DEPUTY COMMISSIONER OF POLICE Vs. SVEDANTAM

JUDGEMENT

(1.) This is a petition to revise the order of a Full Bench of the Small Cause Court disallowing a claim based on the prerogative right of the Crown to be paid its debt in priority to other creditors. The Full Bench took the view that the debt in question was not a Crown debt. This decision is so fundamentally wrong that I think a revision petition is justified.

(2.) The facts shortly stated are that the respondent had obtained a money decree on a debt, and in execution had attached and brought to sale a motor car belonging to his judgment- debtor. The decree was made on 9 September, 1931 and the attachment made absolute on that date. The motor-car was sold on 23 November, 1931 for a sum of Rs. 53. On 4th December, 1931 the Crown, represented by the Deputy Commissioner of Police in charge of licenses, sent a written notice to the Court claiming Rs. 50 out of the money paid into Court and (which had not been paid out to the decree-holder) as arrears of tax due by the judgment-debtor under the Madras Motor Vehicles Taxation Act. This tax is made payable by the Act in respect of licenses which owners of motor-cars are required to take out under the Act. The arrears of unpaid tax due by the judgment-debtor were clearly a debt due to the Crown, that is to say a Grown debt, and the learned advocate for the respondent has quite properly not attempted to justify the Full Bench's decision to the contrary. The debt being created by Act was a specialty debt, and debts due to the Crown by record or specialty have priority over all other debts. Even regarding the debt as a simple debt the Crown would have the prior right to payment over the respondent, because whenever the right of the Crown and the right of the subject in respect of payment of a debt of equal degree compete the Crown's right prevails : In re Henley & Co (1878) 9 Ch. D. 469 Commissioner of Taxation for the state N.S.W. V/s. Palmer (1907) A.C. 179.

(3.) It has been contended that the money paid into court had become the decree-holder's money, and was no longer available to the Crown for the satisfaction of its debt. No doubt under English law if the subject has completely executed his distress by actual sale of his debtor's property before distress proceedings are taken by the Crown the Crown's right will be defeated : Attorney-General y. Leonard (1888) 38 Ch. D. 622. But this is because under the English law a creditor is, after seizure of his debtors goods under a writ of fi fa, in the position of a secured creditor, with a legal right to have the goods sold and to be paid out of the sale proceeds; see Clarke In re (1898) 1 Ch. 336 at 39.