Natwar Lal Sharda S/O Late Sh. Tansukh Rai Sharda vs. Union Of INDIA

Held

The Court held that no case for review was made out in D.B. Civil Review Petition No.113/2019. The Court found that the original writ petition filed by M/s. Sanwaria Sweets Private Limited, through its Director Mr. Ajay Sharda (son of the review petitioner), sought to declare the search conducted on August 27, 2017, as arbitrary, malicious, and illegal. The Court had examined the material on record, including incriminating evidence collected by the Department, for the limited purpose of determining if the search was vexatious. The Court noted that the review petitioner's involvement was prima facie indicated by the material, which included intelligence inputs, recovery of materials during searches at various premises (including the review petitioner's residence), and the fact that the review petitioner was arrested and later granted bail. The Delhi High Court's order declining interim relief, noting the review petitioner's alleged involvement in evading excise duty of over Rs. 63 crores, was also considered. The Court clarified that it had not recorded any finding of guilt against the review petitioner but had considered the existence of material prima facie indicating his involvement along with others while examining the allegation of a vexatious search. The Court also dismissed D.B. Review Petition (Writ) No.89/2019 filed by M/s. Sanwaria Sweets Private Limited, finding it to be an appeal in disguise and lacking any error apparent on the face of the record. Both review petitions were dismissed.

Facts

M/s. Sanwaria Sweets Private Limited filed a writ petition challenging a search conducted on August 27, 2017, and seeking the return of documents. They also prayed for action against the Directorate General of Goods and Services Tax Intelligence (DGGSTI) officials for alleged vexatious search. The writ petition was dismissed on February 12, 2019. Subsequently, Mr. Natwar Lal Sharda, a former director of Sanwaria Sweets, filed a review petition. He contended that observations made against him in the original order were erroneous as he was no longer a director at the time of the search and had resigned. He also highlighted his arrest and subsequent bail, and prior legal challenges in Delhi High Court concerning the search and his detention. The respondents argued that no grounds for review were made out, and the original order was based on a thorough examination of the material.

Key Issues

1. Whether the observations made against the review petitioner, Mr. Natwar Lal Sharda, in the order dated February 12, 2019, passed in D.B. Civil Writ Petition No.2031/2018, are liable to be expunged, given his contention that he was not a party to the said writ petition and had resigned as a director of M/s. Sanwaria Sweets Private Limited prior to the search, thereby violating principles of natural justice? Petitioner's Arguments: The review petitioner argued that since he was not a party to the original writ petition and had resigned from the directorship of M/s. Sanwaria Sweets Private Limited on September 11, 2017, any observations or findings against him without affording him an opportunity of being heard are illegal and harmful to his interests, particularly in ongoing criminal proceedings. He asserted that the original order incorrectly identified him as the Managing Director on the date of the search and that his arrest and subsequent bail indicated a lack of prima facie involvement. Revenue's Arguments: The respondents argued that no case for review was made out. They contended that the original writ petition filed by M/s. Sanwaria Sweets Private Limited involved a thorough examination of the material, which included observations regarding the review petitioner's role. They submitted that the issue of whether the review petitioner was still a director at the time of the search was a serious matter and that the original order did not conclude all pending proceedings.