Kuppuswami, J.
1. These are two appeals, the first by the Hyderabad Co-operative Commercial Corporation Limited (herein after referred to as 'H. C. C. C. Ltd.) through the Director of Civil Supplies, Hyderabad and the second by the State of Andhra pradesh, represented by the Deputy Secretary to the Government of Andhra Pradesh, Civil Supplies Department, against the same order D/-11-7-1967 of the second Additional Chief Judge, City Civil Court, Hyderabad, in E. A. 5/62 in E. P. No. 95/59 in O. S. No. 2 of 1959 o his file.
2. Respondents 1 to 10 in these appeals are the same, respondent 1 being Syed Mohiuddin Khadri, the decree-holder in the above suit, who having dies is now represented by his legal representatives, respondents 2 to 10. Respondent 11 in C. M. A. No. 374/67 is the H. C.C.C. Ltd. represented by the Director of Civil Supplies, who, as stated above, is the appellant in C.M.A. No. 210 of 1967. Later applications were filed to add the Liquidator, H.C.C.C. Ltd. which is now under liquidation as a respondent in the two appeals and the said applications have been ordered.
3. The order under appeal is passed in execution proceedings in O. S. No. 2 of 1959, City Civil Court, Hyderabad. Though the decree was passed on 2-4-1959, the execution proceedings have been going on ever since and have come up to the High Court on several occasion. In order to appreciate the contentions raised by both the sides in these appeals, it is necessary to set out in detail the various events that have culminated in the passing of the impugned order.
4. A company called 'The Hyderabad Commercial Corporation Ltd.' was registered under the Hyderabad Companies Act 4 of 1340 F. on the 23rd Forward, 1352 Fasli. Sometime later on 12th Rajabul Murajab, 1365 Fijri by a Firman of H. E. H. the Nizam it was converted into hyderabad Co-operative Commercial Corporation Ltd. The bye-laws of the Society were duly registered. The H. C. C. C. Ltd. was carrying on its business according to bye-laws. On 26th February, 1952, Notifications Nos. 18 to 20 were published in the Gazette. Under Notification No. 18, the godowns of the H.C.C.C. Ltd. were requisitioned in exercise of the powers conferred under Section 3 of the Requisition of Immovable Property (Continuance of Temporary Powers) Regulation, 1357F. and the Managing Director was ordered to hand over the possession thereof to the Commissioner of Civil Supplies on 1-3-1952. By Notification No. 19, certain articles belonging to H. C.C.C. Ltd., were requisitioned and the Managing Director was directed to hand over the same to the Commissioner of Civil Supplies on 1-3-1952. By Notification No. 20, the whole of the stock of the food supplies referred to therein held by the Corporation was ordered to be sold and delivered possession of to the officers authorised in this behalf at the prices entered in the books of the H.C.C.C. Ltd.
The legal effect of these notification is one of the questions that arises in these appeals. The respondent contends that the entire assets and liabilities of the H.C.C.C. Ltd., were taken over by the Government, with the result that the government became the representative-in-interest of the Corporation. On the other hand, it is contended by the Government that the notifications have only the effect of transferring the godown stocks, etc., but do not have the effect of the government becoming entitled to all the assets and being subject to all the liabilities of the Corporation. At this stage however, it is sufficient to note that the entire management became vested in the Department of Civil Supplies and the Director of Civil Supplies began to represent the company in all its affairs.
5. Disputes seem to have arisen between Syed Mohiuddin Khadri, since deceased (though deceased he is described as the first respondent) and the H.C.C.C. Ltd. in respect of a contract entered into between them. The dispute was referred to arbitration and ultimately tow arbitrators, Sri Sadashiv Rao and Sri Venkatarangam Iyengar, Passed unanimous award dated 23-5-1958 directing the H.C.C.C. Ltd. to pay Syed Mohiuddin Khadri, a sum of Rupees 6, 91,293-10-11 (O.S.) with interest. Syed Mohiuddin Khadri thereupon filed O.S. No. 2 of 1959 before the Chief Additional Judge, City Civil Court, Hyderabad, praying that a decree may be passed in terms of the award. The H.C.C.C. Ltd. represented by the Director of Civil Supplies objected, inter alia, on the ground that the award was passed against a wrong person and, therefore, no decree could be passed in terms of the award. It was contended that H.C.C.C Ltd. was not in existence on the date of award as the Corporation was taken over by the government with effect from 1-3-1952 with all its assets and liabilities. This objection was, however, overruled by the learned Judge who found that there was no evidence to show that the H.C.C.C Ltd. ceased to exist. It was held that H.C.C.C Ltd. was still in existence with the change that the management was taken over by the Government and, therefore, it cannot be said that the award had been passed against a dead or wrong persons. The award was, therefore, made a rule of Court and a decree was passed in term of the award on 248-8-1959.
6. Meanwhile, a provision for the Civil Supplies Department (Telangana) was made in the budget for 1959-60 under Major head ';85-A---Capital Outlay of the Scheme of Government (A) Civil supplies'. One of the items under this head was payment to H.C.C.C Ltd. Rs. 4,50,000. On 12-6-1959, the Assistant Chief Accounts officer addressed a communication to all the District treasury Officers, Civil Supplies, Telangana region, drawing attention to this and other provisions in the Budget and adding that they are requested to kindly make the payments under the above head as per rules and intimate to this office the full particulars of amounts of expenditure incurred in the districts every fortnight on the 5th and 20th of succeeding month to which they relate for watching the expenditure as awhile against the above provision. Coming to know of the Budget provision and the above No. 2 of 1959 filed E. P. No. 95 of 1959 for attachment of 'certain money in the hands of the Commissioner of Civil Supplies, namely, Rs. 4,50,000, vide p. 662 of the Budget for the year 1959-60 and letter No. A/Cs.k.1/520/59 dated 12-6-1959' referred to above.
On 27-11-1959 the Additional Chief Judge, City Civil Court, Hyderabad, issued a prohibitory order to the Commissioner of Civil Supplies requesting him to hold the said sum or such portion of it as is available with him, subject to further orders of the Court. A copy of it was forwarded to the Accountant-General, Hyderabad, wrote to the Commissioner a letter dated 2-12-1959 stating that in view of the above orders, no payment relating to H.C.C.C. period will be made by this office without the concurrence of the Court. A copy of the letter was forwarded to the Court for information. O 4-12-1959 the Court passed another order to send the attached amount of Rs. 4,50,000 or such portion of it before 7-12-19590 to that Court and a communication was sent to this effect to the Commissioner of Civil Supplies with a copy to the Accountant-general. To this the Accountant-General replied as follows by his letter dated 9-12-1959;---
'As regard the remitting of the amount it is stated that the amount mentioned in your office letter referred to above is only a budget provision for meeting the liabilities of H.C.C.C. period. Payment from this provision is made by this office on presentation of bills by the drawing officer, subject to sanction of Government for time-barred claims.'
