1989 PLP 1431 (CLC)

Ismail Merchant for Purchaser. Nemo for Judgment‑Debtor. Noorul Hassan for Claimant (KESC). U. Shah for K.W.S.B. Property in suit was sold in execution of this decree. Out of the sale proceeds a sum of Rs.3,36,173.86 was ordered to be retained by this Court by order dated 19‑2‑1989, which was the claim of the various departments namely Karachi Development Rs.2,53,846, Karachi Water and Sewerage Board Rs.31,629.42. Excise and Taxation Department Rs.44,780 and Karachi Development Authority Rs.5,

980. The balance amount was ordered to be paid to the Decree‑Holder towards the decretal amount. It is contended by Mr. A.I.Chundrigar that the dues of K.E.S.C., K,W.S.B and Excise and Taxation Department on the property in question cannot have preference over the claim of the Decree‑Holder because these dues are against the occupants of the property or at the most against the person of the owner of the property and even if there are dues against the property then also these dues are not of such a nature that they may create an interest in the property in favour of their respective departments. As against this the property having been mortgaged by the Judgment‑Debtor in favour of the Decree‑Holder as early as 26‑4‑1965 will amount to a transfer of interest in favour of the Decree Holder from that date. Hence the claim of the Decree‑Holder shall have preference over the dues being claimed by the claimant departments. Mr. A.I.Chundrigar, Advocate placed reliance on AIR 1932 Sind 121‑ Ahmed Haji Esmail v. Parmanand Meghraj where it was held that arrears of abkari revenue are not due upon any specific land owned by the abkari renter. Hence a sale by Government of the land of the renter for recovery of abkari revenue is a sale subject to any prior mortgage on the land. This ruling does not apply to the facts of the present case because it is mentioned therein that the abkari renter is not of such nature that it can be treated as due upon any specified land though it may be recoverable as an arrear of land revenue. He then cited AIR 1935 Sind 232‑People's Bank of Northern India Ltd. v. Secretary of State for India. In this case a person had taken an abkari licence from Government for sale of liquor and subsequently created a valid mortgage in respect of his stock in favour of another person. The Government, it was held, in the event of default of an instalment could not claim precedence or share in respect of sale proceeds obtained from the sale of the stock at the instance of the mortgagee. The charge in favour of the mortgagee had precedence over the claim of the Crown. This ruling also does not apply to this case for the reason that it pertains to abkari revenue and the property in the case in ruling is stock and not immovable property. Mr. A.I.Chundrigar then cited the latest judgment in this case of I.D.B.P. v. Hand Tools Limited and others (H.C.A.No.85/87) in which it was held that income tax dues are not dues of an assessee shall have precedence over the claim of the Decree‑Holder only to the extent of those dues which are prior to the creation of the mortgage. Those dues which pertain to the period after the creation of the mortgage cannot have precedence over the Decree‑Holder's claim. This ruling is also distinguishable from the present case. Income tax dues are not dues against any specified property of the assessee, hence their position is not different from that of revenue of abkari and therefore they cannot have precedence over the claim of a Decree‑Holder in a mortgage suit with respect to the period subsequent to the creation of the mortgage. But the dues of all the 4 claimants in the present case are dues on this specific property. The arrears of the Excise and Taxation Department and Karachi Development Authority are with respect to property tax and rent/price of land and therefore there can be no doubt that these are on this specific property. Similarly the water charges and the charges of electricity were dues against the occupants as well as the owner of this property and these connections are granted on the specific property and the dues thereof are also a charge on these properties. The offer of the purchaser of this property in execution of this decree was subject to the condition that it will be free from encumbrances thereon. The offer was accepted with the consent of Decree‑Holder. Hence the Decree‑Holder cannot now contend that the arrears which are an encumbrance on this property should not be paid out of the sale proceeds. It was also pointed out during the course of arguments that the plaintiff/Decree‑Holder had in the execution application shown total decretal amount as Rs.6,87,612.24. He enhanced the same in statement under Order 21, Rule 66, CPC to Rs.9,91,

040. He has, however, claimed a sum of Rs.17,34,524.12 by C. M. A. No.1569/88, which is much more than any one of the above two amounts. He has also mentioned in the affidavit that he is entitled to more amount on calculation. It is therefore not clear as to whether he has drawn from the Court more than what is due to him or still something is due to him towards decretal amount. MrA.I.Chundrigar has placed reliance on the judgment of this case which is also reported in 1984 CLC 2987. The office is directed to calculate as to how much amount is due to the Decree‑Holder in accordance with the above judgment and make necessary amendments in the decree and should also certify as to how much interest has become due to him upto date. I am satisfied that the arrears of the above 4 claimant departments shall have precedence over the claim of mortgagee of property in dispute. I therefore direct the Nazir to pay the dues of the respective departments to them from the amount ordered to be detained by the Court with him, after one week of this order. A.A./I‑76/K Order accordingly.