Tek Chand, J. - (1.) By my order dated 11th of July, 1958, which was confirmed on 12th of September, 1958, in L. M. 90 of 1956, I had appointed Shri D. D. Dhawan, Official Liquidator of the Simla Banking and Industrial Company, Limited, in Liquidation, as Receiver to realise the assets of the judgment-debtor, Seth Badri Das Butail of Simla. On 25th of September, 1958, an application has been made (L. M. 37 of 1958) on behalf of the Trustee of Garni Mal Butail Trust, Simla, decree-holders, stating that a decree had been granted in their favour for Rs. 46,056/10/9 from the Court of Senior Sub-Judge, Simla, on 9th of April, 1956. The decretal amount was to be paid by monthly instalments of Rs. 3,000/-, with this proviso that if any of the two instalments were not duly paid, the decree- holders would be entitled to recover the entire amount remaining due under the decree. In execution oi this decree, the property, Oakley Estate belonging to the judgment-debtor had been attached and the Senior Sub-Judge, Simla, appointed Shri M. S. Kochhar as Receiver to realise the assets of the judgment- debtor. It was prayed that as the decree had not been satisfied the assets of Seth Badri Das Butail, after realisation by Shri D. D. Dhawan, Receiver, may be rateably distributed among the petitioners, Trustees of Gauri Mal Butail Trust and the Banking Company, in liquidation. Before this matter could be disposed of, an application was made by the Government Pleader, Punjab, on 19th of June, 1959 (L. M. 57 of 1959) on behalf of the Excise and Taxation Officer, Simla, under Section 151, Civil Procedure Code. It was stated that the property tax under section 3(1) and Rule 9(2) of the Punjab Urban Immovable Property Tax Act, 1940, and Rules, 1941, amounting to Rs. 65-3.12 n.P. for the year 1958-59 and Rs. 326.56 n.P. for the first six months of 1959-60 bad become due which had not been paid by the landlord so, far. It was prayed that property tax amounting to Rs. 979.68 n.P. for the year 1958-59 and for the half year 1959-60 be ordered to be paid out of the amount lying with this Court or the Receiver might be ordered to pay the amount.
(2.) In this three-cornered contest tlie. Official Receiver has not contested the claim of the Excise and Taxation Officer. The main contest now is between the decree-holders, i.e., the Trustees of Gauri Mal Butail Trust, and the Excise and Taxation Officer. The question in controversy is whether the claim of the State is preferential to that of the decree-holders, and can be enforced only on an application being made despite the fact that the State has not obtained any decree or has taken any steps authorised by the statute for the realisation of its dues under the Punjab Urban Immovable Property Tax Act, 1940.
(3.) Section 73 of the Code of Civil Procedure has obviously no applicability to this case, as that is a provision for distribution of assets between two or more decree-hold-ers. The object of this provision is to place all decree-holders on an equal footing regardless of any priority in attachment or of the application for rateable distribution. The intention of the Code is to secure an equitable administration of the property by placing all the decree-hojders on the same level and making the property rateably divisible among them. But before this can be done, it is necessary that the assets must bo held by the Court, and the decrees obtained by the decree-holders, must be decrees for payment of monies. Such decrees should be obtained against the same judgment-debtor; the claimant for distribution must have applied for execution to the Court by which the assets are held; and lastly such application should have been made before the receipt of assets by the Court. These essential conditions do not exist in this case as no decree has been obtained by the State and the application had not been made before the receipt of assets by the Court. If the claim of the State was to be determined only on the basis of Section 73, Civil Procedure Code, I would have had no difficulty in disallowing it But the State in this case is resting its claim on the general principle of law that it is entitled to precedence over all other claims, including decretal claims. Section 73(3), Civil Procedure Code, expressly provides that nothing in this section affects the rights of the Government. This subsection was considered by Bhide, J. of Lahore High Court in Oudh Commercial Bank Ltd. v. Spcy. of State. AIR 1935 Lah 319 (2). and he observed: "I am unable to sec that this sub-section confers any jurisdiction on the executing Court to entertain a claim on behalf of the Government in the absence of any decree in support of it. The sub-section only saves the rights of the Government, independent of the section, such as they might be and merely appears to have reference to the right of priority which can be ordinarily claimed in respect of debts to the Crown.";