2019 (9) TMI 673 - HC - Indian Laws

Right to Privacy - Seeking information from the dealers of BPCL to ensure that the outlets are not operated on benami basis - Seeking copy of sales tax returns, bank account statements and income tax returns pertaining to their dealership - failure to furnish the information - HELD THAT - In K.S. Puttaswamy 2017 (8) TMI 938 - SUPREME COURT , the Supreme Court has held that, the right to privacy is protected as an intrinsic part of the right to life and personal liberty under Article 21 of the Constitution of India and as a part of the freedoms guaranteed by Part III of the Constitution. However, the Apex Court has further held that the right to privacy is not absolute. K.S.Puttaswamy holds that any action by the State or its agencies which curbs or restricts the right to privacy of a citizen shall pass each of the following three tests (1) test of legality, that is, such action must have a legislative or statutory basis (2) test of need and necessity, that is, such action shall serve a definite purpose in public interest and (3) test of proportionality, that is, such action shall be at the minimum level required to achieve the object. Any information which discloses remittances made to the Income Tax Department towards discharge of tax liability would constitute personal information. A demand for furnishing income tax returns filed by a person would constitute invasion of the privacy of a person. The second, fourth and the sixth respondents have got no right to require the appellants to furnish their income tax returns and the bank account statements, as a condition for continuing the petroleum retail dealership granted to them. Ext.P2 circular issued by the second respondent is hereby quashed - Petition disposed off.

Summary

Issues Involved:
1. Legality of the demand for sales tax returns, bank account statements, and income tax returns by oil marketing companies.
2. Infringement of the right to privacy.
3. Validity of the dealership agreements in demanding personal financial information.
4. Applicability of the K.S. Puttaswamy judgment on privacy rights.

Detailed Analysis:

1. Legality of the Demand for Financial Information:
The appellants, who are petroleum retail dealers, challenged the demand by Bharat Petroleum Corporation Limited (BPCL) for sales tax returns, bank account statements, and income tax returns as per Ext.P2 circular. BPCL justified this demand as a policy decision to ensure outlets are not operated on a benami basis. Indian Oil Corporation Limited (IOCL) and Hindustan Petroleum Corporation Limited (HPCL) also contended they have the right to demand such information based on dealership agreements, though they had not issued similar demands at the time.

2. Infringement of the Right to Privacy:
The appellants argued that compelling them to furnish bank account statements and income tax returns infringes their right to privacy, a fundamental right under Article 21 of the Constitution. The court referred to the Supreme Court's judgment in K.S. Puttaswamy v. Union of India, which held that the right to privacy is intrinsic to the right to life and personal liberty but is not absolute. Any encroachment on privacy must meet the tests of legality, necessity, and proportionality.

3. Validity of the Dealership Agreements in Demanding Personal Financial Information:
The court examined whether the dealership agreements could mandate the disclosure of personal financial information. It was argued that personal financial details, such as bank account statements and income tax returns, are private and any demand for such information must be legally sanctioned. The court found that the dealership agreements could not override the fundamental right to privacy, and a contract between an individual and a corporate body does not constitute a law.

4. Applicability of the K.S. Puttaswamy Judgment on Privacy Rights:
The court applied the three-fold test from K.S. Puttaswamy to determine the legality of the demand for personal financial information:
- Legality: The court found no statutory basis for the oil companies' demand for income tax returns and bank account statements. The companies failed to demonstrate any legal provision authorizing such demands.
- Necessity and Proportionality: Since the demand did not pass the test of legality, the court did not need to consider necessity and proportionality.

Conclusion:
The court concluded that the demand for personal financial information by BPCL, as per Ext.P2 circular, and similar potential demands by IOCL and HPCL, infringed the right to privacy and lacked legal sanction. The judgment of the learned Single Judge was set aside, and the circular issued by BPCL was quashed. The court held that the oil marketing companies have no right to require the appellants to furnish their income tax returns and bank account statements as a condition for continuing their petroleum retail dealership. The writ petitions were disposed of accordingly, with no costs awarded.