NARAYAN CHANDRA CHAKRABORTY Vs. UNION OF INDIA

JUDGEMENT

(1.) The plaintiff along with one Giridharilal Ganatra used to carry on business as brokers in the jute and hessian market, in Calcutta, long prior to 1964.

(2.) In the first week of November 1964, the defendant, through its officer, Mr. J. P. Singh, the Chairman of the Central Board of Direct Taxes, New Delhi, made an announcement in a press conference which was published in the Times of India and the Statesman both dated November 8, 1964, to the effect that the persons who would disclose their concealed income voluntarily would be treated leniently by the defendant in the manner mentioned in the said publication. It was further published that the rate of the reward to those furnishing information about concealed income had been stepped up from 2.5% to a minimum of 7.5% of the extra tax to be realised as a result of such information and in suitable cases the reward might go up to 10%. Similar announcements were published in the Sunday Tribune, Ambala, Hindusthan Times Weekly, Hindusthan Standard and Amrita Bazar Patrika, all dated November 8, 1964. The plaintiff and the said Giridharilal made a joint representation in writing dated 25/26, October, 1965, to the then Commissioner of Income-tax (No. 1) giving information of concealed income by seven firms in the Jute Market mentioned in para. 3 of the plaint and furnished valuable particulars regarding the books of accounts relating to their concealed income. Thereafter from time to time information regarding about 52 firms guilty of concealing income were furnished by the plaintiff to the defendant and a list of such names has been set out in para. 8 of the plaint. On January 31, 1967, the plaintiff along with Giridharilal actively helped the defendant's officers in raiding 37 business places. As a result of the raids the defendant discovered concealed income to the extent of Rs. 4 crores, which was published in the Sunday Statesman on February 5, 1967. According to the plaintiff, he acted on the basis of the promises made by the defendant and relied on its representations published in the newspapers mentioned above and as a result thereof he changed his position and suffered disadvantages. In the alternative, the plaintiff stated that he had furnished those informations and rendered active help to the defendant not intending to do so gratuitously and, as a result thereof, the defendant derived benefit by discovering concealed income and realising huge extra taxes and as such the defendant is bound to compensate the plaintiff by payment of the promised reward under Section 70 of the Indian Contract Act. Section 70 was specifically pleaded by way of amendment. It is the plaintiff's case that he received Rs. 100 from the defendant for conveyance and Rs. 12,500 by way of interim reward on November 18, 1969. The plaintiff made several demands for settlement of his claims but without any result. The defendant, through its officer, Sri B. K. Naha, ITO, S.I.B., wrote a letter dated April 29, 1970, acknowledging the defendant's liability to the plaintiff in writing. Thereafter, on October 29, 1970, the Central Board of Direct Taxes informed the plaintiff by a telegram that a further reward had been sanctioned. Pursuant to the same, a further sum of Rs. 12,500 was offered to the plaintiff for acceptance in full and final settlement of all his claims against the defendant but the plaintiff refused to accept the same as, according to him, his claims would be much more than what was offered to him. The plaintiff by his letter dated January 21, 1971, requested the defendant to furnish him certain information regarding assessments relating to his claims but the defendent through its officer, Mr. B. K. Naha, refused to give any information by its letter dated March 4, 1971, and alleged that the reward was ex gratia. Being unable to recover his legitimate dues from the defendant, the plaintiff moved this High Court in its writ jurisdiction under Article 226 of the Constitution by a writ petition being Civil Rule No. 2619(W) of 1971. In the said application, the defendant filed an affidavit-in-opposition affirmed on June 29, 1972, by one Coimbatore Kumaro Krishnamurthi, the Commissioner of Income-tax, West Bengal (No. II) and in para. 24 of the said affidavit, the defendant admitted its liability in writing by saying that the reward was payable on the determination of the extra taxes to be recovered as a result of the information furnished by the plaintiff but the assessments not being complete, the quantum of reward could not be ascertained at that stage.

(3.) The plaintiff had filed a supplementary affidavit in that proceeding affirmed on August 14, 1972, in which he stated in para. 1, that the defendant had recovered more than 8 crores by way of extra taxes and this allegation was not denied by the defendant by filing any affidavit although the supplementary affidavit was duly received by the defendant on August 16, 1972. On the basis of the allegation by the defendant that the assessment was incomplete, the plaintiff did not press the said rule and withdrew the same with leave to take out a fresh proceeding. By the order dated September 27, 1972, disposing of the said rule, this court directed the defendant to make an ad interim payment to the plaintiff at an early date and to expedite the matter. The plaintiff, thereafter, gave several reminders to the defendant. The defendant by its letter dated June 2, 1973, informed the plaintiff that the matter could not be finalised due to various litigations instituted by the assessees and the question of final reward would be taken up after the relevant assessments would become final and on realisation of extra taxes. As the defendant remained silent and no final reward was paid, the plaintiff instituted the present suit for recovery of rupees two lakhs after service of notice under Section 80 of the CPC, According to the plaintiff, no part of his claim is barred by limitation on account of various acknowledgments in writing by the defendent and/or its duly authorised officers.