It sounds unbelievable but is it true? Did Nani Palkhivala copy from Sampath Iyengar’s book? The author traces the fascinating battle between two of the finest legal minds over the originality of the Commentary to the Income-tax Act that all of us use in our day to day practice and reveals fascinating insights into Nani Palkhivala’s genius personality
Well, life all comes down to a few moments. This is one of them: Bud Fox in Wall Street
It seems incredible that anyone would have the temerity to accuse the great Nani Palkhivala of piracy and copyright infringement especially on a subject such as income-tax law. And what makes this even more astounding is that the person making the allegation is not some deranged and raving lunatic frothing at the mouth but Sampath Iyengar, the highly respected lawyer and author of the best selling treatise “The Law of Income-tax”.
So, what possessed Sampath Iyengar to make this preposterous allegation against Nani Palkhivala?
Sampath Iyengar, to his credit, knew what a formidable adversary he was up against and prepared his case well. He accused Nani Palhivala of having “cunningly camouflaged” certain passages and extracted copies of those passages from his book and that of “Kanga & Palkhivala’s The Law & Practice of Income Tax” to build up a solid case against Nani Palkivala of copyright infringement
Well, all these dark secrets including the never-seen-before Plaint filed by Sampath Iyengar in the Madras High Court and the judgement of the Court are revealed for the first time in “Nani Palkhivala: Courtroom Genius”, a book written by legal luminaries Soli Sorabjee and Arvind Datar.
Another surprising aspect is that the judgement of the Madras High Court has not been reported in any of the law journals though it is said to be the first judgement in India on copyright infringement of a commentary on a statute.
Sampath Iyengar, to his credit, knew what a formidable adversary he was up against and prepared his case well. He accused Nani Palhivala of having “cunningly camouflaged” certain passages and extracted copies of those passages from his book and that of “Kanga & Palkhivala’s The Law & Practice of Income Tax” to build up a solid case against Nani Palkivala of copyright infringement. Lets’ see a few examples of what Sampath Iyengar quoted:
Example 1
From Sampath Iyengar’s book:
“Fixed capital is what the owner turns to profit by keeping it in his own possession. Circulating or floating capital is what he makes profit of, by parting with it and letting it change masters”
From Kanga & Palkhivala’s book:
“Fixed capital is what the owner turns to profit by keeping it in his own profession (mistake for possession); circulating capital is what he makes profit of, by parting with it and letting it change masters”
Example 2
From Sampath Iyengar’s book:
“The turning of investment to account was not merely incidental, but was the essential feature of the business, speculation being among the appointed means of the company’s gains”
From Kanga & Palkhivala’s book:
“The turning of investment to account was not merely incidental but was the essential feature of the business, speculation being among the appointed means of the company’s gains”.
Example 3
From Sampath Iyengar’s book:
“The Revenue merely looks at an accomplished fact, viz; of profits having been earned, and assess the same. The assessee might be prosecuted for the crime and yet be charged on the profits.”
From Kanga & Palkhivala’s book:
“The revenue merely looks at an accomplished fact; by bringing the profits to tax, it does not condone or take part in the illegal enterprise. The assessee may be prosecuted for the offence and the same time taxed upon the profits arising out of its commission”.
Sampath Iyengar had chosen his examples well. At first glance, a casual reader would get swayed “Oh My God, did Kanga & Palkhivala really copy from Sampath Iyengar?”
Sampath Iyengar’s other star argument that his book was the “inspiration” for Palhivala’s book and that this constituted “infringement” was mockingly rejected by the Court by likening the claim to that of the idli-sambar vendor who, seeing an illiterate villager enjoying the aroma of the idli-sambar, demanded compensation
Sampath Iyengar’s tactic had the desired effect on the judge who first heard the matter and he promptly granted an exparte injunction restraining Kanga & Palkhivala from selling more copies of their book.
Nani Palkhivala, not wanting to take any chances against his wily opponent, marshaled heavy artillery to aid him in his battle against Sampath Iyengar. The redoubtable Rustom J. Kolah guarded the flank and drafted the written statement while the front was led by M. C. Setalvad, the then Attorney General and H.M. Seervai, Constitutional Law expert. Palkhivala even set up a “War Room” in Chennai where he camped for several weeks when the matter was being heard.
Nani Palkhivala did not want to rely solely on the merits and raised hyper-technical arguments in the written statement such as that the books were not sold in Madras and so the High Court had no jurisdiction and that there was a “great delay” in as much as the books were sold out in Feb 1951 while the suit was filed in Nov 1951. Palkhivala also attacked Sampath Iyengar by stating that the latter’s book was not “original literary work”. Of course, Palkhivala would have known better than anyone else that there was no merit in these technical objections and he abandoned them at the stage of the hearing.
