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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF FEBRUARY 2021
BEFORE
THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD
WRIT PETITION NO.12769/2020 [T-IT]
BETWEEN :
INDIA AWAKE FOR TRANSPARENCY REP. BY P SADANAND AUTHORISED SIGNATORY SHRISTHI CRESCENDO 24 DESIKA ROAD MYLAPORE CHENNAI-600 004. ... PETITIONER (BY SRI M.R.SUBRAMANIAN, ADVOCATE)
AND:
THE CHAIRMAN CENTRAL BOARD OF DIRECT TAXES NORTH BLOCK NEW DELHI – 110 001.
AZIM PREMJI TRUST REPRESENTED BY ITS TRUSTEE AZIM PREMJI TRUST NO. 134 NEXT TO WIPRO CORPORATE OFFICE DODDAKANNELLI VILLAGE SARJAPUR ROAD BENGALURU – 560 035.
WIPRO LTD REPRESENTED BY ITS MANAGING DIRECTOR
2 WIPRO CORPORATE OFFICE DODDAKNNELLI SARJAPUR ROAD BENGALURU – 560 035.
WIPRO ENTERPRISES P. LTD. REPRESENTED BY ITS CHAIRMAN AZIM H PREMJI C BLOCK, CCLG DIVISION DODDAKANNELLI SARJAPUR ROAD BENGALURU – 560 035.
M/S HASHAM INVESTMENT AND TRADING COMPANY PVT LTD REP BY MR AZIM H PREMJI DIRECTOR NO 134 NEXT TO WIPRO CORPORATE OFFICE DODDAKANNELLI SARJAPUR ROAD BENGALURU – 560 035.
M/S TARISH INVESTMENT AND TRADING COMPANY PVT LTD REP BY MR AZIM H PREMJI DIRECTOR NO. 134 NEXT TO WIPRO CORPORATE OFFICE DODDAKNNELLI SARJAPUR ROAD BENGALURU – 560 035.
M/S PRAZIM INVESTMENT AND TRADING COMPANY LTD REP BY MR. AZIM H PREMJI DIRECTOR NO.134, NEXT TO WIPRO CORPORATE OFFICE DODDAKNNELLI SARJAPUR ROAD BENGALURU – 560 035. ... RESPONDENTS (BY SRI GANESH R., SENIOR COUNSEL FOR SRI SANDEEP HUILGOL, ADVOCATE FOR R2-R7)
3 THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE FIRST RESPONDENT TO FORTHWITH TAKE ALL NECESSARY STEPS UNDER THE INCOME TAX ACT IN RESPECT OF THE TAX EVASIONS SET OUT IN CASES 1/2020 TO 5/2020 SET OUT TO IT BY THE PETITIONER UNDER THE TAX INFORMANT SCHEME INCLUDING DIRECTION TO THE FIRST RESPONDENT TO TAKE ALL STEPS UNDER THE INCOME TAX ACT TO PROTECT ANY BAR OF LIMITATION OR ANY CHALLENGE ON SUCH BASIS IN RESPECT OF THE TAX EVASIONS SET OUT IN THE SAID MATTERS INCLUDING BY INVOKING POWERS VESTED ON IT INCLUDING U/S 132/132A OF THE INCOME TAX ACT AND U/S 153A OF THE INCOME TAX ACT; ISSUE A WRIT OF MANDAMUS OR ANY OTHER APPORPRIATE WRIT, ORDER OR DIRECTION, DIRECTING THE 1ST RESPONDENT TO COMPLETE THE ACTIONS UNDER THE INCOME TAX ACT IN RESPECT OF THE TAX INFORMANT INFROMATION CASES 1/2020 TO 5/2020 IN A TIME BOUND MANNER AND TO REPORT THE PROGRESS OF THE SAME PERIODICALLY TO THIS HON’BLE COURT TILL THE FINALISATION OF THE ASSESSMENT SO THAT THIS HON’BLE COURT CAN MONITOR THE SAME.
THIS PETITION HAVING BEEN HEARD AND RESERVED ON 17.12.2020 AND COMING ON FOR PRONOUNCEMENT OF ORDERS THIS DAY, THIS COURT MADE THE FOLLOWING:
O R D E R
The petitioner has filed this petition for direction to the first respondent to take steps under the provisions of the Income Tax Act, 1961 [for short ‘the IT Act’] against the respondents for the alleged tax evasion in a time bound manner and to furnish periodical progress report to this Court lest the action be barred by limitation under the provisions of Section 153A of the IT Act.
