UNION OF INDIA v. R. P. VYAS — 1974 DIGILAW 68 (GUJ)

S. H. SHETH, J. ( 1 ) THIS Revision Application has been filed by Union of India against an order which the Court of the Civil Judge Senior Division at Broach has made in Special Civil Suit No. 4 of 1959. ( 2 ) THE facts of the case briefly stated are as under: One Karansinhji Fatehsinhji of Sagbara died leaving a very large estate. After his death a suit for the administration of his estate was filed in the Trial Court. It was Special Civil Suit No. 4 of 1959. In that suit the respondents were appointed as receivers to realize the assets belonging to the estate of deceased Karansinhji. On 24th April 1972 the Controller of Estate Duty made an application to the Trial Court praying for payment of estate duty out of the assets realized by the receivers. That application is at Ex. 86. The claim which the Controller of Estate Duty made on account of estate duty was to the tune of Rs. 4 16. 3 p. On 22nd March 1973 the Trial Court Directed payment of Rs. 80 0 out of the estate of the deceased towards the aforesaid amount of estate duty. Thereafter consent decree was passed in the suit by which the estate of the deceased was divided between his heirs and legal representatives. The sum of Rs. 74412. 10 p. was lying with the receivers. This amount was not sufficient to pay off the balance of estate duty. The question of paying the remuneration to the receivers arose. The parties to the suit and the receivers agreed that the receivers should be paid a sum of Rs. 614. 00 on account of costs incurred by them and a further sum of Rs. 22 0 for their remuneration. The Court made an arder accordingly pursuant to the consent purshis filed by the parties at Ex. 362. The Court therefore directed that out of the amount lying with the receivers a sum of Rs. 22614. 00 as aforesaid be paid to the receivers and the balance be paid to the Controller of Estate Duty towards the aforesaid amount of estate duty. The Union of India at the instance of the Controller of Estate Duty challenges the aforesaid order by which the amount of Rs. 22614. 00 has been deducted from the sum of Rs. 74412. 00 as aforesaid be paid to the receivers and the balance be paid to the Controller of Estate Duty towards the aforesaid amount of estate duty. The Union of India at the instance of the Controller of Estate Duty challenges the aforesaid order by which the amount of Rs. 22614. 00 has been deducted from the sum of Rs. 74412. 10 p. and the balance has been ordered to be paid to him. ( 3 ) IN this Revision Application which has been directed against the aforesaid order Mr. Bhatt who appears for the petitioner states that the petitioner has no objection if the aforesaid sum of Rs. 614. 00 which represents out-of-pocket expenses incurred by the receivers is paid to them. However he challenges the order in so far as it directs that a sum of Rs. 22000. 00 be paid to the receivers for their remuneration. He does not challenge the quantum of remuneration so much on merits as on the ground that unless the claim on account of estate duty is satisfied no other debt can be Discharged or no other payment can be made. In support of his contention he has advanced the following arguments. ( 4 ) THE first argument which Mr. Bhatt has advanced is that the assets realized may the receivers continue to form a part of the estate of the deceased including the portion earmarked as receivers remuneration by the impugned order of the Court. On 29th September 1973 when the Trial Court made the impugned order that amount formed a part of the estate of the deceased. According to him no order directing payment of Rs. 22000. 00 to the receivers could have been made by the Court on account of the fact that the application Ex. 86 made by the Controller of Estate Duly on 24th April 1972 had been pending before the Court and the claim made under that application had not been fully satisfied. He has further submitted that on 29th September 1973 in respect of the aforesaid amount of Rs. 22000. 00 there were rival claims and that therefore the Court had to decide whose claim should have priority. In order to make good toe argument which he has raised he has invited my attention to several provisions of the Estate Duty Act 1953 ( 5 ) BEFORE I deal with the arguments raised by Mr. 22000. 