P I SHUKLA Vs. TRIBHOVANDAS HARGOVANDAS

JUDGEMENT

(1.) Petitioner No. 1 is the Tax Recovery Officer; and petitioner No. 2 is the Union of India represented by the Commissioner of Income-tax Gujarat. They are challenging in this revision application the order dated 27-6-1983 passed below Exh. 20 in Execution Application No. 732 of 1979 by the learned Judge of the City Civil Court Ahmedabad. Opponents Nos. 1 to 3 who are judgment-creditors and trustees of Hargovandas Laxmichand Charity Trust filed Civil Suit No. 3497 of 1976 in the City Civil Court at Ahmedabad against opponents Nos. 4 to 7 (judgment-debtors) for recovering Rs. 6 55 817 Ps. together with interest at the rate of 12 per cent per annum and costs by selling the properties given under equitable mortgage by the judgment debtors to the judgment-creditors in the year 1911. The said suit was decreed on 20-8-1978. According to the final decree the decretal amount has to be paid by the judgment-debtors by half yearly instalment of Rs. 75000.00. It is further provided in the decree that in case of default of payment of any two instalments the judgment-creditors are entitled to execute the decree at once. With respect to the realisation of rent and mesne profits of the properties in question from 1-1-1979 one of the trustees has been appointed as a Court receiver without remuneration and he is directed to recover rent; and after paying taxes and other expenses to appropriate the net amount towards the instalments payable by the judgment-debtors. It is further provided in the decree that the amount which the Court receiver may receive will be considered as having been received towards instalments. The judgmentdebtors committed default in payment of two instalments; and therefore the judgment-creditors have filed Execution Application No. 732 of 1979 for executing the decree by selling the suit properties and other properties of the judgment-debtors.

(2.) Opponent No. 8 who is one of the tenants in the suit property was paying rent to the Income-tax authorities towards income-tax and wealth-tax liability of the judgment-debtors. He was doing so in view of the notice given and prohibitor order issued by the Income-tax authorities. On 14-10-1980 he received a notice from the Receiver calling upon him to pay rent to him. The second notice to that effect was received by him on 1-6-1981. He therefore on 21-7-1981 gave application Exh. 21 and took out a Chamber Summons Exh. 20 for obtaining a direction from the Court as to whom rent should be paid by him. The learned Judge by his order dated 27-6-1983 held that the effect of the order of the Court contained in the final decree amounts to creating a charge in favour of the mortgagees i.e. judgment-creditors. In that view of the matter the learned Judge negatived the claim of the applicant who also appeared in those proceedings and claimed priority on the basis that crown debt has a priority over other debts.

(3.) The question which falls for consideration is whether the view taken by the learned Judge is correct in law. What is urged by Mr. Bhatt the learned Advocate for the petitioners is that the judgment-creditors in this case are merely decree-holders and the decree which they have obtained is on the basis of an equitable mortgage created in their favour. Therefore mere passing of a decree in such a case cannot amount to creating a charge over the rent and/or other income of the mortgaged property. He further submitted that merely because a receiver has been appointed by the Court to collect rent it cannot be said that for that reasons a charge has been created over the rent and other income of the mortgaged property. He also submitted that in absence of any charge the judgment-creditors must be regarded as ordinary creditors and not as secured creditors and as against the dues of the State right to receive money under the decree must give way.