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TMI Blog2010 (3) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent No. 5 offered certain fixed deposits of the petitioners which were with respondent No. 4, as security for furnishing bank guarantee. Respondent No. 4-bank on the basis of the aforesaid fixed deposits belonging to the petitioners executed a deed of guarantee on November 22, 2003, in favour of the Commissioner of Income-tax (Central), Kanpur, for an amount not exceeding Rs. 34 lakhs for a period of one year only expiring on November 21, 2004, in respect of liability of direct tax arising out of the relevant assessment proceedings concerning block assessment only. The period of the aforesaid guarantee was extended by one another year expiring on November 21, 2005. No extension or any fresh guarantee was given thereafter. Respondent No. 5 was subjected to block assessment under section 158BC of the Act, vide order dated May 30, 2005, and a tax liability of Rs. 8,82,236 was determined. The assessing authority accordingly, vide notice dated September 19, 2005, issued under section 226(3) of the Act directed the bank to pay the aforesaid amount of tax with interest, total amounting to Rs. 9,08,702 as part of the bank guarantee furnished by it. A sum of Rs. 10,08,476 by encashi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id amount at 15 per cent. per annum, with effect from November 22, 2005, and, secondly, for quashing of the letter/order of attachment dated November 18/21, 2005, of the Commissioner of Income-tax (Central), Kanpur, for attachment of the fixed deposit receipts/bank guarantee. 5. We have heard Sri Pankaj Naqvi, learned counsel for the petitioners, Sri Bharat Ji Agrawal, senior counsel assisted by Sri A. N. Mahajan, learned counsel appearing for the Income-tax Department, i.e., respondents Nos. 2 and 3 and Smt. Archana Singh, learned counsel for the bank, i.e., respondent No. 4. We have also perused the pleadings of the parties. 6. On the basis of the respective submissions of the parties, the following points arise for determination in the present writ petition : 1. Whether the fixed deposits of the petitioners which were furnished as security to the bank-respondent No. 4 for extending bank guarantee could have been encashed after the expiry of the period of the bank guarantee even though they were attached during the subsistence of the guarantee period ? 2. Whether the attachment dated November 18/21, 2005, of the bank guarantee/fixed deposits was va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person aggrieved having a legal right and suffering a wrong alone is entitle to invoke the writ jurisdiction. Normally, a person aggrieved is one against whom a decision has been pronounced wrongly depriving him of something or adversely affecting his right over something but it does not include any kind of disappointment or personal inconvenience. In the case at hand, the petitioners are the undescribed party in the contract of bank guarantee as the bank had executed the said guarantee for and on behalf of respondent No. 5 on the strength of the fixed deposits offered by the petitioners. Therefore, if their fixed deposits have been encashed or misappropriated in violation of terms and conditions of the contract of bank guarantee then certainly they have been wronged and their right to property, i.e., fixed deposits has been infringed to which they are entitled to redressal in law. Respondents Nos. 2 and 3 as well as respondent No. 4 in invoking the bank guarantee in effect have encashed the fixed deposits of the petitioners. Accordingly, we are of the opinion that even though the petitioners may not be ex facie party to the contract of bank guarantee they have a judicially enforc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. This brings us to section 281B of the Act which provides for the provisional attachment of the property belonging to the assessee for a period of six months from the date of such attachment unless extended but excluding the period of stay of the assessment proceedings, if any. The language of the above provision is plain and simple. It provides for the attachment of the property of the assessee only and of no one else. The golden rule of interpretation of statutes is that the statute has to be construed according to its plain, literal and grammatical meaning unless its leads to absurdity. The fixed deposits of the petitioners not being the property of the assessee as such were not open to attachment. 17. In view of the aforesaid discussion, in our opinion, the order dated November 18/21, 2005, is patently illegal. 18. Now, we come to the basic question about the validity of the encashment of the fixed deposits of the petitioners for which it is considered appropriate to examine the import of the term "attachment". 19. "Attachment" like the term "bank guarantee", has also not been defined in any statute, though it is widely used in the Code of Civil Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act by the Commissioner of Income-tax (Central), Kanpur. This order has been found to be illegal. Therefore, also it does not come to the help of the respondents. 22. Moreover, the order of attachment was passed on November 18/21, 2005. It was provisional in nature. Its life was only six months. Accordingly, it ceased to remain in force after expiry of six months from the aforesaid date and was not operative on November 1, 2006. There is nothing on record to show its extension. In view of the above also no payment could have been made on November 1, 2006. 23. It appears, the bank under pressure of the order of "attachment" with-out the consent of the petitioners released the amount of the fixed deposits in favour of respondents Nos. 2 and 3 even though the bank guarantee had ceased to be in force ; the attachment was illegal and does not have the effect of authorising payment ; and had lapsed on the expiry of six months from the date of attachment. Thus, the action of the bank in releasing the amount under the fixed deposits was patently illegal and in clear violation of the terms and conditions of the contract of the bank guarantee. 24. To sum up, the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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