2003 (7) TMI 26 - HC - Income Tax

This application is made for the purpose of clarification / modification of the order passed by this court on May 21 2002. It appears from the said order that in view of the earlier order the branch manager Canara Bank Jharia Branch was appointed as receiver to keep the sums being Rs. 9, 00, 000 and Rs. 2, 19, 094.11 in safe custody and would not part and deliver the same. Held that the petitioner is entitled to interest along with the refund of the sum lying with the branch manager of the concerned bank as a receiver appointed by this court further petitioner is entitled to interest on the accrued sum at the rate which will be applicable for the nationalised bank for the relevant period

Summary

Issues: Clarification/modification of previous order, entitlement to interest on the sum held by the bank as receiver

The judgment pertains to an application seeking clarification/modification of a previous order appointing the branch manager of a bank as a receiver to safeguard certain sums during an income-tax proceeding. The court noted that the income-tax authority did not contest the refund of the sums with interest. Despite efforts to involve the bank, it did not object or appear before the court. Consequently, the petitioner was deemed entitled to interest on the accrued sum at the applicable nationalized bank rate. The concerned bank was directed to release the sum with interest to the petitioner. The court treated this aspect as a review of the application, subject to payment of court fees within a week. The application was disposed of without costs. A xeroxed certified copy of the judgment was to be supplied to the parties within seven days.

The judgment referenced the principle established in State of Orissa v. B.N. Agarwalla, emphasizing the right of a person legitimately entitled to money to be compensated for deprivation during a dispute period. The petitioner argued for interest on the sum held by the bank, invoking Section 34 of the Civil Procedure Code. The court, considering the bank's non-appearance and lack of objection, ruled in favor of the petitioner's entitlement to interest. The court's decision was based on the bank's failure to participate despite directives to do so, leading to the direction for the release of the sum with interest to the petitioner. The judgment highlighted the importance of the petitioner's entitlement to interest and treated the application as a review on that basis, subject to the payment of applicable court fees within a specified timeframe.