Anil Saikia and Others vs Assam Board of Revenue and Others

J.N. Sarma, J.—This application i.e. CR No. 814/94 under Article 226 of the Constitution of India has been filed challenging the legality and validity of the judgment and order dated 25.2.94 passed by the Assam Board of Revenue in Appeal Case No. 61 E(D)/93 selling aside the order of settlement dated 20.2.93 passed by the Deputy Commissioner-cum-Collector, Dibrugarh, settling the No. 2 Borsaikia Country Spirit Shop with the Petitioner and settling the same with the Respondent No. 3 and 4 for the remaining period of the term 1993-96. The impugned order by the Board is Annexure-O to the writ application and in this case we are concerned with Appeal Case No. 61 E(D)/93. As many as 5 (five) appeals were filed against the judgment and order passed by the Deputy Commissioner, Dibrugarh settling the Borsaikia Country Spirit Shop No. 2 for the term of 1993-96 in favour of Shri Anil Saikia and Shri Rana Borgohain. The two grounds which were agitated before the Board are -i) the finance of the Respondent is not free from doubt which resulted in rejection of their lender, ii) the Respondent-Anil Saikia having not passed the HSLC examina-tion the corresponding tenderer would not be entitled to preferenciaj treatment under provision 223 of the Excise Rules. The appeal was allowed and the Board passed the following order;

In view of the above, we allow the appeal, set aside the order of settlement on Borsaikia C.S. Shop No. 2 made by Deputy Commissioner, Dibrugarh in favour of Sarvasri Anil Saikia and Rana Borgohain for the term 1993-94 (it should be 1993-96) and settle the same with Sarvasri Santanu Kumar Gogoi and Haren Tasha for the remaining period of the term.

These Shri Santanu Kumar Gogoi and Shri Haren Tasha are the Respondent Nos. 3 and 4 in the writ application and Shri Anil Saikia and Rana Borgohain are the Petitioners in writ application.

I have heard Shri N.M. Lahiri, learned Advocate for the Petitioner and Shri D.N. Choudhury, learned Advocate for the Respondents 3 and 4.

Regarding the second ground it may be stated that Annexure-M is the photo copy of the certificate of the HSLC examination issued by the Deputy Secretary, Board of Secondary Education, Assam, Guwahati and this shows that Shri Anil Saikia as a private candidate passed the HSLC examination in 1988 and was placed in Third Division and this aspect to the matter was also found in favour of the Petitioner in paragraph 4.2 of the judgment

Rule 208(4) of the Assam Excise Rules provides as follows:

Settlement of a shop shall have to be made by selection from amongst the tenderers for that particular shop, and the tenderers so selected shall also be financially sound to run the shops.

Rule 206(2) of the Rules provides as follows:

The tenders must be in such form and contain such particulars as may be prescribed by the State Government. Tenders not containing all the particulars shall be liable to be rejected.

The State Government has prescribed statutory form of tender in which column 11 is one of the columns in the tender form which reads as whether the tenderer/tenderers is/are capable of financing his/their business himself/themselves. Give details of source, cash in hand, bank balance, security, assets etc. This matter came up for consideration before a Full Bench of this Court in Rajkumar Dilip Narayan Singha v. The Assam Board of Revenue and Ors. reported in ILR(1980) Gau 99 whore this Court pointed out as follows:

...There are two general tests which are to be taken note of by the settling authority. First is the personal interest of the tenderer which is the most important as envisaged under different rules. The second is the question of suitability test in which the financial backing in managing the shop comes up for consideration.

The full bench also approved the earlier case of Tulashi Dutta v. State of Assam in CR 24/78 of Gauhati High Court quoting an observation from that case enunciating the law as follows:

If the judgment of Tulashi Dutta is read over as a whole this is amply clear that what was indicated in the observation made in the said judgment was to prohibit benami transaction and not any other transactions which are not so, in taking of any other financial assistance which does not become a hush-hush transaction or benami transaction. This is made clear by the subsequent sentence occurring after the second observation that has been noted in Tulashi Dutta''s case to the following effect:

However, if the financiers are made known and if it is established that they had certain consideration for the advancement, we do not think that the transaction would lake the colour of benami transaction.

This aforesaid observation makes it amply clear that in Tulashi Dutta''s case, nothing was laid down as to restrict the taking of financial assistance from known source.

