Deposit made to avoid appointment of receiver does not cease to be property of judgment-debtor. Government has preferential rights in regard to arrears of taxes.

( 1 ) THIS case is referred to a Bench by Ananthanarayana Ayyar, J. , as he thought that it raises a question of general and public importance and there should be an authoritative pronouncement.

( 2 ) THE civil revision petition is brought against the order of the Subordinate judge, Tenali, accepting E. A. No. 284 of 1959, a petition filed by the Income-tax Officer, Tenali, for the issue of a cheque for Rs. 3,281. 88 np. being the arrears of income-tax due by the judgment-debtor out of Rs. 12,500. 00 in deposit in Court to the credit of O. S. No. 88 of 1955.

( 3 ) THE circumstances leading to this litigation are these. O. S. No. 88 of 1055 was instituted by the petitioner against the second respondent herein (Jainullabdin Saheb) for eviction from the factory which the latter was holding on lease. During the pendency of the suit, the petitioner filed I. A. No. 1899 of 1955 under Order 40, Rule 1 Civil Procedure Code for the appointment of receiver to take possession of the factory and lease for two or more years, on the allegation that the defendant was threatening to commit acts of waste on the machinery and the structures.

( 4 ) THIS petition was contested by the defendant, who represented that he was willing to deposit annual rent of Rs. 7,250. 00 into Court and give security as required by Court.

( 5 ) THEREUPON the Subordinate Judge passed an order to the effect that the defeadant should deposit into Court Rs. 12,500. 00 by 33-12-1955 and furnish security of immovable property for a sum of Rs. 12,500. 00 within three weeks, failing which a Receiver would be appointed to take possession of the suit mill and to auction the lease-hold right in it from year to year till the disposal of the suit. The learned Subordinate Judge thought that this order would afford sufficient protection to the plaintiff. The defendant complied with the conditions by depositing the amount in Court in time and by furnishing security in time.

( 6 ) ULTIMATELY the plaintiffs recovered judgment and in execution of the decree attached the above-mentioned amount. Another decree-holder also attached this amount.

( 7 ) ON 27-6-1959, the Additional Income-tax Officer, Tenali filed E. A. No. 284 of 1959 for the issue of a cheque for Rs. 3,281. 88 np. representing the arrears of income-tax and penalty due by the judgment-debtor, Jainullabdin Saheb.

( 8 ) IN spite of the opposition of the petitioner and the other attaching decree-holder, the Subordinate Judge allowed the application of the Income-tax Officer and ordered the issue of a cheque. It is this order that is impugned in this revision petition.

( 9 ) IN support of this petition, it is contended by Sri Rama Sarma, learned Counsel for the petitioner, that as the money was deposited to the credit of the petitioner s suit the doctrine of priority of crown debts would be inapplicable to this case and the decree-holder for whose benefit the deposit was made earlier was entitled to withdraw the whole amount.

( 10 ) AS substantiating this argument, reliance is placed by the learned Counsel for the petitioner on the judgment of the Divisioa Bench of the Madras High Court Gopalaiyar v. Thiruvengadam, AIR 1918 Mad 1158. In the case under citation a deposit was made by the first defendant as a condition to the setting aside of a decree made under Order 37, Rule 4 C. P. C. , he having failed to obtain leave to contest the suit under that chapter. Thereafter, the suit was tried and judgment was entered against the first defendant. Some time later, his brother, who was the third defendant in the suit, claimed that the money which was deposited by the first defendant belonged to the joint family and therefore it was not available to the plaintiff, the judgment-debtor. This claim was disallowed by the Subordinate judge. On appeal the District Judge held that since the money came from the joint family property the plaintiff was not entitled to it. In second appeal, the Madras High Court ruled that the