IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 625 OF 2020 (ARISING OUT OF SPECIAL LEAVE PETITION (CIVIL) NO. 6639 OF 2019) KISHORE JAGJIVANDAS TANNA APPELLANT VERSUS JOINT DIRECTOR OF INCOME TAX (INV.) & ANR. RESPONDENTS ORDER Leave granted. 2. Despite opportunities, respondents have not filed reply. Learned Senior Counsel for respondents states that they do not wish to file response and appeal may be decided. 3. On 25.08.1987, Kishore Jagjivandas Tanna-the appellant before us and resident of Bombay (now Mumbai) had checked into hotel in New Delhi at about 3:30 p.m. On same day, search and seizure operations under Section 132 of Income Tax Act, 1961 ( Act , for short) were carried out in hotel room and Signature Not Verified Digitally signed by cash of Rs. 5,00,000/- was found in polythene bag. When CHARANJEET KAUR Date: 2020.02.05 16:49:53 IST Reason: confronted, appellant on oath had claimed having collected Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 1 of 13 this amount from trader in New Delhi. Amount of Rs. 4,99,900/- was seized. 4. On 22.12.1987 order under Section 132(5) of Act, as was then applicable, was passed by First Income Tax Officer A-II Ward, Bombay (now Mumbai) holding, inter alia, that there were contradictions and fabrications in appellant s version and stand on source of Rs. 5,00,000/- and therefore amount seized would be retained till assessment for Assessment Year 1988-1989 was finalised, as estimated tax liability and penalty for concealment could exceed seized amount. 5. appellant had thereupon challenged order passed under Section 132(5) of Act in Writ Petition No. 721 of 1988 before High Court of Judicature at Bombay. writ was partly allowed vide judgment dated 25.03.2008 with order under challenge being set aside as it was passed without following principles of natural justice. Liberty was granted to authorities to pass fresh order after issuing show-cause notice under Rule 112-A of Income Tax Rules, 1962 (the Rules, for short) alongwith copy of statements relied upon. Further, on failure to issue notice under Rule 112-A of Rules within 12 weeks, Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 2 of 13 seized amount would be refunded with 6% simple interest from date of seizure till date of return. 6. Consequent to aforesaid liberty and directions, Deputy Commissioner of Income-Tax 1(2), Mumbai had issued notice under Rule 112-A and thereafter passed order under Section 132(5) dated 18.09.2008. By letter dated 19.09.2008, Deputy Commissioner of Income-Tax 1(2), Mumbai informed appellant that seized cash need not be retained in case. Curiously, this letter had also stated: same cash shall be released after obtaining approval of CIT-1, Mumbai. However, seized cash is not lying presently in custody of CIT-1, Mumbai. 2. same fact have been brought to your notice vide above mentioned letter under reference. You are once again requested to give any information available with you regarding such seized cash so that this office will be able to expedite matter. By another letter dated 24.10.2008, Deputy Commissioner of Income-Tax 1(2), Mumbai wrote to appellant stating: you are once again requested to furnish any information which may be useful in locating present whereabouts of seized cash such as names of various officers involved in search action and assessment proceedings etc. You are once again requested to give any information available with you regarding such seized cash so that this office will be able to expedite matter. Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 3 of 13 appellant has rightly responded and argued before us that it was for authorities and not appellant to verify and ascertain which authority had retained cash. burden was not on appellant as he would have no information regarding whereabouts of seized cash. Accordingly, appellant had written letter dated 04.05.2009 requesting respondents to refund cash. 7. On 02.12.2009, Assessment Order for Assessment Year 1987-88 under Section 143(3) read with Section 147 of Act was passed determining total income at Rs. 97,950/-. seized cash of Rs. 4,99,900/- was not accounted and given credit in assessment order. appellant had thereupon moved application under Section 154 of Act objecting that assessing authority had not given credit of Rs. 5,00,000/- (sic. Rs.4,99,900/-) as tax paid. Reference was also made to letter dated 19.09.2009 by which appellant was informed that cash seized as per order under Section 132(5) was not required to be retained and had to be refunded. assessment order possibly had not accounted for seized cash as order under Section 132(5) of Act had directed for refund of Rs. 4,99,900/-. Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 4 of 13 8. It is case of appellant, which we have to observe has not been disputed and denied by respondents, that assessing officer had thereupon required appellant to furnish indemnity bond which was furnished on or about 22.09.2010, thereby indemnifying respondents against any loss caused by grant of refund of Rs. 4,99,900/- plus interest. appellant had certified that he had not obtained seized cash, and neither would he claim nor obtain aforesaid refund in any other manner. It is undisputed position that respondents did not refund Rs. 4,99,900/-. 9. After having waited for some time, appellant had sent written communication dated 05.07.2017 which was received by office of Deputy Commissioner of Income Tax 1(2)(1) on 17.07.2017 whereby he had sought refund of seized amount of Rs.4,99,900/- alongwith interest. computation sheet was also enclosed. 