Calcutta High Court
Nucent Finance Ltd. vs Hindustan Motors Ltd. on 12 May, 2004
Equivalent citations: AIR2005CAL66, AIR 2005 CALCUTTA 66, (2005) 1 ICC 44
Author: Sengupta
Bench: Sengupta
ORDER Sengupta, J.
1. By this application the petitioner has asked for relief for giving direction upon the plaintiff/decree-holder to accept a sum of Rs. 1,60,012/- in full and final settlement of all claims under the said decree dated 11-2-02. The decree has been passed by consent of the parties settling the dues on the date of passing of the order, which is as follows :-
There will be a decree for a sum of Rs. 1,10,42,287.48 p. with interest on the said sum at the simple rate of 10% per annum from the respective dates of default on lease rentals being principal sum which interest calculated upon 6th February, 2002 is Rs. 31,83,162.88 p. and for a further sum of Rs. 4,56,323/- being the residual value of the machinery leased out by the plaintiff to the defendant.
2. Therefore, it is clear that the decretal liability of the judgment-debtor/petitioner was on account of two-folds, namely, for a sum of Rs. 1,10,42,287.48 p. and further sum of Rs. 4,56,323/-. From the pleadings and accompanied documents, it appears to me that there is no dispute as regards liquidating the first figure of Rs. 1,10,42,287.48 p.
3. The petitioner in this case wants an adjustment of an amount of Rs. 2,90,152/- being the aggregate amount of the tax liability of the decree-holder and the same was from time to time deducted by the judgment-debtor and this had happened prior to April 2, 1996, long before the consent decree was passed. According to the applicant, as contended by Mr. Choudhury, Ld. Counsel for the petitioner, the aforesaid sum of Rs. 2,90,152/- is in real sense payable to the judgment-debtor and if the aforesaid amount is adjusted against the sum of Rs. 4,56,323/- then the balance amount would be around Rs. 1,60,012/-. The petitioner has already forwarded a cheque of the aforesaid amount and such cheque has been received by the decree-holder. Admittedly, however, this was received without prejudice to the rights and contentions of the parties.
4. The petitioner submits that on payment of the aforesaid amount, satisfaction of the decree shall be recorded.
5. Mr. Chatterjee for the decree-holder submits that the aforesaid dues relates to some other transaction and it has got nothing to do with the decretal dues. Moreover, the amount covered by the certificate of tax deduction at source are subject-matter of the time long before passing of the consent decree. Therefore, the balance sum of Rs. 2,90,1527- is still payable. Mr. Chowdhury has drawn my attention to the provisions of Order XXI, Rule 2 of the Code of Civil Procedure and submits that any amount payable to the decree-holder by the judgment-debtor whether it relates to the decretal dues or some other transaction, can be taken note, by the Court while recording adjustment.
6. Having heard the respective contentions of the Ld. Counsel for the parties, I am to examine the issue and the only issue is whether the amount covered by the tax deduction at source which was calculated in the year 1996 can be adjusted against the decree which was passed in 2002 or not. So, I appropriately quote provisions of Order XXI, Rule 2 of the Code of Civil Procedure.
"Payment out of Court to decree-holder.
(1) Where any money payable under a decree of any kind is paid out of Court, (for a decree of any kind is otherwise adjusted) in whole or in part to the satisfaction of the decree-holder, the decree-holder shall certify such payment or adjustment to the Court whose duty it is to execute the decree, and the Court shall record the same accordingly.
(2) The judgment-debtor (or any person who has become surety for the judgment-debtor) also may inform the Court of such payment or adjustment, and apply to the Court to issue a notice to the decree-holder to show cause, on a day to be fixed by the Court, why such payment or adjustment should not be recorded as certified; and if, after service of such notice, the decree-holder fails to show cause why the payment or adjustment should not be recorded as certified, the Court shall record the same accordingly.
(2-A) No payment or adjustment shall be recorded at the instance of the judgment-debtor unless--
(a) the payment is made in the manner, provided in Rule 1; or
(b) the payment or adjustment is proved by documentary evidence;
or
(c) the payment or adjustment is admitted by, or on behalf of, the decree-holder in his reply to the notice given under Sub-rule (2) of Rule 1, or before the Court.
(3) A payment or adjustment, which has not been Certified or recorded as aforesaid, shall not be recognised by any Court executing the decree."
7. This makes it absolutely clear that money must be due and payable by the decree-holder to the judgment-debtor. In order to record adjustment, there must be an event of post-decree period but before levy of the execution. Any dues which appears to be barred and before passing of the decree cannot be taken into consideration in this adjustment proceedings. Any dues for pre-decree period and which is squarely disputed and denied cannot be the subject matter of adjustment after the decree is passed. Admittedly, the dues which is sought to be adjusted relates to pre-decree period and this cannot be taken into consideration after the decree is passed or before the execution is levied.
8. Accordingly, I hold that the aforesaid amount covered by the TDS certificate cannot be asked to be adjusted even if it is assumed to be legitimate dues and lawfully payable. Of course, this is not admitted by the decree-holder. Thus, I hold that upon payment of the sum of Rs. 2,90,152/- by the judgment-debtor, the decree passed by this Court on consent shall stand adjusted. Let this amount be paid by the judgment-debtor within one month from date, failing which the recording of adjustment will stand withdrawn and the decree-holder would be entitled to proceed with the execution in accordance with law in terms of the consent decree. I, however, keep the legality and validity of the claim of the judgment-debtor open for realising or recovering, if it is permissible under the law, in appropriate proceedings.
9. Thus, the application stands disposed of.
10. No order is passed as to costs.
11. Let Xeroxed certified copy of this dictated order be made available to the parties, if applied for the same.