In Mukunda Bore Vs. Bangshidhar Buragohain and Others, Mukunda Bora v. Bangshidhar Buragohain and Ors. the Supreme Court pointed as follows:

While on facts the order of the Board under appeal is not impeccable, we must remember that under Article 226 of the Constitution, a finding of fact of a domestic tribunal cannot be interfered with. The High Court in the exercise of its special jurisdiction does not act aS a court of appeal. It interferes only when there is a jurisdictional error apparent on the face of the record committed by the domestic tribunal. Such is not the case here. It is true that a finding based on no evidence or purely on surmise and conjectures or which is manifestly against the basic principles of natural justice, may be said to suffer from an error of law. In the instant case, the finding of the Board that the Appellant docs not possess the necessary financial capacity is largely a finding of fact. Under Rule 206(2) of the Assam Excise Rules, an applicant for settlement of a shop is required to give full information regarding his financial capacity in the lender. Such information must include the details of sources of finance, cash in hand, bank balance, security assets, etc. Then, such information is verified by the Inquiry Officer.

In the instant case, Shri Choudhury appearing for the Respondents submits that the finding of the Board of Revenue being essentially finding of fact, this Court docs not have the jurisdiction to interfere in exercise of powers under Article 226 of the Constitution of India and for this purpose he relies on the following decisions:

1 Mukunda Bore Vs. Bangshidhar Buragohain and Others,

ILR 1982 99 (supra)

Bishnu Ram Borah and Another Vs. Parag Saikia and Others,

In this case, the Supreme Court pointed out that the High Court in the exercise of writ jurisdiction is not entitled to interfere into the question of fact and re-deter-mine the matter on the basis of its own appreciation of evidence.

(1985) 2 GLR (NOC) 3 Prapal Baruah v. Dibyadhar Gogoi and Ors.. This was also a case arising from an order of the Board of Revenue in a liquor case. The Division Bench of this Court pointed out as follows:

It is an accepted principle that....If there is evidence the writ court should not examine whether right conclusion have been drawn from it unless the finding is such that no reasonable man could have arrivedat it....If the finding of fact is not supported by any evidence, or that the finding is perverse or based upon a view of fact which could never be reasonably entertained the writ court can interfere.

This is the settled position of law and keeping this in background, now let us have a look at the finding of the Board of Revenue, indicated earlier in the judgment that we are only concerned with Appeal No. 61E (D)/93. The father of the Petitioner-Anil Saikia who is in service in Maijan Tea Estate wanted to finance Rs. 1 lakh. The cash in hand amount is Rs. 10,000/- and Rs. 90,000/- is the sale proceeds of 400 Nos. of shares of Tea Garden which is sold to one S.K. Agarwal of Dibrugarh on 20.7.92 and out Of it he kept Rs. 90,000/- in his fixed deposit account with U.B.I. Dibrugarh Branch. Rana Borgohain would be financed be his Aunt Smti. B. Konwar to the extend of Rs. 66,000/-. This includes Rs. 5000/- as cash in hand from sale proceeds of agricultural land and the rest is in her S.B. Account No. 15780 with U.B.I. at Tinsukia and this amount has come from the rent of her house rented out @ Rs. 700/- per month. Regarding the payment for security. the Board found this to be genuine. Regarding payment of licence fee it was found by the Board as follows:

This being so the payment on the second item viz; the licence fee is not free from doubt of having been met from the disclosed sources." The payment of this ground is Rs. 5000/- only (1500 + 3500 and it was out of the cash in hand of R. Saikia and Smti. B. Konwar). It is not understood as to why this payment on the second item, namely licence fee is not free from doubt of having been met from the disclosed sources. As such this finding is perverse. Regarding the 3rd item required for taking over a sum of Rs. 50,222/- was needed. It is admitted that Smti. Konwar had a bank balance in the U.B.I. at Tinsukia and it is also found that she gave different money on different dates for Rs. 26,500/-. It is also found that Shri Saikia has encashed his fixed deposit of Rs. 90000/- and given it to the Respondent. So, there was sufficient fund for this account. It has observed that no explanation has been given as to what had been done with the balance of nearly Rs. 60000/- after taking over. The Board has also found fault for not giving explanation regarding Rs. 66000/- a surplus balance in the hand of Shri Saikia and Shri Borgohain.

Law does not require that such an explanation is to be given.

In paragraph 4.1.2. the Board held as follows:

When the Assam Tea Co. which had floated these shares, was contacted indicated that transfer deeds for these shares were executed on 20.8.92 and registered on 23.9.92 in favour of World Link Financial Ltd. There was no indication of Shri S.K. Agarwal in that transaction.

