Lanka Suryaprakash Rao And Others vs Gadigatla Venkaramanna Chowdary And ... on 1 October, 1992
Co. v. State of U.P. affirmed the principle laid down in Murli Tahilram v. T. Asoomal & Co. and Basanta Kumar Bhattacharjee v. Panchu Gopaldutta.
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Murli Tahilram vs T. Asoomal & Co. on 11 February, 1955
The Union Of India (Uoi) vs The Official Assignee Of Bombay on 10 December, 1970
We stress this point here because Mr. Chhatrapati had referred to a decision of the Calcutta High Court in Murli v. Asoomal & Co. , to suggest that "there is no universal claim to priority for State debts" vide para. 30 at page 430, with which remark we are not in agreement. We will advert to this decision a little later.
Builders Supply Corporation vs Union Of India (Uoi) Represented By The ... on 21 June, 1955
I confess I was, and still am unable to follow the reasoning. It was said that the Act required the Certificate Officer to issue a notice under Section 7 after a certificate had been filed and that the only effect of such a notice, as laid down in Section 8, was that subsequent transfers of the debtor's--Immoveable property situated In the district In which the certificate was filed would be void, if
voluntarily made, against claims enforceable In execution of a certificate and that the' amount
due in respect of the certificate would be a first charge upon the immoveable property of the certificate debtor, wherever situated, to which every other charge created subsequently would be postponed.
Builders Supply Corporation vs Union Of India And Others. on 21 June, 1955
The second attempt of the petitioners was to spell out of the provisions of the Public Demands Recovery Act the meaning that no priority could be claimed in respect of income-tax dues and that, in any event, as to the recovery of such dues, the State was limited to the provisions of the Act. I confess I had some difficulty in comprehending what the learned advocate for the petitioners meant. He referred to the recent decision of P. B. Mukharji, J., in the case of Murli Tahilram v. T. Asoomal & Co., and contended that section 8 of the Act would show that the State had been given only a limited priority in respect of public demands such as income-tax dues and that beyond such priority, which was limited to the realisation of the dues out of the immovable property of the debtor, there was no priority in the Act and there could be none under any prerogative right. I confess I was, and still am, unable to follow the reasoning. It was said that the Act required the Certificate Officer to issue a notice under section 7 after a certificate had been filed and that the only effect of such a notice as laid down in section 8 was that subsequent transfers of the debtors immovable property situated in the district in which the certificate was filed would be void, if voluntarily made, against claims enforceable in execution of a certificate and that the amount due in respect of the certificate would be a first charge upon the immoveable property of the certificate debtor, wherever situated, to which every other charge created subsequently would be postponed. That provision, it was said, had two implications. A notice under section 7 operated only on immovable property and the first charge created thereon, which was only another name for priority, was limited to such property and did not extend to the movables of the debtor. In respect of the movables of the debtor, therefore, the section intended the State to be in the same position as other creditors. The second implication of the section, it was said, was that apart from the statute-made priority, the State had no other, because, if it had, the provision freezing the immovable property and creating a first charge thereon would be redundant. In my view the first branch of the argument proceeds on a total misconception of what priority means. There is nothing like priority as between different kinds of property owned by the debtor; the priority contemplated by the principle of the priority of Crown claims is a priority vis-a-vis and over claims of other creditors, though only unsecured creditors. I find it impossible to see how any indication of any kind as to the existence or non-existence of the Crowns or of the States right to priority can be found in the provisions of section 8 of the Public Demands Recovery Act. The first paragraph of the section virtually reproduces section 64 of the Civil Procedure Code, except that it is limited to immovable property situated in the district where the certificate is filed and the second paragraph adds a provision for the creation of a charge on all immovable property of the debtor, which certainly goes beyond the Code. I am unable to see how it can be said that such provision excludes the States right to priority as against other unsecured creditors, or how any provision regarding such priority can be said to be implied in the section. The second branch of the petitioners argument on section 8 is even less tenable. It overlooks the fact that the Public Demands Recovery Act is not limited to the recovery of debts due to the State. The long definition of "public demand", given in Schedule I of the Act and containing as many as fourteen clauses, would how that debts due to local authorities, co-operative societies and in certain cases even private individuals are public demands and can be recovered through the certificate procedure. Debts due to such authorities or individuals enjoy no priority at common law and therefore if the publication of a notice under section 7 was to be given the effect of making subsequent voluntary transfers of certain immovable properties void and creating a charge on all immovable properties of the debtor, a statutory provision in that behalf was needed. The same consideration would answer a further argument advanced by the petitioners which was that if the State had a priority in common law, there could not possibly be any question or priority to be decided, as provided for in the proviso to rule 22. In the first place debts other than public debts have no common law priority and therefore any claim of priority on any other ground, if raised, would have to be determined. Even in the case of debts due to the State; the State would have to make out before the custody Court that the debt is of that character, before such Court could be expected to give preference to such a debt. It has also to be borne in mind that the State is preferred to a private creditor only when the rights of the two meet at one and the same time and therefore whenever a claim of priority is made by the State, it will have to be proved to the custody Court that this requirement of the rule is satisfied. How the Public Demands Recovery Act, which is only a machinery Act for the realisation of debts of various kinds due to various kinds of creditors, can have any bearing on the existence or otherwise of the States right of priority in respect of debts due to it, I find it impossible to see.
