TaxTMI 
TaxTMI 
2011 (9) TMI 69
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....tigations are not suppressed or even unduly delayed; (c) the suitable directions be issued to the Respondent No. 1 to apply to the Foreign Banks, more particularly the UBS Bank for freezing the amounts in the said foreign banks, particularly, the UBS Bank which as stated above is holding, inter alia, the Khan and Tapurias' assets." 2. On 4th July, 2011, on I.A. No.1 of 2009 in the Writ Petition several directions were given. In fact, the said order was divided into three parts. The first part of the order dealt with the alleged failure of the Central Government to recover the large sums of money kept in such foreign banks and in tax havens having strong secrecy laws with regard to deposits made by individuals. The second part dealt with the unlawful activities allegedly funded out of such deposits and accounts which were a threat to the security and integrity of India. The amounts deposited in such tax havens in respect of one Shri Hassan Ali Khan and Shri Kashinath Tapuria and his wife Chandrika Tapuria were alleged to be in billions of dollars in UBS Bank in Zurich alone. Income Tax demands were made to Shri Hassan Ali Khan for Rs.40,000 crores and a similar demand ....
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....ecretary, Department of Revenue; (ii) Deputy Governor, Reserve Bank of India; (iii) Director (IB); (iv) Director, Enforcement; (v) Director, CBI; (vi) Chairman, CBDT; (vii) DG, Narcotics Control Bureau; (viii) DG, Revenue Intelligence; (ix) Director, Financial Intelligence Unit; and (x) JS (FT & TR-I), CBDT be forthwith appointed with immediate effect as a special Investigation Team; (ii) That the Special Investigation Team, so constituted, also include Director, Research and Analysis Wing; (iii) That the above Special Investigation Team, so constituted, be headed by and include the following former eminent judges of this Court: (a) Hon'ble Mr. Justice B.P. Jeevan Reddy as Chairman; and (b) Hon'ble Mr. Justice M.B. Shah as Vice-Chairman; and that the Special Investigation Team function under their guidance and direction; (iv) That the Special Investigation Team, so constituted, shall be charged with the responsibilities and duties of investigation, initiation of proceedings, and prosecution, whether in the context of appropriate criminal or civil proceedings of: (a) all issues relating to the matters concerning....
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....ntelligence resources, whether such investigations or portions of such investigations occur inside the country or abroad. (viii)That the Special Investigation Team also be empowered to further investigate even where charge-sheets have been previously filed; and that the Special Investigation Team may register further cases, and conduct appropriate investigations and initiate proceedings, for the purpose of bringing back unaccounted monies unlawfully kept in bank accounts abroad. 3. The third part of the order deals with the disclosure of various documents referred to by the Union of India in relation to the names and particulars of various bank accounts of Indian citizens in the Principality of Liechtenstein, a small landlocked sovereign nation-state in Europe, which is generally acknowledged as a tax haven. 4. The third part of the order is not of relevance at this stage, since an application, being I.A. No.8 of 2011, has been filed by the Union of India in the Writ Petition, purporting to be an application under Article 142 of the Constitution read with Order 47 Rule 6 of the Supreme Court Rules, 1966, seeking modification of the aforesaid order dated 4th July, 2011. 5. Befor....
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.... the investigating authority that in spite of huge sums of unaccounted money deposited in tax havens abroad, little or no action was taken to proceed with the investigation or even to interrogate the persons accused of having been involved in money laundering and acting against the interests of the country and its citizens. Mr. Divan submitted that the remedy available to the Respondents lay in a review petition under the provisions of Order 47 of the Supreme Court Rules, 1966, and not by an interlocutory application and that too in a disposed of matter. 8. Mr. Shekhar Naphade, learned Senior Advocate who appeared for the Petitioner in Writ Petition (Civil) No.136 of 2011, supported the submissions made by Mr. Anil Divan with regard to the maintainability of the Interlocutory Application No.8 of 2011 filed by the Union of India. It was contended that neither the provisions of Article 142 of the Constitution nor Order 47 Rule 6 of the Supreme Court Rules were attracted in the facts of this case, inasmuch as, the said provisions conferred power and not jurisdiction on this Court in respect of a matter which was pending before it. Mr. Naphade submitted that Article 142 very clearly v....
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.... by way of a Review Petition under Article 137, the same could be set aside by another Bench of the Court ex debito justitiae in exercise of its inherent powers. The majority amongst the Judges held that the want of jurisdiction could be addressed solely by a superior Court and, in practice, no decision could be reviewed collaterally by any inferior Court, but the superior Court could always correct its error either by way of a petition or ex debito justitiae. In fact, it was also observed that in certain situations, the Supreme Court could always invoke its power of review in exercise of its inherent jurisdiction in any proceeding pending before it, without insisting on the formalities of a review application. The learned Attorney General submitted that by appointing two retired Judges of the Supreme Court, Justice B.P. Jeevan Reddy as the Chairman and Justice M.B. Shah as the Vice-Chairman, and directing that the Special Investigation Team would function under their guidance and directions, would amount to interference with the executive authority of the different officials representing different sections of the administration which would lead to a chaotic situation. The directio....