it was also found by the Board that what is the source from which S.K. Agarwal purchased the shares is not known. The source of money of S.K. Agarwal for purchasing of shares is not a relevant consideration in that instant case. I have looked to the annexures filed in connection with the shares. In the Memo of Appeal which is Annexure-B nothing has been stated regarding the transaction of shares. But even then the Board took the matter into consideration. An affidavit filed by Shri Saikia on 11.6.93 is Annexure-F and in this affidavit he has stated that the deposit of Rs. 91500/- was made by him on 20.7.92 by way of fixed deposit in the bank. The Statement was made on 20.2.93 and the tender was in the first week of Feb''93. It cannot be conceived of that in the month of July''92 a deposit was made by way of fixed deposit in the bank keeping an eye regarding lender in the month of February, 1993. Further Annexure-G is a receipt dated 20.7.2 which will show that Shri Saikia received Rs. 91500/'' being the amount of 400 shares of Assam Tea Co. Ltd. Annexure-H is an affidavit filed by Shri S.K. Agarwal to the effect that he purchased the shares from Shri Saikia by paying a price of Rs. 91500/- and sold it in Calcutta. The record before the Board will show that Shri Saikia had 400 shares of Assam Tea Co. Ltd. The Board has drawn an adverse presumption from the fact that the Assam Co. Ltd. wrote letters dated 28th Sept.''93 and 13th Oct. 93 and that letters will show that Shri Saikia made transfer of shares but in that transfer register the name of Shri Agarwal is not maintained but these shares on transfer from Shri Saikia stands in the name of World Link Financial Ltd. and in the name of one Ladoo Gopal Dhclia.

Regarding transfer of shares blanks transfer is always permissible and in the case of blank transfer the seller only fills in his name and signature. Neither the buyer''s name and signature nor the date of sale are filled in the transfer form. The advantage in giving such a blank deed is that the buyer will be at liberty to sell it again without filling his name and signature to a subsequent buyer. In the latter case he can avoid the payment for the transfer stamp and new deed to the buyer. The process of purchase and sale can be repeated any number of times with the blank deed and ultimately when it reaches the hands of one who wants to retain the shares he can fill in his name and date and get it registered in the company''s books. For this ultimate transfer and registration, the first seller will be treated as the transferor even if it happens years after his death (Thomas Committee Report quoted with approval by the Vivian Bose Commission in their Report, pages 799-800).

Blank transfer are common not only in cases of sales of shares but also where shares are offered as security by way of mortgage and otherwise. The characteristic feature of a blank transfer is that the transfer instrument is signed only by the transferor, the name and signature of the transferee being left blank, and then delivered to the transferee along with the certificate of the shares so that the transferee or any other person to whom in his turn he may pass it on, may fill up the blank and complete the instrument by putting his name and signature and apply to the company for registration of the transfer in his name as holder of the shares.

The advantage of this is that it saves the trouble of complying with the formalities of transfer every time the right to the shares is passed from hand to hand and it also saves the payment of stamp duty on each successive transfer.

A transfer in blank, when accompanied by the share certificate or scrip carries to the transferee both the legal and equitable right in the shares and also the right to call upon the company to register the transfer. In the words of Lord Watson, "the person to whom it, i.e. the blank transfer along with the certificate is delivered, can effectually transfer his interest by handing his certificate to Anr. , and the document may thus pass from hand to hand until it comes into the possession of a holder who thinks it fit to insert his own name as transferee, and to present the document to the company for the purpose of having his name entered in the register of shareholders and obtaining a new certificate in his own favour". Colonial Bank v. Cady (1980) 15 App Cas. 267 . The important point to be noted here is that the share certificate should also be delivered along with the blank transfer.

In the instant case, the documents in the record will show that Shri R. Saikia in the year 1992 sold 400 shares but the name of Shri S.K. Agarwal does not appear in the register of the Company. But that itself cannot belie the transfer in view of the above position of law and that was not considered by the Board of Revenue and in that view of the matter this finding regarding sale of shares is absolutely perverse and is an error apparent on the face of the record and the same is liable to be quashed. Accordingly, this finding regarding financial suitability of the Petitioners stands quashed and Annexure-O which is the decision of the Board of Revenue regarding case No. 16E (D) of 1993 regarding the financial suitability of Shri A. Saikia and Rana Borgohain stands quashed.

The next C.R. No. 839/94 filed by Ajoy Kumar Talukdar and Norod Kumar Das in connection with dismissal of Appeal No. 93 E(D) of 1993.

1 have heard Mr. A.K. Bhattacharjyya, learned Advocate for the Petitioners. The Hoard considered their case and rightly dismissed the appeal.

I do not find anything to interfere with the findings of the Board which have arrived at on materials. Accordingly, this writ application stands dismissed.

Conclusion; C.R. No. 814/94 is allowed and the finding of the Board regarding financial suitability of the Petitioners in Appeal No. 61E(D)/93 stands quashed.

ii) C.R. No. 839/94 is rejected.

As the C.R. No. 814 of 1994 is allowed, the earlier stay order passed by this Court shall continue.

I leave the parties to bear their own costs.