Mahanagar Telephone Nigam ... vs M/S Cimmco Limited
2014 Latest Caselaw 5850 Del

$-26
*       IN THE HIGH COURT OF DELHI AT NEW DELHI

+                      EFA(OS) 27/2014

%                          Date of decision : 17th November, 2014

       MAHANAGAR TELEPHONE
       NIGAM LIMITED                        ..... Appellant
                    Through: Mr. Sudhir Nandrajog, Senior
                             Advocate with Mr. Vaibhav Kalra,
                             Advocate.

                                      versus

       M/S CIMMCO LIMITED                                   ..... Respondent
                    Through:


       CORAM:
       HON'BLE MS. JUSTICE GITA MITTAL
       HON'BLE MR. JUSTICE J.R. MIDHA

GITA MITTAL, J. (Oral)

CM 18771/2014 (exemption)

Allowed, subject to just exceptions.

CM 18770/2014 (delay)

For the reasons stated in the application, the delay in filing the present appeal is condoned.

This application is allowed.

EFA(OS) 27/2014 and CM 18769/2014 (stay)

1. It is submitted by learned senior counsel for the appellant that the record necessary for adjudication of the present appeal which is relied upon in support by the appellant has been filed. We have heard learned senior counsel for the appellant and also perused the available record.

2. The instant appeal has been filed by the appellant primarily challenging the direction by the learned Single Judge vide order dated 10 th October, 2014 rejecting the appellant's claim that an amount of Rs.1,52,682/- had been deposited by it with the authorities towards tax deductible at source (TDS) by the appellant towards dues of the respondent.

3. It appears that by an order dated 8th April, 1996, the dispute inter se between the parties recorded a contract dated 5th June, 1990 was referred to arbitration which proceedings culminated in an arbitration award dated 31 st December, 1998 in favour of the respondent contractor. The appellant MTNL assailed the same by way of petition under Sections 15, 16, 30 and 33 of the Indian Arbitration Act, 1940 which was registered as IA No.8149/1999 in CS(OS) No.143A/1999 which came to be rejected by learned Single Judge by an order dated 22nd July, 2010 reducing the amount payable under the award by Rs.3,82,747/-. This order was assailed by way of FAO(OS) No. 700/2010 which was also rejected by a judgment dated 29th September, 2011.

Interestingly, no reference to any amount having been deposited by the appellant towards TDS with regard to the payment to the respondent has been made or recorded in any of the above proceedings.

4. The award dated 31st December, 1998 has noted the contention of the appellant that it was entitled to a deduction of the amount of Rs.1,51,152/- towards TDS. The award, however, does not contain even a remote claim or assertion by the appellant that any such amount had been deposited by it with the Income Tax authorities.

5. The respondent was compelled to seek execution of the Award by way of Execution Petition No.368/2012. In order to crystallize the amount which the appellant was to pay in terms of the arbitral award as modified by the order dated 22nd July, 2010, the matter was referred to the Registrar General of this Court for calculation of the final amounts payable to the respondent - decree holder. The order dated 7th October, 2013 making this reference records the specific statement on behalf of the appellant that "a TDS certificate in the sum of Rs.1,51,152/- was not issued". Therefore, so far as the record is concerned, apart from the above contention on behalf of the appellant that it was entitled to deduct such amount towards the TDS, there is no material at all to establish that such amount was ever deposited with the Income Tax Authorities.

6. We may note here that law postulates a penalty if tax is actually deposited and the certificate in this regard was not issued to the party on whose behalf such deposit was made, penal consequences would enure.

7. The record of the present case as well as the statements made on behalf of the appellant clearly manifest that though the appellant has claimed that it was entitled to deduct such amount, no such amount was actually deposited with the Income Tax authorities. We have even today given an opportunity to learned Senior Counsel for the appellant to show us any

statement made by the appellant that such amount was ever deposited with the Income Tax authorities. Learned counsel is unable to point out that, even a remote suggestion on the part of the appellant that such amount was ever actually deposited. No document to support such deposit could be pointed out.

8. We also find that when the execution petition was finally taken up on 10th October, 2014 before the learned Single Judge, the learned Single Judge had categorically asked the learned counsel for the appellant as to whether the judgment debtor had furnished a TDS certificate for a value of Rs.1,51,152/- to the respondent. It was again stated on behalf of the appellant that no such certificate was issued.

It is submitted before us that the appellant maintains his record only for the period of ten years. The above narration manifests that the disputes between the parties relate to a contract of 1990 and as early as in the year 1996 the parties were already before the arbitrator. The appellant was thus very well aware of the record relating to the contract being necessary for establishing its claim.

9. It is noteworthy that so far as the proceedings before the arbitration were concerned, it was not the case of the appellant that it was liable to make any payment to the respondent. On the contrary, the appellant disputed every claim of the contractor and in fact had urged counter claims strenously contesting the claim of the respondent. If any amount had been deposited towards TDS, the respondent could there and then have become entitled for not only the TDS certificate but also the payment of the amount for which the tax was so deposited.

10. We may also note that so far as the amount payable by the appellant to the respondent is concerned, the learned Single Judge has not interfered with the computation in any manner at all.

11. The present appeal and application are hopelessly misconceived. Valuable judicial time has been unnecessarily wasted. The appeal and application are hereby dismissed with costs which are quantified at Rs.25,000/-. The same shall be deposited with the Delhi Legal Services Authority by the appellant within four weeks from today. The pending application is also dismissed.

GITA MITTAL, J

J.R. MIDHA, J NOVEMBER 17, 2014 dk