Research › Browse › Judgment

Calcutta High Court · body

1998 DIGILAW 81 (CAL)

UNITED BANK OF INDIA v. BIMALENDU SENGUPTA

1998-02-23

BIJITENDRA MOHAN MITRA

body1998
BIJITENDRA MOHAN MITRA, J. ( 1 ) THE instant petition under Article 227 of the Constitution of India is directed against an order dated September 6, 1996, passed by the Bench in S. C. Case No. 183/a/96 passed by the State Consumer Disputes Redressal Commission reversing the order dated March 27, 1996, passed in C. D. F. Case No. 1046 of 1995, dated March 27, 1996. The opposite party in the present revision in his capacity as complainant has initiated the said proceeding before the forum alleging deficiency in service against the respondents/opposite parties in the matter of payment of matured value of certain fixed deposits lying with the concerned bank. The complainant's case is that he received Rs. 90,000 as sale proceeds by selling his only residential house and the land appertaining to it at Barrackpore. According to the version of the complainant the transaction involved capital gains under the Income-tax Act, 1961. The entire amount was invested in accordance with the provisions of Section 54e of the Income-tax Act, 1961, in two fixed deposits for a period of three years each. The said deposits were of Rs. 50,000 and Rs. 70,000 respectively deposited on December 22, 1990, and January 11, 1991. Both the deposits were held with the bank for the full term of three years and there was accrual of interest thereon at the rate of 11 per cent per annum with quarterly rests through the Savings Bank Account No. 3407. The deposit of Rs. 20,000 matured on December 21, 1993, and the deposit of Rs. 70,000 matured on January 11, 1994, and in respect of both the deposits the deposit received was duly discharged and presented at the bank with written instructions to credit the same to the bank account of the said complainant. ( 2 ) THAT some time on January 30, 1994, when the appellant visited the bank a letter dated December 30, 1993, was handed over to him by the manager of the concerned bank in which he was asked to submit clearance from his Income-tax Officer in Form "g". A similar letter was also sent on January 7, 1994, seeking clearance of the Income-tax Department. The complainant contended that it was not necessary when the deposit was for three years and asked for the circular on the basis of which such clearance was insisted on. A similar letter was also sent on January 7, 1994, seeking clearance of the Income-tax Department. The complainant contended that it was not necessary when the deposit was for three years and asked for the circular on the basis of which such clearance was insisted on. The same was followed by issuance of letter taking the stand that the amount of Rs. 90,000 held in fixed deposit with the bank was otherwise exempted from capital gains tax under Section 53 of the Income tax Act, 1961. This was followed by several correspondences but the bank persisted in its contention that the deposited amounts could not be realised without tax clearance certificate and withdraw the amounts without payment of any interest accrued thereon. The complainant filed a complaint before the Calcutta District Forum for return of the said amount with penal interest and compensation. ( 3 ) INITIALLY the case was taken up for hearing on contest before the Calcutta District Forum and it was contended that they were guided by the guidelines of the Ministry of Finance, Government of India that the bank could not make payment against fixed deposit after maturity until submission of Form "g" along with the approval of the Assessing Officer. It was also agitated that the exemption limit under Section 53 of the Income-tax Act against capital gain by sale of landed property was withdrawn with effect from April 1, 1993. The Calcutta District Forum after hearing both the parties held that the matter involved important questions of law relating to the Income-tax Act and the Consumer Forum was not competent to interpret the provisions of the said Act. In that view of the matter the complainant's case was dismissed as not maintainable. ( 4 ) BEING aggrieved by the same the complainant preferred an appeal before the Appellate Authority being the State Consumer Disputes Redres-sal Commission, West Bengal and two points arose for determination in the connected appeal, namely, as to whether the proceeding was maintainable and what claim should be allowed. The Appellate Authority disagreed with the view formed by the District Forum that the same is not maintainable as the complainant has been held in the category of a consumer and the dispute raised by him evidently appears to be a consumer dispute. The Appellate Authority disagreed with the view formed by the District Forum that the same is not maintainable as the complainant has been held in the category of a consumer and the dispute raised by him evidently appears to be a consumer dispute. It has also been pointed out in the appellate order that the District Forum could not abdicate its responsibility in declining to ascertain the proposition interlinked with the grievance of a consumer which comes palpably within the dimension of the definition of consumer dispute under the connected