00 there were rival claims and that therefore the Court had to decide whose claim should have priority. In order to make good toe argument which he has raised he has invited my attention to several provisions of the Estate Duty Act 1953 ( 5 ) BEFORE I deal with the arguments raised by Mr. Bhatt on merits it is necessary for me to note two preliminary objections which Mr. Vin has raised to the maintainability of this Revision Application. The first preliminary objection which Mr. Vin has raised is that the Union of India at the instance of the Controller of Estate Duty could not have made the application Ex. 86. According to him no such application can be made to the Court for payment of estate duty out of the funds lying with the Court. In other words the application Ex. 86 made by the Union of India was according to Mr. Vin not maintainable. The second preliminary objection which Mr. Vin has raised is that there is no jurisdictional error which the Court below has committed and which warrants the entertainment of this Revision Application. ( 6 ) IN order to make good his first preliminary objection Mr. Vin has invited my attention to certain provisions of law. Sec. 53 of the Estate Duty Act 1953 provides as follows:estate duty may be collected by such means and in such manner as the Board may prescribed. SEC. 73 provides for a remedy where an assessee or an accountable person has committed default in payment of estate duty and where estate duty is required to be recovered from him. Sec. 73 prescribes several modes with all of which I am not concerned in this Civil Revision Application. Sub-sec. (5) of sec. 73 is material for the purpose of the prevent case. THE provisions of sub-secs. (1) (1a) (2) (3) (4) (5) (5a) (6) and (7) of sec. 46 and sec. 47 of the Indian Income-tax Act 1922 shall apply as if the said provisions were provisions of this Act and referred to estate duty Including estate duty provisonally assessed) and sums imposed by way of penalty or interest under this Act instead of to income-tax and sums imposed by way of penalty or interest under that Act and to Controller of Estate duty instead of to Income-tax Officer. Secs. Secs. 46 and 47 of the Income-tax Act 1922 lay down modes of recovering income-tax. Those modes of recovery can be resorted to for the recovery of estate duty by virtue of sub-sec (5) of sec. 73 of the Estate Duty Act 1953 None of the sub-sections out of sub-secs. (1) to (7) of sec. 46 and sec. 47 empower or authorise the Income Tax Officer to make an application for payment to him of income-tax out of the assets realized by the Court in an administration suit. Income-tax Act 1922 has been repealed and the Income-tax Act 1961 has replaced it. Sub-sec. (4) of sec. 226 of the Income-tax Act 1961 provides as follows:the Income-tax Officer may apply to the Court in whose custody there is money belonging to the assessee for payment to him of the entire amount of such money or if it is more than the tax due an amount sufficient to discharge the tax. Whereas sub-sec. (4) of sec. 226 of the Income-tax Act 1961 expressly authorises the Income-tax Officer to apply to the Court for payment to him of the amount of the income-tax payable by an assessee the Income_ tax Act 1922 did not contain any such provision. Sec. 73 of the Estate Duty Act has not been amended pursuant to the repeal of the Incometax Act 1922 and the enactment of the Income-tax Act 1961 It becomes therefore necessary for me to refer to General Clauses Act 1897 Sec. 8 thereof provides as under:where this Act or any Central Act or Regulation made after the commencement of this Act repeals and re-enacts with or without modification any provision of a former enactment. then references in any other enactment or in any instrument to the provision so repealed shall unless a different intention appears be construed as references to the provision so re-enacted. It is not necessary for me to reproduce sub-sec. (2) of sec. 8 It is not material for the purpose of the present case. If I read sec. 73 of the Estate Duty Act with sub-sec. (1) of sec. 8 of the General Clauses Act 1897 it means that I have to read in place of sub-secs (1) to (7) of sec. 46 and sec. 47 of the Income-tax Act 1922 the corresponding provisions of the Income-tax Act 1961 Sub-sec. (4) of sec. If I read sec. 73 of the Estate Duty Act with sub-sec. (1) of sec. 8 of the General Clauses Act 1897 it means that I have to read in place of sub-secs (1) to (7) of sec. 46 and sec. 47 of the Income-tax Act 1922 the corresponding provisions of the Income-tax Act 1961 Sub-sec. (4) of sec. 226 of the Income-tax Act 1961 is not the re-enactment of any of the aforesaid provisions of the Income-tax Act 1922 Sub-sec. (4) of sec. 226 is an altogether fresh enactment. There was no corresponding provision in the Income-tax Act 1922 I can read in place of subsecs. (1) to (7) of sec. 46 and sec. 47 of the Income-tax Act 1922 only the corresponding provisions of the Income-tax Act 1961 Since there was nothing in the aforesaid section of the Income-tax Act 1922 which empowered the Income-tax Officer to make an application to the Court for payment to him of the income-tax out of the funds of the assessee lying with the Court it is extremely difficult for me to say that sub-sec. (4) of sec. 226 of the Income-tax