- (1.) The short question of law which arises in this appeal is whether respondent No. 1 the Union of India, is entitled to claim that the tax due to it from respondent No. 2, M/s. R.K. Das and Co., on account of the assessment years 1946-47 and 1947-48 has priority and precedence over the decretal amount due to the appellant, M/s. Builders Supply Corporation, from respondent No. 2. This question has been answered against the appellant by the Calcutta High Court, and by its present appeal brought to this Court with a certificate issued by the said High Court, the appellant contends that the decision of the Calcutta High Court is erroneous in law.
(2.) It appears that respondent No. 2 secured a building contract from the Government in connection with the construction of the Mint and in that behalf it had to make a deposit of Rs. 50,000 as security for the due execution of the contract. In connection with the execution of the said contract, respondent No. 2 obtained a supply of building materials from the appellant. The appellant was unable to secure payment for the goods thus supplied by it, and so, it had to sue respondent No. 2 for recovery of the dues. In that suit, on the 18th April, 1949, the appellant obtained an order for attachment before judgment of Rs. 5,000 out of the aforesaid security deposit of Rs. 50,000. This deposit was lying with the Superintending Engineer, Calcutta Central Circle No. 1. Subsequently, on the 16th June, 1950, the appellant's suit was decreed by the 5th Additional Subordinate Judge, 24 Parganas, for a sum of Rs. 12,275-9-0. This decree was put in execution by the appellant on the 14th February, 1952, in the Court of the 7th Sub-Judge and in consequence, Money Execution case No. 9 of 1952 was started. Four days thereafter the Subordinate Judge issued an order for the attachment of a further sum of Rs. 7,275-9-0 out of the aforesaid security amount deposited by respondent No. 2. Whilst writing to the Superintending Engineer in that behalf, the Subordinate Judge asked him to remit to the Court the sum of Rs. 5,000 which had already been attached before judgment. On receiving this communication, the Superintending Engineer placed a further sum of Rs. 7,275-9-0 under attachment, but did not comply with the requisition of the Court to remit Rs. 5,000 to it. On the 30th April, 1952, the Executing Court wrote to the Superintending Engineer and asked him to transmit the whole of the amount of Rs. 12,275-9-0 which was under attachment as a result of the two previous orders passed in that behalf, but this requisition also was not complied with till March 9, 1953.
(3.) Meanwhile, the Certificate Officer of 24 Parganas had addressed a letter to the Subordinate Judge on the 23rd July, 1952, and requested him that if the Superintending Engineer had transmitted any money to his Court, its payment to the appellant should be withheld in order to enable a claim under O. 21, R. 52 of the Civil Procedure Code to be preferred on behalf of the Government. Along with that letter, the Certificate Officer sent a copy of another letter which had been addressed by him to the Superintending Engineer asking him not to make any payment out of the amount deposited by respondent No. 2 but to retain it after deducting the departmental dues. The Superintending Engineer was informed by this letter that arrears of income-tax due from respondent No. 2 exceeded Rs. 50,000 with the result that the whole of the security deposit less departmental dues, was liable to be applied to the satisfaction of the tax debt in respect of which Government had priority over all unsecured creditors.;