P. Sivadasan v. Union Of India & Ors.

T.S Thakur, J.—In this petition for a writ of mandamus, the petitioner prays for a nation-wide inquiry into the alleged evasion of taxes by Hindustan Lever Limited (HLL for short) and its sister concerns, in connivance with responsible Government officers. A mandamus, directing an inquiry against the officers responsible for inaction against Hindustan Lever Ltd. has also been prayed for, apart from a mandamus, directing the Union of India to grant a reward to the petitioner for furnishing information leading to the detection of the alleged evasion of taxes and duties by the said company. Since the prayers made by the petitioner are somewhat novel in nature, the same may be extracted at the outset:

(i) Issue a writ of mandamus or any other appropriate writ, order or direction to the first respondent to conduct a nation-wide inquiry into the illegal activities of the HLL and its sister concerns in evading various taxes and the involvement of the responsible officers of the respondents in not conducting timely investigation into the entire episode.

(ii) Issue a writ of mandamus or any other appropriate writ, order or direction to the first respondent to conduct an inquiry against the officers who are responsible for not taking action against the HLL after petitioner furnishing valuable informations to them and punish them accordingly.

(iii) Issue a writ of mandamus or any other appropriate writ, order or direction to the first respondent to order for awarding reward to the petitioner for the painful effort made by him for collecting the information about the tax evasion by the HLL.

(iv) Issue a writ of mandamus or any other appropriate writ, order or direction to the first respondent to enact a new law to avoid time bar for demanding excise duty and other duties evaded by the HLL and its sister concerns running into crores of rupees.

(v) Such other relief as this Hon'ble Court may be deem to be just and necessary in the facts and circumstances of the case.

2. The factual backdrop in which the petitioner has chosen to institute these proceedings may be summarized as under:

The petitioner, it appears, was working as a commission and C & RF agent of Ms. Hindustan Lever Ltd., Lipton India Ltd., Ms. Brook Bond (India) Ltd. and Ms. Ponds (India) Ltd. According to the averments made in the petition, the petitioner has resigned from the agency with effect from 18th April, 1994 due to what is described as ‘difference of opinion’ with the HLL Management. The petitioner's case is that his association running over 15 years with HLL gave him an insight into what the petitioner dubs as ‘illegal activities’ of the company resulting in evasion of various taxes. The petitioner claims to have furnished information about such activities of HLL in terms of a letter dated 22nd August, 1996. The details of the alleged activities of HLL and its sister concerns have been set out by the petitioner in some detail in the writ petition, reference to which is not immediately relevant for the disposal of this petition. Suffice it to say that the petitioner's first letter dated 22nd August, 1996 was followed by other communications, copies whereof have been produced and marked as Annexures P-2 to P-13 to the writ petition. The petitioner alleges that although the respondents were convinced about the genuineness of the information provided by the petitioner, they were reluctant to start a nation-wide investigation involving as many as 246 factories and a large number of C & RF depots and branch offices. According to the petitioner, the Additional Director of Central Excise, Zonal Office Chennai informed him on 22nd January, 2000 that they were taking up the matter and would initiate action in the first place in South India and in some places in Western Zone. The writ petition goes on to state that the Department carried out raids in all the South Indian factories of HLL and its godowns. It states that the petitioner was informed after these raids that the officers would first complete investigation in respect of two factories of the company in Kerala State as information provided by the petitioner in respect of the said two factories was found to be true and correct before taking further action. The petitioner, all the same, relentlessly pursued the matter with the authorities by addressing one communication after another, copies whereof have been enclosed with the writ petition as Annexures P-14 to P-20. The writ petition states that based on the investigation made at Cochin and Calicut units of HLL, show cause notices, demanding differential duties and proposing penalty upon the company, were issued which culminated in passing of adjudication orders confirming the demand and levying penalty upon HLL. According to the petitioner, the orders of adjudication raised demand against HLL to the tune of Rs. 98,47,229/- and a penalty of Rs. 42,61,652/- in terms of one order while a sum of Rs. 3,17,537/- and a penalty of Rs. 37,17,537/- was demanded in terms of another adjudication order passed against the said company. The writ petition goes on to state that the department also carried out investigation of three units of HLL within the jurisdiction of Mumbai Zone but the proceedings started on the basis of the said investigation were later dropped.

