IN THE SUPREME COURT OF INDIA
C.A. No. 7346 of 1997
Decided On: 16.08.1999
Aliammal & Ors.
Hon’ble Judges/Coram:V.N. Khare and S.S.M. Quadri, JJ.
Citation:(1999) 7 SCC 382
(i) What is the effect of the prohibitory order dated March 6, 1979 and notice dated January 18, 1988 issued under Section 226(3) of the Income Tax Act by the Tax Recovery Officer?(ii) Whether non-payment of rent by the appellant to the landlord after service of the said order/notice of Tax Recovery Officer on him, amounts to wilful default within the meaning of the proviso to Section 10(2)(i) of the Act?(iii) Whether the High Court is correct in law in allowing CMP No. 13064 of 1996 filed by the respondents and in ordering the eviction of the appellant under Section 10(3)(c) of the Act?
10(2)(i). A landlord who seeks to evict his tenant shall apply to the Controller for a direction in that behalf. If the Controller, after giving the tenant a reasonable opportunity of showing cause against the application, is satisfied –(i) that the tenant has not paid or tendered the rent due by him in respect of the building within fifteen days after the expiry of the time fixed in the agreement of tenancy with his landlord or in the absence of any such agreement by the last day of the month next following that for which the rent is payable.Provided that in any case falling under Clause (i) if the Controller is satisfied that the tenant’s default to pay or tender rent was not wilful, he may, notwithstanding anything contained in Section 11, give the tenant a reasonable time, not exceeding fifteen days, to pay or tender the rent due by him to the landlord up to the date of such payment or tender and on such payment or tender, the application shall be rejected.Explanation. – For the purpose of this sub-section, default to pay or tender rent shall be construed as wilful, if the default by the tenant in the payment or tender of rent continues after the issue of two months’ notice by the landlord claiming the rent.
(A) from March 6, 1979 to February 24, 1988;(B) from February 25, 1988 to February 15, 1990; and(C) February 16, 1990 to February 28, 1991.
222(1)(a). Certificate to Tax Recovery Officer –(1) When an assessee is in default or is deemed to be in default in making a payment of tax, the Tax Recovery Officer may draw up under his signature a statement in the prescribed form specifying the amount of arrears due from the assessee (such statement being hereafter in this Chapter and in the Second Schedule referred to as “certificate”) and shall proceed to recover from such assessee the amount specified in the certificate by one or more of the modes mentioned below, in accordance with the rules laid down in the Second Schedule –(a) attachment and sale of the assessee’s movable property.
26(1)(a)(i). Debts and shares, etc. –(1) In the case of –(a) a debt not secured by a negotiable instrument,(b)* * *(c)* * *the attachment shall be made by a written order prohibiting –(i) in the case of the debt – the creditor from recovering the debt and the debtor from making payment thereof until the further order of the Tax Recovery Officer.
Prohibitory order, where the property consists of debts not secured by negotiable instruments.Office of the Tax Recovery Officer, Tirunelveli.ToSri T.M. Germans Femandes,Hire Cycle Shop,70, Main Road,Eravadi.Whereas Sri S.A. Sahaul Hameed, Eravadi has failed to pay arrears due from him in respect of certificate No. 47-026-Py.7428 dated 26.3.1978 forwarded by the Income-Tax Officer, Special at Madurai amounting to Rs. 81,877 and the interest payable under Section 220(2) of the Income-Tax Act, 1961 for the period commencing immediately after the said date:* * *It is ordered that T.M.Germans Fernandes, Hire Cycle Shop, Eravadi, be and is hereby prohibited and restrained until the further orders of the undersigned from receiving from you a certain debt alleged now to be due from you to T.M.Germans Femandes, Hire Cycle Shop, Eravadi.And that you the said T.M.Germans Fernandes, Hire Cycle Shop, Eravadi be and you are hereby prohibited and restrained, until the further orders of the undersigned, from making payment of the said debt or any part thereof, to any person whomsoever or otherwise than to the undersigned.