7. On 5-12-1959 the Additional Government Pleader filed an application requesting the Court to postpone the calling of this amount from the Commissioner of Civil Supplies till the disposal of the E.P. as the Government was contemplating to contest the same. The Court, thereupon, postponed the calling of the amount attached. The decree-holder then filed a petition to withhold the communication of the order passed on 5-12-1959. This was allowed. On 10-12-1959 a claim petition was filed on behalf of the Government. In the claim petition filed by the government under O. 21, R. 58, Civil P. C., it was contended that though the assets and liabilities of the Corporation were taken over by the Government, by reasons of such taking over, the Government did not itself become liable to the creditors of the Corporation. The Government was in the position of a third party unaffected by the decree of the suit. It was itself a creditor to an extent of eight crores and had first charge on the assets of the Corporation and was, therefore, entitled to file the claim petition relying upon the first charge. It was also pointed out in that petition that there was no actual amount in the hands of the Commissioner of Civil Supplies, but only a Budget provision which was not attachable. Payment of amounts is always subject to the approval and sanction of the government. There was actually no such amount in the hands of the Commissioner of ?Civil Supplies. It was, therefore, prayed that the Court may be pleaded to raise the attachment and recall the prohibitory order and in any case declare that any amount or asset belonging to or payable to the corporation can be paid towards the decree until the claims of the Government as the first lien holder are satisfied.
The decree-holder filed his counter to the claim objection and further filed a petition pointing out that the Government was adopting unjust, obstructive and dilatory tactics and though the Accountant-General had intimated that he will not dispose of the amount of Rs. 4,50,000 until orders of the Court, this would not be sufficient to safeguard his interests as the Budget provision might lapse at the end of the year and the Government may not make any provision in the next year just to harass and deprive him of the fruits of his decree. He, therefore, requested the Court to order the Commissioner of Civil Supplies and the Accountant-General to deposit the said sum of Rs. 4,50,000. In spite of the order dated 7-12-1959 directing to deposit the amount, the sum does not seem to have been deposited by the Accountant-General having explained the position by his letter dated 9-12-1959. On 6-7-1960 the Accountant General wrote to the court stating that with the close of the financial year 1959-60 the balance of ht provision mentioned in the previous letters from the Court had lapsed to the Government.
8. The claim petition came up for hearing on 4-11-1960. The Court rejected the contention that the amount attached was a mere budget provision and, in fact, did not exist and was not available for attachment. It also held that it was not possible in a summary proceeding of the nature to go into the question whether the Government had lien or a first charge over the amounts that were due to them and that would be decided only in a regular suit. It, therefore, refused to raise the attachment and dismissed the petition. The Government, thereupon filed O.S. No. 21 of 1960 before the Additional Chief Judge, City Civil Court, Secundrabad, under O. 21, R. 63, Civil P. C., to set aside the order in claim petition dated 4-11-1960. This was transferred to the High Court and numbered as C.S. No. 1 of 1962.
9. Meanwhile on 6-9-1960 an order was passed by the Registrar of Co-operative Societies under Section 56 (1) of the Hyderabad Co-operative Societies Act, cancelling the registration of the H.C.C.C Ltd. The order stated that an enquiry under Section 42 of the Act was ordered into the affairs of the Corporation by the Deputy Registrar and the Enquiry Officer and the deputy Registrar recommended that it may be liquidated. The order was to take effect after expiry of two months from that date, i.e., after 6-11-1960. The decree-holder thereupon filed W.P. No. 763 of 1960 questioning the said order of liquidation. As he did not recognise the liquidation, in the cause-title, he described the second respondent as the H.C.C.C Ltd. represented by the Director of Civil Supplies. The first respondent was the Registrar of Co-operative Societies. In that petition the decree holder contended, inter alia, that on and form 1-3-1952 there was no society at all in existence as it ceased to be such and became a Department of the Government as it was merged in the Civil Supplies Department of the Government. Therefore, no question of cancelling the registration of the society or appointing a Liquidator for the same can arise. This Court rejected that contention and observed that as the decree-holder had made a claim against the society only as a corporate body and obtained award only against the society only as a corporate body and obtained award only against the society and not against the Government he could not be permitted to contend that the government and the society are one and the same. It further observed that there is no devotion of any liability on the part of the Government.
It was further contended by the petitioner that the liquidation was illegal as the Registrar had not acted independently but to the dictation of the Government, that it was vitiated by bias as H C.C.C. Ltd. was formed under a Firman issued by the Nizam it was not governed by the provisions of the Hyderabad Co-operative Societies Act. These contentions were also rejected by this Court. In the result, the writ petition was dismissed.
10. The suit C.S. No. 1 of 1962 filed under O. 21, R. 63. Civil P. C., came up for hearing on 29-3-1963. Before it was taken up, an application 107 of 1963 dated 18-3-1963 was filed under O. 23,R. 1, Civil P. C., praying that the High Court may be pleased to permit the plaintiff to withdraw the suit with liberty to press its claim to a lien or charge before the Liquidator in liquidation proceedings. in the affidavit in support of that application, it was stated that the Government was advised to go before the Liquidator to press their claim and hence they would like to withdraw the suit. Our learned brother kumarayya, J., who heard the application pointed out that the said request to withdraw the suit, subject to the reservation that the plaintiff may be at liberty to press his claim as a secured creditor in the liquidation proceedings cannot be granted. If the plaintiff had any subsisting right and a remedy in law, the withdrawal may not affect him. This was, however, a matter to be decided having regard to the particular remedy sought. In view of these observations, the learned Advocate General did not press the latter part of the application. The suit was, therefore, dismissed as withdrawn.
11. Meanwhile on 21-4-1962, after the dismissal of the claim petition, the petitioner filed E. A. No. 57 of 1962 dated 21-4-1962 to call for the attached amount. This was against resisted by the H.C.C.C. Ltd. The Personal Assistant to the Director of Civil Supplies who filed the Counter-affirdact averred that the Registrar of Co-operative Societies had ordered liquidation in September, 1960 and the same order had been upheld by the High Court in W.P. No. 763 of 1960 and as the decree-holder had not obtained leave of the Registrar to file the execution petition, it should be dismissed. The application was heard by the Second Additional Chief Judge. City Civil Court, Hyderabad, on 23-7-1962. He took the view that the amount was attached prior to the liquidation proceedings and the Director of Civil Supplies had to send the amount first to the Court and it was only after this, the Director or the Liquidator, as the case may be, can apply to Court to hear their objections. He, therefore, directed the Civil Supplies Department to deposit the amount immediately in obedience to the order of his learned predecessor and it is only after the amount is credited that the objection, if after the property is vested in Liquidator, the decree-holder will be entitled to draw the amount, will be heard giving full opportunity to all concerned.