Act 1961 should be read into sec. 73 of the Estate Duty Act by virtue of the provisions of sec. 8 of General Causes Act 1897 While taking this view on the effect of sec. 8 of the General Clauses Act. 1897 I am supported by the decision of the Allahabad High Court in Chhagan Lal Rathi v. The Income-tax Officer District III (i) Kanpur and another I. L. R. (1965) 1 Allahabad 193. In view of the aforesaid reasons the Union of India is not entitled to place any reliance upon sub-sec. (4) of sec. 226 of the Income-tax Act 1961 in order to support the maintainability of the application Ex. 86. Mr. Bhatt who appears for the petitioner has fairly conceded that sub-sec. (4) of sec. 226 of the Income-tax Act 1961 cannot be read into sec. 73 of the Estate Duty Act. ( 7 ) THE next aspect of the question which arises for my consideration now is whether in absence of any express provision in the Estate Duty Act 1953 empowering the Controller of Estate Duty to make the application which he made to the Trial Court could he have made that application ? Reliance has been placed by Mr. Bhatt upon sec. Reliance has been placed by Mr. Bhatt upon sec. 151 of the Code of Civil Procedure and Order 20 rule 13 thereof Sec 151 of the Code of Civil Procedure merely declares that nothing in that Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. The question therefore which arises is whether the application Ex. 86 made by the Controller of Estate Duty could have been entertained for meeting the ends of justice. Reliance has been placed in that behalf upon the decision of the Full Bench of the Madras High Court in Manickam Chettiar v. Income-Tax Officer Madura 6 Incometax Reports 180. In that case Income-tax Officer had made an application to the court by which he sought an order directing payment to him from the sale-proceeds of the amount of income-tax due to the Crown by the assessee Govind Rao. It was in that context that the contention was raised whether such an application by the Income-tax Officer was maintainable. Chief Justice Leach with whom two other learned Judges concurred has observed in his judgment that sec. 46 of the Incometax Act 1922 was not exhaustive and that it did not have the effect without express words to take away from the Crown the right of enforcing payment by any other method open to it. The Full Bench approached the question from a different angle. They tried to find out whether sec. 46 created a bar to such an application and they answered the question in the negative. They approached the question from that angle on the assumption that it was open to the Crown to enforce payment in any manner open to it. It was contended in that case that if a private person could not enforce payment without first obtaining a decree the Crown was also in the same position. It was further argued in that case that a private person was governed by the provisions of the Civil Procedure Code and as there was nothing in the Code which placed the Crown in a different position the procedure laid down therein must be followed. It was further argued in that case that a private person was governed by the provisions of the Civil Procedure Code and as there was nothing in the Code which placed the Crown in a different position the procedure laid down therein must be followed. That argument was rejected by the Full Bench because in the opinion of the learned judges the Crown enjoyed special position and the Court has inherent powers. According to them whenever such an application was made by the Crown it created special circumstances which warranted its entertainment. They took this view because the Crown had the right of priority in payment of debts due to it. That right had always been existing and had been repeatedly recognized in India. If the Crown was entitled as it was to prior payment over all unsecured creditors the position of secured creditors was tn no way different. Therefore according to them there was no reason why the Crown should not be allowed to apply to the Court for an order directing its debt to be paid out of money in Court belonging to the debtor without having to file a suit. They further observed that in any case it must be a debt which is not disputed or which is indisputable. The debt due to the Crown under the Income-tax Act and arising out of the demand of the Income-tax Officer was not open to question at all. They therefore thought that the Crown could make an application to the Court for payment to it of the dues under the Income-tax Act which an assessee owed if the assets or funds belonging to the assessee had been lying in the Court. That case was decided on a reference to the Full Bench by Mr. Justice Varadachariar. Mr. Justice Varadachariar who delivered a short separate judgment has observed that his doubts about the maintainability