A mortgage decree is a decree for the payment of money within the meaning of r. 16(1) of Sch. II to the IT Act, 1961, and therefore the Civil Court cannot issue any process for the realization of the decree amount after a notice has been served on the defaulter u/r 2 of the Rules.

Sathiadev, J.

1. The Appeal is preferred against the order made by I Additional Sub-Judge, Pondicherry, in E.A. No. 5 of 1977 in E.P. No. 217 of 1974 on a petition filed under Order 21 r. 90 and s. 151 of the Code of Civil Procedure to set aside the sale held on 16-12-1976 on the ground of material irregularity.

2. The appellant herein is Union of India represented by ITO, Pondicherry, who was the petitioner in the Court below and the two respondents herein the respondents therein. In the petition, it was claimed that one Madam Garnier was doing business in automobiles and she died in September, 1967 bequeathing her property to the second respondent and three others. She was in arrears of income-tax amounting to Rs. 10,00,000/-, and the only immoveable property left behind is Door No. 4, St. Lawrence Street, Pondicherry. When the department took steps to bring the property to sale, it filed O.P. No. 21 of 1975 in the same Court against second respondent and three others, who are legal representatives of deceased Madam Garnier, for permission to bring the property to sale and the Court declared that State has the first charge over the property, and permitted it to bring the property to sale, and this petition was ordered on 24-10-75. While so, first respondent herein had filed on 1-7-1974 E.P. No. 217 of 1974, claiming that he is the mortgage under mortgage dated 22-12-1960, and hence he has a right to bring the property to sale. The Executing Court, after granting permission to first respondent to bid, auctioned the property on 16-12-1976, in which the degree-holder/first respondent himself purchased the property for Rs. 44,100/- whereas the property is worth much more. Inspite of the legal representatives of the income-tax defaulter having been served with notices and put on notice about the claim for arrears of income-tax, the proceedings taken in execution by first respondent, being contrary to the provisions of the IT Act, 1961, the sale conducted, would seriously affect the right of the petitioner, and therefore it deserves to be set aside.

3. Second respondent remained absent and it was the first respondent who contended that under mortgage dated 22-12-1960 a sum of Rs. 20,000/- is payable by Madam Garnier, and that under French Law, and as held in Susama Bala v. Bibuti Bhusan the mortgage deed itself is a decree, and it having the force of a decree, he has the right to directly file E.P. No. 217 of 1974, and therefore Court auction sale was held after due publication, and hence petitioner has no right to challenge the sale nor to claim preference over the claim of a secured creditor, and more particularly when IT Act had come into force only in 1964, whereas the mortgage was created as early as 22-12-1960

4. Court below placing reliance in Suraj Prasad Gupta and Another v. Chartered Bank, Kanpur and Another has come to the conclusion that first respondent being the mortgagee and a secured creditor is entitled to priority over tax amount that may be claimed by petitioner, and the decree obtained not being "decree for the payment of money", the Court auction sale used not be set aside. It also took note of he fact that long before Madam Garnier became an income-tax assessee under the provisions of the Indian IT Act, 1961, first respondent having secured a mortgaged which in law, is a mortgage decree, and ranked as secured creditor, and there being no irregularities made out in the auction sale, the sale held on 16-12-1976 deserves to be confirmed, and hence directed sale certificate to be issued. Aggrieved with this order, this appeal is preferred by petitioner, Union of India, represented by ITO Pondicherry. Subsequent to the order, a sale certificate was issued on 5-9-1977 and this appeal was filed on 15-11-1977.

5. Mr. Rangaswamy, counsel for appellant contends that merely because there was a mortagage in favour of the first respondent on 22-12-1960, it does not mean that after service of notice on Madam Garnier and