Champabhai Harsurbhai vs M R Pandya(Shrimali) - Gujarat ...
2021 Latest Caselaw 10672 Guj

    C/MCA/255/2020                                   CAV JUDGMENT DATED: 05/08/2021




              IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                     R/MISC. CIVIL APPLICATION NO. 255 of 2020


FOR APPROVAL AND SIGNATURE:


HONOURABLE MS. JUSTICE SONIA GOKANI

and
HONOURABLE MR. JUSTICE N.V.ANJARIA

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1 Whether Reporters of Local Papers may be allowed to see the judgment ?

2     To be referred to the Reporter or not ?

3     Whether their Lordships wish to see the fair copy
      of the judgment ?

4     Whether this case involves a substantial question

of law as to the interpretation of the Constitution of India or any order made thereunder ?

========================================================== CHAMPABHAI HARSURBHAI Versus M R PANDYA(SHRIMALI) - GUJARAT WATER SUPPLY AND SEWERAGE BOARD THROUGH ITS EXECUTIVE ENGINEER ========================================================== Appearance:

==========================================================

CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MR. JUSTICE N.V.ANJARIA

Date : 05/08/2021

CAV JUDGMENT (PER : HONOURABLE MS. JUSTICE SONIA GOKANI)

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1 Applicant is before this Court seeking invocation of the

contempt jurisdiction under Contempt of Courts Act, 1971

so also under Article 215 of the Constitution of India in the

following factual background.

2 Land of the applicant and all others is situated at village:

Kambhada, taluka of Barvada District: Ahmedabad (Botad).

It was acquired by the respondent for public purpose for

Khambada Jute Pani Purvatha Yogna. The amount of

compensation awarded by the Land Acquisition Officer since

was meagre, the applicant sought reference under Section 18

of the Land Acquisition Act and Land Reference Case No.265

of 1998 was preferred. Learned 7 th Additional Senior Civil

Judge, Ahmedabad (Rural) partly allowed the said case in all

seven reference cases being LRC No.265 to 271 of 1998. The

judgement and award came to be passed on 16.10.2006.

3 The opponent filed First Appeal No.3840 to 3846 of 2008

against the said judgment and award of the Reference Court.

The High Court dismissed the appeals on 26.09.2013.

4 The opponent had deposited compensation amount with the

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trial Court during the pendency of appeal after deducting

the tax (TDS) at the rate of 11.33% amounting to

Rs.17,62,504/- on interest amount. This deduction of the

TDS is the bone of contention in the present matter. As

according to the applicant, the deduction of TDS is contrary

to the judgement delivered by this Court where the High

Court in the case of Movaliya Bhikhubhai Balabhai Income

Tax Officer - (TDS) & Others, 2017 (2) GLH 554 has held that

TDS cannot be deducted while depositing compensation

amount payable to the farmers under the Land Acquisition

Act. This legal position also had been communicated and

brought to the notice of the opponents vide notices dated

20.01.2015,28.09.2015, 01.12.2013, 23.12.2015,

15.06.2016,12.07.2016, 24.08.2016, 18.10.2016, 26.04.2017

and 24.07.2019.

5 Grievance is made by the applicant that although the

contemnor was served with all these notices, none of the

same has been replied or responded to and the amount of

compensation continued to lie with the opponents. This

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action amounts to criminal breach of trust and cheating with

the land owners as well as the Income Tax Department.

6 The Sardar Sarovar Narmada Nigam Limited issued a

resolution dated 07.09.2016 instructing its department not

to deduct TDS from the compensation amount in view of the

law laid down by the High Court. It is the say of the

applicant that the contemnor opponent being the same

person, who has deducted TDS in spite of repeated

reminders. He is directly responsible for the intentional and

willful disobedience. This deliberate and willful breach of

the judgment of the Court and non-compliance shall need to

be strictly dealt with the gross contempt committed being

the deliberate, intentional and willful, the same shall need

to be punished. It was further the say that for 18 years the

farmer/ applicant has lost its land, which was source of

livelihood and only on account of this deliberate act of the

opponent, he could not get the benefit of the Court's

judgment and decree.

7 The prayer sought for, therefore, are as follows:-

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"(a) To hold the contemnor respondent guilty of the contempt of the Hon'ble Court for deliberate and willful disobedience of the judgment and orders of the Hon'ble Court and further be pleased to punish the respondent accordingly as per the provisions of the Contempt of Court Act, 1971.

(b) To direct the contemnor to deposit forthwith the TDS amount deducted by him from the compensation amount of the applicant with interest till the date of deposit.

(c) To grant any other relief/ order that may be deemed fit in the interest of justice."

8 This Court (Coram: Hon'be the Chief Justice Mr. Justice

Vikram Nath and Mr. Justice Ashutosh J. Shastri, CJ,J.) issued

the notice on 06.03.2020, making it returnable on

17.04.2020.