3. It is, in the above background, that the petitioner appears to have made a request by letter dated 19th March, 2004 for the grant of a reward in terms of the policy prevalent in that regard. By another communication dated 15th April, 2004, the petitioner asked for further inquiry into the matter which request was repeated in terms of letter dated 12th May, 2004, copies whereof have been produced as Annexures P-21 to P-23. The writ petition refers to an order dated 29th June, 2004 passed by the Commissioner of Customs and Central Excise (Appeals), Cochin, whereby the appeal filed by HLL was allowed and the order in original passed by the Additional Commissioner of Central Excise, Calicut set aside, holding that the demand raised was beyond the period of limitation prescribed for the same.

4. The petitioner's grievance in the present writ petition now is that although he had furnished the details about tax evasion by HLL and its sister concerns, the Department has failed to take immediate action. It is alleged that respondent Nos. 2 and 3 have not performed their public duty properly and that the Government had lost crores of rupees on account of their inaction. The petitioner has, in that backdrop, prayed for a nation-wide inquiry into the activities of alleged tax evasion of HLL and its sister concerns from the year 1980 onwards besides an inquiry into the involvement of Central Excise and Customs Officers in the entire episode. It is alleged that the officers of the respondents might have colluded with HLL to delay the entire investigation which calls for an independent investigation by an agency like the CBI. The petitioner has, therefore, prayed for a mandamus, inter alia, directing the respondents to suitably reward him for the painful efforts made by him in collecting the information about the tax evasion by HLL.

5. We have heard learned Counsel for the petitioner at some length and perused the record. The petitioner has, as seen above, sought a two-fold relief in this petition. In the first place, the petitioner has asked for a nation-wide inquiry into the activities of HLL and its sister concerns. That prayer is ex facie in public interest and with the object of recovering taxes that are, according to the petitioner, recoverable from HLL but have not been so recovered. The other prayer made by the petitioner relates to the grant of a reward to him for furnishing information which, according to the petitioner, has resulted in the detection of the evasion of duty by HLL and its sister concerns. We propose to deal with the two aspects separately.

6. Insofar as the prayer of the petitioner for a nation-wide inquiry into the alleged evasion of taxes by HLL and its sister companies is concerned, the petition does not inspire the confidence of the Court as a bona fide exercise initiated in public interest. We say so because the factual background in which the petitioner, has despite his long business association spreading over 15 years with HLL, suddenly assumed the role of a crusader against tax evasion has not been set out in the petition. All that the petitioner has stated in para 3 of the petition is that he had resigned from the C & RF Agency of HLL and its sister concerns with effect from 18th April, 1994. The reasons for this resignation, as have been described by the petitioner, to be ‘difference of opinion’ with the company. The petition, however, stops short of elaborating the alleged ‘difference of opinion’ giving rise to parting of ways between the principal and its agent. The long sequence of letters which the petitioner started writing from 1996 onwards to the tax authorities appears to have come only as a sequel to the termination of the agency whether by resignation of the petitioner as he claims or otherwise. The complaint regarding the alleged evasion of taxes by HLL is not, therefore, without a background. It appears to arise out of vendetta resulting from the termination of the agency. The petitioner could and indeed ought to have stated the entire background in which he was making the complaints to dispel any impression that the complaints were made only because the petitioner was aggrieved by the termination of the Agency.

7. Public interest litigation, it is fairly well settled, cannot be resorted to by a litigant for redressal of his individual or private grievance. It can also not be allowed to be used for wreaking vengeance against the respondents. The Court dealing with a petition filed in public interest is, therefore, required to adopt a cautious approach and make sure that the petition is indeed aimed at serving public interest whether by way of protecting public property, recovery of taxes illegally evaded or protecting the fundamental and other rights of any disadvantaged section of the society. The onus to prove that the litigation is in public interest is, therefore, entirely on the party who invokes that jurisdiction. The least the party, invoking the Court's jurisdiction, can do is to disclose truly and fully all the facts constituting the motivating force behind the making of the grievance. The petitioner has failed to do so. The writ petition leaves a gaping hole in the factual narration and falls short of a faithful disclosure of the facts necessary for the Court to accept the petitioner's claim that the proceedings have been instituted bona fide and in public interest.