4 2. The petitioner asserts that it has filed information with the Director General of Income Tax [Investigation] and Principal Director of Income Tax [Investigation] in five different dockets. These dockets are identified as Case Nos.1/2020 to 5/2020. But despite different representations, including the representation dated 22.01.2020, the concerned did not initiate any action and as such, the petitioner has filed public interest writ petition in W.P. No.3635/2020 [PIL] arraying different authorities, including the first respondent in this petition, for directions to constitute a multi disciplinary investigation team to investigate into the alleged breach of the provisions of the Reserve Bank of India Act, 1934, [RBI Act], the Income Tax Act, 1961, [IT Act] the Securities and Exchange Board of India Act, 1992 [SEBI Act] by the second to seventh respondents and to recover assets allegedly removed from the different companies mentioned therein.
5 3. This writ petition is disposed of by a Division Bench of this Court by order dated 1.10.2020 which reads as follows: “Today we have heard the learned Counsel appearing for the petitioner on the question whether this Court should entertain this writ petition filed as a Public Interest Litigation at the instance of the petitioner.
After arguing the matter for some time, the learned counsel for the petitioner seeks permission to unconditionally withdraw the petition. Accordingly, the petition is disposed of as unconditionally withdrawn. However, we make it clear that we have made no adjudication on the issues raised on the merits of the petition. All the pending applications do not survive for consideration and are accordingly disposed of.”
It is after the disposal of this writ petition by the Division Bench, the petitioner has filed the present writ petition. In the present petition, the petitioner asserts that information is filed under the Income Tax Informants Reward Scheme, 2018 [for short ‘the Reward Scheme’], and the information filed
6 demonstrates breach of the provisions of the IT Act by the second to seventh respondents. The first respondent nevertheless has failed to initiate action against these respondents. Therefore, the present writ petition is filed.
The petitioner has also filed other writ petitions alleging breach of the provisions of the Reserve Bank of India Act, 1934, the Securities and Exchange Board of India Act, 1992 [SEBI Act], and the Prevention of Money Laundering Act, 2002. These writ petitions are in W.P.Nos.13838/2020 – India Awake for Transparency vs. The Chairman, Securities and Exchange Board of India, W.P.No.12073/2020 - India Awake for Transparency vs. The Director, Directorate of Enforcement and others and W.P.No.11482/2020 - India Awake for Transparency vs. Mr. Azim Hasham Premji and others1.
1 Presently these writ petitions are disposed of on January 8th 2021, January 21st 2021 and January 18th 2021 respectively
7 5. Sri. S. Ganesh, learned Senior Counsel who appears for the third to seventh respondents, when the matter was listed on 7.12.2020 raised preliminary objections as regards the maintainability of the writ petition. The learned Senior Counsel argues that the petitioner with the unconditional withdrawal of the W.P. No.3635/2020 [PIL] has abandoned the cause and with this abandonment the present writ petition cannot be maintained. As such, the petition must be rejected on the ground of maintainability. In the light of this submission, Sri. R Subramanian, the learned Counsel for the petitioner and Sri Ganesh, the learned Senior Counsel are heard on the question of maintainability of this writ petition.
The learned counsel for the petitioner submits that the petitioner has filed the writ petition in W.P.No.3635/2020 [PIL] espousing public cause and the present writ petition is for enforcement of the petitioner’s
8 right under the Reward Scheme. The petitioner’s allegations of tax evasion would stand vindicated and the petitioner consequentially would be entitled for the reward under the Scheme if requisite follow up action is taken pursuant to the information filed by the petitioner under the Reward Scheme. The first respondent’s failure to act on the information filed by the petitioner under the Reward Scheme affords a separate cause of action, and the present petition is filed with the reliefs as stated in the petition because of such cause of action. Therefore, the unconditional withdrawal of the writ petition in W.P. No.3635/2020 [PIL] would not preclude the petitioner from pursuing this writ petition.
The learned Counsel submits that because of the aforesaid reason and the other antecedent circumstances which would show that the petitioner has initiated certain proceedings against the respondents, the petitioner could not have succeeded in establishing that the writ petition in W.P. No.3635/2020 [PIL] is entirely public interest litigation
9 without any tinge of personal interest. The petitioner has therefore withdrawn the writ petition in W.P. No.3635/2020 [PIL]. The Division Bench has heard the petitioner only on the question whether it should entertain the writ petition filed as public interest litigation. The disposal of this writ petition as withdrawn, even if it is an impediment in law, would only be for initiation of yet another public interest litigation but cannot be construed as an abandonment of the petitioner’s personal locus or cause upon which the present writ petition is filed. Even otherwise, the writ petition in W.P. No.3635/2020 [PIL] is an incompetent petition, and the withdrawal of an incompetent writ petition cannot be construed as abandonment of the cause of action which would otherwise be available to the petitioner. The learned counsel relies upon the decision of the Hon’ble Supreme Court in ‘M/s. M. Ramnarain Private Limited and Another
10 vs. State Trading Corporation of India Limited2 in support of this submission.