9 On 06.08.2020, learned advocate Mr. Munshaw appeared for

the opponent and ensured to deposit the entire amount of

Rs.17,62,504/- within one week, which was directed to be

deposited with the Registry of the High Court by RTGS. The

Court, further directed the details of the bank account of the

present applicant and the claims to be furnished to the

Registry for disbursement of the amount through the

banking mode. This Court passed a detailed order on

17.08.2020 and directed the Registry to transfer the amount

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to the respective accounts within three days.

10 The relevant paragraphs of order dated 17.08.2020 are

reproduced as under:-

"1. This is an application for contempt under the Contempt of Courts Act, 1971. Notice came to be issued by this Court on 6.3.2020 (Coram: Hon'ble the Chief Justice and Hon'ble Justice A.J.Shastri,). On 6.8.2020 learned advocate Mr. Munshaw appearing for the opponent had ensured deposit of the entire amount of Rs.17,62,504/- within one week. It had been directed to deposit the said amount with the High Court Registry by way of RTGS. Today he confirms that total amount has been deposited and the Registry also by way of its separate note confirms the same.

2. We have heard learned advocate Mr. Nitin Amin and learned advocate Mr. Munshaw and also perused the Note of the Registry as well as the details furnished by learned advocate Mr. Munshaw by way of his e-mail dated 11.8.2020. He has bifurcated the entire amount into the shares which each applicant is entitled to and also furnished the account details with oral as well as written request that the respective amount be deposited in the saving account of each of the applicants through RTGS or any other mode.

3. Ld. Advocate Mr. Amin has also further urged that there has been delay of 7 years by the concerned officer in depositing the amount under the pretext of depositing it with the Income Tax Department by way of TDS. Knowing fully well that the Division Bench of this Court in ( 2017 )2 GLH 554 in case of Movaliya Bhikhubhai Balabhai, has held that the interest under Section 28 of the Land Acquisition Act, 1894 is regarded as part of compensation and therefore, the interest on which the tax is sought to be deducted at source under Section 194 A of the Act is interest under Section 28 of the Land Acquisition Act, 1894 which partakes the character of compensation and the same does not fall within the ambit of expression of interest as contemplated under Section 145 A

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of the Income Tax.

3.1 The Court categorically held that the person who receives the payment of compensation in such circumstances is not liable to pay any tax under the head "income from other source" on the interest paid to him under Section 28 of the said Act. The Court in the aforementioned decision also held that the Income Tax Officer was not justified in refusing to grant a certificate under Section 197 of the IT Act or non- deduction of tax at source in as much as the person was not liable to pay any tax.

3.2 Being fully conscious of this decision which is not only delivered in 2017 but also has been communicated to the concerned officer by way of Registered AD Post on 24.7.2019, It is urged that the contempt is well made out.

4. Learned advocate Mr. Munshaw has resisted this application on the ground that there was no deliberate act on the part of any officer. He has further urged the amount has been deposited which includes the interest as contemplated by the Court and now when the amount is fully deposited with the Registry, the same needs to be disbursed in favor of the parties who are to receive compensation, the respondents have purged themselves. He also further submitted that so far as the issue of cost is concerned, the same may not be imposed as the officers are not ordinarily expected to know the ratio laid down by the Court time and again. It was with the genuine belief that the amount was needed to be deposited with the Income Tax Department for being the TDS, the same had not been paid to the petitioner.

5. Noticing the fact that the first communication had gone from present petitioner to the respondent officer on 15.6.2016 within three months of the delivery of the decision, and various communications also followed thereafter, since make the issue clear, we see no ground much less any cogent reasons to satisfy ourselves of the delay caused in making payments. Not only the judgement is clear, but the subsequent correspondence makes

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it very clear that TDS was not to be deducted. Let the respondents file an Affidavit to present its case. The same shall be done on or before 26.8.2020 with an advance copy to the other side.

6. We note that it is a serious issue that despite specific reiterative reminders to the officers concerned, no heed was paid nor has anyone responded nor the amount was deposited. However, before holding anything in relation to this aspect further, we would prefer to avail an opportunity to the officer concerned to explain himself and then shall take a call thereafter. Within 3 days the Registry shall transfer the amount in respective accounts.

Stand over to 26.8.2020."