of such an application were not wholly dispelled. However he thought that they were not serious enough to warrant dissent on his part from the conclusion which the learned Chief Justice and Mr. Justice Mockett had arrived at. It is quite clear therefore from the decision that the application (such as one at Ex. 86 in the present case ) could be made on behalf of the State or the Union of India under sec. 151 of the Code of Civil Procedure. Justice Mockett had arrived at. It is quite clear therefore from the decision that the application (such as one at Ex. 86 in the present case ) could be made on behalf of the State or the Union of India under sec. 151 of the Code of Civil Procedure. ( 8 ) MR. Vin in his turn has relied upon two decisions of the Calcutta High Court. A similar question arose before the Calcutta High Court in Builders Supply Corporation v. Union of India and others 28 Income-Tax Reports 797. The aforesaid Full Bench decision of the Madras High Court was cited before the Calcutta High Court in that case. Chief Justice Chakravarti and Mr. Justice Lahiri who heard that case have expressed doubt about the soundness of the principle laid down by the Full Bench of the Madras High Court in the aforesaid case The question again arose before Mr. Justice Sinha in Associated Pictures Ltd. v. Union of India and others 37 Income Tax Reports 487. The-aforesaid decision of the Full Bench of the Madras High Court was cited before him. So also the aforesaid decision of the Calcutta High Court was cited before him. In that decision Mr. Justice Sinha went a step further and took the view that the principle laid down by the Full Bench of the Madras High Court in the aforesaid decision was not a sound principle. He has held that the reasons which the Full Bench of the Madras High Court in the aforesaid case had given were not impressive. According to him he saw no reason why in the garb of doing justice strangers should be allowed to make applications in a suit or proceeding for the payment of money. He was not impressed by the view of Chief Justice Leach of the Madras High Court in the aforesaid decision that if a suit were to be filed by the Crown it would involve useless delay because the Union could take recourse to the more expeditious remedy under the Public Demands Recovery Act. In order to overcome the observation made by Mr. Justice Sinha in that decision that strangers cannot be allowed to make an application in a suit or proceeding for payment of money Mr. Bhatt has invited my attention to Order 20 rule 13 of the Code of Civil Procedure. In order to overcome the observation made by Mr. Justice Sinha in that decision that strangers cannot be allowed to make an application in a suit or proceeding for payment of money Mr. Bhatt has invited my attention to Order 20 rule 13 of the Code of Civil Procedure. Sub-rule (2) of Rule 13 provides as follows:in the administration by the court of the property of any deceased person if such property proves to be insufficient for the payment in full of his debts and liabilities the same rules shall be observed as to the respective rights of secured and unsecured creditors and as to debts and liabilities provable and as to the valuation of annuities and future and contingent liabilities respectively as may be in force for the time being within the local limits of the Court in which the administration-suit is pending with respect to the estates Or persons adjudged or declared insolvent and all persons who in any such case would be entitled to be paid out of such property may come in under the preliminary decree. and make such claims against the same as they may respectively be entitled to by virtue of this Code. Relying upon sub-rule (2) of Rule 13 of Order 20 Mr. Bhatt has argued that the Union of India being a creditor was entitled to make an application to the trial Court and to claim from the estate of the deceased the amount which was due to it on account of the estate duty. Sub-rule (2) of Rule 13 does not have such a wide connotation as Mr. Bhatt has tried to canvass before me. It permits a creditor to make a claim against the estate under administration of the Court if he is entitled to do so by virtue of this Code. There is no provision in the Code which entitles the Controller of Estate Duty or Union of India to make an application to the Court. If this is the position reliance has got to be placed again on sec. 151 of the Code of Civil Procedure. It is therefore difficult for me to uphold the argument raised by Mr. There is no provision in the Code which entitles the Controller of Estate Duty or Union of India to make an application to the Court. If this is the position reliance has got to be placed again on sec. 151 of the Code of Civil Procedure. It is therefore difficult for me to uphold the