8. That apart, the prayer made in the writ petition for a nation-wide inquiry into the alleged activities of HLL appears to be far-fetched for two precise reasons. Firstly, because the petitioner has not impleaded HLL and other companies against whom he seeks a nation-wide inquiry. It is difficult to appreciate how a writ petition filed against a particular company or group of companies seeking a nation-wide inquiry into their activities can be maintained without the companies being themselves arrayed as party respondents. The omission does not appear to be accidental. The purpose obviously is to secure an order behind the back of the companies concerned and without disclosure of the true and complete facts in regard to their affairs. More importantly, the prayer for a country-wide inquiry is nothing but a prayer for a roving inquiry into the affairs of HLL and its sister concerns. No such inquiry can be directed to be held by a writ Court on the allegations of tax evasion made by a former C & RF Agent whose agency stands terminated and who is obviously aggrieved of such a termination. Even if one were to keep aside the anger resulting from the differences that evidently resulted in the termination of the agency, the least which the petition ought to indicate is the precise basis on which such a nation-wide inquiry may be called for. As noticed earlier, there are, according to the petitioner, as many as 246 factories of HLL and other sister concerns apart from large number of C & RF Depots and Branch Offices. The prayer for holding an inquiry and investigation into the affairs of all such factories, depots and branches cannot be allowed just for the asking. The burden to prove that there was any evasion which would call for an investigation in respect of any particular factory, depot or branch rests heavily upon the petitioner which has not been discharged by him.

9. There is yet another aspect that would make any directions from this Court unnecessary. The averments made in the writ petition show that the complaints made by the petitioner in regard to Cochin and Calicut units were on the petitioners own showing looked into by the authorities and differential duties and penalty levied in terms of adjudication orders passed by the Commissioner of Central Excise, Cochin and Calicut. It is also admitted that investigation in regard to three units of HLL within the jurisdiction of Mumbai Zone were conducted but later dropped. It is not, therefore, a case where the authorities have remained insensitive to reports regarding evasion of excise and other duties and taxes. The complaints have, even according to the petitioner, been investigated and orders passed on the same. There is, in that view, no basis for the Court to hold that there was any failure on the part of the authorities in examining the complaints made by the petitioner. The allegation that the officers of the respondents might have colluded with HLL to delay the investigations or that an independent investigation should be conducted by the CBI are, therefore, only in the realm of conjectures and surmises which cannot provide a sound basis for the Court to step in and issue directions for any such inquiry.

10. Before parting with this aspect of the matter, we also wish to note that the petitioner is a resident of Calicut in the State of Kerala. All the complaints and representations filed by him have been addressed by the petitioner from Calicut to Central Excise Officers in Cochin and Calicut except those addressed to Director General of Anti-Evasion, R.K Puram, New Delhi and the Central Board of Excise and Customs. In the ordinary course, therefore, a writ petition alleging evasion of duty or culpable inaction on the part of the officers could have been filed in the High Court of Kerala at Cochin. It is also noteworthy that based on the information allegedly furnished by the petitioner, the Additional Commissioner of Central Excise, Calicut had passed orders which were set aside by the Commissioner, Customs and Central Excise (Appeals), Cochin. Suffice it to say that the bundle of facts constituting the cause of action for the petitioner to institute any proceedings arose in Kerala which would imply that the present writ petition could as well have been filed by the petitioner in the High Court of Kerala instead of coming all the way to Delhi to do so. On the principles of Forum convenience also the Court in Kerala would be the proper Court in which the matter could and ought to have been agitated.

