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TMI Blog2024 (8) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... be the transferor of the said property, the entire tax liability of the transaction would fall upon the said company, which has now become the property of the decree holder by virtue of the said consent decree, upon Section 50-C of the Income Tax Act, 1961. 2. During hearing of the execution proceeding the learned counsel of the judgement debtor no. 2 had undertaken before the court that his client would comply with all the requisite obligations under the consent decree and he has further undertaken that his client shall file an affidavit stating that the tax responsibility of the relevant transaction shall be upon the judgement-debtor no. 2. Subsequently, the judgement debtor no. 2 refused to submit such an undertaking, and without changing the learned counsel who undertook on behalf of the judgement-debtor, the case was started to be represented by another lawyer of the judgement-debtor no. 2 on the ground of illness of the previous learned counsel. 3. When the judgement-debtor no. 2 refused to submit the relevant affidavit as aforesaid, the decree-holder filed the IA No. GA 1 of 2024 praying for:- "(a) For direction upon the Judgment Debtors to give an undertaking that any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Vs. Union of India), (2018) 10 SCC 707 (Suzuki Parasrampuria Suitings Private Limited Vs. Official Liquidator of Mahendra Petrochemicals Limited (In Liquidation) & Ors.), (2010) 10 SCC 165 (Shyam Telelink Limited Now Sistema Shyam Teleservices Limited Vs. Union of India) and 2023 SCC Online SC 1395 (Pradeep Mehra Vs. Harijivan J. Jethwa (Since Deceased Thr. Lrs.) & Ors.). 6. The learned counsel of the decree-holder has also placed the judicial decision reported at (1973) 2 SCC 467 (Harnandrai Badridas Vs. Debidutt Bhagwati Prasad & Ors.) to buttress his law point that the Executing Court has been empowered to determine all questions between the parties in connection with the execution of relevant decree, and filing of separate suit has been discouraged. Therefore, this court is under an obligation to determine the present issue. 7. Provisions of Section 56-B (i) & 50-C of the Income Tax Act, 1961 have also been placed before this court for consideration. Attention of this court has also been drawn to Sections 46 (1) & 56 (1) of the Companies Act, 2013 which deal with signed transcripts and transfer and transmission of securities respectively. 8. The learned counsel, Mr. Partha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Nav Technology Private Limited having 85.5% of shares of which the plaintiff and other defendants are coparceners. The plaintiff and the defendant nos. 3, 4 and 5 do not wish to continue as member and co-parceners of Sushant Agrawal and has agreed to release and relinquish all their right, title and interest in favour of Sushant Agrawal (HUF) the defendant no. 1 herein. 3. Manju Agrawal, Niharika Agarwal and Anmol Agarwal being the defendant nos. 3, 4 and the plaintiff shall resign as the directors of Nav Technology Private Limited and Sushant Agarwal the defendant no. 2 will be reinstated as director in the said company Nav Technology Private Limited and the other directors in the said company shall be appointed/nominated by defendant no. 2. 4. All other properties/assets belonging either to Sushant Agarwal (HUF) the defendant no. 1 and Nav Technology Private Limited shall belong to the defendant no. 2, who shall be entitled to use and enjoy the same without any interference, claim and/or interest by the other parties in any manner whatsoever. 5. The parties hereto shall execute all such necessary documents that may be required for effectively transferring the sharehol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e all necessary documents that may be required for transfer of the benefit of aforesaid policies/fixed deposits, investments / financial instruments in favour of Sushant Agarwal. 15. That the defendant nos. 2 and 3 shall file the application for divorce by mutual consent before the appropriate court of law. 16. That the defendant nos. 2 and 3 shall execute and sign all such documents that may be necessary for obtaining the decree for divorce and shall make themselves present in the court of law as and when required. 17. That all the pending disputes as on this date between the parties are settled including C.P. No. 80 of 2013 pending before National Company Law Tribunal through this memorandum and none of the parties will initiate any new civil/criminal case in the matter any further. 18. That C.S. No. 201 of 2015 be decreed and disposed of in light of the aforesaid settlement." 