R.S. Grewal vs Union of India

G.C. Garg, J.—Shri Hira Singh executed a Will dated 16-9-1944 and he later on died in the year 1945. Under the Will, he bequeathed the agricultural land and the two houses standing thereon to his son Dr. Shivdev Singh, who later on died in the year 1968, leaving behind two sons and a grandson. Shri Hira Singh also owned a kothi situated in Civil Lines, Ludhiana, having a residential portion and some shops in the front portion thereof. The ownership of this kothi was bequeathed by him in favour of Dr. Shivdev Singh, whereas the right of residence in the kothi was given for life by him to his daughter Smt. Shivdev Kaur Grewal along with the right to enjoy the rental income of the shops situated in the front portion of the kothi. Certain arrears of income tax and wealth-tax became due from Smt. Shivdev Kaur and for the recovery thereof, proceedings were taken by the TRO. He attached the agricultural land mentioned above, which had come to Dr. Shivdev Singh as also the property mentioned hereinbefore.

A suit for declaration and permanent injunction came to be filed by the heirs of Dr. Shivdev Singh, namely, his two sons R.S. Grewal and Dr. J.S. Grewal, his widow Drothi Grewal and the grandson Puneet Grewal, son of Sh. R.S. Grewal.

The suit was decreed for declaration to the effect that the plaintiffs were owners of the agricultural land and the two houses situated thereon and defendant No. 4 Smt. Shivdev Kaur Grewal, had only life interest in the kothi at Ludhiana. The said kothi was held to be liable to attachment and sale for realisation of the wealth-tax dues in terms of Will Ext. P-3. The trial court further ordered that the TRO or the authorities under the income tax Act or Wealth-tax Act will be at liberty to pass order of attachment and sale of agricultural land mentioned in item A of the head note of the plaint as per rules. Appeals there against were filed not only by the plaintiffs but also by defendant No. 4, namely, Smt. Shivdev Kaur Grewal, daughter of Sh. Hira Singh. Both the appeals were dismissed by the District Judge, Ludhiana, by judgment and decree dated 29-4-1996. Hence this appeal at the instance of the plaintiffs only. Mr. Sanjay Bansal, Advocate, appearing with Mr. B.S. Gupta, Sr. Advocate, after obtaining instructions from the TRO, stated that the agricultural land and the houses situated thereon are not liable to attachment or sale for the recovery of the income tax/wealth-tax dues from Smt. Shivdev Kaur Grewal and this property may be ordered to be released from attachment and sale. However, Mr. Bansal, stated that the rental income derived from the shops or residential portion, if any, is liable to attachment for the recovery of the income tax/wealth-tax dues from Smt. Shivdev Kaur Grewal. To the later part of the submission of Mr. Bansal, Mr. Arun Jain had no objection. He only submitted that it may be clarified that rental income derived by or accruing to Smt. Shivdev Kaur Grewal from the kothi situated at Civil Lines, Ludhiana, including shops in the front portion thereof, only is liable to attachment for the recovery of the dues of the income tax Department during her lifetime. This is indeed so and needs no clarification. In that view of the matter, this appeal is disposed of and it is ordered that all rental incomes derived by or accruing to Smt. Shivdev Kaur Grewal from kothi situated in Civil Lines, Ludhiana, and the shops in the front portion thereof are liable to attachment by the income tax Department in respect of the dues standing against Smt. Shivdev Kaur Grewal. Judgment and decree passed by the Courts below is, accordingly, modified to the extent indicated above. No costs.