Income-tax---

----Recovery of tax---Deposit of title deeds as security for payment of tax---No proof that deposit made as security for payment of arrears of tax of assessee's father---Payment of dues by assessee---Assessee a minor and not competent to execute: mortgage at relevant time---Title deeds to be returned to assessee-- Constitution of India, Art. 226.

The appellant demanded the return of the sale-deed in respect of a particular piece of land on the ground that it had been only deposited as security in respect of the amounts due to the Income Tax Department and that there was no need for retention of the said security, there being no subsisting dues of the appellant. The request was turned down on the ground that the deposit of title deeds was made as a security towards the dues of the appellant's father who continued to have arrears payable to the Revenue. This was accepted by a single Judge who dismissed the appellant's writ petition. On further appeal:

Held that the Revenue had not been able to produce any specific material to prove that the document of title deposited by the appellant was in respect of tax dues of the appellant's father or that they had been treated as such by the Revenue. The amount due from the appellant was only Rs.1,913 and the fact that the property was worth more than Rs.40,000 was not by itself a circumstance to indicate that the same must have been filed as security towards the dues of the appellant. The appellant was a minor but the security had not been furnished by the appellant's father in his capacity as guardian. As the appellant was a minor at the relevant point of time, he did not have the contracting capacity to bring about an equitable mortgage by deposit of title deeds. The title deeds had to be returned to the appellant.

P. Gopalakrishnan Nair for the Appellant.

N.R.K. Nair for the Respondents.

JUDGMENT

V.S. MALIMATH, C.J: --The appellant demanded return of sale- deed No.1250 of 1967, dated April 5, 1967, in respect of Sy. No.946 of Changazhassery village measuring 17 cents of land on the ground that it was only deposited as security in respect of the amounts due to the Income Tax Department and that there is no need for retention of the said security, there being no subsisting dues of the appellant. The request was turned down on the ground that the deposit of title deeds was made as a security towards the dues of the appellant's father, Sri B.N. Sreedharan Unni. As Sreedharan Unni still continues in arrears to the Department, the question of returning the document does not arise is the stand taken by the Department. The learned single Judge has accepted the case of the Department and dismissed the writ petition. Hence this appeal.

As we were not satisfied with the materials placed before the Court, we gave an opportunity to counsel for the Income Tax Department to produce materials with them which would probabilise the case of the Department that the document was deposited by way of security not in respect of the dues of the appellant but in respect of the dues of his father, Sri Sreedharan Unni. Learned counsel has not been able to produce any specific material which recites that the document of title deposited by the appellant has been stated to be in respect of the tax dues of his father, Sri Sreedharan Unni or that the Department has treated the deposit as having been made in respect of the dues of Sri Sreedharan Unni. Learned counsel for the Department, however, submits that there are glaring circumstances available in the case, which make the Department's version highly probable. It was submitted that from Exh.R-2(b), a communication from the Income Tax Officer, Central Circle, Ernakulam, dated February 19, 1972, addressed to the Additional Commissioner of income Tax (Recovery), Madras, the dues of the appellant's father towards regular demand was Rs.2,10,241 and Rs.2,01,902 towards advance tax. So far as the appellant is concerned nothing is shown towards the regular demand and only a small amount of Rs.1,913 is shown as advance tax. From this material, it was sought to be contended that there was no such pressure for giving security so far as the appellant is concerned. It was submitted that it was rather only by way of advance tax towards amount due that the security was given. From this circumstance, it was tried to establish that there was no demand at all from the Department against the appellant. It is not possible to accede to this contention, for, it is stated at the end of paragraph 4 of Exh. R-2(b) that revenue recovery certificates have been issued to the Tax Recovery Officer, Quilon, requesting him to take early steps to collect the advance tax arrears. Recovery certificates regarding arrears of revenue could not have been issued unless a demand was issued in respect of the advance tax payable by the appellant and he had failed to pay the amount within the specified time. It is therefore not possible to accede to the contention that there was no pressure so far as the appellant is concerned to offer any security. In paragraph 5 of Exh. R-2(b), the details of the arrears have been furnished. The document in question is serial No.17. This would probabilise the case of the appellant that having regard to the pressure of the authorities for recovery of the advance tax in respect of which proceedings were initiated against the appellant and revenue recovery certificates were issued, it became necessary to offer security. It is no doubt true that the amount due from the appellant was a very small amount of Rs.1,913 as compared to a very huge amount which was due from his father. The fact that the appellant had not paid the advance tax due thus justifies, the inference that he was not in a position to pay the amount due from him. The mere fact that the property is very valuable and worth more than Rs.40,000 is not by itself a circumstance to indicate that the same must have been filed as security towards the dues of the appellant's father. There is another serious problem in the way of the Department. The records clearly indicate that the appellant was a minor. It is therefore reasonable to proceed on the basis that the appellant's father, Sri Sreedharan Unni, was his guardian and was entitled to act on his behalf. It, is necessary to point out that the security has not been furnished by the appellant's father in his capacity as a guardian. The document produced by the respondents as Exh. R-2(a) says that the document was deposited by the appellant himself. Exh. R-2(a) is addressed to tine Income Tax Officer, Central Circle, Ernakulam, which says that "as agreed upon in person, I have delivered to you the under mentioned documents as security". As the appellant was a minor at the relevant point of time, he did not have the contracting capacity to bring about an equitable mortgage by deposit of title deeds by Exh. R-2(a). As already stated, we are not satisfied with the material produced before the Court that the document was deposited towards-the tax dues of the appellant's father or that the document was appropriated as security towards the dues of the appellant's father. In these circumstances, we have no hesitation in taking the view that the. Department had rightly, accepted the deposit of title deeds as security for the dues of the appellant, particularly when it is not the case of the Department that the tax dues of the appellant are not in arrears.

For the reasons stated above, this appeal is allowed, the judgment of the learned Single Judge is set aside and the respondents are directed to return to the appellant the sale-deed deposited as incorporated in Exh. R-2(a), within a month from the date of receipt of this judgment. No costs.

M.BA./9/T.FAppeal allowed.