9911796707
TMI Blog1982 (4) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the petitioner. It would be necessary to set out the facts somewhat in greater detail. The case set out by the petitioner-company in the petition is that it is incorporated under the Indian Companies Act, 1913, having its head office at Aligarh. It runs an oil mill and its property consists of oil mill premises, machinery, equipments and shares, the total assets being of the value of over Rs. 15,00,000. In between 1957-58 and 1969-70, the petitioner-company claims to have suffered heavy losses as a result of which it could not pay certain income-tax dues. Accordingly, the TRO, Aligarh, respondent No. 2, attached the movable assets of the petitioner-company on 18th October, 1972, against a demand of Rs. 1,07,402 and subsequently attached its land and buildings including fixed assets together with business premises on 13th February, 1974, against another demand of Rs. 4,65,194. It is also alleged that prior to the aforesaid attachments, shares of the company worth Rs. 5,80,000 belonging to the directors of the company and their relations as well had been attached against income-tax arrears of the petitioner. Subsequently another demand was raised in the sum of Rs. 1, 17,540 by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner. The amount demanded by that notice was Rs. 71,520. The petitioner has disputed the validity of the payment of Rs. 48,000 by M/s. Malook Chand as also of the aforesaid notice. It has been further alleged that after the payments made by M/s. Malook Chand there is still a sum of Rs. 1,94,000 payable by the petitioner to the Department by way of income-tax dues and the petitioner has been all along requesting the Department to put the attached property to auction but the Department has not been taking any action in that behalf with the result that they have now approached this court by way of this writ petition for the relief mentioned above. The respondents originally were, the Commissioner of Income-tax, Agra, the TRO, Aligarh, and the ITO, A-Ward, Aligarh. Subsequent to the filing of this writ petition, it appears that respondent No. 2 by letter dated 4th April, 1978, cancelled his earlier order requiring Malook Chand to vacate the disputed premises. The petitioner, hence, by means of an amendment, added a further relief for a direction in the nature of certiorari for quashing the said order. On behalf of the respondents two counter-affidavits, were filed, one by Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in support of this assertion it filed a copy of its letter dated May 13, 1966, addressed to the I.T.O. Award, Aligarh, in which in paragraph 3, this fact was stated. After these affidavits had been filed, M/s. Malook Chand made an application for impleadment on October 5, 1979, along with affidavits. That application was opposed by the petitioner. After hearing the parties, the application was allowed and M/s. Malook Chand was impleaded as respondent No. 4. On behalf of respondent No. 4, the main counter-affidavit is the one filed on January 21, 1980, sworn by Ashok Kumar. The substance of the case set out in this affidavit is that the board of directors of the petitioner company by a resolution dated November 18, 1976, approved the transfer of the entire 7,000 shares and management of the company for a total consideration of Rs. 10,50,000 and also resolved that pending finalization of the transfer a lease be granted in favour of respondent No. 4. This resolution was approved by the shareholders in the extraordinary general meeting of the company held on December 16, 1976. Thereafter, on January 10, 1977, a lease agreement was duly executed and registered and there was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .58 and a chart containing the details of the same was subsequently filed with a supplementary counter affidavit during the course of the hearing of the case. It has been further contended that respondent No. 4 was entitled to the extension of the lease for a further period of two years after the expiry of the period of 8 months and consequently paid lease money to the TRO who by his order dated 15th of November, 1977, approved such extension. According to respondent No. 4, the petitioner was not entitled to have the extension cancelled in any circumstance whatsoever and the respondent No. 4 gave a reply to the petitioner's notice in this behalf. It has been, averred that there was a subsisting lease between the parties and further that the TRO had no jurisdiction to review his earlier order and revoke the extension of the lease. In doing so, the TRO overlooked cl. 7 of the lease agreement, which has been reproduced above. After the TRO revoked the approval by his order dated April 4, 1978, the respondent No. 4 made a representation to the Commissioner and the IAC, Agra, and it was thereafter that the direction to vacate the premises issued to respondent No. 4 was withdrawn. