G. Balasaraswati And 8 Others vs The Union Of India And 14 Others
2021 Latest Caselaw 189 Tel

 THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO

                                    AND

      THE HONOURABLE SRI JUSTICE T. VINOD KUMAR

                     Writ Petition No.414 of 2021


ORDER :    (per Hon'ble Sri Justice M.S. Ramachandra Rao)



      In this Writ Petition, the petitioners seek a direction to the

Union of India (1st respondent), the Central Board of Direct Taxes,

New Delhi (2nd respondent), the Principal Chief Commissioner of

Income Tax, Telangana (3rd respondent), the Director General of

Income Tax (Investigation), Hyderabad (4th respondent) and the Dy.

Commissioner of Income Tax (Benami Prohibition Unit), Hyderabad

(5th respondent) to initiate action against respondent nos.6 to 15 in the

Writ Petition including their prosecution under Income Tax Act, 1961

and the Prohibition of Benami Property Transactions Act, 1988 (Act

45 of 1988) (as amended by Act 43 of 2016) and the Prevention of

Money Laundering Act, 2002 in respect of certain real-estate

transactions, allegedly undertaken by respondent nos.6 to 15.

2. In addition thereto, they also seek monitoring of the

investigation being conducted by respondent nos.1 to 5 relating to

benami transactions, tax evasion and money laundering by respondent

nos.6 to 15 as mentioned in the complaint dt.21.08.2019 and

23.08.2019 by this Court as per the judgment of the Supreme Court in ::2:: MSR,J & TVK,J wp_414_2021

Vineet Narain vs. Union of India1 for ensuring effective

investigation, adjudication and also prosecution of respondent nos.6 to

15 by way of a continuous mandamus.

3. Petitioners also seek a Writ of Mandamus directing the

disciplinary authorities of respondent nos.2 to 5 to institute

disciplinary proceedings against delinquent officers of the Income Tax

Department who are found to be in collusion with respondent nos.6 to

15 under Rule 13 of the Central Civil Services (Classification, Control

and Appeal) Rules, 1965.

4. Even before filing this Writ Petition, the petitioners had

instituted a Civil Suit O.S.No.26 of 2020 on the file of IX Additional

District Judge - cum - Commercial Court, Sangareddy against

respondent nos.6 to 14 and others for partition of certain land

admeasuring Acs.87.26 gts. in Kollur village, Ramachandrapuram

Mandal of Sangareddy District (formerly Medak District) ( suit

schedule property) and for separate possession of their specific share

in proportion to what is mentioned in their respective sale deeds

5. We shall briefly touch upon the case of the petitioners in the

Civil Suit O.S.No.26 of 2020 filed by them against the respondent

nos.6 to 15 and others.

6. (a) The petitioners contend that they had purchased certain plots

admeasuring 666 Sq. yds each in the property which is described in

(1996) 2 S.C.C. 199 ::3:: MSR,J & TVK,J wp_414_2021

the suit schedule from one R.R. Madhusudan Reddy (1st defendant in

the said suit) under registered Sale Deeds executed in the year 1984,

but contend that in the absence of a lay-out sanctioned either by the

Gram Panchayat or by the Director, Town and Country Planning or by

the Hyderabad Urban Development Authority (presently Hyderabad

Metropolitan Development Authority), it is impossible to identify the

location of these plots.

(b) It is their contention that the 1st defendant had sold other

plots to defendant nos.10 to 350 in the suit and even those plots are

not capable of identification.

(c) They contend that the 1st defendant had left with him

around Acs.39.00 in the suit schedule property for sale to certain third

parties other than the petitioners and defendant nos.8 to 350; because

of the ambiguity regarding the precise location of all the plots

purchased by the petitioners and defendant nos.10 to 350, they are all

co-owners and joint possessors of the subject land; and filing of the

said suit for partition is the only solution for resolution of their

predicament.

(d) It is contended that the 1st defendant had executed a

registered sale deed dt.24.12.2002 being document No.8493 / 2002 in

favour of 2nd defendant (6th respondent in the Writ Petition) for an

extent of Acs.39.36 gts. within the suit schedule property suppressing

that he had already sold plots by executing 350 registered sale deeds ::4:: MSR,J & TVK,J wp_414_2021

in favour of petitioners and other defendants; and that the

1st defendant also executed another registered sale deed dt.24.12.2002

(Document No.17953 / 2005) in favour of 2nd defendant (6th

respondent in the Writ Petition) for a separate extent of Acs.50.31 gts

in the suit schedule property without disclosing that he had already

sold plots by executing 350 registered sale deeds in favour of

petitioners and other defendants already.