Act. Accordingly, the Appellate Authority could not agree with the same. This court is in agreement with the opinion of the Appellate Authority and it is also of the view that such ruse cannot be put forward by the District Forum to shirk its responsibility and the Appellate Authority has rightly held that the proceeding is maintainable. ( 5 ) THE Appellate Authority in the impugned order under challenge has adverted to the detailed delineation of the facts involved in the controversy. The complainant sold a residential house in the financial year 1990-91 for Rs. 90,000 and he deposited the sale proceeds in two separate accounts of Rs. 20,000 and Rs. 70,000, respectively on February 20, 1990, and January 11, 1991. Both the deposits were termed deposits for a period of three years. The controversies stem as such deposits were made in capital gains accounts. The contention of the petitioner-bank is that the amounts were deposited under the previous Capital Gains Account Scheme, 1988, which was introduced by the Central Government by Notification No. G. S. R. 724 (E), dated June 22, 1988 (1988) 172 ITR (St.) 54. The scheme applies to all assessees according to the contention of the representatives of the bank who are eligible for exemption under Sections 54, 54b, 54d, 54f and 54g of the Income-tax Act. The scheme does not cover any deposit under Section 54e of the said Act. The moot point is as to whether the deposits were made under Section 54e of the Income-tax Act or under Capital Gains Accounts Scheme, 1988. The Appellate Authority in the impugned order has reproduced and quoted the provisions of Section 53. The scheme does not cover any deposit under Section 54e of the said Act. The moot point is as to whether the deposits were made under Section 54e of the Income-tax Act or under Capital Gains Accounts Scheme, 1988. The Appellate Authority in the impugned order has reproduced and quoted the provisions of Section 53. It is significant to mention that in order to apply and/or to invoke Section 53 where full value of consideration received or accured as a result of the transfer of such capital asset does not exceed Rs. 2,000 the whole of the capital gains shall not be charged under Section 45. It has been found in the appellate order that as transfer of the residential house took place in the financial year of 1990-91, and under the law then in force, no capital gains was chargeable under the Income-tax Act by transfer of the house by the complainant. Section 53 stood repealed by the Finance Act, 1992, with effect from April 1, 1993. In view of the repeal of Section 53 as aforesaid before the maturity of disputed deposits the effect of Section 53 was not available. It is also to be taken note of from the entirety of Section 53 that in a case where the value of consideration received as a result of the transfer of long term capital asset does not exceed 2 lakh rupees, the whole of the capital gains shall be exempted from income-tax under Section 45 of the Income-tax Act. The same is the sine qua non of the premise in the impugned order on the basis of which it was sought to be opined that the bank was proceeding on the basis of profound misconception. It is also significant to mention that as the deposits made in the instant case were term deposits, the depositor was required to open a deposit account in terms of Rule 4 of the Scheme. Rule 9 of the Scheme deals with the procedure for withdrawal from the account. As such, there is no system written in the term deposit. So, filing of Form "g" cannot be insisted upon. It is also necessary to make a passing reference to Clause 6 of Explanation 1 appended to Sub-section (1) of Section 54e of the Act and there is no special procedure forecast under the same. As such, there is no system written in the term deposit. So, filing of Form "g" cannot be insisted upon. It is also necessary to make a passing reference to Clause 6 of Explanation 1 appended to Sub-section (1) of Section 54e of the Act and there is no special procedure forecast under the same. As such it cannot but be treated as a pre-deposit and will be guided by the general rules of deposit in the bank. In the light of the same, the arguments advanced by Mr. Bose are by way of digression when he had gone through a painstaking process to refer to the other provisions of the Act as well as the Scheme. This court repeats that if long-term capital asset is within the ceiling limit which is below Rs. 2 lakhs at the relevant point of time and in view of repeal of Section 53 by the Finance Act, 1992, with effect from April 1, 1993, there is no force in the argument of Mr. Bose and his arguments on other provisions of the Act pale into insignificance. On the consideration of the aforesaid twin postulates as mentioned hereinbefore, this court cannot but sustain the impugned order of the Appellate Authority confirming setting aside the order of the Calcutta District Forum passed on March 27, 1996, in C. D. F. Case No. 1046 of 1995. Accordingly, the revisional application fails and it stands dismissed. There is no scope for interference with the impugned order of reversal passed by the Appellate Authority. This court, accordingly, upholds the said appellate order and dismisses the revisional application on contest.