TMI Blog1974 (9) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... ce from the income-tax authorities under rule 2 of the said Schedule followed by another claiming a total sum of about Rs. 4,000 from the defaulter on account of arrears of income-tax. The petitioner filed objections to the execution proceedings on the ground that, by virtue of the aforesaid notice, no process could be issued by the executing court pursuant to the decree against any property of the petitioner by virtue of the bar created for the issue of such a process by rule 16(1) of the said Schedule. On this objection, the executing court by an order of May 25, 1973, held that the bar of rule 16(1) would operate only if the property sought to be proceeded against in execution had been attached pursuant to the notice issued under rule 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "such property" occurring in rule 16(1) must be construed to mean "property" belonging to the defaulter which the defaulter becomes disentitled to deal with by virtue of rule 16(1) of the Schedule as a result of notice issued under rule 2 thereof. On the other hand, learned counsel for the respondent points out that the issue of notice under rule 2 does not ipso facto result in the attachment of the property belonging to the defaulter and in fact the certificate issued under rule 2 could not be executed for a period of 15 days by virtue of rule 3 and that, in certain circumstances, provided by the proviso to the said rule 3, any property of the defaulter may be attached and contends that, until such an attachment is levied by the income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer on which the attachment may be cancelled. Rule 4 provides for the mode of recovery of the amount forming the subject-matter of the notice and includes the attachment and sale of the defaulter's properties. Rule 16, which is primarily intended to prevent private alienation of the property of the defaulter and provides for the consequence of attachment, is in the following terms : "16. (1) Where a notice has been served on a defaulter under rule 2, the defaulter or his representative in interest shall not be competent to mortgage, charge, lease or otherwise deal with any property belonging to him except with the permission of the Tax Recovery Officer, nor shall any civil court issue any process against such property in execution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made the subject-matter of attachment. While sub-rule (1), therefore, makes no reference to the property which may have been attached, sub-rule (2) specifically mentions the property which has been attached. The only rule under which the property can be attached is rule 3, a provision for which is made in the two provisos to the said rule. It is, therefore, not possible to accept the contention that the expression "such property" in sub-rule (1) of rule 16 refers to property which has been attached because, if that were so, the latter part of sub-rule (1) would have formed part of sub-rule (2) and the distinction pointed out by me above in the phraseology employed in the drafting of the two sub-rules leaves no manner of doubt that, where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s rule is to be found in the case of a secured creditor who has the prior right to recover the debt by proceeding against such property. In this view of the matter, once a, notice of demand is issued and has the effect of restraining the defaulter to deal with the property, any further process in respect of such property from any executing court would lead to conflict of jurisdictions and unnecessary multiplicity of proceedings. By virtue of the notice and the operation of sub-rule (1) of rule 16, the property is preserved either for eventual attachment, if found necessary under rule 3, or for realisation of the claim and until this process is complete, all other processes in execution of a decree obtained by a private person must be held o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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