(e) It is also contended that even the lands covered under

these two documents cannot be identified precisely and that they are

illegal, null and void on the basis of a maxim nemo dat quod non

habet; that both these documents dt.24.12.2002 constitute 'benami

transactions' as defined under Section 2(9) of the Prohibition of

Benami Property Transactions Act, 1988 because the 2nd defendant

(6th respondent in the Writ Petition) utilized Rs.36,27,000/- to

purchase the land even though it had only paid-up share capital of

Rs.1,00,000/-. It is also contended that a complaint dt.21.08.2009 had

been lodged with respondent nos.4 and 5, but no action was taken.

(f) It is also contended that the 2nd defendant (6th respondent

in the Writ Petition) had also purchased various portions in the suit

schedule land from the vendors of the petitioners and defendant

nos.10 to 350 under six Sale Deeds executed in the year 2005; and it

is impossible for the 2nd defendant to do so by generating total sale

consideration of Rs.46,32,750/- plus Registration and Stamp duty

charges as its share capital was only Rs.9,00,630/-; and it is contended ::5:: MSR,J & TVK,J wp_414_2021

that these documents are also 'benami transactions', and entries in the

2nd defendant's Books and Income Tax Returns are all fictitious

entries.

(g) It is further contended that the 2nd defendant illegally sold

a portion of the suit schedule land to the 3rd defendant,

M/s. P.L. Computers (10th respondent in the Writ Petition) under

registered Sale Deed dt.29.03.2005 for Rs.23,62,500/-; and the 3rd

defendant / 10th respondent had sold portions of the same to the 4th

defendant, viz., M/s. Avani Meadows (P) Ltd. (12th respondent in the

Writ Petition) under registered Sale deed dt.23.11.2016 and

dt.14.06.2017 for Rs.3,95,20,000/-; and the 4th defendant in turn sold a

portion of the land purchased by it to the 5th defendant i.e., Asif Ali

Baig (15th respondent in the Writ Petition) vide registered Sale Deed

dt.03.08.2017. It is contended that all these documents are 'benami

transactions'.

7. In this Writ Petition, it is alleged that all the above transactions

are benami transactions prohibited by Act 45 of 1988 , that they are all

documents where the consideration was under valued to avoid stamp

duty, registration and transfer duty and that it is impossible for the 6th

respondent to generate the sale consideration of Rs.1.5 crores to

purchase the property under the 8 sale deeds mentioned above with its

paid-up share capital a mere Rs.9,00,630/-. It is also contended that

all entries in the Books of Account and Income Tax Returns of the 6th

respondent are fictitious and sale consideration amount was not ::6:: MSR,J & TVK,J wp_414_2021

reflected therein. Similar allegations are leveled against respondent

nos.10 and 12 also.

8. Petitioners contend that they had instructed their counsel Sri

Rakesh Sanghi, Advocate, to lodge a complaint with the entire

hierarchy of the Income Tax Department authorities and he lodged

complaint on 21.08.2019 and 23.08.2019.

9. It is next contended that petitioners came to know through

reliable sources that the respondent nos. 4 and 5 are colluding with the

respondent nos.6 to 15 and their battery of skilled lawyers by

misinterpreting the statutes mentioned above and taking a view that :

(i) Complaint and the subsequent prosecution under the

Prohibition of Benami Property Transactions Act, 1988

(as amended by Act No.43 / 2016) both are barred by

limitation.

(ii) The Respondent has already paid Income Tax & Wealth

Tax on the money utilized to acquire benami property

and therefore, the transaction / acquisition of property

ceases to be a benami transaction on account of the same

having been assessed to Income Tax and Wealth Tax of

the Benmidars and the Real Owners.

(iii) The amount of the sale consideration mentioned in all the

sale deeds should be taken as the sole basis for ::7:: MSR,J & TVK,J wp_414_2021

determining the value of the benami transaction

irrespective of the market value of the property.

(iv) Even if the acquisition of property constituted a benami

transaction, the subsequent sale of the said property by

the benamidar would not effect the benami property sold

to a bonafide purchaser who had no knowledge or, was

ignorant of the benami transaction."

10. However no response from respondents 1 to 5 is filed in support

of the above assumptions of the petitioners.

11. The petitioners then indicate why each of these possible stands

allegedly being taken by the respondent nos.4 and 5 cannot be

accepted by giving certain explanations for them.

12. Therefore, they seek the reliefs mentioned supra against

respondent nos.1 to 5.

13. Sri Rakesh Sanghi, Counsel for petitioners, emphasized that

persons who indulged in benami transactions/money laundering and

evasion of income tax like respondent nos.6 to 15 cannot be allowed

to go scot-free and escape the consequences of the statutes such as Act

45 of 1988, the Income Tax Act, 1961 and the Prevention of Money

Laundering Act, 2002; and this Court, by granting the above reliefs

sought in the Writ Petition, should ensure that Rule of Law prevails.

