2013 (10) TMI 365 - HC - Income Tax

Limitation - Execution of conveyance is concerned, the same is barred by limitation - Case of the Plaintiff that after the receipt of the amounts in lieu of the flat and in view of the fact that the Defendants had already received the amount of consideration as per the Consent Terms, the Defendants would come forward for execution of the Conveyance Deed - Consent decree passed in the said case was dated 20-8-1983 Execution application undisputedly filed after the period of 12 years prescribed by Article 136 A submission was sought to be advanced on behalf of the Decree Holders/Plaintiffs in the said case that the said decree was a conditional decree and the same would became enforceable only upon happening of the event of obtaining permission by Bombay Port Trust for the assignment of the lease of the said immovable property in favour of the Plaintiffs - Held that - Certificate under Section 230-A of the Income Tax Act was to be obtained - Fact that the permission under Section 230-A was to be obtained would not make the decree in question a conditional decree so as to extend the period of limitation or suspend the period of limitation from running till such time as the certificate was obtained Reliance has been placed upon Section 18(1) of the Limitation Act. Contended that since payment has been accepted by the Judgment Debtors between the years 2004 to 2007 in lieu of the flat admeasuring 600 sq.ft. which was to be handed over to the Judgment Debtors, the limitation period would get extended as a fresh period of limitation would have to be computed from the date of payment and therefore the application filed in the year 2010 was within time - Receipts which are sought to be relied upon in the present Petition do not disclose that the payment was made in lieu of the flat which was to be handed over to the Judgment Debtors Moreover, reliance upon clause (c) of Section 18 of the Limitation Act which carves out an exception in so far as the application for execution of a decree is concerned, the said clause (c) provides that an application for execution shall not be deemed to be an application in respect of any property or right. Hence Section 18 (1) would have no application to the execution of a decree in the present case and therefore the receipts which are sought to be relied upon for payments being made in lieu of the constructed portion to be handed over to the Judgment Debtors, would not in any manner aid the Decree Holder in getting the time extended Petition dismissed No extension of time.

Issues Involved:
1. Bar of limitation for execution of conveyance.
2. Enforceability of the decree.
3. Applicability of Section 230-A of the Income Tax Act.
4. Interpretation of consent decree terms.
5. Applicability of Section 18(1) of the Limitation Act.

Issue-wise Detailed Analysis:

1. Bar of Limitation for Execution of Conveyance:
The primary issue was whether the execution of the conveyance was barred by limitation. The Executing Court held that the execution proceeding was not barred by limitation entirely but was barred concerning the conveyance of the suit property. The Executing Court observed that the decree was enforceable from the date it was passed, and the limitation period could not be suspended indefinitely due to the non-obtainment of the certificate under Section 230-A of the Income Tax Act.

2. Enforceability of the Decree:
The decree in question was deemed enforceable from the day it was passed. The court noted that the decree was not conditional or contingent upon the occurrence of certain events. The consent terms reflected an agreement between the parties, translating into a decree with all the attributes of a decree, thus executable under Article 136 of the Limitation Act. The court held that the enforceability of the decree arose immediately upon its pronouncement, and the period of limitation started from that date.

3. Applicability of Section 230-A of the Income Tax Act:
The court held that the condition of obtaining the certificate under Section 230-A of the Income Tax Act was not a condition precedent for the enforceability of the decree. The Executing Court rightly observed that the period of limitation would not stand suspended until the certificate was obtained. The repeal of Section 230-A in 2001 did not aid the Decree Holder as the decree was enforceable from the date it was passed.

4. Interpretation of Consent Decree Terms:
The court examined clauses 3, 4, 5, 6, 7, 9, 10, and 12 of the consent decree. It was concluded that the decree was enforceable from the day it was passed and was not contingent upon the happening of certain events. The submission that the execution proceeding arose only when the Defendants failed to comply with the advocate's notice dated 12-1-2010 was not accepted. The court held that the decree was enforceable from the date of its pronouncement, and the analogy with an agreement containing a covenant for compliance as and when called upon could not be applied.

5. Applicability of Section 18(1) of the Limitation Act:
The Decree Holder's reliance on Section 18(1) of the Limitation Act, contending that the limitation period would get extended due to payments made between 2004 to 2007, was rejected. The court noted that the receipts did not disclose that the payments were made in lieu of the flat to be handed over to the Judgment Debtors. Moreover, clause (c) of Section 18 of the Limitation Act provides that an application for execution shall not be deemed to be an application in respect of any property or right, thus making Section 18(1) inapplicable to the execution of a decree.

Conclusion:
The court dismissed the petition, affirming that the execution proceeding for the conveyance was barred by limitation and that the decree was enforceable from the date it was passed. The submissions based on Section 230-A of the Income Tax Act and Section 18(1) of the Limitation Act were not accepted. The impugned judgment and order of the Trial Court were upheld, and the writ petition was dismissed with no order as to costs.

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