SYED KHAJA Vs. RAGHAVENDRA RAO

JUDGEMENT

(1.) WHILE finding a suit for specific performance of an agreement of sale in his favour, the plaintiff deposited into court the balance of the consideration money agreed upon under the agreement, along with the amounts necessary for executing and registering a sale deed in his favour. Can this amount be considered as " belonging" to him within the meaning of Section 226(4) of the Income-tax Act, 1961 ? It is this question that arises for decision in this revision petition brought under Article 227 of the Constitution.

(2.) LET me at the outset note the material facts. The suit for specific performance is O.S. No. 13 of 1962, in the City Civil Court, Hyderabad. Respondent No. 2 in the revision petition executed the agreement of sale on October 9, 1962, in favour of the petitioner (plaintiff) agreeing to sell a house in Secunderabad for Rs. 60,000. A sum of Rs. 20,000 was paid on that day itself. However, the second respondent sold the property to respondents Nos. 3 to 8 on which the suit was filed by the petitioner. The trial court awarded only damages and declined to grant specific performance. C.C.C.A. No. 71 of 1964 filed by the plaintiff was allowed by this court and specific performance was decreed. The respondents' appeal to the Supreme Court was unsuccessful. As much as Rs. 48,394.77 was in deposit in the lower court. As the respondents failed to execute the sale deed, the court appointed a Commissioner to discharge that function and accordingly the Commissioner executed the sale deed in favour of the petitioner on December 27, 1973. It is not yet registered for the reason that the second respondent has not produced the income-tax clearance certificate as is required for all sales for amounts beyond Rs. 50,000. It appears, the petitioner is in arrears of income-tax. The Income-tax Officer, L-Ward, acting under Section 226 of the Income-tax Act, got the house sold to the petitioner, attached on January 1, 1974. He further filed E.A. No 35 of 1974, for paying out to him the sum of Rs. 48,394.77 in deposit in court to the credit of O.S. No. 13 of 1962.

(3.) CLAIMING that the amount in deposit belongs to the petitioner, its payment is sought under this provision of the law. This view appealed to the lower court.