UNION OF INDIA Vs. NARAYAN CHANDRA CHAKRABORTY

JUDGEMENT

(1.) This appeal is directed against the judgment and decree dated 11th Jan., 1980 of Mrs. Pratibha Bonnerjea, J. Reported in 1980 (1) CHN at p. 158. The Respondent, Narayan Chandra Chakraborty, filed suit No. 90 of 1974 against the appellant Union of India under the circumstances stated hereinafter.

(2.) Prior to 1964 the respondent along with one Giridharilal Ganatra used to carry on business in the jute and hessain market in Calcutta. On 8th Nov., 1964 an announcement made in a press conference in the first week of Nov., 1964 by one Mr. J.P. Singh, Chairman of the Central Board of Direct Taxes, New Delhi, officer of the appellant, was published in the Times of India and Statesman. Such announcement was in respect of voluntary disclosure of concealed income. It was to the effect that persons who would disclose their income voluntarily would be treated leniently by the respondent in the manner as stated in the publication. It was further published that the rewards to persons giving information about concealed income was being stepped up from 2.5% to a minimum of 7.50% of the extra income to be realised as a result of such information and in suitable cases such reward could be increased upto 10%. On the said date, that is 8th Nov., 1964 similar announcements were published in other newspapers, namely, Sunday Tribune, Ambala, Hindusthan Times Weekly, Hindusthan Standard and Amrita Bazar Patrika Pursuant to such announcement a joint representation in writing dated 24/26th Oct., 1965 was made by the respondent and the said Giridharilal to the then Commissioner of Income Tax No. 1 giving information about the concealed income by seven firms in the jute market. The names of such firms are mentioned in paragraph 3 of the plaint. They also furnished valuable particulars regarding books of accounts relating to such concealed income, According to the respondent, thereafter a list containing the names of other 52 firms guilty of concealing income was furnished to the appellant's officers and the names of such firms are mentioned in paragraph 8 of the plaint. According to the respondent, pursuant to the information as aforesaid on 31st Jan., 1967, thirty-seven business places were raided by the appellant's officer and the respondent along with Giridiharilal actively helped in the above matter. It was further stated that as a result of such raids, the appellant discovered concealed income to the extent of Rs. 4 crores as was published on 5th Feb., 1967 in the Sunday Statesman. The respondent's case was that he acted on the basis of the promises made on behalf of the appellant and relied on the representations published in the newspapers as stated above and as a result thereof he changed his position and suffered disadvantages. The respondent also made his claim on the alternative basis that such information was furnished and help was rendered by him not intending to do so gratuitously and as a result thereof the appellant derived benefit by discovering concealed income and realised huge amount of extra taxes and therefore the appellant was bound to compensate the respondent by payment of promised rewards under Sec. 70 of the Contract Act. Here it may be noted that by an amendment of the plaint, Sec. 70 of the Contract Act was specifically pleaded by the respondent. It was stated by the respondent that he received from the appellant Rs. 100.00 for conveyance charges and Rs. 12,500.00 by way of interim reward on 18th Nov., 1969. The respondent thereafter made several demands for settlement of his claim in respect of the reward but the same was without any result. According to the respondent, by a letter dated 29th April, 1970 the appellant through its officer one Sri B.K. Naha, I.T.O., S.I.B acknowledged its liability to the respondent in writing and thereafter on 29th Oct., 1970 the respondent was informed by a telegram sent by the Central Board of Direct Taxes that a further reward has been sanctioned. As a sum of Rs. 12,500.00 was offered to the respondent as further reward for acceptance in full and final settlement of all his claims against the appellant the respondent refused to accept the same inasmuch as according to him, his claim would be much more than what was offered to him. By a letter dated 21st Jan., 1971, the respondent requested the appellant to furnish him certain information regarding assessments relating to his claims but such information was refused by a letter dated 4th March, 1971 sent by the appellant's officer, Mr. B.K. Naha. In his letter it was alleged that the reward was in the nature ex gratia Having failed to recover his legitimate dues from the appellant the respondent made an application under Art. 226 of the Constitution of India which was marked as Civil Rule No. 2619 (W) of 1971. It was stated by the respondent that an affidavit-in-opposition affirmed on the 29th June, 1972 by one Coimbator Kumaro Krishnamurthi, Commissioner of Income Tax, West Bengal No. II, was filed in the above matter and in paragraph 24 thereof the appellant admitted its liability in writing by saying that the reward was payable on determination of the extra taxes to be recovered as a result of the information furnished by the respondent and as the assessments were not complete the quantum of reward could not be ascertained at that stage. It was further stated that a supplementary affidavit in the said proceeding affirmed on 14th Aug., 1972 was filed by the respondent wherein it was stated that the appellant had recovered more than Rs. 8 crores by way of extra taxes and such allegation, was not denied by the appellant by filing any affidavit although a copy of the supplementary affidavit was duly received by the appellant on 16th Aug. 1972. In view of the stand taken by the appellant that the assessment was incomplete the respondent did not press the said Rule and withdrew the same with liberty to take out fresh proceedings. The said rule was disposed of by an order dated 27th Sept., 1972. In disposing the said rule, the Court directed the appellant to make ad interim payment to the respondent at an early date and to expedite the matter. Thereafter, several reminders were given by the respondent. By letter dated 2nd June, 1973 the appellant informed the respondent that the matter could not be finalised due to various litigation's instituted by the assessees and the question of final reward would be taken up after relevant assessments would become final and on realisation of extra taxes. In view of the appellant remaining silent in the matter and as no final reward was paid to the respondent, the respondent after serving a notice under Sec. 80 of the Code of Civil Procedure filed the above suit claiming for a decree for Rs. 2 lakhs and for other reliefs.

(3.) In the Written Statement filed on behalf of the appellant,announcement in the newspapers as alleged in the plaint were admitted and the authority of the person making the announcement was not disputed. The fact of giving information by the respondent and Giridharilal was admitted and that there were raids on 31st Jan., 1967 was also admitted. The appellant however denied that the respondent and Giridharilal gave active help on the said date or that the result of such raid on 31st Jan., 1967 was published in the Statesman dated 5th Feb., 1967 as was alleged by the respondent. In the Written Statement it was also stated that by a letter dated 25th/26th Feb., 1970 the respondent and Giridharilal was informed by the appellant that their claim for reward would depend on the discovery of concealed income after examination of the seized materials and on completion of the assessment and collection of extra taxes and thereafter by a letter dated 4th March, 1971 the respondent was informed that the reward payable to the informer was in the nature of ex gratia payment and that the respondent was not entitled to any information in respect of any assessment, it was also denied that by the announcements as published in the news papers the appellant made any promise to pay or made any representation as was alleged by the respondent or that the respondent acted on the basis of any such representation of that relying on any such information the respondent had suffered disadvantages or detriment as was alleged by him the appellant also denied having any knowledge of the respondent's supplementary affidavit dated 14th Aug., 1974 and disputed the correctness thereof The appellant's case was that payment of reward being ex gratia in its nature, the suit was misconceived and not maintainable in law. The validity and legality and legality of the notice under Sec. 80 of the Code of Civil Procedure were disputed Further, according to the appellant, there was no acknowledgement of liability by it.