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The Secretary of State for India Vs. Vedavyas Venkatesh Bhatta - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case Number Letters Patent Appeal No. 13 of 1934
Judge
Reported inAIR1936Bom213; (1936)38BOMLR267; 163Ind.Cas.357
AppellantThe Secretary of State for India
RespondentVedavyas Venkatesh Bhatta
DispositionAppeal dismissed
Excerpt:
.....more extensive than that given by the common law, since it creates on behalf of the government a right to priority over all debts of every kind whether secured or unsecured. but that section must be read with section 151 of the code, which confines the preference given or declared in favour of government by section 137 to the demands for the current year, and restricts in terms what was the common law prerogative of the crown.;balmukund v. collector, ahmednagar (1934) 36 bom. l.r. 1103, followed. - - there it was held, after an exhaustive survey of the authorities,-a judgment debt due to the crown is in bombay entitled to the same precedence in execution as a like judgment debt in england, if there be no special legislative provision affecting that right in the particular case. ,..........claims that were made by the bank, which was a private person. mr. justice divatia held that the right of priority given to government by section 137 of the bombay land revenue code was cur tailed by section 151 of the bombay land revenue code, and on reading these two sections together he decided that the government had a right of priority only for the land revenue demand for the current year. he therefore ordered that the decree of the lower appellate court should be set aside and that the sale proceeds should be applied, after defraying the expenses of the sale, to the payment of ankola forest dues, the sunksal forest dues and the dues under the award decree obtained by the bank rateably. the government of bombay have appealed.3. the view taken by mr. justice divatia has been taken.....
Judgment:

Barlee, J.

1. This is an appeal from a judgment of Mr. Justice Divatia.. The facts on which his decision is based are shortly these-

The Divisional Forest Officer had a claim against one Ganpat under the Forest Act for Rs. 1,844 in respect of advances from the Ankola Firewood Depot, and he sent his claim to the Collector in order that the said amount might be recovered as arrears of land revenue under the Land Revenue Code. Ganpat's property was sold and thereafter two other claims were put forward, one claim in respect of money due to the Forest Department from Ganpat and his brother, known as Sunksal dues, and a claim made on behalf of the Ankola Urban Co-operative Credit Bank. Before the sale had taken place this bank had obtained award decrees against Ganpat and his brother and the plaintiffs, their sureties, and they claimed a share of the proceeds of the sale.

2. The question for determination was whether the claims made by Government were to be preferred to the claims that were made by the bank, which was a private person. Mr. Justice Divatia held that the right of priority given to Government by Section 137 of the Bombay Land Revenue Code was cur tailed by Section 151 of the Bombay Land Revenue Code, and on reading these two sections together he decided that the Government had a right of priority only for the land revenue demand for the current year. He therefore ordered that the decree of the lower appellate Court should be set aside and that the sale proceeds should be applied, after defraying the expenses of the sale, to the payment of Ankola Forest dues, the Sunksal Forest dues and the dues under the award decree obtained by the bank rateably. The Government of Bombay have appealed.

3. The view taken by Mr. Justice Divatia has been taken by the learned Chief Justice in the case of Balmukund v. Collector, Ahmednagar : AIR1935Bom25 , where he held that Sections 137 and 151 should be read together and that they confer priority only in respect of arrears for the current year and not for arrears of past years. This is the only decision of our own Court on this point which has been brought to our notice.

4. It is not disputed that the Crown is given priority by common law. Secretary of State for India v. Bombay Landing & Shipping Co. (1868) 5 B. H. C. 23 is the leading case on the subject. There it was held, after an exhaustive survey of the authorities,-

A judgment debt due to the Crown is in Bombay entitled to the same precedence in execution as a like judgment debt in England, if there be no special legislative provision affecting that right in the particular case.

But this common law priority is confined to unsecured debts, cf. Bank of Upper India v. The Administrator-General of Bengal I.L.R. (1917) 45 Cal. 653, where it is held-

that so far as the immoveable properties were concerned including the fixtures, the Crown was not entitled to priority, that the Alliance Bank as first mortgagee ranked first, but the Delhi and London Bank as second mortgagee was not entitled to priority over the Crown.

It follows that the priority given to the claim of Government by Section 137 of the Bombay Land Revenue Code is very much more extensive than that given by the common law, since it creates on behalf of the Government a right to priority over all debts of every kind whether secured or unsecured, and the learned Advocate General contends that Section 151 which restricts the preference given by Section 137 to the demands for the current year, merely takes away this statutory priority and does not interfere with that given by common law.

5. It is common ground that the Crown has a common law priority and that it exists until it is modified by the Legislature; and it is not denied that the provincial legislature had power to modify the common law prerogative. The narrow question before us, then, is whether the legislature has not interfered with the common law prerogative. In my opinion it has done so. Section 137 does not merely create additional rights in excess of those given by the common law but embodies a declaration of the whole of the rights of the Crown to priority. It includes not only the right of priority over secured debts which is new, but also declares the right of priority over debts of all sorts. Therefore Section 151 which confines the preference given or declared by Section 137 to demands for the current year, does in terms restrict what was the common law prerogative of the Crown.

6. The learned Advocate General has pointed out that this may lead to awkward results, but where a section is clear-and in this case we think the section is clear-we cannot allow such considerations to influence our decision.

7. For this reason we agree with the former decision of Mr. Justice Divatia and dismiss this appeal with costs (two sets).

N.J. Wadia, J.

8. It has been held in Balmukund v. Collector, Ahmednagar : AIR1935Bom25 , that Sections 137 and 151 of the Bombay Land Revenue Code should be read together, and that they confer priority only in respect of arrears for the current year and not for arrears of past years. The contention of the learned Advocate General is that apart from Section 137 of the Bombay Land Revenue Code the Crown has under its prerogative a right to precedence for its debts over the unsecured debts of private persons, and that this right which is independent of Section 137 of the Bombay Land Revenue Code, cannot be affected by Section 151. Section 137 admittedly goes further than the ordinary prerogative of the Crown, and gives to the claims of Government under the provisions of Chapter XI precedence over any other debts, secured or unsecured. Section 151 provides that the preference given by Section 137 to Government claims shall apply only to demands for the current year. It, therefore, expressly takes away the precedence which Section 137 gives to Government demands for arrears other than those of the current year, and it takes away that precedence without any qualification, i.e., with regard to unsecured as well as secured debts. It undoubtedly has the effect of reducing the right of precedence for its debts over unsecured debts of private persons which the Crown would have under its ordinary prerogative. But we cannot, merely because it has this result, assume in the face of the express language of the section that such a result was not intended by the section. The prerogatives of the Crown can be affected with the consent of the Crown, that is, by statute.

9. I am, therefore, of opinion that the view taken by Mr. Justice Divatia is correct, and that the appeal must be dismissed with costs.


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