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High Court Of Delhi
TRILOK CHAND JAIN - Appellant
Versus
DAGI RAM PINDI LALL - Respondent
Suit 641 of 1969
Decided On : 12/14/1973
Whether the confidential nature of the documents, records, etc. and the prohibition against their being required by a Court to be produced or evidence thereof to be given as well as the liability of a public servant to be punished for disclosure of the particulars contained in the said documents, records, etc. continued to subsist even after April 1, 1962, with effect from which date the Indian Income-tax Act, 1922, had been repealed and the Income-tax Act, 1961, came into force.
Fact of the Case:
The plaintiff instituted the suit for recovery of Rs. 1,39,722. 86 from the defendants M/s. Dagi Ram Pindi Lall, its three partners Pindi Lall, Bishamber Nath and Dagi Ram and Smt. Budh Wanti, wife of Pindi Lall. While evidence was being recorded in the Suit, the plaintiff obtained summons from the Court requiring the Income-tax Department to produce in Court the records relating to the income-tax of M[s. Dagi Rani Pindi Lall for the years 1964-65 to 1971-72. The Income-tax Officer, District II (XI), New Delhi, sent a letter, dated November 1, 1972, to the Court claiming that the said records relating to Mis. Dagi Ram Pindi Lall were privileged under section 137 of the Income-tax Act, 1961, in view of the decision of H. R. Khanna, J. (as his lordship then was) in Daulat Ram and others v. Som Nath and others, (l968) 68, I. T. A. 779 (1). The Income-tax Officer, however, sent the records in a sealed cover through an Inspector in compliance with the summons of the Court. The plaintiff again applied for and obtained summons requiring the Income-tax Officer to produce the income-tax records relatins: to m/s. Horizon Industrial Products (P) Ltd. and Bishamber Nath Kaul. By a letter, dated January 4, 1973, the Income-tax Officer, Companies Circle-VIII, New Delhi, claimed privilege under section 138 of the Income-tax Act, 1961. It was submitted in the letter that no disclosurs of information regarding income-tax pertaining to income-tax assessees could be made, and that if any information was required, the party should apply to the Commissioner of Inane-tax under section 138 (1) of the Income-tax Act, 1961, read with Rule 113 of the Income-tax Rules, 1962, in Form No. 46. The officer, however, sent the records in a sealed cover to the Court. The plaintiff also filed in the Court a number of certified copies of the accounts of the defendants which he had been able to obtain from the Income-tax authorities, and wanted to tender the certified copies in evidence. The defendants in their turn wanted to summon certain records relating to the plaintiff from the Income-tax Department, but the plaintiff opposed the same relying, inter alia, on the decision in Daulat Ram s case (supra).
Finding of the Court:
By virtue of the declaration of the documents, etc. as confidential, the prohibition imposed against the Court and the liability of a public servant to be punished for disclosure under section 54 of the Indian Income-tax Act, 1922, a right to resist the production and disclosure of the documents, etc. had been acquired or had accrued to an assessee or a third party on his filing the documents before the income-tax auhoriy, and an obligation not to produce or disclose had been incurred by the concerned officer or authority.
Issues: 1. What is the position of law relating to privilege prior to 1964? 2. What is the position of law relating to privilege after 1964? 3. What is the effect of the production of certified coptes relating to income-tax assessment records, and how far certified copies can be admitted in evidence?
Ratio Decidendi: The assessee or the third party acquired a right to resist the production and disclosure of the documents, etc. and an obligation not to produce or disclose was incurred by the concerned officer or authority.
Final Decision: The confidential nature of the documents, records, etc. and the prohibition against their being required by a Court to be produced or evidence thereof to be given as well as the liability of a public servant to be punished for disclosure of the particulars contained in the said documents, records, etc. continued to subsist even after April 1, 1962, with effect from which date the Indian Income-tax Act, 1922, had been repealed and the Income-tax Act, 1961, came into force.
( 29 ) RELYING upon the above decision, Mr. Watel contended that in the present case also the prohibition against a Court contained in section 54 related to the procedure and jurisdiction of the Court, and that under the provision in section 54 it cannot be said that a right, privilege or obligation had been acquired, accrued or incurred within the meaning of section 6 (c) of the General Clauses Act. We are unable to accept the contention. In the case before the Supreme Court, the Morena Courthad no jurisdiction to start with, and the want of jurisdiction was remedied by the extension of the Indian Code of Civil Procedure to Madhya Bharat and the Court was made competent to execute the decree. In the case of section 54, it laid down a prohibition against the Court doing a certain act and the same cannot be regarded, in our opinion, as one relating to procedure or absence of jurisdictoin. The prohibition in section 54 was a substantive provision and not merely procedural, and the section only required the Court not to exercise the jurisdiction normally vested in it. It was just a restraint on existing jurisdiction of the Court. The learned counsel cannot, therefore, derive any assistance from the decision. We have already referred to the decisions in Hamilton Cell's case and Abbott's case and pointed out that the said decisions in fact support the view taken by us. The case of G. Ogden Industries Pty. Ltd. , referred to in the decision of the Supreme Court, is also in no way against the view taken by us. Section 5 of the English Workers' Compensation Act, 1958, provided for compensation fit certain rates for personal injury suffered by an employee in the course. of his employment. By an Amendment Act of 1965, the benefits payable to. the dependents of a 'deceased worker were. increased. After the said amendment Act came into force, a worker suffered pulmonary oedema from which he died. His denendents claimed compensation under the Act of 1958. The question arose, whether compensation should be paid under the increased rates intr
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