As against this order, H.C.C.C Ltd. represented by the Director of Civil Supplies preferred C.M.A No. 304 of 1962 to this Court. The Liquidator preferred C.M.A. No. 343 of 1963. C.M.A. No. 304 of 1962 was heard by Chandra Reddy, Chief Justice and Gopalrao Ekbote, J., on 13-11-1963. Before them it was conceded that the learned Judge cannot give a direction to the Director to bring the money to Court without considering the objections. They, therefore, sent back the matter to the learned judge to decide first the objections before compelling the Director to bring the money to the Court. In the result, the appeal was allowed and the order of the Second Additional Chief Judge, City Civil Court,. was set aside and the case was sent back to him for decision on the objections raised.
12. C. M. A. No. 343 of 1963 filed by the Liquidator, however, was not heard until 23-11-1967. A Bench of this Court consisting of one of us Jaganmohan Reddy, Chief Justice and Kumarayya, J., observed that the appeal filed by the Director of Civil Supplies had already been allowed and the matter remanded to the lower Court. If the Liquidator had any objection he can raise the same in the lower Court. His right to raise objections in the lower Court is subject to any objections which the respondent may have. With these observations the appeal was dismissed.
13. After this order, E.A. No. 543 of 1962 was enquried into by the Second Additional Judge, City Civil Court, Hyderabad. Notwithstanding the order of the High Court I C.M.A. No. 343 of 1963 the Liquidator does not seem to have applied to the lower Court to make him a party. There are some observations in the order of the lower Court, however, which seem to indicate that the Court was under the impression that the arguments were advanced both on behalf of Government and Liquidator. In more than one place, the Court below refers to the objections of the Government and the Liquidator and the arguments addressed on behalf of the government and the Liquidator. The advocate for the respondents who appeared in the lower Court says that the Government Pleader was being assisted by the employees of the Liquidator and the accounts and the documents were produced by the Liquidator. In any event, as we have permitted the Liquidator also to be added as a party to these appeals and heard fully the contentions urged on behalf of the Government represented by the Advocate-General and the Liquidator represented by Sri K. Madhava Reddy, it is unnecessary to consider whether in view of the order of this Court it was the duty of the decree-holder's representative to make the Liquidator a party or whether the Liquidator should have come on record as a party and raise his objections.
We may, however, add that as a responsible officer, who was appointed as Liquidator, it was the duty of the Dy. Registrar of the Co-operative Societies, without relying on technicalities, to appear before the Court and assist the Court without finding fault with the decree-holder in not adding him as a party. The order of the High Court was made in his residence and at his instance and it appears to us that the proper course in those circumstances would have been for the Liquidator to appear in the Court and raise any objections, if he wanted to.
14. Before the lower Court it was contended that since the society was under liquidation and a Liquidator was appointed in Liquidation proceedings, no legal proceedings can be taken or proceeded against the judgment debtor without previous permission of the Registrar. The Court below, however, too the view that as H.C.C.C. Ltd, was a Multi-unit co-coperative society, the State Registrar had no power to direct the dissolution and as the order of the dissolution in the instant case was passed by the State Registrar, it was void and of no effect. The learned Government Pleader the contended that the High Court had held in W.P. Np. 763 of 1960 that the dissoutuion was proper and, therefore, it was not open to the decree-holder to contend that the State Co-operative Registrar had no jurisdiction to pass the order of dissolution.
But the Court below held that the grounds on which the dissolution was challenged in the writ petition were different from the grounds urged now before him. He also observed that it was not canvassed before him that the decision of the High Court operated as res judicata. He, therefore, held that the said decision did not prevent or stops the decree-holder from contending that the State Registrar had no jurisdiction to order dissolution. In the result, he dismissed the objection that the execution petition was not maintainable, by reason of the order of liquidation. He, therefore, directed that further execution should proceed and that the Government should deposit the attached amount within fifteen days form the date of the order.
15 . H. C. C. C. Ltd. thereupon represented by the Director of Civil Supplies, filed C.M.A. No. 210 of 1967 and also applied for stay of operation of the order passed y the Court below, in C.M.P. No. 6406 of 1967. Our learned brother, Sharfuddin Ahmed, j., by an order dated 25-8-1967, directed the Government to deposit a sum of Rs. 50,000 in the first instance within three months from the date of the order and the balance of four lakhs should be paid in instalements to be spread over a period of tow years. The H.C.C.C Ltd., through the Director of Civil Skupplies, thereupon preferred L.P.A. No, 743 of 1967. When the L.P.A. came up for hearing, it was argued that the defer was against H.C.C.C. Ltd and in execution of that decree the Government could not be directed to deposit any sum. It was then pointed out by us that if the direction is to the government and not to the H.C.C.C. Ltd., it would not be possible for us to consider any objection by the government in an appeal by the H.C.C.C Ltd. in view especially of the contention of the Government that H.C.C.C. Ltd. was a distinct entity different form the Government. The Government thereupon filed C.M.A. No. 3724 of 1967 as a third party affected by the order of the lower Court and applied for leave to prefer that C.M.A. which was granted by us.
16. The first contention of the learned Advocate-General is that the attachment of a mere Budget provision is legal and the Court below erred in issuing, in the first instance, the prohibitory order and subsequently the order to deposit the amount in question. The application was made under O. 21, R. 52, Civil P. C., for the attachment of certain money, namely, Rs. 4,50,000 said to be in the hands of the Commissioner of Civil Supplies (vide p. 662, Budget for the year 1959-60 and the letter No. A/ C.S.K,1 /520/59 dated 12-6-1959 addressed to the District Treasury Officer by his office. In ordering this application, the Court directed the Commissioner to hold the said amount or such portion of it as was available with him, subject to further orders of the Court. In order to attract the provisions of O. 21, Rs. 52, Civil P. C., two conditions have to be satisfied: firstly, that there must be property of the judgment-debtor which is sought to be attached; secondly, it should be in the custody of the Court or a public officer.
The contention of the learned Advocate-General is that on the date of attachment, there was only some provision made in the Budget, whereby the Commissioner was authoirsed to spend the amount to a certain extent in connection with the affairs of H.C.C.C Ltd, and this can in no sense be construed as the property of the H.C.C.C Ltd, in the hands of the Government or the Commissioner of Civil Supplies and hence O. 21, R. 52, Civil p. C., has no application.