On the merits, Nani Palkhivala put up a spirited defence and pointed out that Jamshedji Kanga “commanded a very large income tax practice” and that he had figured as counsel in innumerable cases. About himself, Palkhivala made it clear that he also commanded a considerable practice and that he had read, not only the head notes, but the entire judgement of each of the cases referred in his book.
Sampath Iyengar began well in his litigation but couldn’t overcome the collective genius of Nani Palkhivala and his legion of battle-hardened counsels. The onslaught was just too much for him to bear and Sampath Iyengar withered away in the cross-examination and became emotional. He gave some of his answers in a huff. Nani Palkhivala, on the other hand, came in for rich praise from the Judge who called him “a competent and alert lawyer, who was thoroughly conversant with the income-tax law”. The book was also complimented as having “systematic arrangement, clear analysis, sound opinions, citations of cases for every point etc”.
Sampath Iyengar’s trump card – the similar sounding passages in the two books – was also torpedoed by Nani Palkhivala. While the Judge admitted that on “first impression”, a few of the passages etc appeared to have been copied by Palkhivala from Iyengar, he noted that these were only about 2 ½ pages out of 1000 pages. Even these, the Judge held, were not satisfactorily proved to have been copied. The Judge pointed out that the passages looked similar because they had come from a common source, namely, reported judgements!
Sampath Iyengar’s other star argument that his book was the “inspiration” for Palhivala’s book and that this constituted “infringement” was mockingly rejected by the Court by likening the claim to that of the idli-sambar vendor who, seeing an illiterate villager enjoying the aroma of the idli-sambar, demanded compensation. The wise King, who had to decide the dispute, ordered that in return for the aroma of the idli-sambar enjoyed by the villager, the vendor was to be given the opportunity to sniff the villager’s money and enjoy its aroma!
And so ended what the judge called “ill-advised litigation”. The only solace for Sampath Iyengar was that the Judge gave him a clean chit by observing that he was “sincere in believing that a portion of his book had been pirated” by Nani Palkivala though he was quite wrong in his thinking.
CA Vellalapatti Swaminathan Iyer
Hyderabad
The story is very interesting and inspirative about the tax tycoons.
Even today a known counsel is heard and case decided in his favour. On similar arguments, a unknown counsel is not even heard and sometimes mocked at
Perfectly put by Mr. Rakesh Milwani
Being a law student, i think the hon’ble has put it in a wrong logical reasoning as we the students of law doing it in everyday’ practice. It is a general passages put by hon’ ble supreme court in their judgements . And i am pretty much sure that Nani sir never practice like this.
A detail chapter on the same can be found in the newly written book on Palkhivala – “Palkhivala – The Court Room Genius”. The said book has a separate chapter dedicated to the said controversy. One can also find the Plaint, Written Statement and the Judgment of the Madras High Court which is added to the appendix of the said book.
both to my mind are original creation. their style of writing differ. while K&P write one sentence to wrap up a case while SI will reproduce a paragraph. has anybody got a gut today to write a commentary of such scale and depth. no one possibly. it is only the positioning of the cases with aligned facts which matters. older and original K&P certainly had an edge over SI but only in small way may be because it was concise, small letters. both are great works. but in today’s context when every day u see reporting the commentaries have their own limitations. the court has rightly called it ill-advised litigation
The mere fact that these stalwarts got into a litigation against each other itself is too surprising, as both of them are aware and conscious of each others knowledge, expertise and intellect. However, the fact that way back in year 1951 this litigation happened and none was aware about the said verdict is also difficult to understand.
In my humble view geniuses think,speak and write alike. I wonder how come High Court had not considered this view while openly admitting that both of them are genius.
I have gone through the book and it is a fantastic read. A must for all advocates i would say, more so for advocates practicing in the Tax arena
Frankly very few might be aware of such a litigation between two highly respected and recognised legal luminiaries. First impression only left me wondering what would be the arguments putforth by Nani in his defence, but then as expected he made wonderful arguments and ensured that the litigation got sealed to it’s logical end. Anyway it was a very interesting and surpirsing piece of reading.
Nani Palkhiwala was great. Undoubtedly, Nani had gone through all the judgments he had referred in his book and the same can be felt by any reader because without analyzing the fact one can not quote and summarise the whole judgment of 15 pages in one word.
i have just finished reading the book. a great work on a even greater person! the eminent authors and the publishers have to be complemented.his submissions in keshavnanda barathi’s case are telling and so clear. clarity and precision in making his submissions was late palkhivala’s forte.so well brought out in the book. indeed it is abook which shold adorn every lawyer’s bookshelf!
I like your style of writing