1926 (2) TMI 2 - HC - Income Tax

Summary

Issues Involved:
1. Application of the principle of lis pendens.
2. Validity of the sales under the Public Demands Recovery Act.
3. Alleged fraud in the certificate sales.
4. Alleged irregularities in the certificate sales.
5. Validity of the certificate under the Public Demands Recovery Act.
6. Non-service of notice under Section 7 of the Act.
7. Irregularities in the procedure adopted in connection with the sale.
8. Death of a judgment-debtor after attachment but before the sale.
9. Nature of the suit brought by the plaintiffs.
10. Limitation period for bringing the suit.
11. Plaintiffs' entitlement to relief under the Bengal Tenancy Act.

Issue-wise Detailed Analysis:

1. Application of the Principle of Lis Pendens:
The principle of lis pendens was argued but was disallowed as it was not raised in the plaint, nor in any of the lower courts, or in the grounds of appeal presented to the High Court. Therefore, this ground was not entertained.

2. Validity of the Sales under the Public Demands Recovery Act:
The plaintiffs argued that the sales were void and illegal due to improper certificates and non-service of notice. The court found that the certificates, despite some blanks, provided all necessary information and were valid. The non-service of notice argument was dismissed as the notice bore the lithographic signature of the certificate officer, which was deemed sufficient under the law.

3. Alleged Fraud in the Certificate Sales:
The trial court found fraud in the sales, but the appellate court reversed this finding, concluding that the plaintiffs failed to prove fraud. The High Court upheld the appellate court's decision, noting that without proof of fraud, the plaintiffs' suit must fail.

4. Alleged Irregularities in the Certificate Sales:
Several irregularities were pointed out, such as non-service of notice under Rule 46(2) and the omission of certain statements in the sale-proclamation. The court held these to be mere irregularities that did not cause substantial injury to the debtor, and thus, the sales could not be set aside on these grounds.

5. Validity of the Certificate under the Public Demands Recovery Act:
The plaintiffs argued that the certificates were invalid due to blanks in the form. The court found that the blanks did not materially affect the validity of the certificates as all necessary information was provided.

6. Non-service of Notice under Section 7 of the Act:
The plaintiffs contended that notice under Section 7 was not properly served. The court found that notice was indeed served, and the lithographic signature was sufficient, thus dismissing this objection.

7. Irregularities in the Procedure Adopted in Connection with the Sale:
The court found that alleged procedural irregularities, such as non-publication of the sale-proclamation at the local thana, did not invalidate the sale as they did not cause substantial injury to the debtor.

8. Death of a Judgment-debtor after Attachment but before the Sale:
The court held that the death of a judgment-debtor after attachment but before the sale did not invalidate the sale, referencing previous cases that supported this view.

9. Nature of the Suit Brought by the Plaintiffs:
The court analyzed the nature of the suit, concluding that it fell under Section 37 of the Public Demands Recovery Act, which deals with matters relating to the execution of certificates. Since the plaintiffs failed to prove fraud, the suit was dismissed.

10. Limitation Period for Bringing the Suit:
The court found that the suit was not barred by limitation, as the time should run from the date of the final confirmation of the sale, which was 18th May 1920. The suit filed on 3rd June 1921 was within time, considering the period for serving notice under Section 80, Civil Procedure Code.

11. Plaintiffs' Entitlement to Relief under the Bengal Tenancy Act:
The court noted that the suit was not framed to seek relief under the Bengal Tenancy Act. Therefore, no relief could be granted under this head.

Conclusion:
The appeals were dismissed with costs, as the plaintiffs failed to prove fraud, and the alleged irregularities were not sufficient to invalidate the sales. The Secretary of State was awarded separate costs.