The learned Counsel urges that the subject matter of the writ petition in W.P.No.3635/2020 [PIL] and the present writ petition are different: subject matter of any proceedings will be an amalgam of cause of action and the relief. The learned counsel relies upon the decision of the Hon’ble Supreme Court in Vallabh Das vs. Dr. Madan Lal and Others3 in support of this proposition, and submits merely because there is some similarity in the relief/s and in the assertions in the writ petition in W.P.No.3635/2020 [PIL] and the present writ petition, it cannot be construed that the petitioner with the withdrawal of the petition has abandoned the cause which would otherwise be available to him in law.
The learned counsel lastly urges that the reliance on the provisions of Order XXIII Rule 1[3] of the Code of Civil
2 (1983) 3 SCC 75 3 (1970) 1 Supreme Court Cases 761
11 Procedure, 1908 [for short ‘the CPC’] to assert that the petitioner has unconditionally withdrawn the writ petition in W.P. No.3635/2020[PIL] and therefore, the petitioner is precluded from pursuing the present writ petition is not a sound submission. The expression “unconditional” in the orders of the division Bench in W.P.3638/2020 (PIL) is superfluous because of the provisions of Order XXIII Rule 1[3] of the CPC, and use of such expression is of no material significance. A party to the proceedings either withdraws the proceedings with liberty or otherwise and if the proceedings are withdrawn without liberty, only the principles of equity would apply to bar other proceedings on the same cause of action. In the facts and circumstances of this case, the principles of equity cannot be applied.
On the other hand, learned Senior Counsel submits the Division Bench has heard the learned Counsel for the petitioner on multiple occasions and the petition is
12 permitted to be withdrawn unconditionally after the learned counsel for the petitioner was heard substantially. The submission that because of residual personal interest the writ petition in W.P.No.3635/2020 [PIL] was an incompetent petition and therefore petitioner has withdrawn such incompetent petition is completely specious. The petitioner cannot contend that the writ petition in W.P. No.3635/2020 [PIL] is an incompetent petition. In law, incompetent proceedings would be those proceedings which would be non est inasmuch as the proceedings are initiated without a right to initiate such proceedings as in the case where an appeal is filed though not such appeal is permitted. If such appeals are withdrawn, the withdrawal thereof cannot be construed as abandonment; otherwise, the rigours of abandoning proceedings without leave cannot be avoided.
The learned Senior Counsel submits that the reliance upon the decision of the Hon’ble Supreme Court in M/s. M. Ramnarain Private Limited and Others vs. State
13 Trading Corporation of India Limited supra in the facts and circumstances of the case is inappropriate. The Hon’ble Supreme Court in this case was considering the question whether the appellant, who had withdrawn an appeal filed against an order granting installment, could withdraw the same and file another appeal against a decree which also provided for installment. In the factual matrix of that case, the Hon’ble Supreme Court has concluded that the withdrawal of the earlier appeal, which was an incompetent appeal and not an appeal in the eye of law, would not affect the validity of the subsequent appeal filed against a decree from which an appeal is provided.
The learned Senior Counsel argues that the petitioner alleging a particular cause of action, which encompasses the cause of action asserted in the present petition, filed W.P. No.3635/2020 [PIL]. The alleged incompetence in the aforesaid writ petition is because of a
14 mix of the petitioner’s alleged keenness to espouse public cause and a personal interest to receive reward under the Reward Scheme. But in petitions presented as public interest litigation under Article 226 of the Constitution of India, cases where an element of private interest is discerned, the common practice is to either permit the petitioner to withdraw the public interest litigation petition with leave to file a petition for vindication of the discerned personal interest, or to permit the petitioner to convert the petition accordingly.
The learned Senior Counsel relying upon the decision of the Hon’ble Supreme Court in Monnet Ispat and Energy Limited vs. Jan Chetna and Others4 submits that the Hon’ble Supreme Court has allowed the appeal against an order in a Public Interest Litigation and remanded the petition for consideration by a single Judge of the Delhi High Court concluding that the Division Bench had erred in not considering the question of maintainability of the writ petition
4 (2013) 10 Supreme Court Cases 574
15 as public interest litigation. The disposal of the writ petition in W.P. No.3635/2020 [PIL] on a submission made by the Counsel for the petitioner to withdraw the same unconditionally will have to be examined in the background of this pronouncement. If the Division Bench was disposing of the petition for the reasons now canvassed by the learned counsel for the petitioner it would have permitted the petitioner to prosecute the petition before a learned single judge of this Court and not dispose of the same as withdrawn unconditionally.
