COLLECTOR OF AURANGABAD Vs. CENTRAL BANK OF INDIA

JUDGEMENT

(1.) This appeal is brought, by special leave, from the judgment of the Bombay High Court, dated December 17, 1962 in Letters Patent Appeal No. 29 of 1960.

(2.) Respondent No. 2, the firm of Chandmal Marmal was indebted to the 1st respondent, Centra1 Bank of India, Aurangabad branch. In March 11, 1955 the first respondent filed a suit being Civil Suit No. 28/1 of 1955 against the second respondent for recovering a sum of Rs. 14,541 and odd in the Court of Subordinate Judge at Aurangabad. On the application of the first respondent an order for interim injunction was passed in respect of certain properties belonging to the second respondent. The Court had ordered the second respondent to furnish security for the amount of the decree which may be passed against the firm in the suit. On April 28, 1955 Jogilal Mulchand, one of the partners of the second respondent furnished security by creating a charge on his immoveable property, which was a house at Aurangabad. After the security bond was furnished, the attachment was released. The security bond furnished by Jogilal Mulchand read as follows :

(3.) On April 30, 1955 the Subordinate Judge granted a decree against the 1st respondent for a sum of Rs. 14,541 and odd. The 1st respondent filed an application for execution of the decree under S. 145 of the Civil Procedure Code. In the execution of the decree the house which was charged under the security bond was sold and one Girdhardas purchased it in auction sale which was confirmed by the Court on August 14, 1958 and the sale proceeds thereof were deposited by the said Girdhardas in the executing Court. On August 17, 1958 the Sales Tax Officer, Aurangabad Circle wrote a letter to the District Judge, Aurangabad pointing out that a sum of Rs. 9,672 and odd was due to the Government from the second respondent on account of arrears of sales tax for the years 1950-51 to 1955-56. On September 23, 1958 the District Judge sent a letter to the Subordinate Judge asking him not to pay the sale proceeds of the house to the decree-holder, i.e., the first respondent. Subsequently, the Collector of Aurangabad made an order on November 20, 1958 destraining the amount of Rs. 9,672 out of the sale proceeds under S. 119 of the Hyderabad Land Revenue Act (Hyd. Act VIII of 1317 F.). The order of the Collector stated as follows :