argument raised by Mr. Bhatt that Order 20 Rule 13 is a provision which enables the Controller of Estate Duty or Union of India to make to the Court an application for payment to him of the estate duty due from the estate of the deceased. Therefore reference to Order 20 Rule 13 does not carry the matter any further. T have got to answer the question on the basis of sec. 151 under which one view has been taken by the Full Bench of the Madras High Court and a different view has been taken by the Calcutta High Court Whenever the Controller of Estate Duty makes an application to the Court laying claim to payment out of the estate of the deceased of the estate duty it presupposes that the estate duty has been finally assessed. An assessment of estate duty cannot be challenged in the Civil Court. The claim therefore which the Controller of Estate Duty makes is an undisputed claim. It is also an indisputable claim. If there is an undisputed or indisputable claim on account of estate duty and the Controller of Estate Duty makes an application to the Court in order to realize it out of the assets or the estate of the deceased realized by the Court I see no reason why such an application cannot be made. A Court cannot act upon a disputed debt or a debt which requires to be adjudicated upon. A debt which is not disputable and which is not required to be adjudicated upon by the Civil Court is a debt for the payment of which the creditor can certainly make an application to the court in an administration suit. Therefore even in absence of any provision corresponding to sub-sec. (4) of sec. 226 of the Income-tax Act 1961 the application which the Union of India at the instance of the Controller of Estate Duty made to the Trill Court was maintainable. The first preliminary objection raised by Mr. Vin therefore fails and is rejected. Therefore even in absence of any provision corresponding to sub-sec. (4) of sec. 226 of the Income-tax Act 1961 the application which the Union of India at the instance of the Controller of Estate Duty made to the Trill Court was maintainable. The first preliminary objection raised by Mr. Vin therefore fails and is rejected. ( 9 ) I therefore proceed to examine on merits the contention raised by Mr. Bhatt. It takes me to certain provisions of the Estate Duty Act Sub-sec. (1) of sec. 74 provides as follows :subject to the provisions of sec. 19 the estate duty payable in respect of property movable or immovable passing on the death of the deceased shall be a first charge on the immovable property so passing (including agricultural land) in whomsoever it may vest on his death after the debts and encumbrances allowable under Part VI Of this Act and any private transfer or delivery of such property shall be void against any claim in respect of such estate duty. Sec. 19 to which reference has been made by sec. 74 has no application to the instant case. Part VI of the Estate Duty Act specifies debts and encumbrances which can be deducted while determining the value of the estate of the deceased. Sec. 44 of the Estate Duty Act provides that while determining the value of an estate for the purpose of estate duty allowance shall be made for funeral expenses (not exceeding rupees one thousand) and for debts and encumbrances but an allowance shall not be made (a) for debts incurred by the deceased or encumbrances created by a disposition made by the deceased unless subject to the provisions of sec. 27 such debts or encumbrances were incurred or created bona fide for full consideration in money or moneys worth wholly for the deceaseds own use and benefit and take effect out of his interest or (b) for any debt in respect whereof there is right to reimbursement from any other estate or person unless such reimbursement cannot be obtained or (c) more than once for the same debt or encumbrance charged upon different portions of the estate or (d) for debts incurred by or on behalf of the deceased by way of dower to the extent to which such debts are in excess of rupees five thousand and any debt or encumbrance for which an allowance is made shall be deducted from the value of the property liable thereto. It is not necessary for the purpose of this judgment to reproduce the Explanation to sec. 44 Mr. Bhatt has argued that sec. 44 does not permit the deduction of the remuneration payable to receivers from the estate of the deceased. In my opinion the submission made by him on the construction of sec. 44 is correct because debts and encumbrances referred to in sec. 44 are debts and encumbrances incurred or created by the deceased. Remuneration payable to a receiver appointed in a suit for the administration of the property of the deceased cannot be a debt incurred by the deceased or encumbrance created by the deceased. ( 10 ) THE expression property used