PAPPU REDDIAR Vs. UNION OF INDIA

JUDGEMENT

(1.) TWO persons Pappu Reddiar and Sankaralingam Pillai, the appellants before us, had simple money claims against the estate of A. S. T. F. Rodrigues, whose sons are respondents 2 and 3. The creditors brought a suit for administration of the estate of the deceased Rodrigues ana in the course of administration it appears that a sum of about Rs. two lakhs had been brought into Court. There were income tax assessment proceedings in regard to the estate of the deceased in the hands of his sons, and the Income-tax Department, had a claim of nearly Rs. 2,38,819-14-0 by way of arrears of income tax. The Second Additional Income-tax Officer, Tuticorin, applied on behalf of the Union of India in I. A. No. 430 of 1957 in the administration suit referred to above for payment of the arrears clue to the department out of the monies in deposit in the administration suit.

(2.) IT is contended on their behalf that although they were only simple money creditors of the estate of deceased Rodrigues, as they had taken enormous trouble in bringing the monies into Court it is highly inequitable that such monies should be paid out to the Income-tax authorities who did nothing to bring these monies into Court. We are unable to find any principle of law behind this argument. IT is a well accepted rule that as between creditors in equal degree the Sovereign or Government would be entitled to priority in the matter of payment. This position has now been settled beyond doubt so far as this Court is concerned by the Full Bench decision in Collector of Tiruchirapalli v. Trinity Bank, .