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Hindustan Commercial Bank Ltd. vs Union Of India (Uoi) And Ors. on 27 April, 1964 cites

The Governor General In Council vs Shiromani Sugar Mills Limited (In ... on 11 March, 1946

8. Some argument was advanced before us to the effect that if the law giving the Crown debts priority was so well accepted, it would not have been necessary to specifically provide for the same in the shape of some statutory provisions such as are to be found in the Indian Companies Act or in the laws relating to land tenures in the various States. The statutory provisions which have recognised and enforced this right have been introduced to define the scope of that right with regard to the scheme of the particular Act in which they find place. Reliance was placed upon Governor-General in Council v. Shiromani Sugar Mills Ltd., AIR 1946 F C 16. That does not support the contention that it was not a part of the law of India that Government debts would have a priority. All that their Lordships held was that once a statutory provision had been introduced with regard to this right, then the provision, itself had got to be interpreted and the rule of common law could not be invoked with the result that the right could be asserted only between the limits provided by the statutes. Their Lordships have not said that the right of the Government to have priority for its debts was not recognised in India. For the reasons mentioned above, we are of the opinion that circumstances being the same and the nature of the debt. being the same, the Government would have a priority over the rights of a private creditor. But as stated earlier this finding will not be of any help to the Government in this case. We have already held that the amounts in the hands of the Military authorities sought to be attached by the Bank were assigned for the payment of the dues of the Bank and the Bank had over them a charge. In that view of the matter, the Government cannot claim to have a priority for the attachment of that amount in order to realise the-income-tax dues. We will also state that it is not a case where the recovery of arrears of income-tax has been made under Section 279 of the U. P. Zamindari Abolition and Land Reforms Act as arrears of land revenue. Proceedings are going on as if it were execution of a civil Court decree. In a case like that, obviously the party who had an assignment in its favour of the money in dispute will have priority over others.
Bombay High Court Cites 26 - Cited by 91 - Full Document
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