11 Pursuant to the said order on 21.08.2020, the affidavit-in-

reply has been filed by the opponent Mr. Pandya, Executive

Engineer, Public Health Works Division, Gujarat Water

Supply and Sewerage Board. According to him, he has the

highest regards for the orders passed by this Court or any

Court of the land and has neither intentionally nor willfully

defied the order, much less the order passed in First Appeal

No.3846 of 2008 on 26.09.2013 confirming the judgement

and decree passed in Land Reference Case Nos.265 to 271 of

1998 by the learned 7th Additional Senior Civil Judge,

Ahmedabad (Rural). Unconditional apology is tendered for

deduction of RS.17,62,504/- towards TDS from the amount

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of compensation to be paid to the applicant and others

12 According to him, he holds educational qualification of B.E.

(Civil) from L.D. Engineering College and joined services of

Gujarat Water Supply and Sewerage Board on 30.08.1991 as

Junior Engineer and later was promoted to the post of

Deputy Executive Engineer on 14.02.2009 and was posted as

Deputy Executive Engineer, Bavla Sub-Division under

Executive Engineer, Public Health Works Division with

effect from 01.05.2017. He is presently holding the charge of

the said post as a regular posting. According to him, he is

given the additional charge of the post of Executive

Engineer/ Public Health Works Division, Ahmedabad with

effect from 17.10.2017. He performed additional duties of

Executive Engineer, Public Health Works Division,

Ahmedabad over and above his regular post with effect from

17.10.2017. He is to look after the water supply scheme of

Taluka Sanand, Bavla, Dholka, Dhandhuka of his Sub-

Division as also all other talukas of the District, Ahmedabad.

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He also needs to discharge his duties as in-charge Executive

Engineer for other 05 Sub-Divisions also. There are 450

villages of District: Ahmedabad (Rural), which are provided

with potable water as well as sewerage system by the Public

Health Works Division, Ahmedabad. Even residents of

taulkas like Dholka, Dhandhuka, Bavla, Sanand, Bareja and

Singharwa are provided drinking water supply. Apart from

the supply of water, repairs and maintenance of supply and

water supply and drainage system of the District are his

responsibilities. He also has administrative duties over and

above technical duties.

13 According to the applicant, total amount of Rs.1,68,24,292/-

was deposited through a cheque on 22.09.2008 by the office

of Superintendent Engineer, Public health Circle, after

obtaining an opinion of the advocate on 23.09.2008. It was

re-calculated and additional amount of Rs.28,89,402/- had

been deposited in the District Court, Ahmedabad (Rural) on

01.12.2008. Out of this huge amount, amount of

Rs.17,62,504/- was deducted towards TDS. The then

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Executive Engineer of Public Health Works Division,

Ahmedabad did not take any decision in respect of the TDS

and circle level exercise was initiated and completed. All the

notices were addressed to Executive Engineer, Public Health

Construction Department near Town Hall, Ellis Bridge and

the opponent was not holding additional charge of Executive

Engineer till 17.10.2017 and the concerned Executive

Engineer had addressed a letter to the Superintendent

Engineer, Public Health Circle, Ahmedabad. The opponent,

therefore, was not at all conversant with the land acquisition

prices, as well as the correspondences, as he was holding the

additional charge of Executive Engineer with effect from

17.10.2017. He came to know about the proceedings as well

as the deduction of TDS only when the notice of 01.07.2019

was served upon his office on 08.07.2019 and he put up a

note that legal advisor of the Board be consulted and needful

be done for availing the funds to deposit the amount of

compensation. It was to be done by the Head Clerk. The

opponent has tendered unconditional apology for not taking

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any further action and having failed to supervise till the

notice came to be issued on 06.03.2020. According to him,

the funds have been released by the head office of the Board

and the amount has been deposited on 10.08.2020. He has

also produced the substantiating document from Annexure-

A to Annexure-C.

14 This Court has heard extensively learned advocates on both

the sides and also noticed the chronology of events. It is

quite clear from the details, which have been narrated that

in Land Reference Cases No.265 of 1998 to 271 of 1998,

learned 7th Additional Senior Civil Judge, Ahmedabad (Rural)

awarded the judgement and decree in favour of the applicant

and others. The appeals preferred being First Appeal Nos.

3840 to 3846 of 2008 against the said judgement and award

by the opponent Board came to be dismissed on 26.09.2013.

The amount of compensation came to be deposited to the

tune of Rs.1,68,24,292/- on 22.09.2008 drawn on the Punjab

National Bank in District Court, Ahmedabad (Rural) at

Ahmedabad by the Office of Superintendent Engineer

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(Health Circle) Ahmedabad. After obtaining an opinion of

the advocate, compensation was once again recalculated and

the additional amount of Rs.28,89,402/- was deposited in the

District Court, Ahmedabad (Rural) through cheque

No.918895 on 01.12.2008 drawn at Punjab National Bank.

While so doing, the deposited amount of Rs.17,62,504/- was

deducted towards the TDS, the said amount of compensation

as per the affidavit was deposited by the Office of

Superintendent Engineer, Public Health Circle, Ahmedabad

after deducting the TDS, the then Executive Engineer, Public

Health Works Division, Ahmedabad, according to the

opponent, was needed to take the decision, however, the

same has not been done. Another defense, which has been

given is that all the notices referred to by the applicants

were addressed to the Executive Engineer, Public Health

Construction Department and the opponent was not holding

the additional charge of Executive Engineer till 17.10.2017

and the concerned Executive Engineer had addressed a letter

to the Superintendent Engineer, Public Health Circle,

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Ahmedabad requesting him to do the needful.