I received a letter from the Income Tax Officer that letter is Ex.B-2. As per Ex.B-2 till further orders I was stopped from paying the rent.
As per orders of the Government I did not pay the rent.
ToSri. T. Jermons, S/o. Sri Thommai Fernando,70, North Main Road,Eravadi-627103,Nanguneri Taluk.A sum of Rs. 3,91,067 is due from Sri. S.A. Shahul Hameed of 87, 7th Street, Eravadi on account of Income-Tax/ super-tax/ penalty/ interest/ fine. You are hereby required under Section 226(3) of the Income- tax Act, 1961, to pay to me forthwith any amount due from you to, or, held by you, for or on account of the said S.A. Shahul Hameed of Eravadi upto the amount of arrears shown above, and also request you to pay any money which may subsequently become due from you to him or which you may subsequently hold for on account of him upto the amount of arrears still remaining unpaid, forthwith on the money becoming due, or being held by you as aforesaid as such payment is required to meet the amount due by the tax payer in respect of arrears of income-tax/ super-tax/ penalty/ interest/ fine. I am to say that any payment made by you in compliance with this notice is in law deemed to have been made under the authority of the tax-payer and my receipt will constitute a good and sufficient discharge of your liability to the person to the extent of the amount referred to in the receipt,(Emphasis supplied)I am to observe that if you discharge any liability to the tax payer after the receipt of this notice, you will be personally liable to me as Income-Tax Officer I, Tirunelveli, to the extent of the liability discharged, or to the extent of the liability of the tax-payer for tax/ penalty/ interest/ fine referred to in the preceding para, whichever is less.Further, if you fail to make payment in pursuance of this notice to me as Income-Tax Officer, you shall be deemed to be an assessee in default in respect of the amount specified in the notice and further proceedings may be taken against you for the realisation of the amount as if it were an arrears of tax due from you in the manner provided in Sections 222 to 225 of the Income-Tax Act, 1961, and this notice shall have the same effect as an attachment of a debt by the Tax Recovery Officer in exercise of his powers under Section 222 of the said Act.The necessary challans for depositing the money to the credit of the Central Government may be obtained from me.A copy of this notice is being sent to Sri. S.A. Shahul Hameed, 87, 7th Street, Eravadi (tax payer),Sd/-Ist Income-Tax officer,Tirunelveli.
10(3)(c). A landlord who is occupying only a part of a building whether residential or non- residential may, notwithstanding anything contained in Clause (a), apply to the Controller for an order directing any tenant occupying the whole or any portion of the remaining part of the building to put the landlord in possession thereof, if he requires additional accommodation for residential purposes or for purposes of a business which he is carrying on, as the case may be.Provided that, in the case of an application under Clause (c), the Controller shall reject the application if he is satisfied that the hardship which may be caused to the tenant by granting it will outweigh the advantage to the landlord:Provided further that the Controller may give the tenant a reasonable time for putting the landlord in possession of the building and may extend such time so as not to exceed three months in the aggregate.
(1) The provisions of Clause (c) have overriding effect over Clause(a);(2) Clause (c) applies to a case where,(i) the landlord is occupying only a part of building;,(ii) the tenant is occupying the whole or any portion of the remaining part of the building;(iii) the landlord requires additional accommodation for residential or for non-residential purposes of a business which he is carrying on;(iv) the landlord is seeking an order from the Rent Controller directing that the landlord be put in possession of that portion or part of the building which is in possession of the tenant;(3) if the landlord makes out a case under Clause (c) the Controller has to evaluate the hardship that will be caused to the tenant if he is evicted from the portion in his occupation and the advantage that will be gained by the landlord; if he is satisfied that the hardship to the tenant will outweigh the advantage to the landlord, the Controller has to reject the application for eviction of tenant; and(4) in the event of the Controller ordering eviction he is empowered to give the tenant a reasonable time for putting the landlord in possession of that portion or part of the building of which eviction is ordered and to extend the same from time to time but not exceeding three months.