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TMI Blog2020 (10) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... , but so far as the deposit of the Holdback Amount into treasury towards the tax liability of the Respondent is concerned, it is certainly a matter as between the Respondent and its contracting counter party, namely, the Appellants. There is a clear obligation on the part of the Appellants to deposit the Holdback Amount into the treasury; Section 205 of the Income Tax Act has nothing to do with the same. As far as Section 9 of the Act is concerned, it cannot be said that this court, while considering a relief thereunder, is strictly bound by the provisions of Order 38 Rule 5. As held by our Courts, the scope of Section 9 of the Act is very broad; the court has a discretion to grant thereunder a wide range of interim measures of protectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sarrah Khambati i/b Wadia Ghandy Co. for the Respondent. ORDER : (Per S.C. Gupte, J.) 1. Heard learned Counsel for the parties. 2 These commercial appeals challenge an order passed by a learned Single Judge of this court under Section 9 of the Arbitration and Conciliation Act, 1996 ( Act ). By the impugned order, the learned Judge has granted interim relief to the Respondent herein (original petitioner) in terms of prayer clause (b)(i) of the Commercial Arbitration Petition, which requires the Appellants herein to deposit in court ₹ 59,51,08,633/- viz. An amount of ₹ 44,63,71,671 in the case of Jagdish Ahuja Anr. and an amount of ₹ 14,87,36,936/- in the case of Shree Ahuja Properties Realtors Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, though withheld by the Appellants, has not been deposited into the treasury. That was presumably on the footing that it was not payable to the revenue. If it was not payable to the revenue, it is the seller, who was entitled to receive this amount. It cannot be that the amount is neither deposited into the treasury towards the tax obligation of the seller nor paid directly to the seller towards the price of the FCDs. That is apparently the basis on which the impugned order of deposit of the Holdback Amount into the court was passed by the learned Single Judge. 4 It is difficult to find fault with this order. Mr. Naphade, learned Senior Counsel appearing for the Appellants, submits that, firstly, under Section 205 of the Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 205 of the Income Tax Act has nothing to do with the same. 6 As far as Section 9 of the Act is concerned, it cannot be said that this court, while considering a relief thereunder, is strictly bound by the provisions of Order 38 Rule 5. As held by our Courts, the scope of Section 9 of the Act is very broad; the court has a discretion to grant thereunder a wide range of interim measures of protection as may appear to the court to be just and convenient , though such discretion has to be exercised judiciously and not arbitrarily. The court is, no doubt, guided by the principles which civil courts ordinarily employ for considering interim relief, particularly, Order 39 Rules 1 and 2 and Order 38 Rule 5; the court, however, is not un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above, the amount is either to be deposited into the treasury in accordance with the agreement between the parties or if, for any reason, it is not payable to the revenue towards the Respondent s tax liability, as is the case of the Appellants here, it is to be paid to the Respondent itself as part of the price of debentures. In fact, when these two options were posed by the learned Single Judge to the Appellants counsel, in fairness both conceded that there was no third option. 7 In other words, neither Counsel could point out that the Appellants had any case for retaining the amount. If that is so, there is practically no defence on merits so far as this amount is concerned. Mr. Naphade submits that his client cannot be called upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ousing Finance Ltd. A total of 94.12 % of shareholding of this company, held by the Appellants and their family members as promoters, was pledged to lenders. A number of claims were being pursued against the company in different fora. The allegations of disposal of assets are made in this context. 9 Mr. Andhyarujina, learned Senior Counsel appearing for the Appellant in the companion petition, whilst adopting Mr. Naphade s submissions, makes an additional point. It is submitted that the Respondent has already had the benefit of tax insofar as the Holdback Amount is concerned and cannot pray for deposit of that amount in court. The submission is incomprehensible. Let us examine it in both scenarios, that is to say, the first where the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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