17. It is to be observed that the decree in O.S. No. 2 of 1959 which is sought to be executed is against H.C.C.C Ltd., Though some attempt was made in the earlier stages of the proceedings that having regard to the circumstance that the Government had taken over all the assets and liabilities of H.C.C.C Ltd. in 1952 and H.C.C.C Ltd. ceased to function on and from that day, the judgment-debtor must be deemed to be the government, Mr. Venkataramana quite rightly, in our opinion, did not attempt to take up that stand in this appeal, especially in view of the fact that this Court had expressly decided in its judgment D/-19-9-1961 in W.P N. 763 of 1960 that the decree was against the H.C.C.C Ltd. and not against the Government. Therefore, it remains for us to consdier whether the amount sought to be attached was the property of the H.C.C.C Ltd. in the hands of a Public Supplies within the meaning of O, 21, R. 52, Civil P. C. In order to decide this question it is necessary to consider the nature of a Budget provision.
18. Under Art, 202 of the Constitution, the Governor shall, in respect of every financial year cause to be laid before the House or Houses of the Legislature of the State a statement of the estimated receipts and expenditure of the State for that year. called 'annual financial statement' that is also in short referred to as the 'Budget'. The Finance Department prepares the Budget after requiring the department of the Secretariat to furnish materials on which to base the estimates. The Departments of the Secretariat depend on the estimates framed by the heads of departments, who in turn depend on the material furnished by district and other officers who collect the revenues or incur expenditure. After estimates are examined by the respective administrative departments and subsequently by the Finance Department, they are placed before the Council of Ministers, for decision as to which of the proposals should be provided for in the Budget with reference to the amount available and the comparative urgency of the proposals. The Finance Department then consolidates the estimates embodying the decision of the Council of Ministers and prepares the statements for consideration by the Houses of the Legislature. The estimates of expenditure which are not charged on the consolidated fund are submitted to the Assembly in the form of Demands for Grants. The Assembly may assent, or refuse to assent to any demand, or assent to a demand, subject to a reduction of the amount specified therein.
19. After the demands for grants are voted by the Assembly, a Bill is introduced to provide for the appropriation out of the Consolidated Fund of the State of all the moneys required to meet the grants made by the Assembly. After the Bill has been passed and assented to by the Governor, it will be published as the Appropriation Act. This, it is seen that the provision made in Budget for any particular expenditure, is only in the nature k of a decision made by the Government to spend up to a particular amount in connection with a particular matter for which the approval of the Legislature is obtained in the from of an Appropriate Act. Therefore, the mere fact that in the Budget provision it is shown that a certain amount is considered by the government as required for payment to H.C.C.C Ltd., does not mean that it has ceased to be the property of the Government and has become the property of the H.C.C.C. Ltd., in the hands of the Government.
20. The learned Advocate-General further pointed out that even after a Budget provision is made, in respect of a Major Head of expenditure, sanction of the Government must be obtained from time to time before any expenditure is incurred under that head. In this connection he invited our attention to Clause 78 of the Budget , is one of the items under the Major Head '85-A---Capital Outlay on Schemes of Government Trading'.
It is, therefore, submitted on behalf of the government that as there is no order of the Government sanctioning payment, the amount continued to be in the hands of the Government. The learned Advocate-General also referred to various other instances evidenced by Exs. P-53, P-54 and P-55, etc., where the government passed orders sanctioning payment of amounts decreed against H.C.C.C Ltd. Under ex. P-53 dated 29-8-1959, they accorded sanction for payment of Rs. 29,346.93 to the T. A. C. A. Bodhan, and stated that the expenditure shall be debited to the provision of Rs. 405 lakhs made in the current year's budget for 'payment to H.C.C.C Ltd.'. Under Ex, P-54 dated 24-9-1960, the Government sanctioned payment of Rs. 106-32 to Vacant Saw Rice Mill, Mancherial, being the costs awarded to the petitioner as per the orders of the High Court and the expenditure so sanctioned was directed to be debited to the provision made in the current year's budget under '85-A-Capital Outlay on Schemes of Government Trading (a) Civil Supplies -- payment --relating to H.C.C.C. period. Under Ex. P-55 dated 22-6-1961 a similar sanction for payment to Rama Brahmam and Sons was accorded.
21. The learned Advocate-General points out that there is no such order sanctioning payment to H. C. C. C. Ltd. in this case. In answer to this, Mr. Venkataramana submitted that though a mere budget provision in the Budget may not be liable to attachment, the position in this case is entirely different in view of the letter dated 9-12-1959 addressed by the Commissioner drawing their attention to the fact that a provision was made for payment of Rupees 4,50,000 under Major Head '85-A--Capital Outlay on scheme of Government Trading (a) Civil Supplies' in the Budget Estimates for the year 1959-60 to the H.C.C.C. Ltd. and directed all the Treasury Officers to make payment under the above head as appear rules and intimate to the office the full particulars of the amounts of expenditure incurred in the districts every fortnight. This communication was approved by the Commissioner of Civil Supplies. Mr. Venkataramana, therefore, contends that this communication clearly shows that the amount of Rs. 4,50,000 was treated as earmarked for payment to H.C.C.C. Ltd. he also argues that the Commissioner would not have made such a Communication if the Government had not accorded its sanction.
It is true, as pointed out by the learned Advocate-General that no order of the government according sanction for payment of the sum to H.C.C.C Ltd. was placed before us, On the other hand, documents Exs. P-53, etc., referred to earlier show that he Government was according sanction from time to time for payment out of the total sum of Rs. 4,50,000 to satisfy the various decrees. We are, however, inclined to agree with Mr. Venkataramana's submission that the Civil Supplies Department would not have made a communication which was approved by the Commissioner of Civil Supplies, if the sanction of the government had not been obtained. It does not, however follow that on and after the communication that the amount should be treated as the property of the H.C.C.C Ltd. in the hands of the Commissioner of Civil Skupplies and is liable to attachment under Order 21, Rule 52, Civil P. c. In this connection it is necessary to consider certain provision of the Budget Manual.
22. 'Appropriation' is defined as the amount provided in the Budget Estimate for a unit of appropriation or the part of that amount placed at the disposal of a disbursing officer. Thus, it is clear that the amount of appropriation continues to be at the disposal of the disbursing officer. Though it may be intended to be paid for particular purpose or to a particular institution, it does not, by reason for the appropriation, become the property of the institution in the hands of the officer.