in sec. 74 has been defined by sub-sec. (15) of sec. 2 in the following terms:property includes any interest in property movable or immovable the proceeds of sale thereof and any money or investment for the time being representing the proceeds of sale and also includes any property converted from one species into another by any method. Sub-sec. (16) of sec. 2 defines the expression property passing on the death in the following terms:property passing on the death includes property passing either immediately on the death or after any interval either certainly or contingently and either originally or by way of substitutive limitation and on the death includes at a period ascertainable only by reference to the death. Mr. Bhatt has also invited my attention to clause (ii) of sub-sec. (12) of sec. 2 which defines legal representative. Mr. Bhatt has also invited my attention to clause (ii) of sub-sec. (12) of sec. 2 which defines legal representative. It provides thus:legal representative means a person who in law represents the estate of a deceased person and includes. . . . . . . . . . . . . . . (II) As regards any obligation under this Act any person who takes possession of or intermeddles with the estate of a deceased person or any part thereof and ( 11 ) RELYING upon these provisions of the Estate Duty Act Mr. Bhatt has argued that the assets realized by the receivers in the present suit constituted the property which passed on the death of the deceased. He has further argued that from that property which passed on the death of the deceased no deduction on account of receivers remuneration could be made within the contemplation of sec. 44 of the Estate Duty Act. Mr. Vin in his turn has argued that the receivers remuneration represents the costs of realizing the assets of the deceased. If those costs were not incurred the assets of the deceased could not have been realized and nothing would have been available to the Controller of Estate Duty for payment to him. According to Mr. Vin therefore the costs incurred by the receivers for realizing the assets of the deceased must in their very nature be first paid out of the estate of the deceased before the estate of the deceased is disbursed. According to him the very nature of these costs of realization of the estate of the deceased is such that if it is held that they do not have priority over the claim in respect of estate duty no receiver would ever work and no estate of the deceased in an administration suit would ever be realized by any receiver. In other words if a receiver appointed by the court in an administration suit does not have the certain hope of receiving his remuneration and if his claim to remuneration depends upon the prior satisfaction or otherwise of the claim in respect of estate duty there will be no incentive for the receiver to work and to realize the assets and no one will be ready to be a receiver in such a situation. Mr. Mr. Vin has further argued that receivers always act on behalf of the Court and costs incurred by the receivers are really the costs of the Court. Therefore according to him they must have top priority over all other claims. The next argument which Mr. Vin has to raised is that a receiver appointed under Order 40 Rule 1 of the Code of Civil Procedure has a statutory lien on the assets realized by him. According to him such a lien must prevail over any other claim statutory or otherwise which may be made to the assets of the deceased. He has invited my attention to quite a few decisions in support of his proposition that a receiver has a lien on the assets realized by him in respect of his remuneration. It is not necessary for me to make any reference to those decisions. It cannot be gainsaid that a receiver has a lien in respect of his remuneration on the assets which he collects. Mr. Bhatt has tried to argue that the lien which a receiver has in respect of his remuneration is an equitable lien and an equitable lien cannot prevail over the statutory charge contemplated by sub-sec. (1) of sec. 74 of the Estate Duty Act. In support of his argument Mr. Bhatt has stated that Order 40 nowhere states that a receiver shall be paid his remuneration or shall have a lien in respect of remuneration on the assets realized by him. He has raised that argument in order to bring home to me his proposition that the lien which the receiver has in respect of his remuneration on the assets realized by him is a purely equitable lien and there is nothing statutory about it. I am unable to uphold that argument raised by Mr. Bhatt for the simple reason that an appointment of a receiver made under Rule 1 of Order 40 of the Code of Civil Procedure always carries with it the concept of remuneration for his services. Therefore the lien which he has in respect of his remuneration on the