Excise And Taxation Officer vs Gauri Mal Butail Trust on 10 December, 1959
19. Reliance has also been placed on a Single Bench decision reported in Murli Tahilram v. T. Asoomal and Co., (S) AIR 1955 Cal 423, in which the claim of the State to the priority under the Bengal Public Demands Recovery Act was not recognised. Apart from the peculiar facts or that case, the reasoning of that decision was not accepted by a Division Bench of that High Court in (S) AIR 1956 Cal 26.
Somasundaram Mills Private Ltd. vs Union Of India And Another. on 9 March, 1969
This decision as well as the earlier decision of Mukharji J. in Murli Tahilram v. Asoomal & Co. draw a dividing line, even at an earlier stage before the actual payment to the decree-holder. If the court had passed an order for payment to the decree-holder before the application by the Government for claim to priority had been received even at that stage according to the Calcutta decision, the money ceases to belong to the judgment-debtor, and must be deemed to belong to the decree-holder; therefore the Crowns claim for priority could not be granted if it was made after the passing of the order. But in the present case such a situation does not need to be visualised; not merely has the court made a direction for payment of the money toe the decree-holder but it has also been paid to the decree-holder the Governments application was made to the executing court.
Hindustan Commercial Bank Ltd. vs Union Of India (Uoi) And Ors. on 27 April, 1964
In Murli Tahilram v. T. Assomal & Co., 59 Cal W N 701 : ((S) AIR 1955 Cal 423) the same view was taken.
Somasundaram Mills (P.) Ltd., ... vs Union Of India (Uoi) Represented By ... on 9 July, 1969
12. This decision as well as the earlier decision of Mukharji, J. in Murli Tahilram v. Asoomal and Co., , draw a dividing line, even at an earlier stage before the actual payment to the decree-holder. If the Court had passed an order for payment to the decree-holder before the application by the Government for claim to priority had been received, even at the stage according to the Calcutta decision, the money ceases to belong to the judgment-debtor, and must be deemed to belong to the decree-holder, therefore the Crown's claim for priority could not be granted, if it was made after the passing of the order. But in the present case, such a situation does not need to be visualised; not merely has the Court made a direction for payment of the money to the decree-holder, but it has also been paid to the decree-holder before the Government's application was made to the executing Court.
Bank Of Commerce Ltd. (In Liquidation) vs Arun Kumar Chowdhury And Ors. on 1 June, 1964
51. The next case referred to by Mr. Banerjee is a decision of this Court in Murli Tahilram v. T. Asoomal and Co., (S) . In this case the only question discussed was that of priority between the State and a private litigant with regard to their respective claims. It was also considered whether the Bengal Public Demands Recovery Act and the Rules framed thereunder gave any priority to the State in regard to its claim for arrears of sales tax out of the moneys in the hands of a Receiver appointed by the Court.
State Of Kerala vs E.P. Mathew on 7 April, 1960
In Murli Tahilram v. T. Asonmal and Co., (S) AIR 1955 Cal 423 P. B. Mukharji, J., dealt with the origin of the right as follows: