TMI Blog2019 (2) TMI 1280X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to the discussions under the individual heads of the documents relied upon by counsel for the plaintiff for a judgment on admissions, it cannot be said that either the TDS certificates or the e-mail dated 19th February, 2016 or even the working notes constitute admissions which are clear, unambiguous and free from giving any scope to the defendant to explain or account for the same. It cannot be said that the documents relied upon by counsel clearly and unequivocally demonstrate that the defendant had admitted (by such documents) that it was ready to agree on a commission of 5% for the entire transaction or had agreed to alter the 12.50% commission in clauses (f) and (g) of the MOU dated 26th March, 2013, in respect of the entire transaction between the plaintiff and the defendant. [At this point in time, this court cannot place any weightage on the significance of a possible counter claim to be filed by the defendant or of the alleged breaches on the part of the plaintiff.] As pointed out that since the e-mail dated 19th February, 2016 and the working notes show that the defendant had indeed agreed on 95% of the bill amount from the plaintiff and had therefore admitted to 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the party of the Second part, immediately after receiving the payment from North Eastern Coalfields Limited, after deduction of TDS as per Income Tax Act, 1961 and the Mutually agreed amount as per point no. (f) i.e. 12.50% of value of work done. The petitioner/plaintiff is admittedly not privy to the contract between the defendant and NEC. The defendant has made substantial payments to the plaintiff till date amounting to approximately ₹ 79 crores. The decree claimed in the plaint relates to the balance amount allegedly due and owing to the plaintiff. 2. The dispute in the instant application under Order XII Rule 6 of The Code of Civil Procedure, 1908, is the rate agreed to be kept by the defendant before making the payments to the plaintiff of the amount received by the defendant from NEC. The defendant relies on the rate agreed by the parties in the MoU while the petitioner relies on the rate of 5% which the petitioner claims has been continuously followed in the transactions subsequent the MoU. The petitioner has prayed for final judgment and decree for a sum of ₹ 13,64,26,682/- to be passed against the defendant on the basis of a rate of 5% margin to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o exist from Sales Tax Declaration Forms relating to the transactions in question between the concerned parties. Counsel further relies on two Division Bench decisions of this court; Arvind Metals Vs. Sonu Soni Finvest Company Pvt. Ltd and Dolly Mazumder Ors. Vs. Zee Telefilms Limited on the point of TDS certificates being evidence of admission of liability. 5. Mr. Jishnu Chowdhury, learned counsel appearing for the defendant opposes this application on the ground that the alleged admission had been made by the defendant in the context of the huge amounts outstanding from the plaintiff and can be explained from the exchange of mails between the parties. Counsel stresses that the defendant is contemplating filing a counter-claim against the plaintiff for breach of the terms of the MOU. Counsel denies that either the TDS Certificates or the email of 19th February 2016 can constitute admission on which the plaintiff can be entitled to a judgment. 6. I have heard the submission of learned counsel appearing for the parties. The decisions relied upon by Mr. Chowdhury for the defendant, particularly those where it has been held that there can be no judgment upon admission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon by the plaintiff which the plaintiff considers sufficient for a judgment on admission have to be seen in the context of the interpretation given to Order XII Rule 6 of the CPC by the courts. i) The TDS certificates: Under Section 194C of The Income Tax Act, 1961, a person responsible for making any payment to a contractor for work done pursuant to a contract between the person and the contractor, will have to deduct an amount equal to the percentages specified under the section at the time of credit of such sum to the account of the contractor or at the time of payment of the amount due to the contractor by the person concerned. The TDS certificates disclosed in the petition show the name of the plaintiff as the Assessee and the name of the defendant as the Deductor together with the TDS deposited by the defendant for the years 2012-2013 to 2015-2016. Learned senior counsel for the plaintiff has urged this court to hold that the TDS certificates prove that the defendant has deducted tax at source against the bills of the plaintiff at the rate of 2% per annum under Section 194C and that the gross bill amounts would add up to a total of ₹ 2,34,17,960/- while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear is only issued to the contractor (assessee) after the TDS has been deposited by the deductor (the person who has engaged the contractor). The percentage of the tax deducted will arise only after the person receives the bill from the contractor and the liability under the bill accrues, which is in consonance with the mercantile method of accounting where the liability has to be accounted for as soon as the bill is received from a contractor. Therefore, a TDS is evidence that a person is liable for the amounts raised by a contractor for work done and that a jural relationship exists between the parties. One can even go to the extent of saying that based on the act of a person depositing tax at source, the existence of a debt is admitted to the contractor concerned. But the quantum of debt to a contractor can only be ascertained from a conjoint reading of the balance sheets of the respective parties. One would presume that the specified amount outstanding would be reflected as a liability in the balance sheet of the debtor (in this case the defendant) while the same amount would be reflected under the heading sundry debtors or amount receivable . The amount reflected in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation at that time you well known the condition of your site. You was help less to supply diesel, spare parts and even tyres to Tirap site as per their requirement. We have no sufficient funds to pay your outstanding also. So if you want to clear your market immediately through us then ask your management to release our standing otherwise we will pay the party payment according to condition of project performance. (The gaps in grammar are those of the parties.) From the above exchange, it appears that the defendant had deducted commission at 5% for the RA bills raised after September 2015. The plaintiff s mail lists out six RA bills from 34 to 39 where 5% commission has been deducted by the defendant. It is the plaintiff s case that the admission contained in the defendant s reply mail of 6% (and not 5%) confirms the agreed modification from the 12.50% mentioned in Clause (f) of the MOU of 26th March 2013. One finds however that the email reflects only six RA bills from 34 to 39. Further, the defendant s reply shows that a further calculation at the rate of 6% was to be sent to the plaintiff (which is not part of the papers). The most significant point however is the last ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eping in mind that a judgment on admission is a judgment without trial which permanently denies any remedy to the defendant, by way of an appeal on merits. Therefore unless the admission is clear, unambiguous and unconditional, the discretion of the court should not be exercised to deny the valuable right of a defendant to contest the claim. In short the discretion should be used only when there is a clear admission which can be acted upon. Seen in the above light, a court would hesitate to pronounce judgment in a case where there is even a slightest doubt as to whether a defendant has been able to come up with an explanation as to the alleged admission, however specious the explanation might be. The decision of the Hon ble Supreme Court in IDBI Trusteeship Services Limited Vs. Hubtown Limited reported in (2017) 1 SCC 568 , which now governs the field of grant of interlocutory decree, lays down the parameters of exercise of judicial discretion in relation to a defence before pronouncing judgement. In paragraph 17 of the said decision (passed in proceedings under Order XXXVII of the CPC), it has been held that even if a defence is improbable, doubtful or below the mark of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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