Asif Khaliq vs. State Of U.P. And 2 Others
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The petitioner, Asif Khaliq, filed a writ petition seeking the restoration of his factory machinery seized by respondent no. 2, the Additional District Magistrate (Finance and Revenue), Ghaziabad. The seizure was pursuant to an order dated 28.12.2021 under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in a case involving M/s Hero Fincorp Limited. The petitioner claimed the seized machinery belonged to his proprietorship concern, M/s Umbrella Corporation, and not his wife's concern, M/s Zeb Designers, which had taken the loan. However, the Court noted significant omissions in the writ petition, including the failure to disclose the petitioner's wife as the proprietor of M/s Zeb Designers, the non-disclosure of GST registration for M/s Umbrella Corporation, and the absence of proof of ownership of the seized machinery. Furthermore, the Court found that representations filed by the petitioner were sent by his son, Ashar Asif Zaidi, who is also the son of the petitioner and proprietor of M/s Zeb Designers, a fact concealed by the petitioner.
Held
The Court held that the writ petition was filed with false averments and suppression of material facts. The petitioner failed to disclose crucial information, including his wife being the proprietor of M/s Zeb Designers, the location of her factory, and the ownership of the seized machinery by his proprietorship concern, M/s Umbrella Corporation. The Court also noted that representations filed by the petitioner were sent by his son, Ashar Asif Zaidi, who is also the son of the petitioner and proprietor of M/s Zeb Designers, a fact concealed by the petitioner. Citing the Supreme Court judgments in United India Insurance Company Ltd. V. B.Rajendra Singh and S.P. ChengalVaraya Naidu (dead) by L.Rs Vs. Jagannath (dead) by L.Rs and others, the Court emphasized that fraud and justice do not coexist, and a person approaching the court must do so with clean hands. Consequently, the Court found the writ petition liable for dismissal with exemplary costs. The Court also directed the Additional District Magistrate to inform M/s Hero Fincorp Limited, the financier, about the order, as they were not made a party to the writ petition.
Key Issues
1. Whether the writ petition, filed by the petitioner, suffers from suppression and concealment of material facts, thereby disentitling him to seek equitable relief under Article 226 of the Constitution of India, in light of the averments made and documents filed. 2. Whether the order dated 28.12.2021 passed by the Additional District Magistrate (Finance and Revenue), Ghaziabad, under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, is without authority of law, arbitrary, and illegal. Petitioner's Contention: The petitioner argued that his machineries were seized without any legal basis, as he had neither taken any loan nor mortgaged his property nor stood as a guarantor. He contended that the order passed by the Additional District Magistrate was wholly without authority of law, arbitrary, and illegal. Revenue's Contention: The respondents, through the Additional Chief Standing Counsel, did not explicitly present arguments on the merits of the seizure order. However, the Court's findings indicate that the revenue's implicit contention revolved around the petitioner's conduct in filing the writ petition with suppressed and concealed material facts.
Sections Cited
Section 14
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AFR Court No. - 3 Case :- WRIT - C No. - 16263 of 2022 Petitioner :- Asif Khaliq Respondent :- State Of U.P. And 2 Others Counsel for Petitioner :- Jahangir Haider Counsel for Respondent :- C.S.C. Hon'ble Surya Prakash Kesarwani,J. Hon'ble Jayant Banerji,J. Heard Sri Jahangir Haider, learned counsel for the petitioner and Sri Amit Manohar, learned Additional Chief Standing Counsel for the respondents. This writ petition has been filed praying for the following reliefs:- "i. Issue a writ, order or direction in the nature of mandamus directing the respondent no.2 to restore the possession of the petitioner's factory seized machine situated at S-115 Harsha Compound, Site-2, Loni Road, Industrial Area Mohan Nagar, District Ghaziabad, in favour of the petitioner to enable him to run his factory smoothly." Learned counsel for the petitioner submits that the petitioner neither took any loan from M/s Hero Fincorp Limited nor mortgaged his property nor stood as guarantor for any one and yet, his machineries located at S-115, Harsha Compound Site-2, Loni Road, Industrial Area, Mohan Nagar, District Ghaziabad have been seized by respondent no. 2 and an order dated 28.12.2021 under Section 14 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 has been passed by the