11. That brings us to the question whether the petitioner has made out a case for the Court's intervention in so far as the payment of reward claimed by him is concerned. The petitioner's grievance appears to be that although he is entitled to a reward, the respondents have not entertained his request or processed the claim according to the prevailing rules and guidelines. This position, however, is belied by a communication dated 16.5.2005 from Deputy Director (Intelligence), Directorate General of Central Excise Intelligence, New Delhi which the petitioner has himself placed on record on 8th November, 2005. The said communication addressed to the petitioner is as under:

“This is with reference to your representation addressed to the Director General regarding your pending rewards. In this regard, it is informed that this office is in touch with the jurisdictional Central Excise Commissionerates regarding present status of the case and that the payment of reward to you would be considered at the appropriate time in accordance with the reward rules and guidelines.”

12. The above clearly shows that the issue regarding the grant of a reward is not yet finally determined. The matter is under consideration and is, according to the communication, being dealt with in accordance with the reward rules and guidelines. In the light of the said communication and in the absence of any final decision from the authorities on the entitlement of the petitioner to a reward, it is premature for the petitioner to make any grievance. No mandamus can, in that view, be issued to the respondents, particularly, when payment of a reward is at best an ex gratia payment which the petitioner cannot claim as a matter of right. The legal position in this regard is settled by the decisions of the Supreme Court in Union Of India v. R. Padmanabhan., (2003) 7 SCC 270; and Union of India v. C. Krishna Reddy, (2003) 12 SCC 627. In the later decision, Their Lordships have summed up the legal position as under:

“The scheme or the policy of the Government of India dated 30.3.1985 shows that the authority competent to grant the reward, while taking a decision regarding the entitlement of the person concerned has to keep many factors in his mind like specificity and accuracy of the information, the risk and trouble undertaken, the extent and nature of the help rendered by the informer, whether information gives clues of the persons involved in smuggling or their associates, the difficulty in securing the information, the risk involved for the Government servants in working out the case and whether apart from seizure of contraband goods, the owners/organisers/financiers/racketeers have been apprehended. The scheme further mentions that reward is an ex gratia payment and subject to the guidelines and may be granted on the absolute discretion of the competent authority and further that no one can claim the reward as a matter of right. The High Court in writ jurisdiction cannot examine or weigh the various factors which have to be taken into consideration while deciding a claim regarding grant of reward. These are matters exclusively within the domain of the authorities of the Department as they alone can weigh and examine the usefulness or otherwise of the information given by the informer. In the writ petition filed by the respondent, no details had been given on the relevant issues. If the grant of reward cannot be claimed as a matter of right, it is not understandable as to how a writ of mandamus can be issued commanding the Government to give a particular amount by way of reward. Though this specific plea was taken in paras 18 and 21 of the counter-affidavit, yet neither the learned Single Judge nor the Division Bench adverted to this aspect of the matter.

It is well settled by a catena of decisions of this Court that a writ of mandamus can be granted only in a case where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of that officer to discharge the statutory obligation. The chief function of the writ is to compel performance of public duties prescribed by statute and to keep subordinate tribunals and officers exercising public functions within the limit of their jurisdiction. Therefore, in order that a mandamus may issue to compel the authorities to do something, it must be shown that there is a statute which imposes a legal duty and the aggrieved party has a legal right under the statute to enforce its performance [see Bihar Eastern Gangetic Fishermen Coop. Society Ltd. v. Sipahi Singh, AIR para 15; Lekhraj Sathramdas Lalvani v. (In Both The Appeals), Dy. Custodian-cum-Managing Officer; and Umakant Saran (Dr.) v. State of Bihar].”

13. In the light of the above, all that we need observe is that since the petitioner's claim for grant of a reward has remained pending for some time, it would be appropriate for the competent authority to take an early decision in the matter. We hope and trust that the competent authority shall do so within six months from the date, a copy of this order is produced before it. Needless to say that if the petitioner is aggrieved of the decision so taken, he shall be free to seek appropriate redress in appropriate proceedings before competent Court in accordance with law.

14. With the above observations, this writ petition fails and is hereby dismissed but in the circumstances without any order as to costs.

Writ Petition dismissed.