15. From the above as well as the tabular statement of the execution case it appears that the instant execution case has been filed by the decree holder/defendant no. 2 for implementation of the terms of the consent decree in its entirety. However, during the pendency of this execution proceeding, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the outstanding obligations are to be carried out from the side of the judgment-debtor, and the same shall be done within a very short time. Learned Counsel for the decree-holder has disputed the above statement. However, learned Counsel for the judgment-debtor seeks for an accommodation for filing a detailed affidavit showing that the tax responsibility of the transaction relating to the property at Park Street will be of the judgment-debtor. List the matter on January 22, 2024." "BEFORE: The Hon'ble JUSTICE APURBA SINHA RAY Date : 22nd JANUARY, 2024. Ms. Pooja Saha with Mr. Mahiul Islam, Advs. For the Judgment Debtor Mr. Nirmalya Dasgupta with Mr. Jitendra Patnaik, Advs. for the Decree Holder THE COURT: Learned Counsel for the judgement debtor has sought for accommodation for filing an affidavit pursuant to the order dated 22nd December, 2023, as his senior Counsel is indisposed of. Learned Counsel for the decree holder is present and has raised no objection. Learned Counsel for the judgement debtor has further submitted that the affidavit will be submitted by 29th January, 2024. The decree holder will be at liberty to file affidavit-in-reply, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponsibility of the said transaction. The learned counsel has also pointed out that as by order dated 28th February 2024 this court directed the judgement debtors to submit an affidavit as per earlier orders and also to hand over shares and transfer deeds to the decree holder, such order is binding upon the respondents/ judgement debtors since no appeal has been preferred against such order of the court and further the judgement debtors can neither change their stand nor deny to file any affidavit undertaking the tax responsibility of the said transaction. In this regard, he has taken shelter of reported decisions as mentioned in Salil Dutta (Supra), Barkat Ali & Anr. (Supra), Indu Bhusan Jana (Supra), Suzuki Parasrampuria Suitings Private Limited (Supra), Shyam Telelink Limited Now Sistema Shyam Teleservices Limited (Supra) and Pradeep Mehra (Supra). The learned counsel wants to impress upon this court that the principle of res-judicata is also applicable in the subsequent stages of the same proceeding. As the order dated 28th February, 2024 was not challenged, it has become final, and, therefore, the respondents cannot take a diametrically opposite stand to such order since the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whatsoever and Smt. Manju Agarwal shall be entitled to use, enjoy and/or deal with the same as owner thereof and in the manner as she likes. The condition 7 of the consent decree stipulates that "All the defendants including the added defendant and the plaintiff shall execute all such documents that may be required including Deed of Partition and/or any other deed if required for transferring the said Park Street property in favour of Manju Agarwal." 20. Therefore, from the above conditions it is revealed that by virtue of the said consent decree the plaintiff, the defendant no. 2 i.e. the decree holder and defendant no. 4 had relinquished their right in connection with the property as mentioned hereinabove and they had given absolute right to Smt. Manju Agarwal to use, enjoy and deal with the said office premises admeasuring 1314 sq.ft as owner thereof without any hindrance and objection, and further she has been given authority to deal with the said property as owner thereof and in the manner as she likes. 21. The relevant deed of conveyance shows that the property was sold by the Nav Technology Pvt. Ltd. being represented by one of its directors, namely, Anmol Agarwal. There i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebtors cannot be appreciated. 23.1. But, the important question which arises at this stage is whether an executing court can direct the person other than the vendor of a registered deed to shoulder the tax responsibility in connection with a transaction where sale value of the property is lesser than the value of the adopted or assessed by the Authority for the purpose of payment of stamp duty in respect of such transfer. In this case, as per consent decree the Nav Technology Pvt. Ltd. along with other defendants are to execute transfer deed in respect of the office space as aforesaid in favour of Manju Agarwal. As the name of Nav Technology Pvt. Ltd. has been shown as the vendor and as the relevant provisions of the Income Tax Act direct the vendor to shoulder the tax responsibility, I cannot direct the then director or the vendee to shoulder the tax responsibility personally. As the law does not authorise an executing court to say anything palpably against the provisions of Income Tax Act, 1961 the executing court cannot pass such a direction. The undertaking given by the concerned lawyer shows that such undertaking was given against the provisions of law, and even if such under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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