15 As can be seen from the communication dated 03.08.2016

addressed to the Executive Engineer to Superintendent

Engineer, on receipt of notice of Mr.M.G.Amin of dated

15.06.2016, stating that the opinion has been sought from

advocate Siddhesh Desai, which is expected to arrive and a

short note prepared has been sent to the Superintendent

Engineer in doing the needful in the matter. The note

provides the details of victims, the land reference case

number with survey number and measurement of the land

acquired. It also provides the details of the amount, which

had been deposited and TDS deducted from the said amount

of compensation deposited with the Court. The total amount

of Rs.17,62,504/-(Rs. 14,47,313/-)+ Rs. 3,15,191/-) was to be

returned to be disbursed with 15% interest to the claimant

victims as per the notice of Mr.M.G.Amin. It also refers to

the decision rendered in Special Civil Application No.17944

of 2015 stating that as per the said decision, the interest

given under section 28 of the Land Acquisition Act, no TDS

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can be deducted. It also further mentioned that the amount

deducted as TDS has not been deposited with the Income

Tax Department. Therefore, it questioned as to whether the

amount needs to be paid to the applicant claimants or not.

This had been addressed on 03.08.2016 and nothing has

been done thereafter.

15.1 Assuming that the present opponent was not the

Executive Engineer at the relevant point of time, the fact is

undisputed remains that he was given the additional charge

of Executive Engineer, Public Health Works Division,

Ahmedabad with effect from 17.10.2017. Therefore, it is

incorrect on his part to submit that he came to know of such

deduction of TDS amount when the notice dated 01.07.2019

was served upon him on 08.07.2019. After having taken over

the additional charge of Executive Engineer, Public Health

Works Division, Ahmedabad with effect from 17.10.2017, the

present applicant would have been fully aware of the

pendency of notice, which has been issued by Mr. M.G.Amin

on 15.06.2016, as his own predecessor had communicated to

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the higher up i.e. the Superintendent Engineer, Public

Health Works Department, Ahmedabad and had sought

guidance in relation to the amount of TDS. It also referred to

the decision rendered by this Court and inquired as to

whether the amount needs to be paid to the present

applicant and others. It is also not an acceptable aspect that

the other notices, which have been referred to by the

applicant being the notices dated 20.01.2015,28.09.2015,

01.12.2013, 23.12.2015, 15.06.2016, 12.07.2016, 24.08.2016,

18.10.2016, 26.04.2017 and 24.07.2019 had not been

received by his office. In fact, his predecessor had received

notice of 15.06.2016 and he admits of having received notice

dated 01.07.2019. If the Superintendent Engineer had not

done anything nor had he responded to the communication

dated 03.08.2016, it was incumbent upon the petitioner to

have followed it up as it was his responsibility to pay the

compensation. It is quite surprising to note that the amount,

which has been earmarked as TDS had not been deposited

with the Income-Tax Department. The communication of

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the year 2016 itself is clearly reflecting this aspect and yet

nothing has been done till the notice came to be issued by

this Court on 06.03.2020.

16 Thus, the amount which was otherwise required to be paid

to the applicant and others whose land had been acquired

and when direction was to deposit the entire sum including

the amount of interest, no TDS could have been held back.

There is no justifiable ground much less any satisfying

reason for not disbursing the amount in favour of the

applicant. Apt would be to refer to the decision of this Court,

rendered on 31.03.2016 of Movaliya Bhikhubhai Balabhai

(supra), where the petitioner had challenged the

communication issued by the Income Tax Officer as well as

action of the respondent of deducting and depositing the

amount towards TDS from the amount of interest and

further directions had been sought to pay the amount of TDS

to the petitioner.

16.1 The petitioner in that case was the original claimant in

the Land Reference Cases. It was decided by the learned

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Principal Senior Civil Judge, Junagadh by an award, whereby

the reference was partly allowed and additional compensation

as awarded irrigated land and for non-irrigated land along with

other benefits. Pursuant to the award passed by the Reference

Court, the Executive Engineer, Junagadh Irrigation Scheme

Division submitted a calculation sheet, which showed the

amount of interest. The amount of TDS is to be deducted as

per section 194A, the petitioner made an application to the

Income Tax Department under section 197(1) for deciding the

tax liability of interest and to issue the certificate as nil tax

liability. Such application was rejected on the ground that

interest amount on the delayed payment of compensation and

enhancement value of compensation is taxable as per section

57 IV read with section 56(2)(viii) and section 145A(b) of the

Income Tax Act.