He also cited several decisions including the decision in Vineet

Narain (1 supra) for the above contention. He also relied on the ::8:: MSR,J & TVK,J wp_414_2021

decision of the Supreme Court in National Institute of Mental

Health and Neuro Sciences vs. C. Parameswara2 to contend that

merely because a civil suit is pending, a party is not precluded from

instituting a Writ Petition on the same issue.

14. We have noted the above submissions.

15. While we do not wish to comment on the merits of the

pleadings of petitioners in the civil suit since it is sub judice, we are of

the opinion without knowing the defence of defendants in the suit

(because Written Statement of the defendants has not been filed) it is

difficult to get a complete picture to draw any conclusion in the

matter. Also, petitioners by leading evidence in the suit and by cross-

examining witnesses for respondent nos.6 to 15 could prove their

contentions in the suit. This Court is not inclined to go into the

several contentions advanced in the Writ Petition and conduct a

parallel enquiry to that which would happen in the civil suit when it

would go to trial.

16. We are also of the opinion that on the basis of the material

placed before this Court by the petitioners, i.e., copies of complaints

made by counsel for petitioners, plaint in O.S.No.26 of 2020 and

copies of the sale deeds referred to above, no adverse inference can be

drawn against respondent nos.3 to 5 of any collusion with respondent

nos.6 to 15 at all. We are also of the opinion that aspersions cannot be

cast on officers of Government Departments solely on the basis of

(2005) 2 SCC 256 ::9:: MSR,J & TVK,J wp_414_2021

suspicions and assumptions of the petitioners tarnishing their

reputation.

17. In our opinion, there are several disputed questions of fact

which would arise for consideration in the suit filed by the petitioners

against 350 defendants including respondent nos. 6 to 15 herein.

18. It appears that the petitioners want to buttress their pleadings

in the suit by extracting information from the Income Tax authorities

regarding respondent nos. 6 to 15 who are opponents of petitioners by

filing the instant Writ Petition; and also wish to use the forum of the

High Court to probably coerce the respondent nos.6 to 15 for some

settlement.

19. In this regard we may quote the recent decision of the Supreme

Court in Tehseen Poonawalla v. Union of India3 in which certain

observations, though made in the context of public interest litigation,

equally apply to cases like the instant one. The Supreme Court

bemoaned:

"98. Frivolous or motivated petitions, ostensibly invoking the public interest detract from the time and attention which courts must devote to genuine causes. This Court has a long list of pending cases where the personal liberty of citizens is involved. Those who await trial or the resolution of appeals against orders of conviction have a legitimate expectation of early justice. It is a travesty of justice for the resources of the legal system to be consumed by an avalanche of misdirected petitions purportedly filed in the public interest which, upon due scrutiny, are found to promote a personal, business or political agenda.

    (2018) 6 SCC 72, at page 148
                                       ::10::                       MSR,J & TVK,J
                                                                            wp_414_2021

This has spawned an industry of vested interests in litigation. There is a grave danger that if this state of affairs is allowed to continue, it would seriously denude the efficacy of the judicial system by detracting from the ability of the court to devote its time and resources to cases which legitimately require attention. Worse still, such petitions pose a grave danger to the credibility of the judicial process. This has the propensity of endangering the credibility of other institutions and undermining public faith in democracy and the rule of law. This will happen when the agency of the court is utilised to settle extra-judicial scores. Business rivalries have to be resolved in a competitive market for goods and services. Political rivalries have to be resolved in the great hall of democracy when the electorate votes its representatives in and out of office. Courts resolve disputes about legal rights and entitlements. Courts protect the rule of law. There is a danger that the judicial process will be reduced to a charade, if disputes beyond the ken of legal parameters occupy the judicial space."( emphasis supplied)

20. We are of the opinion that filing of this Writ Petition is an abuse

of process of Court and this Court cannot allow itself to be used as a

private investigator by the petitioners to prove their contentions in the

civil suit or to coerce the respondents for a possible settlement under

threat of a prosecution from respondents 1-5 under the various statutes

referred to above.

21. In this view of the matter, we are of the opinion that the Writ

Petition does not deserve to be entertained by this Court, and it is

accordingly dismissed at admission stage with costs of Rs.5,000/- to

be paid to the High Court Legal Services Committee by the petitioners

within four (04) weeks from to-day.

                                    ::11::              MSR,J & TVK,J
                                                            wp_414_2021

22. As a sequel, miscellaneous petitions pending if any in this Writ

Petition, shall stand closed.

__________________________________ JUSTICE M.S.RAMACHANDRA RAO

__________________________ JUSTICE T. VINOD KUMAR Date:29 .01.2021 Ndr