10. Principal Commissioner of Income Tax-1, Mumbai, realising fault and liability to pay, had then written letter dated 11.10.2017 to Director General of Income Tax (Investigations), New Delhi inter alia stating that seized cash had not been transferred to concerned commissioner in Mumbai and Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 5 of 13 therefore same should be transferred as appellant was pressing hard for refund. respondents have not placed on record further correspondence and steps taken to ensure refund. This letter dated 11.10.2017 admits and acknowledges liability to refund amount. 11. Left with no option, appellant in July, 2018 had filed Writ Petition No. 2079/2018 before Bombay High Court which has been dismissed vide impugned judgment dated 17.09.2018 primarily on two grounds. First, appellant should have filed execution petition under Rule 647 of Chapter XXXIII of Bombay High Court (Original Side) Rules,1980 which stipulates that order made under this Chapter shall be executed, as if it were decree made in exercise of Ordinary Original Civil Jurisdiction of High Court. Second, writ jurisdiction is not meant to confer benefit and enable litigants who sleep over their rights to derive advantage for themselves . appellant should have been prudent enough to know as to how monies, allegedly retained illegally, have to be recovered promptly and expeditiously . appellant had failed to take refund despite favourable order made by High Court more than decade back that is, on 25.03.2008, and therefore does not deserve any relief under Court s discretionary and equitable jurisdiction. Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 6 of 13 writ jurisdiction is not meant to escape bar prescribed in Limitation Act, 1963. 12. Having considered aforesaid factual matrix, we do not think that reasoning in impugned judgment can be sustained. first reason is fallacious as Writ Petition No. 721 of 1988 was partly allowed with direction to assessing officer to pass fresh order under Section 132(5) of Act after following procedure and Rule 112-A of Rules. Direction for refund was applicable if no notice would be issued within time stipulated. In any case, learned judges had option to treat writ petition as execution application or could have given liberty to appellant to file execution application which as per law of limitation can be filed within 12 years. This aspect has been completely over-looked and not been given due consideration. 13. second reason is also without merit, as we would elucidate. Remedies by way of writ under Article 226 of Constitution of India are extraordinary remedies exercised under plenary jurisdiction conferred by Constitution on superior courts. Constitution does not prescribe any limitation period for invoking writ jurisdiction, as by very nature this atypical extraordinary jurisdiction is discretionary and equitable, which puts Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 7 of 13 it on different footing from ordinary civil proceedings. This astir flexibility is required to ward off unfairness and clear way to render equitable justice, which might not be achievable on strict application of law on limitation. This would be true in matters with unusual circumstances, as writ jurisdiction offers designed and venerate remedy against violations and for protecting and enforcing fundamental rights and also statutory rights under Article 226 of Constitution. Long back Aristotle had acknowledged that nature of equitable is correction of law where it is defective owing to its universality . This is reason why all things are not determined by law, as for some things it is impossible to lay down uniform law and therefore, decree of flexibility is needed. (See dissenting opinion of Justice Breyer of Supreme Court of United States in Paula Petrella v. Metro-Goldwyn Mayer, Inc., et al.) Referring to exercise of writ jurisdiction in Tilokchand and Motichand and Others v. H.B. Munshi and Another,1 Hidayatullah C.J. had held that there is no lower and upper time limit for entertaining writ petition, and each case must be considered on its own facts. Where there is appearance of avoidable delay and this delay affects merits of claim, this Court will consider it and in proper case hold party disentitled to invoke extraordinary jurisdiction with 11969 2 SCR 824 Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 8 of 13 utmost expedition . In other words, writ petitions should be filed within reasonable period which period has to be considered with reference to facts of particular case. Therefore, as courts of equity, we have evolved principle of practice, and not as rule of law, not to enquire into belated and stale claims, notwithstanding that no period of limitation is prescribed either by Constitution or by Limitation Act. These principles enable writ court to administer justice on principles of equity, justice and good conscious. 14. Delay could reflect acquiescence and acceptance. In U.P. v. Arvind Kumar Srivastava2, reference was made to U.P. Jal Nigam v. Jaswant Singh3 which had referred to passage of Halsbury s Laws of England (para 911, pg. 395) to observe: 12. In determining whether there has been such delay as to amount to laches, chief points to be considered are: (i) acquiescence on claimant's part; and (ii) any change of position that has occurred on defendant's part. Acquiescence in this sense does not mean standing by while violation of right is in progress, but assent after violation has been completed and claimant has become aware of it. It is unjust to give claimant remedy where, by his conduct, he has done that which might fairly be regarded as equivalent to waiver of it; or where by his conduct and 2(2015) 1 SCC 347 3(2006) 11 SCC 464 Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 9 of 13 neglect, though not waiving remedy, he has put other party in position in which it would not be reasonable to place him if remedy were afterwards to be asserted. In such cases lapse of time and delay are most material. Upon these considerations