16.2 Aggrieved petitioner was before this Court and after

detailed hearing, the Court relied on the decision of the Apex

Court, rendered in case of Commissioner of Income Tax,

Faridabad v. Bir Singh (HUF), Ballabgarh, 2009(8) SCC 412 and

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other decisions to hold that interest under section 28 of the

Land Acquisition Act partakes the character of the

compensation. It does not fall within the ambit of expression

interest as contemplated in section 145(A) of the Income Tax

Act. Therefore, the petitioner is not liable to pay income tax

under the head "Income from other sources" on the interest

paid to it under section 28 of the Act of 1894.

16.3 Relevant findings and observations are profitably to be

reproduced here:-

"8. The above referred decision in the case of Ghanshyam (HUF) came to be followed by the Supreme Court in the case of Commissioner of Income Tax, Rajkot v. Govindbhai Mamaiya, (2014) 16 SCC 449, wherein the court after referring to the above decision in the case of C.I.T. v. Ghanshyam (HUF) (supra) held that it is clear that whereas interest under section 34 of the Act of 1894 is not treated as a part of income subject to tax, the interest earned under section 28, which is on enhanced compensation, is treated as an accretion to the value and, therefore, part of the enhanced compensation or consideration making it exigible to tax under section 45(5) of the Income Tax Act.

9. Thus, the Supreme Court in the case of Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF) (supra) has held that the interest under section 28 of the Act of 1894 unlike interest under section 34 is an accretion to the value and hence, it is a part of the enhanced compensation or consideration which is not the case with interest under section 34 of the 1894 Act. Therefore, interest under section 28 of the Act of 1894 would form part of the enhanced compensation

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and would be exigible to capital gains under section 45(5) of the I.T. Act. In other words, in case of a transaction which is otherwise exigible to capital gains tax under section 45 of the I.T. Act, the interest received under section 28 of the Act of 1894 being an accretion to the value, would form part of the compensation and would be exigible to tax under section 45(5) of the I.T. Act, whereas the interest received under section 34 of the Act of 1894 would be "interest" within the meaning of such expression as envisaged under section 145A of the I.T. Act and would be deemed to be the income of the year under consideration, chargeable to tax as income from other sources under section 56 of the I.T. Act.

10. In the facts of the present case, it is an admitted position that the interest on which the tax is sought to be deducted at source under section 194A of the Act is interest under section 28 of the Act of 1894 and not under section 34 thereof. As noted here in above, the petitioner's application for a certificate under section 197 of the I.T. Act for no deduction of tax at source has been rejected on the ground that the interest amount received under section 28 of the Act of 1894 is taxable as per the provisions of section 57(iv) read with section 56(2)

(viii) and section 145A(b) of the I.T. Act. Section 145A of the I.T. bears the heading "Method of accounting in certain cases". Section 145A(b) provides that notwithstanding anything to the contrary contained in section 145, interest received by an assessee on compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received. Clause (viii) of subsection (2) of section 56 of the I.T. Act provides for income by way of interest received on compensation or on enhanced compensation referred to in clause (b) of section 145A which is chargeable as income from other sources. The first respondent Income Tax Officer seeks to tax the interest received by the petitioner under section 28 of the Act of 1894 as income from other sources under section 56(2)(viii) read with section 145A(b) of the I.T. Act. In the opinion of this court, in the light of the law laid down by the Supreme Court in the case of Ghanshyam (HUF) (supra), the interest received under section 28 of the Act of 1894 would not fall within the

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ambit of the expression "interest" as envisaged under section 145A(b) of the I.T. Act, inasmuch as, the Supreme Court in the above decision has held that interest under section 28 of the Act of 1894 is not in the nature of interest but is an accretion to the compensation and, therefore, forms part of the compensation. At this stage it may be apt to quote the following part of the decision of the Supreme Court in Ghanshyam (HUF) (supra):

"54. Section 45(5) read as a whole [including clause (c)] not only deals with reworking as urged on behalf of the assessee but also with the change in the full value of the consideration (computation) and since the enhanced compensation/consideration (including interest under Section 28 of the 1894 Act) becomes payable/paid under the 1894 Act at different stages, the receipt of such enhanced compensation/consideration is to be taxed in the year of receipt subject to adjustment, if any, under Section 155(16) of the 1961 Act, later on. Hence, the year in which enhanced compensation is received is the year of taxability. Consequently, even in cases where pending appeal, the court/tribunal/authority before which appeal is pending, permits the claimant to withdraw against security or otherwise the enhanced compensation (which is in dispute), the same is liable to be taxed under Section 45(5) of the 1961 Act. This is the scheme of Section 45(5) and Section 155(16) of the 1961 Act. We may clarify that even before the insertion of Section 45(5)(c) and Section 155(16) w.e.f. 1-4-2004, the receipt of enhanced compensation under Section 45(5)(b) was taxable in the year of receipt which is only reinforced by insertion of clause (c) because the right to receive payment under the 1894 Act is not in doubt. 55. It is important to note that compensation, including enhanced compensation/consideration under the 1894 Act, is based on the full value of property as on the date of notification under Section 4 of that Act. When the court/tribunal directs payment of enhanced compensation under Section 23(1-A), or Section 23(2) or under Section 28 of the 1894 Act it is on the basis that award of the Collector or the court, under reference, has not compensated the owner for the full value of

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the property as on date of notification."

