The significance of joint ownership and the bank's obligation to remit to the Income Tax Department based on the terms of the deposit.

Headnote:
FDR - Joint FDR Ownership - Income Tax Act, Section 245 - Summary: The court discussed the joint ownership of the FDR and the bank's obligation to remit a portion of the proceeds to the Income Tax Department. It emphasized the significance of the application form and the appointment of nominees, ultimately dismissing the complainant's claim.
Fact of the Case:

The complainant and his family obtained a joint term deposit from the bank. The bank remitted a portion of the deposit to the Income Tax Department, leading to a complaint by the complainant.
Finding of the Court:

The State Commission's finding that the deposit was not joint was deemed faulty, and the court dismissed the complaint, stating that the bank had no option but to remit the proceeds to the Income Tax Department.
Issues: Ownership of the joint term deposit, obligation of the bank to remit to the Income Tax Department, and the complainant's claim of sole ownership.
Ratio Decidendi: The joint ownership was established based on the application form and the absence of appointed nominees. The bank was obligated to remit a portion of the deposit to the Income Tax Department.
Final Decision: The State Commission's order was set aside, and the complaint was dismissed. The amount deposited by the bank was to be refunded to the petitioner.

JUDGMENT

V.K. Jain, Presiding Member(Oral) - The complainant, late Sh. Mahavir Prasad Keshavdev Kedia, his son, Mr. Vimal Kumar M. Kedia and his daughter-in-law, Mrs. Renu Kedia took a term deposit of Rs. 2 lakhs from the petitioner Bank. A perusal of the application form, which is available on page nos. 45 and 46 of our paper book, would show that the requisite application in this regard was submitted and duly signed by all the three applicants, though photographs of only the complainant, late Sh. Mahavir Prasad Keshavdev Kedia was taken. The learned counsel for the petitioner Bank submits that since the son and daughter-in-law of the deceased complainant already had accounts with them, it was not necessary to take their photographs. Be that as it may, the fact remains that the FDR was obtained in the joint name and was duly signed by all the three applicants.

2. It appears that the FDR was lost by the complainant, his son and his daughter-in-law and consequently, they requested the Bank to issue a duplicate FDR. A letter dated 17.11.2004 was submitted by all of them jointly to the Bank, agreeing to indemnify the Bank in the event of its sustaining any loss, by issuing the duplicate FDR. The duplicate FDR was also issued by the Bank in the joint name of all the three persons i.e. the complainant, his son and daughter-in-law.

3. There were certain dues payable by the son and daughter-in-law of the complainant to the Income Tax Department. Consequently, vide notice dated 07.05.2004, the concerned Assistant Commissioner of the Income Tax Department required the petitioner Bank to attach and remit a sum of Rs. 1,65,805/- towards payment of the dues of Sh. Vimal Kumar M. Kedia and a sum of Rs. 1,12,250/- towards the dues payable by Smt. Renu Kedia.

4. Vide letter dated 13.05.2004, the petitioner Bank informed the Income Tax Department that the FDR, which they were holding were in the joint names of late Sh. Mahavir Prasad Keshavdev Kedia, his son, Mr. Vimal Kumar M. Kedia and his daughter-in-law, Mrs. Renu Kedia and sought instructions as to whether it had to remit only proportionate amount to the Income Tax Department. It was also informed to the Department that the original FDR was with the first account holder and normally, they require the original FDR to be surrendered before closing of the account. Vide letter dated 13.05.2004, the Assistant Commissioner of Income Tax Department informed that Bank that the notice issued by them was valid for joint accounts as well and in the absence of any specific information, the shares in such joint accounts may be presumed to be equal. The Bank was, therefore, requested to remit the amount in the name of Mr. Vimal Kumar M. Kedia and Mrs. Renu Kedia. Vide letter dated 14.05.2004, the Assistant Commissioner of Income Tax Department, referring to the clarification sought by the petitioner Bank informed it that the remission of money should be accompanied by a No Objection Letter from late Sh. Mahavir Prasad Keshavdev Kedia, stating that the entire amount may be adjusted through the tax dues of Mr. Vimal Kumar M. Kedia and Mrs. Renu Kedia. This clarification was given on the aspect as to whether the entire amount of the FDR proceeds was to be paid to the Income Tax Department or not. The petitioner Bank, complying with the aforesaid notice of the Income Department remitted rd of the FDR proceeds against the dues of Mr. Vimal Kumar M. Kedia and rd of the FDR proceeds against the dues of his wife, Mrs. Renu Kedia. The remaining rd amount was kept by opening a separate FDR in the name of late Sh. Mahavir Prasad Keshavdev Kedia. That FDR was later encashed by him.

5. Being aggrieved from the act of the Bank in remitting rd of the FDR proceeds in the Income Tax Department, late Sh. Mahavir Prasad Keshavdev Kedia approached the concerned District Forum by way of a complaint.

6. The complaint was resisted by the petitioner Bank, on the ground that they had merely complied with the instructions issue

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