rests doctrine of laches. Laches emphasises on prejudice caused by delay and also by negligence whereby third party could be affected or position of parties has undergone change or parallel right has been created. In Maharashtra State Road Transport Corporation v. Balwant Regular Motor Service,4 this Court had referred to Lindsay Petroleum Co. v. Hurd5 in which Sir Bens Peacock had elucidated: Now doctrine of laches in Courts of Equity is not arbitrary or technical doctrine. Where it would be practically unjust to give remedy, either because party has, by his conduct, done that which might fairly be regarded as equivalent to waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put other party in situation in which it would not be reasonable to place him if remedy were afterwards to be asserted in, either of these cases, lapse of time and delay are most material. But in every case, if argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to bar by any statute of limitations, validity of that defence must be tried upon principles substantially equitable. 4AIR 1969 SC 329 5(1874) LR 5 PC 221 Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 10 of 13 Two circumstances, always important in such cases, are, length of delay and nature of acts done during interval, which might affect either party and cause balance of justice or injustice in taking one course or other, so far as relates to remedy. 15. In Shankara Cooperative Housing Society Ltd. v. M. Prabhakar,6 this Court had highlighted and specified following principles which are to be applied when writ court examines issue of delay, laches and acquiescence: 54. relevant considerations, in determining whether delay or laches should be put against person who approaches writ court under Article 226 of Constitution is now well settled. They are: (1) There is no inviolable rule of law that whenever there is delay, Court must necessarily refuse to entertain petition; it is rule of practice based on sound and proper exercise of discretion, and each case must be dealt with on its own facts. (2) principle on which Court refuses relief on ground of laches or delay is that rights accrued to others by delay in filing petition should not be disturbed, unless there is reasonable explanation for delay, because Court should not harm innocent parties if their rights had emerged by delay on part of petitioners. (3) satisfactory way of explaining delay in making application under Article 226 is for petitioner to show that he had been seeking relief 6 (2011) 5 SCC 607 Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 11 of 13 elsewhere in manner provided by law. If he runs after remedy not provided in statute or statutory rules, it is not desirable for High Court to condone delay. It is immaterial what petitioner chooses to believe in regard to remedy. (4) No hard-and-fast rule, can be laid down in this regard. Every case shall have to be decided on its own facts. (5) That representations would not be adequate explanation to take care of delay. 16. In facts of present case, respondents do not and cannot dispute that they have to refund seized amount. Further, considerable delay and failure to make payment constitutes and is inseparable from cause of action as delay and negligence is on part of authorities. appellant does not seek setting-aside or quashing of adverse order, no third-party rights are involved and respondents ex- facie would not suffer due to change of position. Prayer for compliance of valid and legal order passed cannot be equated with prayers made in repeated representations seeking change of position. Acquiescence is not apposite to patience as acquiescence is not just standing-by, and refers to assent on being aware of violation or reflects conduct showing waiver. Laches is this case would require sheer negligence of nature Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 12 of 13 and type which would render it unjust and unfair to grant relief. When, liability to pay Rs.4,99,900/- is acknowledged and accepted, then to deny relief by directing payment in terms of order under Section 132(5) of Act would be unjust, unfair and inequitable. Statute mandates respondents to make payment. To be fair to counsel for respondents, it was conceded that appropriate order may be passed to do justice. 17. For aforesaid reasons, appeal is allowed with direction to respondent authorities to pay Rs. 4,99,900/- with interest as per law within period of three months from date on which copy of this order is received. In case of failure to pay in time, appellant would be at liberty to file contempt petition against officers concerned and also claim costs. J. (S. ABDUL NAZEER) J. (SANJIV KHANNA) NEW DELHI; JANUARY 24, 2020 Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 13 of 13 ITEM NO.39 COURT NO.13 SECTION III SUPREME COURT OF INDIA RECORD OF PROCEEDINGS Special Leave Petition (Civil) No.6639/2019 KISHORE JAGJIVANDAS TANNA Appellant(s) VERSUS JOINT DIRECTOR OF INCOME TAX (INV.) & ANR. Respondent(s) Date : 24-01-2020 This appeal was called on for hearing today. CORAM : HON'BLE MR. JUSTICE S. ABDUL NAZEER HON'BLE MR. JUSTICE SANJIV KHANNA For Appellant(s) Mr. S.C. Tiwary, Adv. Mr. Jatin Zaveri, AOR Mr. Neel Kamal Mishra, Adv. For Respondent(s) Mr. K. Radhakrishnan, Sr. Adv. Mr. Pranay Ranjan, Adv. Ms. Priyanka Das, Adv. Mrs. Anil Katiyar, AOR Mr. Sumit Upadhyay, Adv. Ms. Manjari Tiwari, Adv. UPON hearing counsel Court made following ORDER Leave granted. Civil Appeal is allowed in terms of signed order. Pending application(s), if any, shall stand disposed of. (RACHNA) (RAJINDER KAUR) SENIOR PERSONAL ASSISTANT ASSISTANT REGISTRAR (Signed order is placed on file) Civil Appeal arising out of SLP (Civil) No. 6639 Of 2019 Page 14 of 13 Kishore Jagjivandas Tanna v. Joint Director of Income-tax (Inv.) & Anr