Law:

Section:

Rule 16, read with rule 2, of Schedule II to the Income-tax Act, 1961 – Private alienation to be void in certain cases – Notice under rule 2 had been served upon defaulter judgment debtor requiring him to pay amount specified in tax recovery certificate – Subsequently, on application filed by first respondent who had obtained money decree against judgment debtor, Civil Court passed order of attachment of property and permitted first respondent to auction said property – Whether in view of rule 16, Civil Court has been deprived to issue any process against property of defaulter on whom notice under rule 2 had been served – Held, yes – Whether, therefore, order of attachment and subsequent order of sale made by Civil Court was without jurisdiction and, therefore, same was to be set aside – Held, yes FACTS The first respondent filed a suit against 'A' and obtained a decree for a sum with future interest and costs. This amount was due to him under a promissory note executed by 'A'. 'A' was a defaulter in the payment of income-tax. Therefore, on a certificate received by him from the ITO concerned, the TRO served a notice under rule 2 upon the defaulter, requiring him to pay the amount specified in the certificate. After the suit was decreed and while execution proceedings were pending, 'A' died and his legal representatives were brought on record. An execution petition was filed by the decree-holder and an attachment of the property of the judgment-debtor was effected. Subsequently, the decree-holder filed permission to bid and set off and obtained such permission. He bid at the auction held and deposited a sum after adjusting the amount due to him under the decree in his favour. Thereafter, the auction-purchaser-cum-decree holder filed application under section 73 of the Code of Civil Procedure, 1908 for rateable distribution of the assets. This petition was allowed. He filed an application for the issue of a cheque. In the meantime, the TRO attached the amount in court deposit on the ground that the Government had priority over the amount for recovery of the tax arrears due from the tax defaulting judgment-debtor. Therefore, the decree-holder filed the…

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