Delhi High Court
V.K. Dewan & Co. vs Dda on 17 February, 2010
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ Execution Petition No.194/2005
% Date of decision:17th February, 2010
V.K. DEWAN & CO. ..... Decree Holder
Through: Mr. Sandeep Sharma with Mr. Vikas
Sharma, Advocates
Versus
DDA ..... Judgment Debtor
Through: Mr. D.S. Mehandru with Ms. Alpana
Pandey, Advocates
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. Whether reporters of Local papers may
be allowed to see the judgment? No
2. To be referred to the reporter or not? No
3. Whether the judgment should be reported No
in the Digest?
RAJIV SAHAI ENDLAW, J.
1. The only controversy remaining in this execution is two-fold; firstly, as to till which date the decree holder is entitled to interest, whether till the date of attachment effected pursuant to the order in the execution or till the date of release of the attached monies and secondly as to whether the judgment debtor / DDA is entitled to deduct at source amounts under Section 194 A of the Income Tax Act.
Execution Petition No.194/2005 Page 1 of 42. As far as the first of the aforesaid controversies is concerned, I have recently in N.K. Garg & Company Vs. Union of India MANU/DE/1687/ 2009 held that where the decree directs the payment of interest till the date of payment of the decretal amount, interest is payable till the date of payment and not till the date of attachment. In the present case, also no neglect can be attributed to the decree holder in release of the attached monies. The judgment debtor inspite of notice of the execution, kept on seeking adjournments and ultimately on 31 st March, 2006, the court issued warrants of attachment of the monies lying in the bank account of the judgment debtor. Even thereafter opportunities were sought for making the payment directly. Ultimately on 2nd August, 2006 on the failure of the judgment debtor to make payment inspite of assurances, this court directed the attached monies to be forwarded by the bank in the name of the Registrar General of this Court. Thereafter on 18th December, 2006, the counsel for the judgment debtor for the first time contended that the amount payable under the decree was less than the amount attached and received in the Court. Accordingly, order for release of the amount admitted by the judgment debtor was made on 18th December, 2006 and pursuant thereto the monies released on 10th January, 2007. It is thus held that the decree holder would be entitled to interest under the decree till 10th January, 2007.
3. As far as the claim for deduction of tax at source on the element of interest is concerned, the counsel for the decree holder has relied upon Unique Enterprises v. Delhi Development Authority 127 (2006) DLT 401 where the question of deduction under Section 194 C of the Income Tax Act was considered. This Court held that the same did not apply to payments Execution Petition No.194/2005 Page 2 of 4 pursuant to an award made rule of the Court. It was further held that the payment even though of the nature referred to in Section 194 C of the Income Tax Act had merged in the decree and no deduction at source could be claimed. The said judgment was followed by other Single Judges in order dated 19th February, 2008 in Execution Petition No.129/2007 titled V.K. Dewan & Company Vs. Delhi Jal Board and in order dated 13th July, 2006 in Execution Petition No.55/2006 titled Shri Balwant Jain Vs. DDA.
4. The counsel for the judgment debtor has sought to distinguish the aforesaid judgments by contending that they were vis-à-vis Section 194 C of the Income Tax Act i.e. payment to contractors whereas the deduction in the present case was sought to be made under Section 194 A i.e. on interest. Reliance in this regard was sought to be placed on the order dated 18 th January, 2007 in Execution Petition No.174/2006 titled M/s A.R. Khanna & Sons Vs. Delhi Development Authority. In that case tax had already been deducted and TDS certificate prepared. The Court noted that though in accordance with the order in Balwant Jain Vs. DDA (supra), no such deduction was to be made but since deduction had already been made and certificate prepared, the court did not direct payment of the amount deducted towards tax at source. The said order cannot thus be relied upon by the judgment debtor as laying down that no such deduction is to be made. On the contrary, it also recognizes that no such deduction is to be made. It also shows that deduction of tax qua interest, under Section 194 A was also held to be impermissible. I may also notice that recently in Indian Hume Pipe Co. Ltd. v. State of Rajasthan (2009) 10 SCC 187 it has been held that a person deprived of monies is entitled to be compensated by whatsoever Execution Petition No.194/2005 Page 3 of 4 name called, be it interest, compensation or damages. Thus, it cannot be said that payment of interest under the decree is akin to payment of interest to which Section 194 A applies. The reasoning given in Unique Enterprises (supra) that such payment is as part of a decree and the payment merges in the decree holds good qua Section 194 A also.
5. I thus do not find any merit in either of the objections raised by the judgment debtor. The parties to appear before the Registrar General of this Court for computation of the amounts due in terms of the aforesaid and the additional amounts found due to the decree holder be released from the attached monies and if the attached monies are not sufficient, the judgment debtor / DDA to pay the said amount to the decree holder immediately on computation.
The parties to appear before the Registrar General on 10th March, 2010.
RAJIV SAHAI ENDLAW (JUDGE) February 17, 2010 gsr Execution Petition No.194/2005 Page 4 of 4