The mere fact that the Commissioner of Civil Supplies directed the Treasury Officers to make payments to H.C.C.C. L td. as and when occasion arose does not mean that the amount as a whole became the property of the H.C.C.C Ltd., in the hands of the disbursing officer, namely, Commissioner of Civil Supplies. It is for this reason that the Accountant-General when he was directed by the order of the Lower Court dated 4-12-1959 to deposit the amount, replied by his letter dated 9-12-1959 as follows:--
'. . . . As regards the remitting of the amount it is stated that the amount mentioned in your office letter referred to above is only a budget provision for meeting the liabilities of the H. C.C.C. period. Payment form this provision is made by this office on presentation of bills by the drawing officer, subject to sanction of Government for timbered claims.'
This, according to us, represents the correct position. Until and unless the bills are drawn and paid to H.C.C.C Ltd., the amount or any part thereof cannot be treated as property of the H.C.C.C Ltd. We are, therefore, of the opinion that O. 21, R. 52, Civil P. C., has no application and the attachment effected and the prohibitory order made on 27-11-1959 and the subsequent directions to deposit the amount are not valid.
23. In support of his contention, the learned Advocate General referred to a number of decisions which we now proceed to consider.
24. In Tulaji v. Balabhai, (1898) ILR 22 Bom 39, it was held that Sec. 272 of the Civil Procedure Code (Act XIV of 1882) which corresponds to O. 21 Rule 52, Civil P. C. does not allow of an anticipatory attachment of money expected to reach the hands of a public officer, but applies only to moneys actually in his hands. In that case the appellant was in receipt of a monthly allowance of Rs. 500 from the Akalkot State. It was paid to him at Poona through the post office there. The decree-holder sought to attach by a prohibitory order issued on the 6th April, 1895 which was received by the Post Master on the 8th April. The allowance which was sent by M. O. was received on the 13th April. it was held that on the date of attachment there was no money in the hands of the Post Master as the money sought to be attached did not reach his hands until the 13th April and there cannot be an anticipatory attachment of money expected to reach the hands of a public officer but applies only to moneys actually in his hands. This decision was followed in K. Thiruvangaidal v. R. Chinnaswami, AIR 1915 Mad 236(1).
In Thakurdas v. Joseph Iskender, AIR 1917 cal 13, it was held that rule was intended to relate to an officer who has to the time the application is made to the hands the fund which may be the subject of attachment. Their Lordships followed of earlier decision of the Calcutta High Court in Padmanand Singh v. Rama Pradas, (1911) 11 Ind Cas 422 (Cal), which had also held that O. 21, Rule 52, Civil P. C. does not allow of an anticipatory attachment.
25. Mr. Venkataramana sought to distinguish these tow decisions by arguing that in those cases money sought to be attached was not in the hands of the office whereas in this case the money was in the hands of the Commissioner of Civil Supplies and he had, as a matter of fact, by his letter dated 12-6-1959 directed the Treasury Officers to pay the amount to H.C.C.C. Ltd, when the bills were presented. The segment, however, ignores the vital fact, namely that even assuming that there was money of the hands of the Commissioner of Civil Supplies, it was not the money of H.C.C.C. Limited in his hands but the money of the Government which he was authorised xxxxx to H.C.C.C Limited. It is, therefore clear that there is no money of the judgment debtor, namely H.C.C.C. limited in the custody of an officer which can e the subject of attachment under o. 21 xxx Civil P. C.
26. It was then argued by Mr. Venkataramana that in any event once the appropriation is made and the Commissioner himself had directed the Treasury Officers to pay the amount to H.C.C.C Limited, it would be in the nature of a debt due to H.C.C.C Limited and the Commissioner would be the position of a Garnishee. It is really not necessary for us to consider this question as the attachment here has not been made on that footing under O. 21,R. 46, Civil P. C. which relates to attachment of debts etc., but was made under O. 21, R. 52 on the footing that the amount was that of the judgment-debtor in the custody of an officer. Even if that submission is open xxx decree-holder, we are not inclined to view the amount in the hands of the Commissioner of Civil Supplies as a debt owing to H.C.C.C Limited, In Harida Acharjia Chowdhry v. Baroda Kishore Achajia Chowdhry, (1900) ILR 27 Cal 38, it was held that the word 'debt' in Section 266 of the Civil Procedure Code (XIV of 1882) which corresponds to O. 21, R. 46, Civil P. C. means an actually existing debt and not merely a sum of money which may or may not because payable at some future time or the payment of which depends upon contingencies which may or may not happen. In that case, when a person was bound to pay a monthly allowance to the judgment-debtor it was held that the prohibitory order cannot be issued to the person on a date anterior to the time when the amount falls due.
In Dunlop and Ranken Ltd., v. Hendall, (1957) 3 All ER 344, the judgment creditors of sub-contractors, obtained a garnishee order against the principal contractors under the building contract. Under Clause 21 of the contract no payment was due to a sub-constructor until receipt of the architect's certificate under Cl. 24 and the payment was to be made to the sub-contractors in accordance with the certificates. It was held that until the architect's certificate had been given the was no debt due to the sub-contractors and hence the garnishee order should not have been made. It was held that the judgment-debtor did not have a right to be paid. Therefore there was no debt until the certificate certifying the amount to be paid (sic).
27. In the present case also the order of the Commissioner of Civil Supplies directing the Treasury Officers to make payment to H.C.C.C Limited does not clothe the H.C.C.C. Limited with the right to be paid. It was always open to the government or the Commissioner of Civil Supplies to withdraw the direction before any bill was presented to them by the H.C.C.C. Limited or on behalf of H.C.C.C Limited. We are, therefore, also unable to agree with the contention that the amount of Rs. 4,50,000 is in the nature of a debt owing to H.C.C.C. Limited which is liable to be attached under O. 21, R, 46 Civil P. C.
28. The learned Advocate General further contended that even assuming that the lower Court could have issued the order dated 27-11-1959 requesting the Commissioner of Civil Supplies and the Accountant General to hold the said sum of Rs. 4,50,000 or such portion of it, subject to the further orders of the Court, it could not direct them to deposits the said amount in 1967 long after the Budget provision had lapsed at the end of Financial year 1959-60 that is on 31-31960 . He contended that even assuming without admitting, that the amount was available in November, 1959 when the prohibitory order was issued there was no such amount in existence after 31-3-1960 when the Budget provision lapsed. Mr. Venkataramana sought to meet this argument by saying that the Court had directed them to deposit the said amount even on 4-12-1959 and it was their duty to do so and if by reason of their negligence or refusal to do so, the Budget lapsed it was not the concern of the decree-holder and the order of the Court had still to be complied with. he submitted that the Commissioner of Civil Supplies who is a public officer in the employment of the Government must be deemed to be an Agent of the Government and if by reason of the inaction of the Agent, the fund which was in his hands against gets back into the hands of the principal, the principal is liable to bring back the said amount in obedience to the direction of the Court. he cited a number of decisions in support of his contention that Officers are Agents of the Government.