Thus, it is clear that the Supreme Court after considering the scheme of section 45(5) of the I.T. Act has categorically held that payment made under section 28 of the Act of 1894 is enhanced compensation, as a necessary corollary, therefore, the contention that payment made under section 28 of the Act of 1894 is interest as envisaged under section 145A of the I.T. Act and has to be treated as income from other sources, deserves to be rejected.

xxx xxx xxx

13. The upshot of the above discussion is that since interest under section 28 of the Act of 1894, partakes the character of compensation, it does not fall within the ambit of the expression "interest" as contemplated in section 145A of the I.T. Act. The first respondent - Income Tax Officer was, therefore, not justified in refusing to grant a certificate under section 197 of the I.T. Act to the petitioner for non-deduction of tax at source, inasmuch as, the petitioner is not liable to pay any tax under the head "income from other sources" on the interest paid to it under section 28 of the Act of 1894.

14. The petitioner had earlier challenged the communication dated 9th February, 2015 whereby its application for a certificate under section 197 of the I.T. Act had been rejected, and subsequently, tax on the interest payable under section 28 of the Act of 1894 has already been deducted at source. Consequently, the challenge to the above communication has become infructuous and hence, the prayer clause came to be modified. However, since the amount paid under section 28 of the Act of 1894 forms part of the compensation and not interest, the second respondent was not justified in deducting tax at source under section 194A of the I.T. Act in respect of such amount. The petitioner is, therefore, entitled to refund of the amount wrongly deducted under section 194A of the I.T. Act.

15. For the foregoing reasons, the petition succeeds and is accordingly allowed. The second respondent having wrongly

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deducted an amount of Rs.2,07,416/- by way of tax deducted at source out of the amount of Rs.20,74,157/- payable to the petitioner under section 28 of the Act of 1894 and having deposited the same with the income-tax authorities, taking a cue from the decision of the Punjab and Haryana High Court in Jagmal Singh v. State of Haryana (supra), the first respondent is directed to forthwith deposit such amount with the Reference Court, which shall thereafter disburse such amount to the petitioner herein. Rule is made absolute accordingly with costs."

17 It is, thus made quite clear in the said decision that the

interest amount under section 28 of the Land Acquisition

Act since partakes the character of compensation, it cannot

fall under the expression interest under section 145A of the

Income Tax Act. Therefore, it is not the income from other

sources and the petitioner is not liable to pay any tax on the

interest paid to it under section 28 of the Act.

17.1 In other words, the amount paid under section 28 since

forms part of the compensation and not the interest, there is

no justification in deducting the tax at source under section

194A of the Income Tax Act in respect of such amount. The

said decision had entitled the revision of the amount, which

has been wrongly deducted under section194A of the Income

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Tax Act. The High Court had directed the Income Tax

Department to forthwith deposit the tax deducted at source,

which was otherwise payable to the petitioner by way of

interest under section 28 with the Reference Court and

further directed the amount to be disbursed to the

petitioner.

17.2 This decision leaves no room of doubt for any one, who

has been communicated the same that the amount of

interest would not attract the tax and, therefore, it would

not be required for the authority to deduct the tax at source

nor would it be obligated to deposit such amount with the

Income Tax Department.

18 (I) Reverting tot he matter on hands, the notice sent by the

learned advocate for the applicant had attached the said

decision along with legal notice(II) Since it would be

extremely clear from the reading of the decision that no

deposit was to be made with the Income Tax department the

respondent contemnor had sought guidance of the

Superintendent Engineer having fully comprehended the

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decision rendered in Movaliya Bhikhubhai Balabhai (supra). If

not from the earlier date surely from 17.01.2017, the present

respondent contemnor applicant would be responsible to

ensure that the said amount deducted as TDS does not

continue to lie with the department, which was otherwise

the amount of compensation to be paid to the present

applicant and others.

18.1 Moreover, after the last notice, which is admitted to have

been received by the opponent on 08.07.2019, nothing has

been explained, except that the task was handed over to the

Head Clerk, who failed to pay the amount. One wonders as

to how the Head Clerk could be said to be responsible in

matters like this, as he would have no powers virtually to

decide the aspect of disbursement, that too of such a huge

amount of Rs. 17,62,504/- and the issue had been pending

with the office of the Executive Engineer from the year 2016.

On one hand, the respondent attempt to shift the blame

upon the Superintendent Engineer with a defence that he

was already addressed a communication by his predecessor

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Executive Engineer and he himself sought to draw his

attention, but, to no avail and on the other hand, he has

chosen to plead that he task was already given to the head

Clerk. Neither of these inspires any confidence.