assets realized by him flows in its very nature from the order of his appointment made under Rule 1 of Order 40. His remuneration forms an integral part of his appointment. Therefore the lien which he has in respect of his remuneration on the assets realized by him flows in its very nature from the order of his appointment made under Rule 1 of Order 40. His remuneration forms an integral part of his appointment. Therefore the lien which he has in respect of his remuneration is in my opinion a statutory lien even though the lien originally might have its origin in. 4 equity. ( 12 ) IN N. Abdul Rahim v. Lingappa Vaijappa Angol and another A. I. R. 1943 Bombay 273 Mr. Justice Lokur has defined the position of a receiver in an administration suit. He has laid down that an administration suit is in essence a suit for an account and application of the estate of a deceased debtor for the satisfaction of the dues of all his creditors. The entire administration and settlement of the estate are assumed by the Court. The assets are marshalled and decree is made for the benefit of all the creditors. It is for this purpose that the Court appoints a receiver but that receiver does not have a better status than that of a receiver appointed under Order 40 Rule 1. In an administration suit the receivers possession is the possession of the Court which takes upon itself the management during the continuance of the litigation. In such a suit it is the duty of the Court to see that all the assets are realised and equitably distributed amongst all the creditors. Even if such a suit has been filed by a single creditor the decree passed would be in favour of all the creditors and even after the preliminary decree is passed every creditor has a right to be joined as a party and to prove his claim. But no creditor will be allowed to steal a march over others by obtaining a separate decree and recovering his dues by executing it. One of the important principles which has been laid down in this decision is that possession of the receiver is possession of the Court and that a receiver acts purely on behalf of the Court. The costs which a receiver therefore incurs in realizing the assets of the deceased must be deemed to be the costs incurred by the Court. One of the important principles which has been laid down in this decision is that possession of the receiver is possession of the Court and that a receiver acts purely on behalf of the Court. The costs which a receiver therefore incurs in realizing the assets of the deceased must be deemed to be the costs incurred by the Court. ( 13 ) THE question therefore which emerges from the above discussion is whether the receivers lien which in my opinion is statutory should have priority over the first charge in respect of the estate duty as contemplated by sub-sec. (1) of sec. 74 of the Estate Duty Act or whether the first charge in respect of estate duty should have priority over the statutory lien which a receiver enjoys in respect of his remuneration. In order to convince me that costs of the receiver are costs of the Court and have always a priority over the first charge Mr. Vin has invited my attention to sub-sec. (2) of sec. 46 of the Income-tax Act 1922 sec. 183 of the Bombay Land Revenue Code and sec. 222 of the Income-tax Act 1961 These provisions to which he has referred are purely illustrative in character. Sub-sec. (2) of sec. 46 empowers the Income-tax Officer to forward to the Collector a certificate under his signature specifying the amount of arrears due from an assessee and empowers the Collector on receipt of such certificate to proceed to recover from such assessee the amount specified therein as if it were an arrear of land revenue. Sec. 183 of the Bombay Land Revenue Code provides that when any sale of moveable property under this Chapter has become absolute and when any sale of immoveable property has been confirmed the proceeds of the sale shall be applied to defraying the expenses of the sale and to the payment of any arrears due by the defaulter at the date of the confirmation of such sale and recoverable as an arrear of land revenue and the surplus (if any) shall be paid to the person whose property has been sold. Sec. 222 of the Income-tax Act 1961 enables the Incometax Officer to forward to the Tax Recovery Officer a certificate under his signature specifying the amount of arrears due from an assessee and the Tax Recovery Officer on receipt of such certificate shall proceed to recover from such assessee the amount specified therein by one or more of the modes mentioned in that section in accordance with the rules laid down in the Second Schedulerule 8 in Second Schedule to that Act provides for disposal of proceeds of execution. The first payment which has to be made out of the proceeds of sale is in