2021 (2) TMI 313 - HC - Benami Property

Benami transactions/money laundering and evasion of income tax - real-estate transactions allegedly undertaken by respondent nos.6 to 15 - 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 complain - 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 - HELD THAT - 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. 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 suspicions and assumptions of the petitioners tarnishing their reputation. 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. 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. 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. Writ Petition does not deserve to be entertained by this Court, and it is accordingly dismissed at admission stage with costs.

Issues Involved:
1. Direction to initiate action and prosecution under various statutes.
2. Monitoring of investigation by the court.
3. Direction for disciplinary proceedings against delinquent officers.
4. Allegations of benami transactions and tax evasion.
5. Collusion of Income Tax Department officers with respondents.
6. Petitioners’ intention behind filing the writ petition.

Detailed Analysis:

1. Direction to Initiate Action and Prosecution:
The petitioners sought a direction to the Union of India and relevant tax authorities to initiate action against the respondents for alleged violations under the Income Tax Act, 1961, the Prohibition of Benami Property Transactions Act, 1988 (as amended by Act 43 of 2016), and the Prevention of Money Laundering Act, 2002. The court noted that the petitioners had already filed a civil suit (O.S.No.26 of 2020) for partition of certain land and that the relief sought in the writ petition was similar to the issues being addressed in the civil suit.

2. Monitoring of Investigation:
The petitioners requested the court to monitor the investigation into benami transactions, tax evasion, and money laundering by the respondents, citing the Supreme Court judgment in Vineet Narain vs. Union of India. The court, however, declined to comment on the merits of the civil suit since it was sub judice and emphasized that it was not inclined to conduct a parallel inquiry to the civil suit.

3. Direction for Disciplinary Proceedings:
The petitioners also sought a writ directing the disciplinary authorities to institute proceedings against officers of the Income Tax Department allegedly colluding with the respondents. The court found no adverse inference against the officers based on the material presented and stated that suspicions and assumptions of the petitioners could not tarnish the reputation of government officers.

4. Allegations of Benami Transactions and Tax Evasion:
The court examined the petitioners' allegations that the transactions in question were benami and involved tax evasion. The petitioners contended that the sale deeds were undervalued to avoid taxes and that the financial transactions were fictitious. The court noted that these issues were already part of the civil suit and that the petitioners could prove their contentions by leading evidence in that suit.

5. Collusion of Income Tax Department Officers:
The petitioners alleged collusion between Income Tax Department officers and the respondents. The court found no evidence of such collusion based on the complaints and documents submitted by the petitioners. The court emphasized that casting aspersions on officers without concrete evidence was unwarranted.

6. Petitioners’ Intention Behind Filing the Writ Petition:
The court observed that the petitioners appeared to be using the writ petition to extract information from the tax authorities and possibly coerce the respondents into a settlement. The court quoted the Supreme Court's decision in Tehseen Poonawalla v. Union of India, highlighting the misuse of judicial process for personal or business agendas.

Conclusion:
The court concluded that the filing of the writ petition was an abuse of the court's process. It dismissed the petition at the admission stage, imposing costs of ?5,000 to be paid to the High Court Legal Services Committee. The court emphasized that it could not be used as a private investigator by the petitioners to support their civil suit or to coerce the respondents. All pending miscellaneous petitions in the writ petition were also closed.

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