Shri Lila Ram Pegu vs The Assam Board of Revenue and Others

K. Lahiri, J.—This is an application under Article 226 of the Constitution of India for an order or writ of certiorari to remove into this Court a decision of the Assam Board of Revenue. the appellate authority constituted under the Assam Excise Act, for the purpose of quashing the impugned order dated 24.1.1081 of Revenue Case No. 18 of 1981.

The spring board of attack against the impugned order that, the appellate authority has failed to grasp the precise and accurate meaning, of the expressions "Benami transaction" non behind in Rule 211 of the Assam Excise Rules, 1945. We Extract Rule 211 here in below:

The Presiding Officer shall be on his guard against combination of tenders at the time of settlement. Benoml transaction shall not he permitted The Presiding Officer may also refuse to consider tenders submitted by undesirable persons.

(Emphasis added)

The subsidiary paint taken by the Petitioner is that the appellate authority has. gone wrong in demanding reasons for settlement from the settling authority. According to the Petitioner the primary authority (the settling authority) is not obliged to reasons for making settlement in favour of a party, as the provisions of the Rules do not prescribe any such obligation.

A relevant diary of facts and dates will help focus attention of the primary legal question. The Deputy Commissioner, Sibsager invited public tenders for settlement of the Kokilamukh C.S. Shop No, 5 for the period 1.10.81 to 31.3.84. Eight persons and tenders including the Petitioner and Respondent No. 2, who pass (sic) the sitting lessee of "the shop", the term of the settlement was to expire on 30.9.81. The Dupty Commissioner in consulcation with the Advisory Committee settled the shop with the Petitioner but there is no stated person why the Petitioner was (sic) chosen nor is there any reason why the other tenderers including Respondent 2 were excluded. Against the said order Respondent No. 2, the sitting lessee, and one Shri Prafulla preferred appeals before the Board of Revenue, Later Shri Prafulla withdrew the appeal and the same was dismissed accordingly. The Appellate authority found no, reason in support of the order of settlement in favour, of the Petitioner.

Before us the area of controversy between the parties admitted and the condition set forth below are admitted by the learned Counsel for the parties (i) The Board is a statutory authority having quasijudicial function; (ii) The Board is amenable to writ jurisdiction of this Court; (iii) The power of the Board, the appellate authority is co-extensive with that of the primary authority; (iv) One of the grounds on which certiorari may issue is error of law apparent on the face of the record and not every error either of law or of fact; which may be corrected by a court of appeal or revision ; (v) The error in appreciating the documentary evidence or affidavits or errors in drawing inferences, or omission to draw inference cannot be rectified by this, court in a writ application. The errors alluded, are not "errors of law apparent on the face of the record"; (vi) The appellate powers zeroised by the Board, the highest authority for deciding question of settlement of liquor shops, are wide powers as ruled in Nagendra Nath Bora and Another Vs. The Commissioner of Hills Division and Appeals, Assam and Others,

All hands agree that certiorari could issue to correct an error of law, but it must be something more than a mere error of law, it must be manifest on the face of the record, A landmark case on the question of power to issue writ or order of certiorari is HEG v. Bolton (1841) 1 Q.B. 66-113 E.R. 1054. As late as in 1922 the Judicial Committee of the Privy Council in King. v. Kat bell liquors ltd. (1922) 2 A.C. 128 : (1922) All E.R. (Repr) 339-91 LJPC 146 referring to HEG. v. Bolton (supra) observed "...undoubtedly is a landmark in the history of certiorari, for it summarise in an impeccable form the.principles of its application." In Rex v. Northumberland Compensation (1952) 1 All E.R. 268-1951 (1) K.B. 711 the powers to issue an order of certiorari, on the grounds of error law apparent on the face of the record, were much extended. It has been held that certiorari could be used to correct errors of law which appear on the face of the record even though they do not go to its jurisdiction. Advent of many new Tribunals and, the imperative need for supervision called for this well tried means of control.

In Edwards (Inspector of Taxes) v. Bairstow 1955 (3) All E.R. 48 (53) (H.L.) it has been held that if a Tribunal arrives at such a conclusion that no reasonable Authority properly instruct in, law could arrive at it or is erroneous because a wrong legal approach has been adopted, the error would amount to error of law apparent on the face of the record.