We consider it unnecessary to consider that question as it does not arise in these proceedings. as stated earlier the decree-holder before he can apply for attachment under O. 21 , R. 52, civil P. C., has to satisfy the Court not only that the amount sought to be attached belongs to the judgment-debtor but is in the hands of an officer. The Public Officer concerned can only produce the amount if it is I his custody. If it ceases to be in his custody for some reason or other, there is no question of his being directed to produce the amount. The question whether the Government is liable for the negligence of its officer and if so to what extent, does not arise in these proceedings. The Court below has directed the Government to produce the amount in question. We do not see how such an order can be made in proceedings under O. 21, R. 52, Civil P. C. which relate to funds in the custody of a particular officer belonging to the judgment-debtor. As we have already held that the funds to not belong to the judgment-debtor, the order of the lower Court directing the Government to produce the amount appears to be unsustainable.
29. It is further contended by Mr. Venkataramana that the order of attachment had become final and it could be questioned only in a suit filed under O. 21, R. 63, Civil P. C. Such a suit (C. S. 1/62) was file by the government and was withdrawn o 18-3-1963 and this Court has expressly stated in its judgment dated 29-3-1963 that the learned Advocate General did not press the latter part of his request in his application to withdraw the suit, namely, to give his clients liberty to press their claims before the Liquidator. As the suit file under O. 21, R. 63, Civil P. C. was withdrawn and dismissed, the order of attachment has become final and cannot be questioned.
30. Order 21, R. 58, Civil P. C. relates to the investigation of claims and objections made to the attachment of property on the ground that such a property is not liable to attachment. It is pointed out that when the attachment was sought to be made on 27-11-1959 by issue of a prohibitory order the government filed a claim petition, E. A. 136/59 in which they raised the contention among others, that there was no actual amount in the hands of the Commissioner of Civil Supplies but only a Budget provision which was not attachable. This objection was enquired into and by its order dated 4-11-1960 the learned Chief Judge, City Civil Court held that he was not in a position to come to the conclusion that the amount attached does not exist or was not available for attachment and ultimately dismissed the claim petition and refused to raise attachment. The Government, thereupon filed C. S. 1/62 under Order 21, R. 63, Civil P. C. to set aside the order in the claim petition. This suit, as stated earlier was withdrawn and dismissed Mr. Venkataramana, therefore, contends that under O. 21, Rule 63, Civil P, C. the order dated 4-11-1960 is conclusive and the attachment cannot be questioned. He invited our attention to decisions in Akkammaml v. Komarasami, AIR 1943 Mad 36, in which it was held that under O. 21, R. 63, Civil P. C. an order passed on a claim petition is conclusive unless the claimant files a suit within one year to establish the right which he claims. In Seethamma v. Kotareddi, (1949) 1 Mad LJ 593 == (AIR 1949 Mad 586), it was held that the provisions of O. 21, R, 63, Civil P. C. are mandatory and the decision in a claim petition is final unless the party aggrieved takes the course indicated in the rule by instituting a suit to supersede it within a year. The specific provisions of O, 21, Rule 63 override the more gnarl Principle enunciated in Sec. 11 Civil P. C. in Chimpiramma v. Subrahmanyam (1956) 2 Andh WR 1137=(Air 1957 Andh Pra 81 FB), a decision of a Full Bench, it was pointed out that when a claim is dismissed it become conclusive against the claimant not because of the principle of re judicata but because of the express provision in the Civil P. C., namely O. 21, R. 63.
31. The learned Advocate General could not and did not dispute this proposition. He, however, contended that in a case like this where the existence of a fund in the hands of the Officer is denied, there is no necessary to file a claim petition or to file a suit under O, 21, R. 63, Civil P. C. He argued that the case was analogous to a case of attachment of debt under O. 21, R. 46, Civil P. C., where the existence of a debt is denied by the garnishee and relied upon decisions which held that in such a case the execution Court has no jurisdiction to go into the question of the existence of the debt. In Butchayya v. Krishnamachari, AIR 1936 Mad 152 it was held that where the garnishee totally denies the existence of the debt, and consequently of any obligation on his part to the judgment debtor he cannot institute a suit to establish the right which he claims to the property under O. 21, R. 63, Civil P.c. their Lordships observed as follows:
'In these circumstances it is not explained how if the Court disallows the objection, he can 'institute a suit to establish the right which he claims to the property' under O. 21, R. 63. According to him the property in dispute, namely, the debt or the obligation on his part is non-existent. Therefore, it is not possible for him to claim any right to such non-existing property. In these circumstances, we are of the opinion that the objection that the debt does not at al exist and orders of the executing Court, if any, consequent on such objection do not come within the purview of O. 21, Rr. 58 to 63.'
Their Lordships referred with approval to the decision in 61 Mad LJ 863=(Air 1932 Mad 169) in which it was held that it was not for the executing Court to determine whether the debt was actually due or not and that it has to attach the alleged debt and thereafter there are only two courses open to it, either to sell the debt or appoint a receiver to realise it. The same view has been taken in a number of decision of other High Courts, or instance Ma Saw Yin v. Hock To, AIR 1926 Rang 175, Kameswar Singh v. Kuleshwar Sing, AIR 1942 Pat 508, Pannalal v. Bhagirathibai, AIR 1924 Nag 98 and Govt, of U. S. of Trave-Co. v. Bank of Cochin Ltd., AIR 1954 Trave-Co. 243 (FB).
32. It was argued that in the same manner in case of attachment under O. 21, R. 52, Civil P. C. if the Officer denies existence of any amounts in his hands the executing Court cannot go into that question and the provisions of Order 21, Rules 58 to 63, Civil P. C. are not attracted.
33. Mr. Venkataramanan, however, points out that there is no analogy between the attachment of a debt under O. 21, R. 46 C. P. C. and attachment of amount under O. 21, R. 52, Civil P. c. He referred us to R, 175 of the Civil Rules of Practice. It is in the following terms:---
'175. If the proper sought to be attached is in the custody of a Public Office, the execution petition shall ask that the property maybe brought into Court and realised, and the notice of attachment shall request that the money or property may be brought into Court, or that such officer will state whether he has nay and what objection to so doing. If any objection is raised by such officer, notice maybe issued, in manner provided by Order XXVII of the Code for issue of summons, for the determination of such objection.'
Therefore, it was submitted that there is a provision for raising of objection by the officer as to the existence of the amount and for the determination of such objection.
