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TMI Blog1969 (3) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... t and decree of the High Court of Calcutta refusing to enter satisfaction of two decrees under Order 21, rule 2, of the Code of Civil Procedure, obtained by the respondents against the Union of India in the following circumstances. The respondents, M/s. Soorajmull Nagarmull, imported spindle on from Philadelphia. The firm was required to pay customs duty under item 27(3) of the First Schedule to the Tariff Act, 1934, at 27 per cent. ad valorem. The firm filed two suits asking for refund of excess duty claiming that the on was dutiable only under item 27(8) at 2 as. 6 ps. per imperial gallon. The suits were filed against the Collector of Customs, the Assistant Collector of Customs for Appraisement and the Union of India. The suits were su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms. Further the sums were held by the Collector of Customs on behalf of the Union of India and not on behalf of the firm. The High Court found the notice to be defective inasmuch as it asked for payment towards income-tax and towards penalty, while the receipts, which were granted to the firm, stated that the amount was for super-tax. On these three grounds, the High Court held that the learned single judge was right in dismissing the application of the Collector of Customs for the adjustment of the decrees. Order 21, rule 2, of the Code of Civil Procedure, takes note of payments out of court to decree-holders and provides that where any money payable under a decree of any kind is paid out of court, or the decree is otherwise adjuste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and held it from the firm. It is next contended that the notice is defective inasmuch as it shows that the money was lying with the Collector of Customs whereas it was, in fact, lying with the Union of India and that it was not money held by the Collector Of Customs on behalf of the firm. Section 46(5A) of the Income-tax Act reads as follows : " 46. Mode and time of recovery ........... (5A) The Income-tax Officer may at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the assessee at his last address known to the Income-tax Officer) require any person from whom money is due or may become due to the assessee or any person who holds or may subsequently hold money for or on account of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than a kind of a garnishee order issued to the person holding money which money is due to an assessee. The Collector of Customs had recovered this money and under the decrees of the court the Union of India was liable to refund it to the firm. A granishee order is issued to a debtor not to pay to his own creditor but to some third party who has obtained a final judgment against the creditor. By a parity of reasoning this amount, which was with the Collector of Customs, could be asked to be deposited with the income-tax authorities under section 46(5A). The argument is extremely technical for that the firm is entitled to get a double benefit of the decree, first by having the decretal amount paid to the benefit of the firm and then to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ust, therefore, be subject to the same rule. The rulings themselves do not control the present matter. In Bidhoo Beebee v. Keshub Chunder Baboo the payment was not under a garnishee order but under the process of the court issued in execution by arrest of the judgment-debtor. Contrasting what had happened in the case with the words of the second rule of Order 21 (then section 206 of the Code of 1859) the learned judges observed that section 206 covers cases of voluntary payment. The debtor was protected by treating the payment as being made through the court. The exact point we are dealing with was not before the court. In Mahiganj Loan Office Ltd. v. Behari Lal Chaki there was a scheme framed by the depositors of a banking company for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt. In the case cited the court knew of the payment and could give protection in other ways. In A. P. Bagchi v. Mrs. F. Morgan the payment was again without the consent of the judgment-debtor either in fact or in law. Too much emphasis appears to have been placed upon mutual understanding and too little on payment out of court which is the essence of the rule. The case turned on whether there was any understanding between the parties that sums spent by the judgment-debtor on repairs would be set off against the decretal amount and therefore Order 21, rule 2, of the Code of Civil Procedure, was held inapplicable. In none of the cases the point of a garnishee order was considered. In our opinion, a case of a garnishee payment or one made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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