S AIYADURAI NADAR Vs. T R SAKKU BAI

JUDGEMENT

(1.) THIS appeal has been filed against the order in Application No. 2736 of 1978. The said application was filed by the plaintiff in C. S. No. 10 of 1977 for declaration that the attachment effected by the Income-tax Officer as per his letter No. T.R. 6694 of 1971-72 and 492 of 1977-78 dated April 22, 1978, of the monies standing to the credit of the suit as invalid and not binding on the applicant. The appellant is the plaintiff in C. S. No. 10 of 1977. That was a suit filed by him for a decree against three defendants for the recovery of a sum of Rs. 2,70,000 with interest from the date of the plaint. The money was advanced to the first defendant and the second and third defendants are the sureties. The suit was decreed on February 15, 1977. In execution of this decree in E. P. No. 38 of 1977, the appellant attached the right, title and interest of the defendants in a picture titled "Ennaippol Oruvan". That picture was produced by a firm of producers called Sir Vinayaka Pictures. The partners of Sir Vinayaka Pictures are the same as those of R. R. Pictures, the second defendant in the suit.

(2.) IT appears that Sri Vinyaka Pictures are in arrears of income-tax of Rs. 4,36,692 up to December, 1977, and R.R. Pictures are in arrears of income-tax to the extent of Rs. 15,80,400 up the end of 1977. On a certificate being received from the Department, the Tax Recovery officer issued a notice to both Sri Vinayaka Pictures and R. R. Pictures under rule 2 of the Second Schedule to the Income-tax Act 1961. IT appears that some of the creditors of R. R. Pictures also made claims in respect of the proceeds of Sri Vinyaka Pictures. In the execution proceedings, in Applications Nos. 3564, 3568, 3591 and 3592 of 1977, M/s. Gemini Pictures Circuit Ltd. and Mr. V. Veeraraghavan were appointed as joint receivers in respect of the picture Ennaippol Oruvan with a direction to the receivers to deposit all the moneys received by them to the credit of C.S. No. 10 of 1977. The amounts realised by the distribution and exhibition of the picture are deposited to the credit of C.S. No. 10 of 1977. The prayer in Application No.2736 of 1978 in effect was for appropriating the entire money towards the decree in C.S. No. 10 of 1977. But the Income-tax Department claimed payment of this money on a priority basis on the ground that income-tax arrears are Government debts.