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....exist, and its perpetration would result in miscarriage of justice, then it would not on any principle be precluded from rectifying the order. Mistake is accepted as a valid reason to recall an order. Their Lordships emphasized the fact that rectification of an order stems from the fundamental principles that justice is above all. It is exercised to remove the error and not for disturbing finality. In the judgment it was also observed that the Supreme Court has the inherent power to make such orders as may be necessary for the interest of justice or to prevent the abuse of process of Court. The Court is, therefore, not precluded from recalling or reviewing its own order, if it is satisfied that it is necessary to do so for the sake of justice. It was pointed out that even the learned third Judge held that while the Government was mainly responsible for the unfortunate state of affairs that should not desist the Supreme Court from revising or reviewing the said orders which had serious consequences. The learned third Judge also observed that it is the duty of the Court to rectify, revise and recall its orders as and when it is brought to its notice that certain of its orders were pa....
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.... Chandi Lal Saha [(1991) Supp. 2 SCC 465], wherein this Court extended the benefit of its judgment to persons who were not even in appeal before it. 17. Even if the present application was to be dismissed as being not maintainable under Article 142 of the Constitution read with Order 47 Rule 6 of the Supreme Court Rules, 1966, it would not preclude the Applicants from filing an application for review under Article 137 of the Constitution. As the very working of the Special Investigation Team appointed under the order of 4th July, 2011, is in question, it is necessary to cut across the technical tapes sought to be invoked on behalf of the Petitioners and hold that in view of the inherent powers vested in the Supreme Court of India, preserved in Order 47 Rule 6 of the Supreme Court Rules, 1966, and having regard to the fact that the Supreme Court is the guardian of the Constitution, I.A. No.8 of 2011, even in its present form is maintainable in the facts and circumstances of the case, which include threats to the security of the country. 18. The objections raised by Mr. Anil B. Divan and supported by Mr. Shekhar Naphade, regarding the maintainability of I.A. No.8 of 2011, are, ther....
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....op the generation of Black Money in the country, its legal transfer abroad and its recovery. The Committee also examined various other issues which are enumerated in the application. The application further proceeds to tabulate the efforts to create further legislative and administrative framework to obtain information about illicit money of Indian citizens already parked outside the country. Thereafter, the application sets out the efforts already made and the results thereof. On the basis of that, it is stated that the Government has achieved substantial success not only in getting information on illicit money parked outside the country but also in stopping the transfer of illicit money outside the country. Thereafter, the details are given of the illicit money detected. 3. It is stated that in the order dated 4th July, 2011, these efforts have neither been adverted to nor evaluated before rendering the finding in Paragraph 46 of the judgment. 4. The application thereafter sets out various efforts made in the matter of investigation of the case of Hassan Ali Khan and Kashinath Tapuriah. The application thereafter reproduces the directions sought in I.A. No.1 of 2009, which was ....
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....herefore, in my opinion, the application deserves to be dismissed at the threshold. 7. As the submissions made by the learned counsel for the parties have been succinctly noticed by my Learned Brother Altamas Kabir, J. in His Lordship's order, the same need not be repeated herein. 8. In my opinion, an application for clarification/modification touching the merits of the matter is not maintainable. The Court can consider the matter, if at all, only upon a review application on limited grounds. In considering the application for review, the procedure laid down under Order XL of the Supreme Court Rules, 1966 read with Article 137 would have to be followed. Review of a judgment is a serious matter and is, therefore, governed by constitutional and statutory provisions. This view of mine will find support from a number of earlier decisions of this Court. It would, at this stage, be appropriate to make a reference to some of the observations made. 9. In the case of Ram Chandra Singh v. Savitri Devi & Ors. 2004 (12) SCC 713 this Court considered the issue as to whether an application for clarification/modification would be maintainable in the face of the provisions contained in Article ....
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..... If parties file review petitions indiscriminately, the time of the Court is unnecessarily wasted, even it be in chambers where the review petitions are listed. Greater care, seriousness and restraint is needed in filing review applications." 11. In my opinion, ten years down the line, the situation is even worst than what is depicted by the aforesaid observations. Now we are facing an almost daily practice of having to consider applications for "modification and clarification". 12. In the aforesaid judgment, this Court also considered the nature and scope of the jurisdiction to review its own order/judgment. Since the application herein has been described as an application for "modification", it would be necessary to notice the observations made by this Court in Paragraphs 17 and 18 of the judgment. The observations of this Court are as under:- "17. We next come to applications described as applications for "clarification", "modification" or "recall" of judgments or orders finally passed. We may point out that under the relevant Rule XL of the Supreme Court Rules, 1966 a review application has first to go before the learned Judges in circulation and it will be for the Court to....
