* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Reserve: April 01, 2009
Date of Order: July 01, 2009
(1) +Ex.P. 351/2008
% 01.07.2009
Five Star Engg. & Agents Pvt. Ltd. ...Decree holder
Through : Mr. J.C. Seth, Advocate
Versus
Punjab State Industrial
Development Corp. ...Judgment Debtor
Through: Mr. Chetan Sharma, Sr. Adv. with Mr. Rishi Malhotra, Advocates
(2) + Ex.P. 123/1998
%
Balkau Timbers P. Ltd. ...Decree holder
Through: Mr. J.C. Seth, Advocate
Versus
Punjab State Industrial
Development Corp. ...Judgment Debtor
Through: Mr. Chetan Sharma, Sr. Adv. with Mr. Rishi Malhotra, Advocates
AND
(3) + Ex.P. 122/1998
%
Talwar Brohters P. Ltd. ...Decree holder
Through: Mr. J.C. Seth, Advocate
Versus
Punjab State Industrial
Development Corp. ...Judgment Debtor
Through: Mr. Chetan Sharma, Sr. Adv. with Mr. Rishi Malhotra, Advocates
JUSTICE SHIV NARAYAN DHINGRA
1. Whether reporters of local papers may be allowed to see the judgment?
2. To be referred to the reporter or not?
3. Whether judgment should be reported in Digest?
JUDGMENT
1. These execution petitions relate to an award passed by the learned Arbitrator. This Court ordered warrants of attachment of the account of OMP Nos. 351/08, 122/98 & 123/98 Page 1 Of 3 Judgment Debtor to recover the amount of Rs.33,99,140.77. This amount was attached by HDFC Bank and remitted to the Court on 30th June, 2008. However, judgment debtor made an application stating therein that the calculations made by the decree holder were not in terms of the decree. He also informed the Court that JD had filed a review application before the Supreme Court for reviewing the order dated 13th March 2008.
2. The contention of judgment debtor is that the amount paid by JD earlier towards the decree should have been adjusted against the principal amount. JD also took the plea that interest on damages has been wrongly awarded to the decree holder. The damages normally do not carry interest.
3. Per contra, contention of decree holder is that the amount earlier received in normal course has to be adjusted against the costs and interest and once the costs and interest stand paid, the remaining amount has to be adjusted against the principal amount. Decree holder also contended that the JD wrongly deducted the income tax at source as the damages is not considered as income and this deduction of income tax should not have been allowed to JD.
4. It is settled law that unless the Court has in the decree, specified the mode of adjustment of amount received from JD, the normal principle of adjustment of amount is that whatever amount is received from JD, if it is received in installments or phases, the first liability is to discharge costs and interests out of this amount and after meeting out costs and interests, the remaining amount has to be adjusted against the principal. The contention of JD being contrary to this principle is not acceptable. Similarly, the contention OMP Nos. 351/08, 122/98 & 123/98 Page 2 Of 3 of decree holder that no TDS could have been deducted is baseless. The damages in lieu of the use of premises is in the form of rent and it is the income of decree holder and decree holder is bound to pay income tax on this amount and the payer of damages is bound to deduct TDS. The deductions of TDS are, therefore, perfectly in order. Even, the award provides that the JD shall deduct TDS and give TDS certificate.
5. I consider that the calculations should be made by the decree holder and JD in accordance with above principle. TDS has to be deducted out of the damages paid to the decree holder. Both decree holders and Judgment Debtor are directed to make calculations taking into account the amount received or the amount deposited in the Court or recovered by attachment date-wise and present correct calculations in the Court. Once the amount is recovered from JD, JD is not liable to pay interest on that amount from the date of recovery. Let fresh calculations be sent to judgment debtor and also filed by decree holder within one week from today. The due amount be paid by JD within two weeks.
6. List on 20th August 2009.
July 01,2009 SHIV NARAYAN DHINGRA J. rd OMP Nos. 351/08, 122/98 & 123/98 Page 3 Of 3