1969 (3) TMI 22 - HC - Income Tax

Attachemnt of property - There is no bar in law operating upon the right of a third party whose property has been wrongly attached to straightaway file a suit in the civil Court for declaration of his rights in regard to that property - the suit was one for a declaration of their rights in an immovable property and would be governed by Art. 120 of the Limitation Act - suit of the plaintiffs, therefore, was not barred by limitation

Issues Involved:
1. Title of the plaintiffs to the attached houses.
2. Validity of the notice under section 80 of the Civil Procedure Code.
3. Maintainability of the suit.
4. Applicability of Order 21, Rule 63 of the Civil Procedure Code.
5. Limitation period for filing the suit.

Issue-wise Detailed Analysis:

1. Title of the Plaintiffs to the Attached Houses:
The primary issue was whether the three houses attached by the Collector were the property of the plaintiffs, Smt. Kalawati and Binda Prasad, or Phool Chand, the assessee. The trial court found in favor of the plaintiffs, holding that the houses were indeed their property and not that of Phool Chand. This finding was affirmed by the Additional District Judge on appeal.

2. Validity of the Notice under Section 80 of the Civil Procedure Code:
The plaintiffs had given notice to the Union of India and the Income-tax Officer under section 80 of the Civil Procedure Code before instituting the suit. The trial court repelled the technical pleas raised by the defendants regarding the validity of this notice.

3. Maintainability of the Suit:
The trial court also addressed the maintainability of the suit and found that it was maintainable. The technical pleas raised by the defendants in this regard were rejected.

4. Applicability of Order 21, Rule 63 of the Civil Procedure Code:
The core contention in the appeal was whether the suit was governed by Order 21, Rule 63 of the Civil Procedure Code, which would require it to be filed within six months of the rejection of the plaintiffs' objection by the Collector. The plaintiffs argued that their suit was a simple suit for a declaration of rights and not governed by Order 21, Rule 63. The court held that the attachment made by the Collector was not under Order 21, Rule 54, Civil Procedure Code, but under section 279(f) of the U.P. Zamindari Abolition and Land Reforms Act. Consequently, the plaintiffs' application before the Collector was not an objection or claim within the meaning of Order 21, Rule 58, and the subsequent suit was not under Order 21, Rule 63.

5. Limitation Period for Filing the Suit:
The plaintiffs contended that their suit was governed by Article 120 of the Limitation Act, 1908, which provided a six-year limitation period for suits seeking a declaration of rights. The court agreed with this contention, holding that the suit was not barred by limitation. The court rejected the argument that the suit should have been filed within six months under Order 21, Rule 63, Civil Procedure Code, as the application made before the Collector was not under Order 21, Rule 58.

Conclusion:
The appeal was allowed, and the order of the lower court remanding the case was set aside. The court held that the suit for declaration filed by the plaintiffs was governed by Article 120 of the Limitation Act and was not barred by limitation. Consequently, the plaintiffs' suit for declaration of their rights in the immovable property was decreed with costs throughout.

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