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TMI Blog2003 (9) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 as damages from defendants Nos. 1 to 6 and Nos. 10 and 11. The plaintiff on account of the death of his sister inherited the insurance amount of Rs. 1,04,000 in the year 1973. Out of the said amount, the plaintiff invested a sum of Rs. 48,000 in a fixed deposit for a period of five years in Canara Bank carrying interest at the rate of 10 per cent. per annum, deposited a sum of Rs. 58,000 in Tamil Nadu Transport Development Financial Corporation Ltd., for a period of four years carrying interest at the rate of 13 per cent. per annum and deposited Rs. 2,000 in Karnataka Bank in savings bank account. The fourth defendant-Income-tax Officer conducted the raid and found some sale deeds and other documents and issued prohibitory orders to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the date of maturity till actual payment. For loss of interest and the inconvenience caused, the plaintiff claimed damages of Rs. 50,000 from defendants Nos. 10 and 11 who are the Income-tax Officers and has held them personally responsible for the damage caused. The defendants have resisted the suit. As on the date of filing of the suit the tenth defendant was not alive. The said fact was not brought to the notice of the court. Against a dead person the proceedings were continued The trial court allowed the suit and directed defendants Nos. 1 to 6 and Nos. 10 and 11 to pay the suit claim of Rs. 50,000 and further allowed interest at the rate of 6 per cent. per annum from the date of maturity of the fixed deposit pertaining to Canara Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sort of grievance but the same cannot be vindicated legally. The Income-tax Officers evidently have acted within their jurisdictional powers to find out the source of the fixed deposits and to know whether it was an escaped income assessable to tax. The income-tax authorities do have jurisdiction under the Income-tax Act to enquire into the matter and they are also empowered to issue orders of attachment and prohibitory orders to keep the property intact subject to the result of the proceedings. It is not a case that the authorities acted without any exercisable jurisdiction. The further contention that there is inordinate delay in disposal of the proceedings is also not a tenable ground. Mere delay in disposal of the proceedings does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved have remained unrepresented. There is no authenticated material available on record to find out as to what was the contract rate of interest agreed to be payable on the fixed deposits. From the date of deposit till date of maturity the banks have paid interest. However, from the date of maturity till actual payment, on account of prohibitory order the amounts have been withheld and were in possession of the banks. Therefore, the banks are duty bound in law to pay interest on the fixed deposits at the contract rate subject to fluctuations in the rates as directed by the Reserve Bank from time to time. Therefore, I find that the Canara Bank, Tamil Nadu Transport Development Financial Corporation and the Karnataka Bank are bound to pay i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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