BANK OF INDIA Vs. JOHN BOWMAN

JUDGEMENT

(1.) This is a petition by the Bank of India challenging an attachment levied by the Collector of Bombay under Section 13, Bombay City Land Revenue Act, 1876, and also requiring the Court to prevent the Collector from selling the properties under attachment.

(2.) It appears that the Bank of India, the petitioners, advanced to the National Tube Wells" Company a sum of Rs. 2,50,000 on 14-2-1953. Respondent 3 guaranteed this loan. On 1-11-1951, a contract was arrived at between the State of. Bombay and the National Tube Wells Company with regard to the National Tube Wells Company erecting 400 tube wells in the State of Bombay. Under this contract the tube wells had to be completed by 31-3-1953. On 12-6-1953, another agreement was arrived at between the State of Bombay and the National Tube Wells Company. By this' agreement the Government agreed to advance a sum of Rs. 9,75,000 to the Company. This advance was guaranteed by the various directors of the National Tube Wells Company including respondent 3 and the extent of the guarantee of respondent 3 was Rs. 2,56,125. Time for the performance of the contract was extended to 31-3-1955. The contract provided that the amount advanced by Government was to be repaid by a certain date. There was default in payment of that amount. Now, under the agreement of 12-61953, respondent 3 along with the other directors had agreed that the sum payable by them was recoverable by the State as arrears of land revenue. On 710- 1953, the sum of Rs. 2,56,125 was demanded by the State. On 10-12-1953, the Collector of Bombay issued a warrant of attachment against three immoveable properties of respondent 3 under Section 13, Bombay City Land Revenue Act. On the same day notices intimating the date of the sale were pasted on these properties. On 5-1-1954, the Bank of India filed a suit in this Court to realise the loan advanced by them on 14-2-1953, and in this suit a consent decree was passed on 23-2-1954. By this consent decree respondent, 3 along with others made himself liable to pay the decretal amount. On 16-2-1954, respondent 3 filed a petition challenging the warrant of attachment and the threatened sale by the Collector. The petition was dismissed by Tendolkar J. Respondent 3 appealed to this Court and this Court upheld the decision of Tendolkar )., and concurred with him in dismissing the petition. This was on 7-41954. On 23-4-1954, the Bank of India! in execution of the decree they had obtained, obtained a warrant of attachment from this Court. On 30-4-1954, the Collector gave notice that he would sell the property on 25-5-1954. This sale was 'postponed to 22-6-1954. On 10-6-1954, the Bank of India obtained a warrant of sale in their execution proceedings. On 21-6-1954, the Bank of India presented the present petition from which this appeal arises. The trial Judge on an 'ex parte' application made by the bank refused to stay the sale, but issued an injunction against the Collector restraining him from getting the sale confirmed. The result was that the sale has taken place, but the sale has not been confirmed. On the merits of the petition the learned Judge came to the' conclusion that the attachment and the sale held by the Collector were valid and in accordance with law and that the execution proceedings taken out by the Bank of India could not in law prevent the Collector from realising the dues from respondent 3. It is against this decision of the learned Judge that this appeal is preferred.

(3.) Now, very strong reliance has been placed by the Advocate General on the decision of the Appellate Court in respondent 3's petition, and what has been argued by the Advocate General is that in that decision we held that the contract between the State and respondent 3, by which respondent 3 agreed to his debt being realised as arrears of land revenue, was a valid contract. We also held that the State was entitled to proceed against respondent 3 under Section 13, Bombay City Land Revenue Act and therefore that decision is binding upon us, and if it is binding upon us, it is not open now to the Bank of India to bring into issue the very questions that were decided by the Court of Appeal on the earlier petition. Now, there are two important aspects of that judgment to which attention must be drawn. The contesting parties on that petition were the State of Bombay on the one hand and .respondent 3 on the other. The contest was between the debtor and the creditor and the primary question that arose for our consideration was whether the debtor was bound by the contract which he had solemnly entered into with the State of Bombay. The second important aspect of the matter which is clearly referred to in our judgment is that we expressed the opinion that whatever the legal rights of the petitioner might be we were not inclined to give him relief under our special jurisdiction under Article 226 of the Constitution. We pointed out that the petitioner had no defence on the merits and he had agreed to the particular procedure by which his debt should be realised and justice did not demand that this Court should give any relief to the petitioner. Now, in our opinion, the position that arises on this petition is entirely different, and the position that arises is whether the contract between the State and respondent 3, even though it be a valid contract, can be enforced against the petitioners who were not parties to that contract. In our opinion it is open to the Bank of India to contend that however valid the contract may be, as between the State and respondent 3, and whatever our view might have been about the contractual rights and liabilities of the State and respondent 3, as far as the Bank of India is concerned that contract cannot be binding on them and cannot be enforced against them. It is on this aspect of the case that we have decided that the Bank of India is entitled to put forward its contentions notwithstanding the judgment delivered in --'Bhagwandas Narottam Divecha v. The State of Bombay', O. C. J. Appeal No. 37 of 1954 decided by Chagla C. J. and Dixit J. on 7-4-1954 (Bom.) (A).