2021 (8) TMI 1435 - HC - Indian Laws

Seeking invocation of the contempt jurisdiction under Contempt of Courts Act 1971 so also under Article 215 of the Constitution of India - 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 - HELD THAT - 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. 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 explained in any manner except as discussed which is not only not satisfactory explanation it pains 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. Conclusion - 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. Petition disposed off.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment include:

• Whether the deduction of TDS from the compensation amount awarded under the Land Acquisition Act constitutes contempt of court, given the precedent set in Movaliya Bhikhubhai Balabhai that such deductions are not permissible.
• Whether the actions of the contemnor, in failing to comply with the court's judgment regarding the non-deduction of TDS, constitute willful disobedience under the Contempt of Courts Act, 1971.
• The appropriate remedy and punishment for the contemnor's actions, including whether an unconditional apology and subsequent compliance can mitigate the contempt.

ISSUE-WISE DETAILED ANALYSIS

Deduction of TDS from Compensation Amount

• Legal Framework and Precedents: The relevant legal framework involves the Land Acquisition Act, Section 28, and the Income Tax Act, Section 194A. The court referenced its own decision in Movaliya Bhikhubhai Balabhai, which determined that interest under Section 28 of the Land Acquisition Act is part of the compensation and not subject to TDS.
• Court's Interpretation and Reasoning: The court reiterated that interest under Section 28 is considered compensation, not income from other sources, and therefore, TDS should not be deducted. The court emphasized that the contemnor was aware of this precedent, yet failed to act accordingly.
• Key Evidence and Findings: The court noted multiple communications to the contemnor informing him of the legal position and the need to refund the deducted TDS. Despite these reminders, the contemnor did not act until the court issued a notice.
• Application of Law to Facts: The court applied the precedent from Movaliya Bhikhubhai Balabhai to the facts, finding that the deduction of TDS was unjustified and constituted a breach of the court's judgment.
• Treatment of Competing Arguments: The contemnor argued that there was no deliberate act of contempt, citing administrative confusion and lack of awareness. The court rejected these defenses, noting the clear legal precedent and the contemnor's responsibility to comply with it.
• Conclusions: The court concluded that the deduction of TDS was a clear violation of the court's judgment and constituted contempt.

Willful Disobedience and Contempt

• Legal Framework and Precedents: The Contempt of Courts Act, 1971, defines civil contempt as willful disobedience to any judgment or order of the court.
• Court's Interpretation and Reasoning: The court found that the contemnor's failure to act, despite being informed of the legal position, amounted to willful disobedience. The court emphasized the importance of compliance with judicial decisions to uphold the rule of law.
• Key Evidence and Findings: The court highlighted the contemnor's failure to respond to multiple notices and the lack of action until the court intervened.
• Application of Law to Facts: The court applied the definition of civil contempt to the contemnor's actions, finding that the delay and failure to comply with the court's judgment constituted contempt.
• Treatment of Competing Arguments: The contemnor's defense of administrative oversight and lack of intent was not accepted by the court, which stressed the need for accountability in public office.
• Conclusions: The court determined that the contemnor was guilty of civil contempt due to willful disobedience of the court's order.

SIGNIFICANT HOLDINGS

• Core Principles Established: The court reaffirmed the principle that interest under Section 28 of the Land Acquisition Act is part of the compensation and not subject to TDS. It emphasized the duty of public officials to comply with legal precedents and court orders.
• Final Determinations on Each Issue: The court found the contemnor guilty of contempt for willful disobedience of the court's judgment. It accepted the contemnor's unconditional apology but imposed a fine of Rs. 2,000 and costs of Rs. 50,000 to be paid to the applicant and the Gujarat High Court Legal Aid Committee.
• Verbatim Quotes of Crucial Legal Reasoning: The court stated, "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."