Bombay High Court

Bank Of Rajasthan Ltd. vs Union Of India on 16 October, 2001

Equivalent citations: 2002 122 TAXMAN 608 Bom

JUDGMENT

The petitioners are praying for a writ of certiorari for quashing the garnishee notice issued against them, which has been sent to the petitioners by the revenue authorities on 24-3-1999, as depicted by Annexure Exh. D.

2. Some facts need to be stated for the purpose of unfolding the controversy and the points involved around the said controversy: On 18-7-1983, an agreement was executed between the petitioners on one side, and one Hindu undivided family having the members (a) Tolaram Lachhiram Chudiwala, (b) Vikas Tolaram Chudiwala, (c) Mohini Tolaram. Chudiwala, (d) Sangita Vikas Chudiwala, (e) Venulata Tolaram Chudiwala (then minor), (f) Kushal Vikas Chudiwala. By virtue of this agreement the premises belonging to said Hindu undivided family admeasuring 400 sq. ft. situated at 195, Kalbadevi Road, Ist Floor, Bombay - 400 002, was rented out to the petitioners. Petitioners were to pay rent of Rs. 5,125 for occupation of the said premises, and first of such payment was to be made on or before 31-7-1983. The subsequent payments were to be made on or before last day of each and every succeeding month. Similarly three other agreements were executed between the petitioners and said Hindu undivided family on the same day. The total rent which was to be paid was Rs. 20,500 per month. Said amount was paid till garnishee notice was issued, which was dated 24-3-1999 by which the petitioners were directed to pay the said amount of Rs. 20,500 which was to be paid to said Hindu undivided family (original assessee). The petitioners did not pay that amount to the revenue and continued communication with the concerned officers by exchange of letters. The petitioners were treated to be 'deemed assessee' and that is why the petitioners are coming to this court with this writ petition by making prayer of appropriate writ.

3. Shri Shukla, the counsel appearing for the petitioners, submitted that in view of the said agreement, the petitioners are entitled to adjust the amount of monthly rent payable to said Hindu undivided family towards the repayment of loan of Rs. 15 lakhs which petitioners had granted to said Hindu undivided family by virtue of the agreement dated 6-7-1983. He further submitted that when the petitioners are to recover the said amount by adjusting the amount of rent, the revenue does not have any right whatsoever to direct the petitioners to pay the amount to it. He further submitted that the revenue is totally in error in treating the petitioners as 'deemed assessee'. He, therefore, submitted that garnishee notice be quashed by issuing a writ of certiorari.

4. Shri Jetly, the counsel appearing for the respondents, submitted that the transaction of loan agreement, which pertains to grant of said loan is totally different from the agreement by which the petitioners were required to pay rent to the said Hindu undivided family (original assessee). He submitted that the petitioners are holding the said amount as garnishee and, therefore, the revenue is entitled to direct them to pay the said amount to the revenue towards recovery of the arrears of taxes from the original assessee. He further submitted that sufficient opportunity was given to the petitioners but they did not satisfy the concerned officers by cogent and proper legal grounds. He submitted that petition needs to be dismissed.

5. During the course of submissions advanced, it surfaced that the petitioners are facing eviction suit filed by the original assessee but that suit is on the ground that by efflux of time contemplated by the said agreement, the period of lease happened to be over and the said HUF is entitled to the vacant possession of the suit premises.

6. Thus if the petitioners are required to make the payment of Rs. 20,500 per month to the revenue towards the recovery of the arrears of the taxes which is to be recovered from the original assessee, they are not likely to suffer in any way in suit for eviction from the suit premises. On the record it is quite clear that the transaction of granting loan of Rs. 15 lakhs is totally different from the transaction and the agreement by virtue of which the petitioners occupy the suit premises. It is also an admitted fact that the petitioners are occupying the suit premises and are liable to pay the amount of Rs. 20,500 per month to the original assessee as rent of the suit premises. It is further pertinent to note that the said loan amount of Rs. 15 lakhs has been also secured by equitable mortgage of the flat situated at Petit Hall, Nepean Sea Road, Bombay, admeasuring 1,200 sq. ft.

7. When a person or an institution or corporation is holding some amount which is receivable by the assessee though that amount is connected with a commercial transaction, the revenue is entitled to treat such person, institution or corporation as 'garnishee' and resultantly' deemed assessee'. False pleas cannot be permitted to defeat lawful recovery by the revenue. Hobble Goblin of litigation has to be ignored.

8. The petitioners were offered sufficient opportunity by the revenue but instead of putting forth proper and satisfactory grounds, the petitioners tossed the revenue by exchange of letters. Apart from that, the petitioners filed this writ petition quite late and, therefore, the petition is also suffering from laches.

9. Thus, summing up of all, this court comes to the conclusion that the petitioners did not make out a ground for granting a writ of certiorari in their favour. The petitioners are to pay the said amount till they are occupying the suit premises from the date of said garnishee notice. Thus, the petition stands dismissed, with costs.