Skipping over a number of other decisions we find the House Lord''s decision in Anisminte Ltd. v. Foreign Compensation Commission 1969 (2) A.C. 147 : 1969 (1) All E.R. 208 which inter alia held that inspire of "no certiorari" provision in statute it cannot protect an order which is a nullity and, Court should exercise its jurisdiction. The meaning of the previsions "purported determination" and real determination" of explained. It is now a settled law that although a Tribunal has jurisdiction to enter into, an enquiry, if it does or (sic) to do decision to which it had given a certiorari would the to quash the decision. Other leading decisions are Ambike (sic) v. S.B. Bhatt AIR 1951 SC 971 , Kays Concern Vs. Union of India (UOI) and Others, Collector of Customs v. Pedntkae AIR 1976 SC 1499 ; Mohd. Shafi Vs. Additional District and Sessions Judge (VII), Allahabad and Others, . Skipping over a number of decisions we find the latest pronouncement of the Supreme Court in Mukunda Bore Vs. Bangshidhar Buragohain and Others, It deals with the power of the High Court to interfere such the findings of the Board of Revenue while dealing with the excise settlement under the, Assam Excise Act and Rules framed thereunder. We extract the observations of their lordships:

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 surmises and conjectures or which is manifestly against the basic principles of natural justice, may he said to suffer from an error of law. In the instant case, the finding of the Board that the Appellant does not possess the necessary financial capacity, is largely a finding of fact.

(Emphasis added)

From the rules laid down by the Supreme Court we feel that a certiorari would lie-(a) if there is an error apparent on the face of the record committed by the authority; (b) if on the face of the order it appears to us that in law the grounds are not such as to warrant a decision; (c) if the authority has failed to proceed in accordance with the essential requirements of law which it was meant to administer; (d) if the is a patent error of law founded, on a clear disregard of the law on based on obvious wrong interpretation of a statutory provision upon which the decision lay resulting in injustice: (e) if the material provision of law is overlooked by the appellate authority; which amounts to patent error of law; (f) if the impugned order is not a "real decision" but a "purported decision".

We are of the opinion that an error of fact based on material cannot be disturbed. The basic reason of the restrictive altitude is that a court exercising writ jurisdiction under Article 226 of the Constitution does not sit as an appellate court and its function is merely supervisory. Any finding of fact arrived after appraisal of oral of documentary material cannot be touched unless it is based on "no evidence" or "inadmissible evidence or, "is patently wrong", so much so that no instructed in loss person could have arrived at the conclusion, We are also of the opinion that; where the order of the authority refers to several grounds, some relevant and existent and others irrelevant or non existent, the order would be sustainable if the court is satisfied fled that the, authority would have based the order on the basis of relevant and, existing grounds, and deletion of the irrelevant non-existent grounds could not have affected the ultimate decision. We are of the view that if the conclusion reached by the Tribunal on appraisal of evidence can be supported by-reasons other than those contained in the order, but the Tribunal has omitted to consider the relevant factors. Ordinarily the order of the Tribunal cannot be quashed, as the order it the authority can be supported by reasons other than those set forth in the order. Findings of fact reached by the appellate authority, on appreciation of evidence or an inference of fact drawn from material before it cannot be permitted to be reopened in proceedings for certiorari on the score (1) that the evidence is insufficient, or (2) the appreciation of the evident is wrong, or (3) that some materials were not duly considered. The propriety of the conclusion drawn from material on record cannot be interfered with, as it is the competent authority draw inference or opinion from the material, it would amount to exercise of appellate power which has not been conferred on us by or under the Constitution. However, the principles forth in this para and the previous paragraph are not cast redes. The principles net forth are illustrative and in appropriate cases and on suitable occasions, to uphold the cause justice, there may be departure; from the rules. There may be departure of the rules if special and ponderable causes.

In the appeal before the Board of Revenue the allegation of the Petitioner was that the Respondent No. 2 was a Benamdar''. The appellate .authority has turned down the claim on scrutiny of the, material at its disposal. The learned Counsel has not questioned the sufficiency or propriety of the conclusions reached by the Board, However, the counsel submits that the Board has failed to grasp the precise meaning of the expression "Benami transaction". Rule 211 prohibits "benami transaction". Clause (sic) of the statutory form proscribes a column, being column II. wherein a tenderer is to indicate the source of his finance. The "Benami" is a persian word,-a combination of words "benami", that is, no name, nameless or fictitious. When a an purchases a property in the, name of another who merely lands his name with no intention to make the latter the beneficiary or causes another to purchase the property providing the consideration money for the benefit of the "real purchaser" (who provides the consideration money) with no intention to make the purchaser (the person who has lent his name), the beneficiary he property, are some illustrations of Benami transactions, Purchase may be made in the name of non-existent or imaginary existent but non-interested person. It is a case of providing a fictitious name of substitution of the name of one person instead mother, who is the teal but hidden party to the transaction, real author of the transaction, or the real owner remains he background-he is "Benamdar" of "beneficiary". The person in whose name or whose name is used is "Benamidar". Jcnarnidar is a person who merely lends his name but actually he does not acquire any interest in the property, though he may process it but in fact he does not possess in law. The onus is undoubtedly on the person who seeks to establish that "the transaction" is "benami". There must be material before the authority to conclude a transaction as "benami". in AIR 1949 88 (Federal Court) (Coram Kania C.J., Fazl ALi, Patanjall Sastri, Mahajan and B.K. Mukherjee JJ.) the Federal Court explained the law as onus of proof and the meaning of the expression "benami transction" We cull the relevant portion hereunder.

