Judgment

HIDAYATULLAH, C.J.I. :- This judgment shall dispose of Civil Appeals 564-571 of 1968. Of these, four are against the common judgment and order of a Division Bench of the Calcutta High Court, December 10, 1963, dismissing 4 appeals (139-142 of 1959) from the order of a learned Single Judge, April 23, 1959 in Writ Petitions 159-162 of 1958. The remaining four appeals are against the order, November 24, 1964, refusing to certify the case as fit for appeal to this Court under Article 133 (1) of the Constitution.

2. The facts are as follows: One Dalchand Singhi held a prospecting license in the earstwile Korea State (now in Madhya Pradesh). His son Bahadur Singh Singhi took a mining lease and started a colliery known as Jhagrakhand Colliery. In 1942 a private limited Company called the Jhagrakhand Collieries Ltd. was started with an authorised capital of Rs. 24 Lakhs (2400 shares of Rupees 1000 each.) Bahadur Singh divided equally the 2400 shares between himself and his 3 sons Rajendra Singh Singhi, Narendra Singh Singhi and Birendra Singh Singhi. In 1943 the colliery business and its assets were transferred by the joint family to the Company. In 1944 the father and his 3 sons separated and partitioned the property. Bahadur Singh Singhi died on July 7, 1944 leaving a will - Letters of Administration with the will annexed were granted in 1945. The register of Jhagrakhand Collieries Ltd., was rectified and showed thereafter 900 shares in the name of Narendra Singh Singhi and Rajendra Singh Singhi and 600 shares in the name of Rajendra Singh Singhi. Birendra Singh Singhi died on December 12, 1950 leaving a widow Smt. Champa Kumari and two minor sons Ashok Kumar Singhi, Chandra Kumar Singhi and also a minor daughter. These minors have now attained majority.

3. Under what is known as the Tyagi Scheme announced on May 19, 1951 a voluntary disclosure was made by the Jhagrakhand Collieries Ltd. and the share-holders. The time limit for such disclosure was August 31, 1951. Before this the Income-tax Officer had filed a complaint for certain offences and under a search warrant seized the books of account of the company from 1945 to 1950. This was on July 3, 1951. The shareholders and the company then disclosed on July 31, 1951 a concealed income of Rs. 42,52,501 during the years 1945 to 1948.

4. On November 28, 1951 the Commissioner of Income-tax offered to withdraw prosecutions if the Company and the share-holders agreed to pay taxes due on a total income of Rs. 90,00,000 to be distributed over the years 1945-1950 (both inclusive) together with a penalty of 20% and interest at 3% p. a. on unpaid tax. There were certain other conditions with which we need not concern ourselves. Certain representations followed and finally on December 26, 1951, it was agreed that the parties jointly and severally pay Rs. 67,48,841/11. It was also agreed that a sum of Rs. 55,99,832/6 would be accepted in full satisfaction upon the parties paying the amount in the following instalments:

(a) By December 31, 1951 ... Rs. 7,50,000

(b) By March 31, 1952 ... Rs. 5,00,000

(c) By March 31, 1953 ... Rs. 9,50,000

(d) By March 31, 1954 ... Rs. 9,50,000

(e) By March 31, 1955 ... Rs. 9,50,000

(f) By March 31, 1956 ... Rs. 9,50,000

(g) By March 31, 1957 the balance

On the failure of any of the instalments the whole sum of Rs. 67,48,341/11 together with interest would become due. A deed of Agreement, Guarantee and Equitable Mortgage showing the total income and total net tax liability of each share holder were shown. They were -

1947/48 to 1951-52 Total tax

Smt. Champa Kumari s husband ... Rs. 5,28,917-11

Rajendra Singh Singhi ... Rs. 9,30,498-03

Narendra Singh Singhi ... Rs. 9,93,816-15

Jhagrakhand Collieries Ltd. ... Rs.43,99,712-11

5. The Company paid the following sums by way of tax:

February 1, 1952 ... Rs. 3,50,000

April 1, 1952 ... Rs. 90,000

April 22, 1952 ... Rs. 1,22,000

Narendra Singh Singhi paid the following sums by way of tax:

February 1, 1952 ... Rs. 1,50