or is otherwise actuated by mala fides.

16. The petitioner after the judgment was reserved has filed an

application to place other materials on record and which application was

allowed. The petitioner by the said application has drawn attention to the

answer in the Lok Sabha to Unstarred Question 5645 relating to amendment

in Anti Corruption Act and contends that the same demonstrates that the Act

as it exists has not been examined and the Bill aforesaid introduced in the

Parliament is not the outcome of any study of the law and the study

undertaken is still ongoing. The petitioner also invites attention to the

correspondence with the CVC, also emphasizing the need and feasibility of

benami law as it exists. On the basis thereof it is contended that the

respondent has not followed the prescribed Parliamentary procedure for

formulating statutory regulation. The petitioner yet further invites attention

to the judgment dated 22 nd February, 2012 of the Mumbai High Court in

Sanjay Dinanath Tiwari Vs. Director General of Police (Anti Corruption)

[WP(C) 51/2010] directing the State to attach the properties of the

respondent therein held benami. On the basis thereof it is contended that no

detailed procedure as pleaded by the respondent in its counter affidavit is

required to be formulated. The petitioner again relying on Dalbir Singh

(supra) has further argued that the delay caused in implementing the benami

law is obstinate and this Court is empowered to issue the directions sought.

17. We are afraid none of the aforesaid persuades us to take a view

different from the one expressed above. The petitioner has been unable to

show as to how the framing of Rules inspite of difficulties expressed, will

not lead to large volume of futile litigation.

18. We therefore find ourselves unable to grant the reliefs sought and

dispose of this writ petition merely expressing and conveying our belief and

confidence that immediate steps shall be taken for removing the lacunas

aforesaid in the law and / or for having the law amended / replaced so that

the purpose which the Act was intended to serve, is enforced.

RAJIV SAHAI ENDLAW, J

ACTING CHIEF JUSTICE th APRIL 20 , 2012 „gsr‟.