It is settled law that the onus of establishing that a transaction is benami is on the Plaintiff and it must be strictly made out. The decision of the Court cannot rest on mere suspicion but must rest on legal grounds and legal testimony. In the absence of evidence the apparent title must prevail. It if also well established that in a case where it is asserted that on assignment in the, name of one person is in reality for the benefit of another, the real last is the source whence the consideration came and when it is non possible to obtain evidence which conclusively establishes or rebuts the allegation, the case must be deals with on reasonable probabilities and legal inferences arising from proved or admitted facts.

(Emphasis added).

It been hold by lord Camphell in Dharamdas v. Shyamu Sundari Das 13 M.I.A. 929: 6 M.R. 53 (P.C), that

We have heard from the highest authorities, from the authority of Sir Edward East, and Sir Edward Ryan, that the criterion in these casus in India is to be considered from what source the money tomes with which the purchase money is paid.

(Emphasis by us)

In Jaydayal Poddar (Deceased) through L.Rs. and Another Vs. Mst. Bibi Hazra and Others, the Supreme Court, in a civil action observed:

the essence of a benami is the intention, of the party or parties concerned ; and no unoften such intention is shrouded In a thick veil which cannot be easily pierced through. Though the question, whether a particular sale is benami or not, is largely one of fact, and for determining this question, no absolute formulae or acid test, uniformly applicable in all situations, can be laid down yet in weighing the probabilities and for gathering the relevant indicia, the courts are usually guided by these circumstances; (1) the source from which the purchase money came;(2) the nature, of possession of the property; after the purchase; (3) motive if any for giving the transaction a benami colour; (4) the position of the parties and the, relationship, it was between the claimant and the alleged benamidar; (5) the custody of the title deeds alter the sale and (6) the conduct of the parties concerned in dealing with the property after the sale. The above indicia are hot exhaustive and their efficiency varies according to the facts of each case. Nevertheless No. 1. viz. the source whence the purchase money came, is by far the most important test for determining whether the sale standing the name of one person Is in reality for the benefit another.

(Emphasis supplied)

The essence of benami transaction is to cover, the (sic) intention. Therefore, it is really difficult to pierce the veil the source from which purchase money comes is by far the important test to determine whether a transaction is or is (sic) a banami one. Benami transaction can be established on the case of reasonable probability".

In the instant case there is no averment made by the Petitioner before the appellate authority that Respondent No, 2 arived the fund from an unknown source, It has not been (sic) learned that the financiers of Respondent No. 2 were not the of financiers but Shri Kula Dutta. The Petitioner merely Assessee that Shri Kula Dutta used to frequent the shop and Respondent No. 1 was never seen running the shop. There is no (sic) made by, the Petitioner in his affidavit marked Annexure that Kula Dutta financed the Petitioner i.e. the source of the indicated in Column 11 fictitious but really Sri Dutta the financier, Similarly the other affidavit marked as Anneexure sworn by Ajit Kerdang has been rightly rejected. It (sic) ompibus statement that Sri Kula Dutta was the financier Respondent No. 2. The deponent is a cultivator aged about (sic) and the allegations in the affidavit are vague and were rejected by the appellate authority. The Petitioner missed failed to show that the source of purchase money, came (sic) Kula Dutta. There is no material, whatsoever to show the money, came from any unknown source or that it was (sic) by Kula Dufta. The appellate authority has very rightly at the conclusion that it was not a. benami transaction inferences drawn are based on material, it is not open to review the finding unless it is "a make-believe one". The appellate authority has drown inference, which reasonably correct. We are, however, quite alive of the fact that a benaimi transaction may be established by "reasonable probability", and such transactions are ordinarily shrouded in a thick veil, which is apt easily pierced through, the source whence the purchase money came is by far the most important test to determine whether a, transaction is benami or not. Bearing in mind all the principles we have scrutinised the impugned, order and. find it to be impeccable. In Mukunda v. Bangshidhar AIR 1990 SC 1534 the Supreme Court, while dealing with the jurisdiction of this Court under Article 226, held that the Court does not sit as an Appellate Court and when there is Jurisdictional error apparent on the face of the record the decision of the Tribunal can be raferfered with, otherwise not. The finding of the Board are bated on material, there it no violation of the principle of natural justice non do we find any error, non to speak of error of law apparent on the face of the record, therefore, the first contention fails.