19 It is not out of place to make a mention of the fact that the

first appeal came to be decided by this Court on 26.09.2013

and rest of the amount had been deposited as per the

affidavit filed by the opponent on 23.09.2008 and

18.12.2008. The amount of TDS had been deducted in the

year 2008 itself. After, the First appeal came to be decided

on 26.09.2013, either the said sum ought to have deposited

with the Income Tax Department or it could have released in

favour of the present petitioner and others. Once having lost

the appeal and not having challenged it further before the

Apex Court, there was no earthly reason for the opponent to

continue to hold this amount, which did not belong to the

respondent contemnor or to the Board. It had no legitimate

reason at all to retain the same. Where was the need on the

part of the applicant to issue a single notice, since the

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appeals were of the opponent Board. The Board was fully

aware of the appeals having been dismissed against it and

resulted in favour of the present applicant, therefore, being

the acquiring body, the onus lied on the opponent to pay the

entire amount of compensation, which had been directed by

the Court. It when had no business to unauthorised and

unsustainably retain any amount of the litigating party, who

has already been deprived of its land, for being used for the

public purpose and yet the owners continued to be at the

receiving end all these years.

20 Even while giving benefit to its maximum to the conduct of

the respondent that it had no clarity till the decision of this

Court delivered on 31.03.2016. The ignorance of law

thereafter is not an excuse, much less for those who are

holding the public posts. It is also incorrect to state that the

law was not comprehensible for the contemnor or that he is

not supposed to be aware of the decisions delivered by this

Court, not at least after the communication addressed on

03.08.2016 to the Superintendent Engineer. It has a

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categorical reference of the notice dated 15.06.2016 and the

decision, which has been delivered by this Court. In public

office the work ,which remains incomplete shall need to be

completed by the next incumbent since it is like a relay race

where the next officer, who holds the charge is obligated to

complete the task, which remains incomplete from

17.10.2017.

20.1 The applicant having already taken the charge of Executive

Engineer long before, for non-release of the amount of

compensation and even not depositing such amount of TDS,

as the amount was to be deposited with the Income Tax

Department, needs to be held liable.

20.2 It shall need to be construed as a deliberate and willful act,

as he was fully aware of the law on the subject and he has

chosen not to respond to a single notice, which has been

issued. Even the notice he directly received in the year 2019

also has not been replied till the deposit of the amount on

10.08.2019. When this Court issued the notice for more than

a year, the opponent sat tight over this.

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20.3 Without any fathomable explanation the attempt was made

on the part of learned advocate Mr. Amin to implicitly

suggest that the amount was not released for extraneous

reasons. However, we have chosen not to enter into that

arena in absence of any specific pleading or affidavit to that

effect. It is sufficient for us to notice absence of any bona

fide for retaining this amount for all these years right from

the year 2013. This being the contempt jurisdiction, it has to

be individual specific and the applicant having taken over

the charge on 17.10.2017, he certainly is responsible for this

deliberate inaction.

20.4 The law on the subject is also quite clear. Section 2A of the

Contempt of Courts Act defines, the contempt which is

either civil contempt or criminal contempt.

Section 2(b) defines civil contempt which means

willful disobedience to any judgement, decree, direction,

order, writ or other process of a Court or willful breach of

any undertaking given to the Court.

20.5 Section 11 provides that the High Court shall have

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jurisdiction to inquire into or try a contempt of itself or of

any Court subordinate to it whether any contempt is alleged

to have committed within or outside the local area, the local

limits of its jurisdiction and whether the person alleged to

be guilty of contempt is within or outside such limit.

20.6 Section 12 provides for punishment for contempt of

Court. It provides that save as expressly provided in this Act

or any other law, the contempt of Court shall be punished

with simple imprisonment for a term, which may extend to

six months or with fine, which may extend to Rs.2000/- or

with both.

20.7 Sub-section (3) of Section 12 starts with non-obstante

clause and states that notwithstanding anything contained

in this section, whether the person is found guilty of civil

contempt, the Court, if considers that fine will not meet

with the ends of justice and that the sentence of

imprisonment is necessary, shall instead of sentence, given

the simple imprisonment direct that he be detained in civil

prison for such period not exceeding six months, as it may

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think fit.

20.8 Sub-Section (4) further provides that whether the persons

found guilty of contempt of Court in respect of any

undertaking given to Court is a company, every person, who,

at the time of contempt was in-charge of or was responsible

to the company for the conduct of the business of the

company as well as the company shall be deemed to be

guilty of the contempt and punishment may be enforced

with the leave of the Court by the detention in the civil

prison of each such person.

The proviso to this also provides that nothing

contained in this sub-section shall render any such person

liable to such punishment, if he proves that the contempt

was committed without his knowledge or he exercised due

diligence to prevent its commission. The similar provision in

case of the Company is also provided at sub-section (5) of

section 12.