The learned Senior Counsel argues that the Hon’ble Supreme Court in Sarguja Transport Service vs. State Transport Appellate Tribunal, M.P. Gwalior and others5 has held that withdrawal of a writ petition filed in a High Court without permission to file a fresh writ petition may not bar other remedies such as a suit or a petition under
5 [1987] 1 SCC 5
16 Article 32 of the Constitution of India, but the remedy under Article 226 of the Constitution of India should be deemed to have been abandoned by a party in respect of the cause of action relied in the writ petition which is withdrawn without permission. He submits that this proposition would apply on all fours in the facts and circumstances of this case.
As regards the submission by the learned counsel for the petitioner that the subject matter of any proceedings would be as borne out by the asserted cause of action and the relief claimed, the learned Senior Counsel, without disputing the proposition, submits that this Court must in deciding whether the subject matter of a writ petition which is withdrawn without liberty is the same as subject matter in the subsequent writ petition will have to take a holistic view, and when such holistic view is taken of the undisputed circumstances, in the present case, there cannot be any doubt that the subject matter in W.P. No.3635/2020 [PIL] and
17 in the present writ petition are the same, and to take a narrower or pedantic view would defeat the very purpose of applying the equity principle contained under Order XXIII of the CPC. There is an obvious distinction in the present case and in the case on hand before the Hon’ble Supreme Court in Vallabh Das vs. Dr. Madan Lal and Others supra relied upon by the learned counsel for the petitioner to contend that the subject matter of the two different proceedings are different.
The question of maintainability of this writ petition will have to be examined not only in the light of the rival submissions but also in the light of features that are beyond cavil. After the dismissal of the writ petition in W.P.No.3635/2020 (PIL), the petitioner has filed other writ petitions which are disposed of by coordinate Benches of this Court. The reasons for the disposal of these writ petitions will have a material bearing on the question for consideration because of certain undisputed facts. The petitioner in these
18 subsequent writ petitions has split up the causes pleaded in the earlier writ petition in W.P. No.3635/2020 [PIL] based on the alleged violations of the provisions of different enactments: if the present writ petition is for a direction to the concerned to initiate action under the provisions of the I.T. Act, the other writ petitions are filed for the alleged violations of the provisions of the other enactments such as RBI Act, SEBI Act, PML Act and the Companies Act, 2013.
• W.P.No.13838/2020 is for a direction to take up investigation for violation of the regulations under the SBI Act, and this writ petition is disposed of on 8.01.2021.
• W.P.No.11482/2020 is for a direction to the concerned to initiate proceedings for violations of the provisions of the RBI Act. The writ petition is disposed of on 18.01.2021.
• W.P.No.12073/2020 is for a direction to initiate proceedings for violations of the PML Act, and this writ petition is dismissed on 21.01.2021.
• W.P.No.172/2021 is for directions to conduct investigations into the alleged violations of breach of the provisions of the Companies Act, 2013, and this writ petition is dismissed on 12.02.2021.
The learned counsel on record for the respondents has placed on record the copies of the orders in these writ petitions during mention hours after the petition is reserved for orders. Each of these writ petitions are dismissed on the ground of maintainability after observing the undeniable similarity in the causes pleaded in these writ petitions and the writ petition in W.P.No.3635/2020 and opining that the decision of the Hon’ble Supreme Court in Sarguja Transport Services (supra) would apply. It is also opined that if a writ petition is withdrawn without liberty, the remedy in respect of such cause for the purposes of another petition under Article 226 of the Constitution of India would be abandoned.
In this petition, it is urged that withdrawal of the writ petition in W.P.No.3635/2020 cannot be an impediment because this petition is for realization of a right under the Reward scheme which contemplates a certain reward for furnishing information that culminates in a successful launch of investigation. But this cause is not part of the cause pleaded/urged in the writ petition in W.P.No.3635/2020. It is also urged that this different cause turns the subject matters in the present writ petition and in the writ petition in W.P. No.3635/2020 [PIL] different and therefore, this writ petition cannot be dismissed on the ground of maintainability.