respect of costs incurred by the Income tax Officer All other payments are to be made thereafter. ( 14 ) MR. Vin has invited my attention to two decisions of the Court of Appeal in England. In Strapp v. Bull Sons and Co. (1895) 2 Chancery Division 1 the Court of Appeal has dealt with the question of lien. In that case a joint stock company for building operations got into difficulties. An action against the company was brought by a debenture-holder and a petition for winding up was presented by an unsecured creditor. By a consent order in the matter of the winding-up petition it was ordered that 5000 pounds should be raised by the plaintiff to that action and the unsecured creditors in order to complete the contracts which sum was to be a first charge on the assets of the company in priority to all the debentures that all the unsecured creditors should have second debentures given them that two receivers and managers should be appointed one of whom was nominated by the unsecured creditors to carry on the business but the company was to incur no fresh debts or liabilities. 4250 pounds were accordingly raised but the receivers and managers in completing the contracts incurred Considerable further expenses for which they claimed to be indemnified. On these facts the Court of Appeal has held in that case that the receivers and managers were entitled to be indemnified out of the assets of the company in priority to the persons who advanced 4250 pounds as well as to the holders of debentures. ( 15 ) THE next decision to which Mr. Vin has invited my attention is in In re Glasdir Copper Mines Limited. ( 15 ) THE next decision to which Mr. Vin has invited my attention is in In re Glasdir Copper Mines Limited. English Electro-Metallurgical Company Ltd. v. Glasdir Copper Mines Limited (1906) 1 Chancery Division 365 In that case a similar question arose for the consideration of the Court of Appeal. The principle which the Court of Appeal has laid down in that decision is as follows. Where advances for the preservation of a limited companys assets are made to a receiver and manager by a party to a debenture-holders action under an order of Court which directs that the sums advanced shall be a first charge on the assets in priority to the debenture-holders the receiver and manager is nevertheless entitled to take his costs and expenses properly incurred out of the assets in priority to the sums advanced it it appears that the true bargain was that the assets should be realized by the receiver and manager for the benefit of all concerned. Reference has been made in that decision to the earlier decision of the Court of Appeal to which I have already referred. ( 16 ) MR. Bhatt has argued that the charges in those cases were not statutory charges. In the instant case sub-sec. (1) of sec. 74 provides for a statutory charge a my opinion the charge which the Controller of Estate Duty has on the estate of the deceased is indeed a statutory charge. So also the charge which the receiver has in respect of his remuneration on the assets realized by him is a statutory charge. The costs incurred by the Court by appointing the receiver must in their very nature have priority over all other claims statutory or otherwise because unless the Court through the receiver realizes the assets nothing will be available to a public authority such as the Controller of Estate Duty for realizing the amount of public dues or estate duty either in part or wholly. The costs which the Court incurs therefore for realizing the assets of the deceased in an administration suit are so basic and fundamental in character that by their very nature they must have priority over all other claims. The costs which the Court incurs therefore for realizing the assets of the deceased in an administration suit are so basic and fundamental in character that by their very nature they must have priority over all other claims. The entire substratum of the claim made by the Controller of Estate Duty would not have come into existence if the Court had not appointed the receivers and if the receivers had not realized the assets of the deceased. To say that the Court shall realize the assets of the deceased through the receiver appointed by it but shall not pay to the receiver any remuneration for the services rendered by him unless the claim in respect of estate duty has been satisfied is in my opinion an absurd proposition. I am unable to imagine what would have happened to the claim made by the Controller of Estate Duty if the Court had not appointed the receivers and had not through their services realized the assets of the deceased. In my opinion therefore the order which the learned Trial Judge has made is an eminently justified order. [the rest of the judgment not material for reports. ]application dismissed. .