N.U.Beg, J. - (1.) This is a plaintiff's first appeal against a Judgment and decree of the Civil Judge, lucknow, dismissing the plaintiff's suit for the recovery of Rs. 35,575/-from the defendants together with costs and interest, pendente lite and future, as the Court may deem just.
(2.) The plaintiff in the suit was Badri Das appellant, who held canteens as an Army contractor at Jheium, Mona and Sargodha before the partition of India, which took place with effect from the 15th August, 1947. similarly Messrs. K. S. Haji S. Abdullah and Brothers also held canteen contracts at Lucknow, Allahabad and Faizabad in U. P. before the partition. After the partition Messrs. K. S. Haji S. Abdullah and Brothers wanted to migrate to Pakistan. Badri Das found it difficult to carry on his business in Pakistan due to the disturbances there. Hence he also wanted to migrate to India. In this situation, the plaintiff and Messrs. K. S. Haji S. Abdullah and Brothers agreed to exchange their respective business as Army contractors in India and Pakistan. The oral agreement between the two parties appears to hare been stipulated about the month of September, 194/-This agreement was, however, reduced to writing by the parties on the 26th October, 1947. This written agreement is Ex. 8 in the present case. In this agreement Messrs. Ch. Badri Dass and Sons, Station Contractors Jheium, are party No. 1, and Messrs. K. S. Haji S. Abdullah and Brothers, Station Contractors, Lucknow, Allahabad and faizabad, are party No. 2. The terms of the said agreement are as follows:- "(a) Party No. 1 will take over all the stocks of party Ho. 2 at the places mentioned above (Lucknow, Allahabad and Faizabad) at C.S.D. wholesale price plus all overhead charges, viz., Terminal Tax, Cartage, and Bank Commission. (b) Party No. 1 will take over all the furniture, crockery, and cutlery, etc. etc. placed in canteens and fesidential quarters along with the Garage in No. 7, Post Office Road, Dilkusha, Lucknow. (c) Party No. 1 will take over all the outstandings, i.e., the amounts due to party No. 2, as far as they are verified and confirmed by the officers concerned. (d) In lieu of the above, party No. 2 agrees to take over all business of party No. 1 including furniture and stocks etc. etc. at Jehlum in West Punjab, i.e. canteens at jehlum, Mona and Sargodha, on the same terms and conditions as aforesaid. (e) The payments are to be made by one party to the other on completion of the Board proceedings at Lucknow in U. P. and Jheium in West Punjab." The above agreement of exchange was approved by the Military authorities concerned in both the dominions. On the 10th December, 1947. Messrs. K. S. Haji S. Abaullan and Brothers transmitted a receipt for Rs. 30,000/- to the plaintiff and sent a letter No. 29/5/X/3 dated 11th December, 1947, of adjustment of Rs. 30.000/- towards the value of the goods to be taken over by the plaintiff at Lucknow, Allahabad and Faizabad. The Military authorities in India accorded their sanction to the handing over or canteen goods to the plaintiff on the 7th November, 1947. A Board of Military authorities was constituted for the purpose of handing over the said canteen goods. This Board met at Lucknow on the 15th November, 1947, in the morning. The plaintiff's case is that the possession 01 the goods of Messrs. K. S. Haji S. Abdullah and Brotners was delivered to him by the Board on this date. At about 5 P.M. after the possession of the goods had been delivered to the plaintiff, the allegation of the plaintiff is that the said goods were attached as a result of a certificate issued by the income-tax Department for the realisation or an amount of over six lakhs of rupees alleged to be due from K. S. Haji S. Abdullah and Brothers. The plaintiff's case is that the said attachment of the property for the realisation of the Income-tax dues of Messrs. K. s. Haji S. Abdullah and Brothers was unlawful and illegal, as the property in the goods had already passed to him before the attachment of goods had taken place. The said goods were sold by the Income-tax Department En an auction commencing on the 24th Feb. 1948. The auction of the goods continued on various dates. The proceeds of the auction of the goods were adjusted towards tne income-tax dues. The attached goods, stores and furniture were sold for considerably over Rs. 30,000/-. The plaintiff is entitled to recover from the defendants at least an amount of Rs. 30,000/- in respect of which a receipt had been transmitted to him by Messrs. K. S. Haji S. Abdullah and Brothers. The plaintiff was further entitled to interest at the rate of six per cent per annum from January 1948, when the first sale of canteen goods took place. This amount came to Rs. 5,575/-. The plaintiff, therefore, brought the present suit for the recovery of Rs. 35,575/-together with pendente lite and future interest from the date of the decree to the date of realisation at such rate as the Court may deem fit. The plaintiff impleaded the Union of India through the Secretary-in-charge Defence Department of the central Government, New Delhi, as defendant No. 1, and the secretary-in-charge, Finance Department (relating to Income-tax) New Delhi, as defendant No. 2. The decree for the afore-said amount was claimed against both the defendants.
(3.) Both the defendants filed a joint written statement. On their behalf, it was admitted that a certificate for the realisation of Income-tax dues from Messrs. K. 5. Haji S. Abdullah and Brothers was issued by the income-tax authorities, and the goods and stores in question were attached for the realisation of the said dues on the 15th November, 1947. Their case was that the attachment in question was a valid attachment, as the goods in question belonged to the assessee Messrs. K. S. Haji S. Abdullan and Brothers, and were the property of the said assessee at the time of the said attachment. It was also pleaded on their behalf that the alleged transfer of goods in favour of the plaintiff was fraudulent and, therefore, bad in law. The defendants further pleaded that the plaintiff being the successor of Messrs. K.S. Haji S. Abdullah and Brothers was liable for the income-tax dues of his predecessor-in-interest. In any case, the plaintiff's suit was barred by estoppel. So far as defendant No. 1 was concerned, it was further pleaded on its behalf that the suit was not maintainable against it, as no cause of action was disclosed in respect of the claim against the Union of India through the Secretary-in-charge, Defence Department of the Central Government, New Delhi.;