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TMI Blog1969 (1) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... 7) of the Income-tax Act, 1922 ; Rs. 5,64,301-14-9 due as sugarcane cess under section 29 of the Sugar Factories Control Act, 1938, for the years 1952-53 to 1954-55 ; and Rs. 1,92,053-12-3 due by the company to the Co-operative Development Union Ltd. as arrears of cane price for the year 1954-55. By order dated July 14, 1954, issued under the Essential Supplies (Temporary Powers) Act, the Government of U. P. appointed the Collector, Deoria, as the authorised controller of the company. On August 8, 1955, the Land Reforms Commissioner sanctioned the proposal submitted by the Collector, Deoria, to sell the holdings and the property of the company for realizing Rs. 8,38,176-13-0. Sardar Jagjit Singh, Chief Engineer, Indian Institute of Sugar Technology, Kanpur, valued the movables belonging to the company, i.e., tools and workshop plant, mill stores, spare parts and furniture at Rs. 7,64,817 and the lands and the factory at Rs. 23,75,000. Thereafter a sale proclamation was issued on October 4, 1955, for recovery of the total amount of Rs.8,38,176-13-0. The sale was fixed for November 8 1955. In the first instance only the movables were put up for sale by the Collector, Deoria, but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over the amount, he may proceed to sell the immovable property of the defaulter. But the learned judge was of the opinion that the provision was merely directory and not mandatory. He observed : "... the provision relating to the exhaustion of the processes contemplated in clauses (a) to (e) of section 279 of the Act is merely directory. In view of the provisions of the various Acts which make the realization of sums becoming due under those Acts as arrears of land revenue and in view of the provisions of the Act the Collector has got a duty and a statutory obligation to realise those sum. He has no discretion in the matter. Consequently I read the words 'may realise the same from the interest of the defaulter in any immovable property' in sub-section (1) or 'may be recovered from any immovable property of the defaulter' in sub-section (2) as meaning that if the Collector does not succeed in recovering the amount by having recourse to the processes mentioned in clauses (a) to (e) of section 279 of the Act he shall sell the immovable property of the defaulter." The learned judge also observed that the Collector acted in violation of the statutory provision contained in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount for which the property was put up for sale was recoverable as arrears of land revenue, no part of it was due in respect of any specific land. The amount could prima facie be recovered from the immovable property of the defaulter. But relying upon the expression "under this section" in section 286(2) of the Act 1 of 1951, it was contended that the immovable property of the company could be attached and sold only after the processes prescribed in section 279, clauses (a) to (e), were resorted to and the Collector was unable to recover the dues. It was urged that this is the true effect of section 286(1) and section 279 of Act 1 of 1951. Section 286 (1) provides : "If any arrears of land revenue cannot be recovered by any of the processes mentioned in clauses (a) to (e) of section 279, the Collector may realize the same by attachment and sale of the interest of the defaulter in any other immovable property of the defaulter." Section 279 of the Act sets out the procedure for recovery of arrears of land revenue. The section as it stood at the date of sale provided : "An arrear of land revenue may be recovered by any one or more of the following processes : (a) by servin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inapplicable where the defaulter is an artificial person like a company. Power to recover arrears of land revenue from a defaulter is governed by the processes mentioned in section 279, clauses (a) to (e), and section 286(1) places certain restrictions upon the power of the Collector to recover land revenue by attachment and sale of lands other than the holding in respect of which the land revenue is due. But the restrictions on the power of the Collector operate only when land revenue is in arrears. Restrictions, if any, upon the power of the Collector to recover dues under other statutes, as arrears of land revenue, arises from the statute which is the source of the liability and not from Act 1 of 1951, which merely sets out the processes for recovery of the dues. To hold that sub-section (2) of section 286 requires the Collector in the first instance to recover out of the movable property or by arrest and detention of the defaulter before immovable property of the defaulter is attached and sold is to amend the substantive provisions of the Acts under which the liability for money due is recoverable as land revenue. For instance, under section 46(2) of the Indian Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income-tax Act. We are, therefore, unable to agree with the opinion expressed by Jagdish Sahai J., that the use of the words "under this section" points to the applicability of the whole section i.e., sub-section (1) in the recovery of dues recoverable under sub-section (2) of section 286, and "that the two sub-sections have got to be read together and the effect of sub-section (2) is that even in connection with the recovery of miscellaneous dues as arrears of land revenue it is permissible to sell immovable property of the defaulter but subject to what is provided for in sub-section (1) ." We are also unable to agree with the observations made by the learned judge that " ... if sub-section (2) of section 286 of the Act were to be read in isolation and detached from sub-section (1) it would become impossible to administer the same. Sub-section (2) only provides that the arrears of miscellaneous dues may be recovered from any immovable property of the defaulter without specifying the manner in which they are to be recovered, that is to say, without indicating whether it would be recovered from the usufruct of the property or by its sale or by mortgage or lease." The provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a consolidated amount which included Rs. 81,821-2-0 due as income-tax. But on that account the sale is not illegal or irregular. An amount exceeding Rs. 7 lakhs was recoverable for the sugarcane cess and the cane price and the immovable property of the company could have been put up for sale for recovery of those dues. The sale is not proved to be vitiated on the ground of any material irregularity or mistake in publishing or conducting it, and it is therefore not liable to be set aside. It was finally contended that the company was prevented from exercising its right under rule 285-H of the rules framed under U. P. Act 1 of 1951, because the purchaser at the sale was appointed, by order of the Central Government, authorised controller of the factory of the company, and all the properties of the company were put in the possession of the purchaser, and that the company was unable to raise the requisite amount to be deposited under rule 285-H. Under rule 285-H any person whose holding or other immovable property has been sold under the Act may, at any time within thirty days from the date of sale, apply to have the sale set aside on his depositing in the Collector's Office-- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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