Decided on July 22,2003

UNION OF INDIA Respondents

Referred Judgements :-



AMITAVA LALA, J. - (1.)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. This was done in view of a proceeding before the income-tax authority. On the earlier occasion when the matter was heard nobody appeared on behalf of the income-tax authority. However, the court had gone through the order of the Income-tax Appellate Tribunal and it was held as follows :
"Accordingly, the Commissioner of Income-tax (Appeals) held that the various bank accounts standing in the names of relatives of the late Nandlal Sultania could not be treated as benami case of the assessee on the basis of the statement of Shri Rajhayakyam Marodia. Accordingly, he deleted the entire addition in this respect."

(2.)Accordingly, the writ petition was treated to be intructuous and the same was dismissed. Interim order was vacated. The branch manager of the concerned bank was discharged from acting as receiver and was directed to hand over the sum lying in his custody in favour of the petitioner as per the calculation in paragraph 11 of the supplementary affidavit. The order was acted upon. The petitioner received the sum. By making this application the petitioner contended that in view of State of Orissa v. B.N. Agarwalla, a person deprived of use of money to which he is legitimately entitled has a right to be compensated for the depreviation, call it by any name. It may be called interest, compensation or damages. This basic consideration is valid for the period the dispute is pending before the arbitrator (as in that case the question of arbitration proceeding was involved) as it is for the period prior to the arbitrator entering upon the reference. This is the principle of Section 34 of the Civil Procedure Code and there is no reason or principle to hold otherwise in the case of arbitrator. Although it is not very pertinent to go into the controversy whether Section 34 of the Code of Civil Procedure will be applicable herein or whether any agreed rate of interest will be applicable herein. But the question germane for the purpose of due consideration is 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.
(3.)Learned counsel appearing for the income-tax authority has no say in respect of refund to such sum with interest. I only wanted to know the defence of the bank. Accordingly, I had directed to issue a notice upon the bank but at no point of time did the bank appear and make any objection.

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