1969 (4) TMI 6 - HC - Income Tax

Summary

Issues Involved:
1. Whether the decree under execution was a money decree capable of execution.
2. Whether the valuation of shares was conducted appropriately per the terms of settlement.
3. Whether the execution petition was maintainable.
4. Whether the objection to the execution was barred by res judicata.

Detailed Analysis:

Issue 1: Whether the decree under execution was a money decree capable of execution.
The court concluded that the terms of settlement did not provide for a money decree that could be executed in the manner claimed by the respondent. The court emphasized that the terms of settlement were part of a compromise in an appeal arising from a suit where the certificate debtor sought to declare a certificate void. The terms provided conditional relief to the certificate debtor, contingent upon the fulfillment of payment conditions. The court held that the decree did not substitute the certificate debt with a money decree. Instead, the revenue authorities retained the right to proceed with the original certificate proceedings if the payment conditions were not met. The decree was not intended to be a money decree but rather a conditional settlement to avoid further liabilities under the certificate.

Issue 2: Whether the valuation of shares was conducted appropriately per the terms of settlement.
The court found no substance in the contention that the valuation was improper. The terms of settlement left the valuation to an independent valuer nominated by the Commissioner of Income-tax. The court noted that the terms did not require notice to the judgment-debtor or any party regarding the valuation process. The independent valuer, Shri G. Basu, had assessed the value, and there was no dispute about his nomination. The court also found that the judgment-debtor's lawyer had participated in the valuation proceedings, as evidenced by the correspondence and minutes of the proceedings. The court rejected the argument that the valuation should have been the market value, noting that the terms did not specify this and that the parties had left the method of valuation to the discretion of the valuer.

Issue 3: Whether the execution petition was maintainable.
The court upheld the second contention of the appellants, concluding that the execution petition was not maintainable as there was no executable decree. The court reasoned that the terms of settlement did not create a decree for money payable under the decree. Instead, the obligation to pay was to avoid further liabilities under the certificate. The court held that the revenue authorities could proceed with the original certificate proceedings if the payment conditions were not fulfilled, as the certificate proceedings remained alive and executable.

Issue 4: Whether the objection to the execution was barred by res judicata.
The court rejected the respondent's contention that the objection was barred by res judicata. The court noted that the earlier judgment of the learned subordinate judge had found the execution itself to be not maintainable, and the present appellants had succeeded in that litigation. Therefore, no adverse finding against the appellants could operate as res judicata. The court referenced relevant case law to support this conclusion.

Conclusion:
The appeal was allowed, and the judgment and order of the learned subordinate judge were set aside. The execution petition was dismissed as not maintainable, and each party was directed to pay their respective costs. The court's decision emphasized that the decree under execution was not a money decree and that the revenue authorities retained the right to proceed with the original certificate proceedings if the payment conditions were not met.