Additional District Magistrate (Finance and Revenue), Ghaziabad in Case No. 7749 of 2021 (Hero Fincorp Limited Vs. M/s Zeb Designers and others) which is wholly without authority of law, arbitrary and illegal and, therefore, it deserves to be quashed. Learned counsel for the petitioner on being questioned, states that the loan was taken by his wife, namely, Shabih Asif (S.Asif) who is proprietor of M/s Zeb Designers and location of her factory is 33/312, site-2, Loni Road, Industrial Area, Mohan Nagar, Ghaziabad. He further states that the seized machineries etc. belongs to M/s Umbrella Corporation which is a proprietorship concern of the petitioner and not of his wife or M/s Zeb Designers. We have perused the writ petition and we find that the petitioner has neither stated in the writ petition that the machinery in question belongs to M/s Umbrella Corporation nor he has disclosed that the proprietor of M/s Zeb Designers is his wife nor he disclosed any GST registration of alleged M/s Umbrella Corporation nor has filed any document indicating registration of M/s Umbrella Corporation under the CGST/UPGST Act or under the Factories Act nor any proof of seized machinery belonging to him have been filed. In the writ petition, no papers has been filed to indicate that there actually exist a proprietorship concern in the name and style of M/s Umbrella Corporation. On the contrary, on perusal of paragraph no. 11 of the writ petition, we find that the petitioner has stated to have made representations dated 28.4.2022 and 2.5.2022 to the Additional District Magistrate (Finance and Revenue), Ghaziabad and copy whereof has been filed as Annexure nos. 1 and 2. Perusal of Annexure-2 to the writ petition shows that it was sent by Asif Zaidi through e- mail and as per schedule-1 annexed to the deed of guarantee appearing at page 84 of the personal affidavit of Additional District Magistrate (Finance and Revenue) dated 10.1.2023 who is the son of the petitioner and his full name is Ashar Asif Zaidi and the petitioner's full name of Asif K. Zaidi. Learned counsel for the petitioner has stated that full name of petitioner is Asif Khalik Zaidi. The petitioner has very conveniently concealed all these material facts in the writ petition. Thus, the writ petition has been filed making false averments and suppressing material facts. In the case of United India Insurance Company Ltd. V. B.Rajendra Singh and others, JT 2000(3) SC.151, considering the fact of fraud, Hon'ble Supreme Court held in paragraph 3 as under : "Fraud and justice never dwell together". (Frans et jus nunquam cohabitant) is a pristine maxim which has never lost its temper overall these centuries. Lord Denning observed in a language without equivocation that "no judegment of a Court, no order of a Minister can be allowed to stand if it has been obtained by fraud, for fraud unravels everything"(Lazarus Estate Ltd. V. Beasley 1956(1)QB 702). (Emphasis supplied by the Court)." Hon'ble Supreme Court held in para 7 as under :- "
The High Court, in our view, fell into patent error. The short question before the High Court was whether in the facts and circumstances of this case, Jagannath obtained the preliminary decree by playing fraud on the court. The High Court, however, went haywire and made observations which are wholly perverse. We do not agree with the High Court that "there is no legal duty cast upon the plaintiff to come to court with a true case and prove it by true evidence". The principle of "finality of litigation" cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, tax-evaders, bank-loan-dodgers and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal- gains indefinitely. We have no hesitation to say that a person, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation." We find that the petitioner has approached this Court by suppressing and concealing material facts. Therefore, the writ petition deserves to be dismissed with exemplary cost. For all the reasons aforestated, the writ petition is dismissed with a cost of Rs. One lac which shall be deposited by the petitioner with the High Court Legal Services Committee within two weeks from today. A copy of this order shall be sent by the learned Standing Counsel to the Additional District Magistrate (Finance and Revenue), Ghaziabad within a week who shall ensure compliance of this order. Since, the financier i.e. M/s Hero Fincorp Limited has not been made party in the present writ petition, therefore, we direct the Additional District Magistrate (Finance and Revenue), Ghaziabad to inform about this order to the aforesaid M/s Hero Fincorp Limited. Order Date :- 11.1.2023 sfa/ SYED FAHEEM AHMAD High Court of Judicature at Allahabad
Reproduced from the public record of the Allahabad High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.