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.... review. It is clearly indicated that in those circumstances the Court could either reject the application straight away or permit withdrawal with leave to file a review application to be listed initially in chambers. 14. Examined on the touch stone of the observations made above, I am of the considered opinion that the application herein though described as an application for modification is in substance more in the nature of a Memorandum of Appeal. At best, it could be said to be in substance an Application for Review. It certainly does not lie within the very narrow limits within which this Court would entertain an application for modification. 15. In yet another case of Zahira Habibullah Sheikh v. State of Gujarat 2004 (5) SCC 353 this Court, faced with a similar situation, had this to say : "The petition is in essence and substance seeking for a review under the guise of making an application for direction and modification apparently being fully aware of the normal procedure that such applications for review are not, unless the Court directs, listed for open hearing in Court, at the initial stage at least, before ordering notice to the other side and could be summarily reje....
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....engthen the cause of justice. 18. To be fair, it must be noticed that the learned Attorney General appearing for the Union of India had relied on a number of judgments in support of his submissions that the Court would have inherent powers to modify its own order/judgment. The primary judgment relied upon by the learned Attorney General is in the case of S. Nagaraj v. State of Karnataka 1993 (Supp.4) SCC 595. I am of the considered opinion that the aforesaid judgment would be of no assistance to the submissions made by the learned Attorney General. The aforesaid judgment was rendered in the background of very peculiar facts. It would appear that this Court had passed an order having far reaching consequences and prejudicially affecting the rights of other groups of employees under Articles 14 and 16 of the Constitution of India. The order had permitted backdoor entry of thousands of stipendiary graduates because of the negligence of the State in putting correct facts before the Court. The Government seemed to have woken up after considerable damage had already been done and moved an application for modification/clarification of the order dated 30th October, 1991. The learned Attor....
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....ibility. Yet in the realm of law the courts and even the statutes lean strongly in favour of finality of decision legally and properly made. Exceptions both statutorily and judicially have been carved out to correct accidental mistakes or miscarriage of justice. Even when there was no statutory provision and no rules were framed by the highest court indicating the circumstances in which it could rectify its order the courts culled out such power to avoid abuse of process or miscarriage of justice. In Raja Prithwi Chand Lal Choudhury v. Sukhraj Rai the Court observed that even though no rules had been framed permitting the highest Court to review its order yet it was available on the limited and narrow ground developed by the Privy Council and the House of Lords. The Court approved the principle laid down by the Privy Council in Rajunder Narain Rae v. Bijai Govind Singh that an order made by the Court was final and could not be altered: "... nevertheless, if by misprision in embodying the judgments, by errors have been introduced, these Courts possess, by Common law, the same power which the Courts of record and statute have of rectifying the mistakes which have crept in .... The H....
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....2 Rules as amended in 1987. The 1987 amendments have the effect of smuggling in thousands of persons into Government service by a back-door -- without complying with the requirements of Articles 14 and 16. One can understand the rules as framed in 1982, but it is extremely difficult to appreciate or understand the reasons for which the 1987 amendment was brought in. The question, to repeat, is whether this Court should extend its arm -- its discretionary power under Articles 136 and 32, as the case may be, to implement such unconstitutional rules and help these persons to gain a back-door entry into Government service -- that too at the highest level in group 'C' services straightaway. It is true that no one has questioned the 1987 amendments. The petitioners do not question them because they are advantageous to them; they want them to be implemented. The Government cannot and does not question them because it has itself made them. The parties who are affected namely the persons awaiting employment under the Government probably do not even know what is happening. But where an unconstitutional provision of such vast impact is brought to the notice of this Court and it is asked to en....
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....nd due to equitable considerations arising in favour of other employees the practical difficulty in appointing all the five thousand stipendiary graduates as First Division Assistants appears to be insurmountable. Even so we have no hesitation in saying that we would have refused to modify our order dated October 30, 1991 at the instance of the Government but the Court cannot be unjust to other employees." 20. These observations make it abundantly clear that the Court was dealing with a particularly unsavory situation created by the Government which had led to insurmountable difficulties and possible injustice to both the stipendiary Magistrates and other employees. The Court, therefore, observed that but for this unique situation, it would have refused to modify the order dated 30th October, 1991. In Paragraph 18, the Court makes it clear that the order was passed under a mistake. The Court would not have exercised its jurisdiction but for the erroneous assumption, which in fact did not exist. In Paragraph 36, again, it is reiterated by the Court that it would be the duty of the Court to rectify, revise and recall its orders as and when it is brought to its notice and certain of ....