Our company hass placed a deposit amount of Rs 8.00 lacs in a " No lien " account with one of the PSB's in 2008. The purpose of this deposit was to give a token amount towards a proposed OTS. Arouns same time the Income Tax dept sent a notice to the Bank u/s 226(3) for attached and recovery . The OTS did not go through. When our company asked the Bank to refund the money deposited under " no lien" , Bank refused to return the funds stating that there is an income tax attachment and they shall return the funds only after the department lifts the said attachment u/s 226(3).
In 2010 Bank and the company has a settlement , however even then Bank refused to return the funds to the company giving the reason of income tax department.
The company funds are lying with the Bank under " No lien". We feel that the Bank ought to have returned the funds. But Bank feels otherwise and has been holding the funds.
I need advice on how to get back the funds under " no lien" . Is Bank's stance correct. Is there any similar case / or any judgment of court that we can use.
Thanking you in anticipation.