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be seen that there is no outstanding liability against the petitioner-company. It has been alleged that respondent No. 4 moved an application under r. 12 of Schedule If to the Act on January 26, 1979, for release of the property so that respondent No. 4 may be able to enforce the aforesaid two agreements but that had not been done. It is claimed that the resolutions passed by the board of directors of the company on 16th November, 1976, and by the general body of the company at its extraordinary general meeting held on 16th December, 1976, are valid and the lease deed and the agreement to sell the shares executed on 10th January, 1977, in pursuance thereof are valid and enforceable in law. It has further been averred that the petitioner suppressed material facts from the court in its writ petition and hence disentitled itself from the grant of any equitable or discretionary relief under art. 226 of the Constitution. Rejoinder affidavits have been filed to this counter-affidavit by the petitioner and also on behalf of respondents Nos. 2 and 3. On behalf of the petitioner it was submitted before us by his learned senior counsel, Shri Shanti Bhushan, that the payments mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable by the person whose property is attached. On behalf of respondent No. 4, his learned counsel, Sri L.M. Singhvi, made the following submissions before us that the petition has become infructuous inasmuch as no demand of the I.T. Dept. is left, for the recovery of which the Revenue can be directed to sell the property; that the petitioner his no legal right to have the attached property put to auction and the court would not grant a futile writ; that there has been palpable suppression of facts on the part of the petitioner ; the facts suppressed are the agreement to sell executed on January 10, 1977, the lease deed and the resolution of the board of directors and its approval at the extraordinary general meeting were not mentioned in the writ petition nor filed along with it. The person sought to be evicted was not impleaded as party. According to counsel the court will not assist the petitioner to circumvent his legal obligation or wriggle out of the contracts made. The next submission made was that no writ petition is maintainable for settling private disputes and eviction can be sought in appropriate forum. Highly disputed questions of facts are involved and alternative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that order was recalled by an order dated April 4, 1978, and respondent No. 4 was required to vacate the premises by April 15, 1978. However, the later part of that order was withdrawn by order dated April 11, 1978. We are also not inclined to enter into the question as to whether payments made by respondent No. 4 after August 31, 1977, can be accepted towards the liabilities against the petitioner even though those payments had been made without the petitioner's consent. We have thus to see as to whether after adjusting these payments there is any amount left due from the petitioner and whether the petitioner can ask the Department to put the attached property to auction and realise the dues outstanding. As noted above, according to the case set up by respondent No. 4, it made a payment of Rs. 3,75,000 to the petitioner out of which the latter paid Rs. 1,44,000 to the Revenue. Further, respondent No. 4 directly paid to the Revenue on behalf of the petitioner a total sum of Rs. 1,13,520 in all. Apart from these payments it is claimed that refunds have become due to the petitioner as a result of the decisions in the appeals. The ITO has revised the assessments for 1972-73 to 1977 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of a receiver for the management of the assessee's movable and immovable properties. Then we come to Sch. II which lays down the procedure for recovery of tax. Under r. 2, on receipt of certificate from the ITO for the recovery of arrears due from an assessee-defaulter, the TRO has to first serve notice upon the defaulter requiring the defaulter to pay the amount specified in the certificate within fifteen days from the date of the service of the notice. In the event of the amount mentioned in the notice not being paid, he is to proceed under r. 4 to realise the amount by one or more of the four modes which have been mentioned above. Rule 8 provides for disposal of proceeds of execution. It says that whenever assets are realised, by sale or otherwise in execution of a certificate, they shall be disposed of in the following manner : (a) there shall first be paid to the ITO the costs incurred by him; (b) there shall in the next place be paid to the ITO the amount due under the certificate in execution of which the assets were realised (c) if there remains a balance after these sums have been paid, there shall be paid to the ITO therefrom any other amount recoverable un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovable properties have been under attachment since October 18, 1972, and the immovable properties since February 13, 1974. Shares of considerable value have also been given in security. Certainly no direction can be, given to the TRO by the court in regard to the manner in which he is to proceed to realise the dues from the sale of these properties, but certainly it cannot be accepted that once the properties are attached, the attachment is to continue for as long as the TRO desires. The petitioner has been again and again inviting the attention of the TRO to put the properties to auction and realise the dues, but that is not being done. No valid and sound reason has been given by the TRO for not accepting this request. Certainly the action of the TRO can be said to be arbitrary in this behalf and the court can give a direction to him under art. 226 of the Constitution. We have also shown above that under r. 8, from the assets realised by sale, it is not only the amount specified in the certificate in execution of which the assets were realised, which is required to be paid to the ITO. At first the costs incurred in attachment and sale of the property are to be paid. After that, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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