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2025 Supreme(Online)(DEL) 933
HIGH COURT OF DELHI
Manoj Jain, J
G S C INDUSTRIES – Appellant
Versus
NORTH DELHI MUNICIPAL CORPORATION – Respondent
W.P.(C)-5211/2019
Mr. Ashim, Ms. Sunieta Ojha, Ms. Vasudha, Ms. Priyanka, Ms. Divita, Mr. Dinesh Chandra Tripathi
The court affirmed that a petitioner should not be penalized for a cheque's dishonor due to bank error when attempting to comply with an Amnesty Scheme.
Headnote:(A) Delhi Municipal Corporation Act, 1957 - Section 156(1) - Property Tax - Grievance regarding warrant of distress issued for unpaid property tax amounting to Rs. 6,51,256/- after the petitioner attempted to avail the Amnesty Scheme but faced cheque dishonor due to technical issues - Petitioner deposited the amount under protest after the warrant was issued. (Paras 3, 10, 11, 21)
(B) Amnesty Scheme - The court highlighted that the petitioner made timely efforts to comply with the Amnesty Scheme by submitting a cheque, which was returned unpaid due to bank error, thus denying the benefit of the scheme was unjust. (Paras 12, 21)
Facts of the case:
The petitioner, owner of Property No. 20, issued a cheque to avail the Amnesty Scheme, which returned unpaid due to a technical issue, leading to a demand for further payment by MCD.
Findings of Court:
The court finds that the petitioner acted in good faith and should not be penalized for the cheque's dishonor due to bank error; the amount paid should be adjusted towards future Property Tax.
Issues: The main issue was whether the petitioner was unjustly denied the benefit of the Amnesty Scheme due to the cheque's dishonor.
Ratio Decidendi: The court ruled that the petitioner had taken all necessary steps to comply with the Amnesty Scheme, and the dishonor was due to a technical fault on the bank's part, thus warranting adjustment of the payment towards future tax.
Result: Petition allowed, amount adjusted towards future Property Tax.
JUDGMENT :
1. The issue raised in the present petition is very short and precise.
2. The grievance raised in the present petition is with respect to a letter dated 28.09.2018 issued by MCD.
3. The above letter, described as warrant of distress, has been issued under Section 156 (1) of Delhi Municipal Corporation Act , 1957 and a demand of Rs. 6,51,256/- has been raised towards Property Tax for the period ending 31.03.2018. It is, also, brought to the notice of the Court by the petitioner that, without prejudice to its rights and contentions, the above said amount was deposited by the petitioner, albeit, under protest vide communication dated 20.12.2018 sent to MCD.
4. Let me give a very brief factual matrix of the case.
5. The MCD had come up with a Property Tax Amnesty Scheme (2016-2017) and the relief provided under the Scheme, inter alia, as under:-
“Waiver of 100% Penalty and interest, if up to date payment is made by 28.02.2017.
Waiver of 100% Penalty of 50% Interest, if up to date payment is made by 31.03.2017.”
6. Petitioner company, being owner of Property No. 20 (Palace Cinema), Roshanara Road, wanted to avail the above said Amnesty Scheme and issued a cheque for a sum of Rs. 9,89,152/-. Such cheque was duly received by MCD and they, even, issued an acknowledgement, in this regard, on 20.02.2017.
7. Thus, the payment had been made by the petitioner by issuing a cheque drawn on one of its account which it maintained with Oriental Bank of Commerce (now merged with Punjab National Bank) and such cheque No.093259 was bearing date as 16.02.2017.
8. The above said cheque was sent for realization but it returned unpaid for reason “refer to drawer”.
9. As per the communication issued by Oriental Bank of Commerce on 05.04.2017 (Annexure A-7), the abovesaid cheque was returned back on 23.03.2017 due to some technical problem on their part. Mr. Tripathi, who represents the abovesaid Bank, however, submits that the cheque was, actually, returned on 23.02.2017 instead of on 23.03.2017.
10. It also needs to be highlighted right here that the petitioner, admittedly, deposited the above said amount of Rs. 9,89,152/- with MCD on 02.08.2017 and due acknowledgement, in this regard, was also issued vide Receipt No. 89724 by MCD. Thus, admittedly, the amount under said cheque has already been duly deposited with the MCD, albeit, on 02.08.2017.
11. Since the above said cheque returned unpaid, the MCD declined the benefit of Amnesty Scheme to the petitioner and it was in the abovesaid background that MCD issued the abovesaid warrant of distress dated 28.09.2018, thereby asking the petitioner to deposit further sum of Rs. 6,51,256/- which is towards interest and penalty. Naturally, since MCD did not receive the payment by 28.02.2017, it levied interest and penalty.
12. The grievance of the petitioner is merely to the effect that in order to avail the abovesaid Amnesty Scheme, he had, well-in-advance, submitted a cheque with MCD and MCD had even sent the above said cheque for encashment to the Bank and due to some technical reasons, the cheque could not be honoured and was returned and, therefore, in such a situation, the benefit of Amnesty Scheme, could not have been denied to him.
13. It also needs to be highlighted that the Bank has filed affidavit and as per the contents mentioned in the affidavit, the cheque was returned unpaid on 23.02.2017. It is also mentioned in the affidavit that the account was freezed on 13.02.2017 on account of non-submission of KYC documents by the concerned account-holder.
14. However, few things need to be noted here.
15. There is no dispute to the fact that on the relevant date i.e. 23.02.2017, when the cheque was presented for encashment, there was sufficient balance in the above said account for honouring the above said cheque. Mr. Tripathi also confirms the same and the petitioner has also submitted a statement of account of its said account which has been duly certified by the Bank as well.
16. When asked, Mr. Tripath
