P.K. Balasubramanyan, J.@mdashWhen CMP No. 11713 of 1993 came up for hearing, it was submitted that the original petition itself may be heard and disposed of. Accordingly, the counsel for the petitioner, Shri N.R.K. Nair, the counsel for respondents 1 and 2 and the counsel for the third respondent were heard. The original petition is for the issue of a direction to respondents 1 and 2 to release the gold ornaments of the petitioner which were taken possession of by the officers of respondents 1 and 2 from the premises of the third respondent during a raid conducted in the premises. According to the petitioner, the article shown as serial No. 70 in the list attached to the panchanama prepared by the officers of respondents 1 and 2 are gold ornaments belonging to him and pledged by him with the third respondent for taking a loan of Rs. 50,000. The petitioner has a case that the third respondent has no objection to the said articles being released to him as can be seen from the copy of the letter, Ext. P3, written on behalf of the third respondent to the first respondent on 6-5-1993. The prayer of the petitioner, therefore, is that he may be allowed to get the gold ornaments belonging to him released on his depositing the principal and interest due from him to the third respondent, before respondents 1 and 2.
2. The third respondent has not disputed the fact that Ext. P3 letter was given by the third respondent certifying its willingness for the release of the article to the petitioner and admitting that the said article is one pledged by the petitioner before it. But the learned counsel for the third respondent seeks to oppose the prayer of the petitioner on the ground that no tax is due from it to the income tax Department and the effect of permitting the petitioner to deposit the money due to it with the Department would be unauthorised and would, in effect, deprive it of its capital with which it carries on its business. He submits that there is no warrant for such a course. He further submits that the article at best could only be returned to the third respondent since it was seized from it and he has no objection to the article being released to it by the department and for it to return it to the petitioner on the petitioner depositing the money due to it with the third respondent.
3. The learned counsel for respondents 1 and 2 submitted that, as far as the department is concerned, the department had offered to release the entire articles to the third respondent on its furnishing bank guarantee for a sum of Rs. 20 lakhs but that the third respondent was not willing to adopt that course. It is submitted by the learned counsel that the department could release the articles to the petitioner on the strength of the letter Ext. P3 issued by the third respondent only if the amount due from the petitioner to the third respondent on the loan transaction including interest was deposited by the petitioner before the 1st respondent. The learned counsel submits that there should not be direction for the release of the goods to the petitioner without the amount being deposited to the account of the 3rd respondent with the first respondent.
4. In the light of Ext. P3,1 am not inclined to entertain the argument on behalf of the third respondent that the articles cannot be returned to the petitioner and the authorities are bound to return it to him only in terms of section 132B of the income tax Act, 1961 (''the Act''). That apart, the learned counsel for the petitioner points out that u/s 132(7), the Assessing Officer can return the article to any other person if the Assessing Officer is satisfied that the seized asset was held by the person from whose premises it was taken into custody for or on behalf of any other person. Ext. P3, which has not been repudiated by the 3rd respondent in his counter-affidavit, clearly indicates that the third respondent was holding the article shown as Item No. 70 in the panchanama only as a pledgee of that article or only as security for the amount due from the petitioner. Under these circumstances, I am satisfied that there could be a direction for the return of the article to the petitioner on the basis of the offer made by him that he is willing to deposit the money due from him to the third respondent before the income tax authorities. No doubt, it is somewhat harsh to direct the deposit of the amount due to the third respondent from the petitioner before the 1st respondent. But this situation has been brought about by the failure of the third respondent to take advantage of the offer of the department to release all the articles to him on his furnishing a bank guarantee for Rs. 20 lakhs. In fact, the third respondent has filed an original petition before this Court challenging that order and the same is pending. The amount involved in the present transaction is comparatively negligible compared to the turnover in the business of the 3rd respondent and, therefore, I am satisfied that in this case in the interests of justice the course suggested by the learned counsel for the department can be accepted and the article released to the petitioner on his depositing the amount due from his to the third respondent before the first respondent. In the result, this original petition is allowed and respondents 1 and 2 are directed to return article No. 70 in the panchanama prepared at the time of seizure of the articles from the premises of the 3rd respondent on condition that the petitioner deposits with the first respondent to the account of the third respondent, the principal sum and interest due from the petitioner to the 3rd respondent on the loan of Rs. 50,000 for which the article No. 70 was pledged. In the circumstances of the case, I make no order as to costs.
