ISLAMIC INVESTMENT COMPANY Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS chamber summons is taken out by the respondents, the Food Corporation of India against whom an Award was passed by the arbitrator on 21st January, 1996. The Award was made into a Rule of the Court and a decree was passed in terms thereof on 8th March, 2000. Under the decree a total amount payable towards principal was Rs. 7,99,067. 16. The total decretal amount along with interest on principal at the rate of 10% per annum from 7th February, 1989 to 8th March, 2000 including cost of Rs. 4,165. 50 was in the sum of Rs. 16,39,45. 66. The interest on the above principal sum of Rs. 7,99,067. 16 for the period from 7th February, 1989 to 8th March, 2000 at the rate of 10% p. a. was Rs. 8,86,198/ -. As per further interest on the above principal from 9th March, 2000 to 31st December, 2001 at the rate of 10% p. a. was in the sum of Rs. 1,45,145. 62. Thus the total interest at the rate of 10% p. a. on the above principal from 7th February 1989 to 31st December, 2001 came to Rs. 10, 31,344/ -.

(2.) THE Food Corporation of India has an account with the State Bank of India. The decree holder M/s. Islamic Investment Company sought a garnishee order against the State Bank of India which was granted on 12th September, 2001. On the granishee order being served on the State Bank of India, that bank informed the Food Corporation of India which accordingly paid the decretal amount as per decree along with interest amounting to Rs. 10,31,344/- to the Sheriff of Bombay. The aforesaid amount is not in dispute.

(3.) BY this chamber summons the Food Corporation of India claims that it is entitled to withdraw a sum of Rs. 2,06,269/- being 20% of the interest paid by it towards satisfaction of the decree, on account of TDS, which it is liable to pay under section 195 of the Income Tax Act. Whether it is in law entitled to do so is the question.