This submission is examined on the basis of assertions in the present writ petition and the writ petition in W.P. No.3635/2020 [PIL] as regard the violations of the IT Act. In the writ petition in W.P. No. 3635/2020 [PIL] in paragraph 26 (f) to 26 (j), the petitioner refers to the transactions that are in violation of the provisions of the IT
21 Act; these transactions are certain gift transactions, merger transactions, inter se transactions between two trusts and other alleged evasions referring to the information filed by the petitioner. This information according to the petitioner is assigned docket numbers/ case number 1/2020 - 3/2020. Additionally, the petitioner has filed application for amendment in the writ petition in W.P. No. 3635/2020 [PIL] to include assertions as regards the alleged tax evasions by the third and fourth respondents, and the petitioner in this regard has referred to the information filed and identified by the petitioner as docket/ case Nos. 4/2020 and 5/2020. These allegations and references are the very assertions made in the present writ petition, but the distinction attempted is the change in the locus. It is stated that the allegations, references and relief in the earlier petition is to espouse public cause and in the present case is to earn the reward assured under the scheme. If this ingenious effort in drawing distinction, even if it is so, is permitted it would be glossing
22 over the undeniable fact that the petitioner having chosen a particular course of action and having withdrawn such action, now wants to re-agitate all the issues. This would be impermissible and beyond countenance both on the ground that the subject matters are different and that the unconditional withdrawal of the writ petition would be of no consequence.
As pointed out by the learned Senior counsel, it is not unknown that if public interest litigation cannot be sustained because it is hued by personal interest or right, and if the bench hearing such public interest litigation petition is persuaded to opine that vindication of personal right could be pursued, such public interest litigation petitions are disposed of with necessary liberty. Therefore, the significance of the unconditional withdrawal of the public interest litigation must be considered with all its possible import and consequences, and the contentions to shrivel the
23 rigours attached to the unconditional withdrawals must be subjected to greater scrutiny.
This Court, on a closure scrutiny of the assertions and references in this petition and in the writ petition in W.P.No.3635/2020 (PIL) is of the considered view that the petitioner cannot be permitted to continue with this petition despite the unconditional withdrawal of the said writ petition in W.P.No.3635/2020 (PIL) even on the ground that the subject matters in these two petitions are different: to permit the petitioner to continue the writ petition would be overlooking the kernel given the core issues urged by the petitioner for the seeming and encouraging artifice.
As regards the respondents’ defence that the petitioner with the withdrawal of the writ petition in W.P.No.3635/2020 (PIL) has abandoned the cause and the present petition should be dismissed accordingly, reference to the decision of the Hon’ble Supreme Court in Sarguja
24 Transport Services vs. State Transport Appellate Tribunal , M.P., Gwalior and others supra would be just and appropriate. The Hon’ble Supreme Court in para – 9 of this judgment has held as follows: “The point for consideration is whether a petitioner after withdrawing a writ petition filed by him in the High Court under Article 226 of the Constitution of India without the permission to institute a fresh petition can file a fresh writ petition in the High Court under that Article. On this point the decision in Daryao's case is of no assistance. But we are of the view that the principle underlying Rule 1 of Order XXIII of the Code should be extended in the interests of administration of justice to cases of withdrawal of writ petition also, not on the ground of res judicata but on the ground of public policy as explained above. It would also discourage the litigant from indulging in bench-hunting tactics. In any event there is no justifiable reason in such a case to permit a petitioner to invoke the extraordinary jurisdiction of the High Court under Article 226 of the Constitution once again. While the withdrawal of a writ petition filed in a High Court without permission to file a fresh writ petition may not bar other remedies like a suit or a petition under Article 32 of the Constitution of India since such withdrawal does not amount to res judicata, the remedy under Article 226 of the Constitution of India should be deemed to have been abandoned by the
25 petitioner in respect of the cause of action relied on in the writ petition when he withdraws it without such permission. In the instant case the High Court was right in holding that a fresh writ petition was not maintainable before it in respect of the same subject matter since the earlier writ petition had been withdrawn without permission to file a fresh petition. We, however, make it clear that whatever we have stated in this order may not be considered as being applicable to a writ petition involving the personal liberty of an individual in which the petitioner prays for the issue of a writ in the nature of habeas corpus or seeks to enforce the fundamental right guaranteed under Article 21 of the Constitution since such a case stands on a different footing altogether. We however leave this question open.”
It is already observed that the Coordinate Benches in similar circumstances relying upon this proposition have dismissed the other writ petitions holding that such petitions, which are filed after abandoning the earlier petition with the unconditional withdrawal, would not be maintainable. This Court is also of the considered view that the enunciation by the Hon’ble Supreme Court in Sarguja Transport Services vs. State Transport Appellate Tribunal , M.P., Gwalior
26 and others supra would apply and the petition is liable to be dismissed also on this ground.
The petition is dismissed accordingly.
SD/-
JUDGE
AN/SA*