The second contention of the Petitioner is that the Board has; committed an error in holding that reasons should be giving by the primary authority. We hold that the finding did not adversely effect any of the parties as the appellate authority considered the respective cases of the parties arid on scrutiny of. the available material set aside the order and settled the shop in favour of Respondent No. 2, which wer positively within the jurisdiction of the Board, an appellate authority having co-extensive powers with the settling authority.

In our opinion the observations of the learned Board of Revenue have strong force. It may be true that the setting authority. is an administrative authority. However, the functions are quasijudicial in nature, atleast it decides who amongst the tenderers should be selected and why the claims of the other tenderers are to be rejected. It is true that the settling authority is not to make a speaking'' order under the Rules'' but he is to submit a report to the Excise Commissioner about the result of "the sale". There various qualifications and disqualifications set forth in the Rule There are questions of giving preference to the parties. The settling authority perform a public duty it is bound to consider each tender individually, the respective merits of the tenders and thereafter decide to settle the shop in favour of a (sic) under. Reasons for setting the shop are necessary as: (1) (sic) order is appealable and the appellate unthority must known (sic) the settlement is made in favour of a particular tenderer (sic) the reason why the other tenders were considered to be less (sic) able than the "successful tenderer". (2) Giving of reason, (sic) (3) There is no provision in Excise laws, which authorities the settling authority to withhold the reasons. Therefore (sic) (4) If such authority is permitted to tender order without reasons apart from arbitratitiess there will be a potent danger of non-consideration of the merits of the other tenderers and would encourage mechanical exercise of the power. Giving of check arbitrary actions by the authority; (5) Observance of the principles of natural justice is implicit in "the rule of law". The rule of law itself commands a reasoned decision. The minimum that the rule of law requires is that one cught not to be deprived of his right without the authority of law. It has been held in Mahabir Prasad Santosh Kumar Vs. State of Uttar Pradesh and Others, that the duty to give reason is the minimum requirement of the Rule of law ; (6) The giving of reasons in the words of Lord Denning, in Breen v. Amalgamated Engineering Union 1971 (1) All E.R. 1148 "is one of the fundamentals of good administration." In fact in a Government of law ther is nothing like unfettered discretion immune form judicial reviewbility; (7) in Gudikanti Narasimhulu and Others Vs. Public Prosecutor, High Court of Andhra Pradesh, the Supreme Court ruled that the executive, no less than judiciary is under general duty in act fairly". Indeed, fairness founded on reason is the essence of the guarantee epitomised in Article 14"; (8) A party is entitled to know the reasons that deprived him of the settlement . It is a branch of the principles of natural justice, that a party deprived of a statutory claim must be furnished with reasons. Unless he knows reason why the order of settlement. It is a branch of the principles of natural justice, that party deprived of a statutory claim must be furnished with reasons, Unless he knows the reason why the order of settlement made in favour of a party or why his claim is turned down, the cannot prefer an appeal meeting the reasons and the appeal under the Excise Law is a statutory right; (9) The settling authorities are public servants and they perform public duties; therefore, while making the settlements the authorities must state reasons; for the decisions. ''Even discretionary power campled with duty calls for reasons to be stated; (10) The primary authority is bound to determine the question of settlement "according to law", on the basis of legally relevant consideration, therefore it is imperative i9r the authority to state, the reasons for its decision, In our opinion, the primary authority is, duty-bound to give reasons for its decisions. An authority which adjudges, respective claims of, the tenderers cannot disarms the appellate authority by taking refuge in silence. However, we hasten to add that failure to finish reasons does not make the order void. It makes the task of the appellate authority onerous as the appellate authority Is bound to exercise hard to discern the reasons and consider the merits of all the tenderers. Further, it may give scope to the settling authority to furnish grounds to the appellate authority which had never played in their minds at the time of making the settlement. It is high time that the settling authority should give reasons for the decisions, howsoever brief it may be- Therefore, we are happy and glad that the appellate authority has justly evolved an empirical principle, which deserves appreciation at this end. We are extremely happy to note the worthy and valued judgment of the learned Members of the Board. The Board is very much justified in lamenting that its duties became onerous, for the absence of reasons in the order of the settling authority. The findings are timely and timeless.

For the foregoing reasons, we hold that the impugned order is unassailable and unimpeachable and trie petition musts be dismissed. However, there will be no order as to costs.

These were the reasons why we rejected the application on 8.2-19S2 with a diction that a reasoned judgment would follow.