21 It would be apt to reproduce section 13 at this stage:-

"13. Contempts not punishable in certain cases.

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Notwithstanding anything contained in any law for the time being in force, no court shall impose a sentence under this Act for a contempt of court unless it is satisfied that the contempt is of such a nature that it substantially interferes, or tends substantially to interfere with the due course of justice."

21.1 It is quite clear from this provision that the Court is not

to impose the sentence for a contempt under the

Contempt of Courts Act unless the contempt is of such a

nature that it substantially interferes or tends

substantially to interfere with due course of justice and

the satisfaction of the Court in this respect is a must.

21.2 Section 13B provides that the Court may permit in any

proceedings or contempt of Court justification by truth as

a valid defence, if it is satisfied that it is in public interest

and the request for invoking the said defence is bona fide.

In other words, the justification by truth is considered a

valid defence, provided it is in public interest and the

request for its invoking such defence is a bona fide

request.

22 It is quite clear from the said provisions that the Court is

required to be satisfied that the contemnor interfered or

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attempted substantially to interfere with the due course of

justice. Here, there does not appear to be any justification of

truth as a valid defence in absence of any public interest, nor

is there a request for the invocation of said defence bona

fide. There is a patent absence of the respondent having

exercised due diligence to prevent commission or having

made all possible endeavours to ractify the situation. To

continue to justify as this being the continuous defaults of

his predecessors and he being extremely hard pressed work

wise for being incharge of the post, are hardly palatable

defences. Neither they appear as valid or truthful defences

nor are they anywhere touching the requirement of public

interest. After the delivery of decision by this Court in, of

course, another matter on identical issue, there are six

notices issued by the applicant in post 31st March, 2016

period being (i) 15.06.2016 (ii) 12.07.2016 (ii) 25.08.2016 (iv)

18.10.2016 (v) 24.06.2017 (vi) 24.07.2019 and not a single

notice is answered and in absence of any justifiable ground

this willfull, deliberate and arbitrary approach is not

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explained in any manner except as discussed above which is

not only not satisfactory explanation, it pains us to find that

such kind of bureaucratic approach is capable of not

allowing the fruits of the decision of the Court to be reaped

by the common man.

23 This Court, from the overall discussion as held hereinabove,

finds that the act of the opponent is willful and he is guilty

of civil contempt. He shall be heard on 31.07.2021.

(MS. SONIA GOKANI, J. )

(N.V.ANJARIA, J)

Further Order

24 After pronouncing the contemnor guilty of contempt of court, we have heard him for punishment. The contemnor appeared before us through video conference from the office of learned advocate.

25 Learned advocate Mr.Munshaw for the respondent -

contemnor has fervently urged that the respondent has unconditionally apologised and also requested that there

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was no willful disobedience and the respondent being Executive Engineer in charge of a particular division, could not be held liable under the Contempt of Courts Act. It is further urged that as per the statement made by learned advocate for the respondent on 06 th August, 2020, the amount has been deposited with the Registry and that should also be a valid and cogent ground for the Court as the contempt can be said to have been purged.

26 For the reasons given in the body part of our judgment, while holding him guilty, we have found that respondent - contemnor by his conduct interfered substantially with the due course of justice and, therefore, he has been held guilty for contempt of court. The contemnor for wilful and deliberate disobedience of the order of the Court is liable to be punished for contempt. However, considering the earnest request of learned advocate Mr.Munshaw, we accept unconditional apology of the respondent to the extent not to punish him by sending him in prison, and instead, limiting the same to the payment of fine as the amount has already been deposited as per the statement made by learned advocate for the respondent on 06th August, 2020. 27 Accordingly, we deem it proper to punish the respondent-

contemnor with fine of Rs.02,000/- (Rupees Two Thousand Only), to be paid by him personally, which will meet the

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ends of justice, having held the contemnor guilty under the Contempt of Courts Act for non-compliance of judgment and order of this Court.

28 The respondent-contemnor shall also pay cost of Rs.50,000/-

(Rupees Fifty Thousand Only) to be borne by the respondent-contemnor. The amount of fine as well as amount of cost as above, shall be deposited with the Registry of this Court by the respondent within two weeks of the receipt of copy of this order. Upon such deposit by the respondent-contemnor, Registry shall pay amount of Rs.40,000/- (Rupees Forty Thousand Only) to the applicant through RTGS in his account. The rest of the amount shall be transmitted to the Gujarat High Court Legal Aid Committee.

29 So far as grievance of learned advocate Mr.Amin about repeated and deliberate defaults of such nature on part of the officers so far as component of T.D.S. of compensation is concerned, we make it clear that this being the first case of this kind, we have chosen to limit ourselves to imposition of fine. In future if we notice any other matter, the Court may be constrained to take stringent action.

(MS. SONIA GOKANI, J. )

(N.V.ANJARIA, J) SUDHIR