Talwar Brothers P. Ltd. vs Punjab State Industrial ...
2009 Latest Caselaw 2404 Del

     *            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