34. Form 62 of the Appendix in terms of which the notice has to be sent also states that if an officer has any objection he should inform the Court of the grounds thereof. In this case, however, no notice was sent according to this form asking him to inform the grounds of objection. The notice was sent only in form 21 of Appendix 'E' to Civil P. C. asking the officer to hold money subject to the further orders of the Court. Apart form this, we are of the opinion that there is no distinction in principle between the denial of amount in the custody of an officer when an attachment is made under O. 21, R. 52, Civil P. C. and the denial of a debt when the attachment is made under O. 21, R. 46, Civil P.C. In either case we do no think that the provisions of O. 21. Rules 58 to 63 are attracted. There was, therefore, no necessity for the officer or the Government to make any claim under O. 21, R. 58, Civil P. C.
It is no doubt true, that the Government filed a claim petition which was dismissed and thereupon filed a suit under Order 21, Rule 63, Civil P. C. These proceedings, according to us were misconceived and the mere fact that the Government took proceedings which do not lie does not preclude them from contending that the case is not covered by O. 21, Rules 58 to 63, Civil P. C. and that, any decision in the claim petition does not prevent them form questioning the validity of the attachment ink spite of the fact that they filed a audit which was later withdrawn.
35. Finally it was argued that H.C.C.C Limited having gone into liquidation by reason of the order of the Registrar dated 6-9-1960 the proceedings in the Court below could not be continued without, the leave of the Liquidator and in his absence. The Court below considered this contention but negatived it because it was of the opinion that the order of the Registrar cancelling the registration and appointing the Liquidator was illegal and ultra vies. It took the view that the H.C.C.C. Ltd. is a multi-unit Co-operative Society within the meaning of the Multi-Unit Co-operative Societies Act (Act VI of 1942) and as under Section 5-A of the said act it is the Central Registrar of Co-operative Societies that is empowered to dissolve the Society and as in this case the dissolution was effected by the State Registrar, the order of dissolution was contrary to the provisions of the said Act and hence invalid.
36. Section 5-A of the said Act deals with any Co-operative Society which, immediately before 1-11-1956 had its objects confined to one State, becomes, as from that day, a multi-unit co-coperative society, by virtue of the provisions of Part II of the States Reorganisation Act of 1956. The learned Advocate General Contends that Section 5-A of the Act has no application to the instant case, because H.C.C.C. Limited was a multi-unit Co-operative Society even before 1-11-1956 and had not become a multi-unit Co-operative Society after 1-11-1956 by virtue of the provisions of the State Reorgnisatin Act. He has referred to the following bye-laws of the Society in this connection.
37. Under bye-law 4, the objet of the Corporation was to promote the economic interest of its members and to help in carrying on their business successfully and profitably. To achieve this object, the corporation was authorised to carry on the business of buyers, sellers, distributors, suppliers, dealers, exporters and importers of all kinds of agricultural produce, all kinds of finished or semi-finished products, all kinds of farm-yard of chemical manures and other chemicals required in agricultural industry, all kinds of milk, milk produce and farm-cattle etc.
38. Under bye-law 4(5) it was authorised to set up branches, agencies, shops, sale deposits and show-rooms in or outside H.E.H. THE nizam's Dominions for carrying on the business of the Corporation.
39. Under bye-law 4(9) it was athorised to take or otherwise acquire and hold shares in any other Co-operative Society or company in or outside the hyderabad State having objects altogether or in part similar to those of the Society or carrying on any other business capable of being conducted so as to directly or indirectly benefit the society.
40. In view of these bye-laws he argues that H.C.C.C Limited was a Multi-unit Co-operative Society even from its inception and did not become one by virtue of the States Reorganisatin act and hence Section 5-A of the Multi Union Co-operative Societies ?Act has no application.
41. In view of the clear terms of the bye-laws Mr. Venkataramana, very fairly conceded that he could not support the judgment of the lower Court on this aspect based upon sec. 5-A of the Act. he, however, contended that the ultimate decision that the dissolution is illegal is correct even on the footing that the society was a Multi-Unit Co-operative Society from the inception. he argued that under Section 4 of the Act, the Central Government may, if it thinks fit, appoint a Central Registrar of Co-operative Societies and such Central Registrar was appointed on 29-12-1956. On that day by a notification, the Government of India, in exercise of powers conferred under Section 4 (1) of the Act appointed the Joint-Secretary-in-Charge of C0-operation in the Ministry of Agriculture, Government of India, as the Central Registrar of C0-operative Societies.
42. Section 4 (2) of the Act states that such a Registrar, if appointed, shall exercise in respect of any Co-operative society to which this Act applies to the exclusion of the Provincial Registrar, the powers and functions exercisable by the Registrars of Co-operative Societies of the State in which the society is actually registered.
43. Mr. Venkataramana, therefore, contends that tin view of Section 4 (2) of the Act it is only the Central Registrar that has, after his appointment, the jurisdiction to make the order of dissolution and the order passed by the State Registrar, therefore, contravenes Section 4 (2) of the Act. Reliance however, is placed by the learned Advocate for the Liquidator on Section 5-B of the Act which authorises the Central Government to direct, by a notification, that any power or autority exercisable by the Central Registrar of Co-operative Societies under this Act, shall, in relation to such matters and subject to such conditions as may be specified in that direction, be exercisable also by such Registrar of Co-operative Societies of a State or by such Officer subordinate to the Central Government or to a State Government as any be specified in the notification.
44. It was stated that under Section 5-B of the Act notifications were made on 22-1-1957 and on 19-5-1960 directing that the power or authority execrable by the Central Registrar in relation to the reconstitution, Reorganisation or dissolution of the Multi-unit Co-operative Societies, which are deemed to be actually registered in the States concerned shall be exercisable also by the Registrar of Co-operative Societies, Andhra Pradesh and other States mentioned in that notification. It is therefore, contended that thought under Section 4 92) of the Act it is the Central Registrar that is to exercise the powers or authority in respect of this society, after the notifications in question they became exericsable by the State Registrar. We do not agree with this contention.
Section 5-A and 5-B of the Act were introduced by Section 105 of the States Reorganisation Act, 1956. By reason of Reorganisation of States in 1956, it became apparent that several of the Co-operative Societies which were functioning within the States concerned would thereafter be functioning in more than one State and would therefore, become multi-unit Co-operative Societies under Act 6 of 1942. To cover those cases Section 5-A was enacted which deals with the reconstitution, reorgnisation or dissolution of such Societies. Under that section, the central Registrar is given certain powers. Section 5-B refers to powers or authority exercisable by the Central Registrar under this act and it is only in respect of such powers that a notification can be made authorising the State Registrars to exercise such powers or authority. The powers exercisable by the Central Registrar under the Act are contained only in Section 5-A which refers to societies which became Multi Unit Co-operative Societies by virtue of provisions of the States Reorganisation Act.
45. Sections 2 and 3 which deal with Co-operative Societies which were Multi Unit Co-operative Societies before the Act 6 of 1942 or which were registered after the Act, merely sate that they are subject, for all pruposes of registation, control and dissolution to the law relating to Co-operative Societies in force for the time being in the provide in which it s actually registered. When a Central Registrar is appointed under section 4 (1) of the Act he is authorised to exercise in respect of those societies the powers or authority exercisable by the particualr State Registrar. Section 4 (2) read with Seclion 2 and 3 of the Act clearly point to the conclusion that the power which the Central rEgistrar exericses under the section is a kpower exercisable by the State Registrar under the Act in force in the State which is applicable to partifualr Soceity. The power so exercised by the Centrla Registrar cannot be a power exericised or exercisable by the central Registrar under this Act. In view of the fact that ss. 5-A and 5-B of the Act were enacted together by alway of amendments under Section 105 of the States Reorgnisation Act and in view of the fact that Section 5-B refers only to the entrustment of powers exercisable by the Centrla Registrar under this Act to the State Registrar, we are of the opinion that the power referred to in that seciton can have only referecne to the power of the Central Registrar under Sections 4 (2) where he is exercising only the kpower of a State Registrar under the provisions of the State Act. If Section 5-A has o aplication it follows that it is only the Central Registrar to the exclusion o fthe State Registrar that can exercise powers under Sectiln 4 (2) of the act and as such the ordr of liquidation dated 6-9-1960 made by the State Registrar is not in consonance with the provilsons of the Act.
46. It is to be noted that there is no reference in the said order to any delegation of powers under Sec. 5-B of the Multi-Unit Co-operative Societies Act. It is no doubt true, as contended by the learned Advocate general on the authority of decisions in Hukumchand Mills v. State of Madhya Pradesh, : [1964]52ITR583(SC) , Rajam Chetti v. Seshayya, (18950 ILR 18 Mad 236 (FB), secy. of State for India v. Apparao, 45 Mad LJ 156 = (AIR 1924 Mad 92) and Anjaneya Motor Transport v. State of Madras, 1955-2 Mad LJ 376 = (AIR 195 Mad 660), that it is not necessary to indicate the source of the power and even if the source of power is wrongly indicated it will not vitiate the order, if the order is otherwise traceable to a power that is in existence. No exception can be taken to that proposition, but in this case as the entrustment of power by the Central Registrar to the State Registrar under Sec. 5-B is only in relation to such matters and subject to such conditions as any be specified in the notification, one would therefore, expect a reference to the notification indicating the matters and conditions in relation to which and subject to which the power or authority is exericisable by the State Registrar.
The absence of a reference to the notification delegating such powers is a painter to the fact that even the Government did not consider that Section 5-B was applicable to this society and that the dissolution could be made in pursuance of the powers conferred under that notification. while copies of this resolution were marked to various Officers and Bodies, it is significant to the that no copy was marked to the Central Registrar. If he was exercising kpowers of the central Registrar delegated to him under Section 5-B of the Act one would expect that a copy would be marked to the Central Registrar. This also would indicate that even the Government was of the view that Section 5-B has no application to the facts of the case and the order of dissolution was not made in exercise of the powers vested in the State Registrar under Section 5-B of the Act. For these reasons we are of the opinion that the order of liquidation invalid and opposed to the provisions of the Act.
47. It was next argued by the learned Advocate General that the validity of the Liquidation was considered by the High Court in its judgment dated 19th September, 1961 in W. P. No. 763 of 1960 and as this Court had held that the order of dissolution was valid and that the Liquidator was validly appointed, that decision operates as res judicata and cannot be questioned in these proceedings.
48. We do not agree with this contention. The grounds on which the liquidation proceedings were attacked in W. P. No. 763 of 1960 are entirely different form the grounds on which they are being attacked in these proceedings. The contention raised in the Writ Petition were that the Hyderabad Co-operative Societies Act had no application, as H.C.C.C. Limited was constituted under a Firman of H.E.H. the Nizam, that the Registrar was actuated by bias: and that he had acted to the dictation of the Government. On the other hand the contention at present is that the dissolution is contrary to the provisions of the Multi Unit Co-operative Societies Act. This question was not considered by this Court in the said Writ Petition. Even the Government proceeded on the footing that the dissolution was effected by the Registrar in exercise of the powers under Section 53 of the Hyderabad Co-operative Societies Act. No reference was at all made by either of the parties to the provisions of the Multi Unit Co-operative Societies Act or the powers exercisable there under.
49. It was contended by the learned Advocate General that the issue that the liquidation proceedings were invalid, be in contrary to the Multi Unit Co-operative Societies Act, might and ought to have been raised by the petitioner in the Writ Petition, and as it was not raise, the principle of constructive res judicaata will apply. He relied upon a decision of the Supreme Court in Gulabehand v. State of Gujarat, : [1965]2SCR547 . In that case it was held that the decision of the High Court in a Writ Petition under Art. 226 on the merits on a matter after contest will operate as res judicata in a subsequent regular suit between the same parties with respect to the same matter. Their Lordships, however, made it clear that it was not necessary for them to consider and they did not consider whether the principle of constructive res jidicata can be invoked by a party of the subsequent suti on the ground that a matter which might or ought to ahve cbeen raised in the earlier proceeding was not so raised hterein.
In Devial , v. Sales Tax Officer, : [1965]1SCR686 , the Supreme Court had to deal with a case where an assessee challenged the vaalidity of sales tax for a particualr year by a petition under Art. 226. The petition was rejected on merits and an appeal was dismissed by kthe Skupreme Court on merits. Subsequently by a Writ Petition he once agains challenged the same assessment, on a ground which provisouly was not raised in the Writ Petition and which was not permitted to be raised by him afresh in the Supreme Court in appeal. Their Lordhsips of the Supreme Court in appeal. Their Lordships of the Supreme Court held that the Second Writ Pettion was barred by the principle of constructive res judicata. The learned Advocate General requested us to apply ths decision to the presnet case and hodld that the decree-holder was barred on the principle of constructive res judicata from questioning the validaity of the liquidation in these proceedings, by reason of the judgment of the High Court in W. P. No. 763 of 1960. We cannot regard the decision of the Supreme Court as an authority for the proposition that the principle of constructive res judicata has to be applied to every decision in a writ petition. The decision relied upon by the learned Advocate-General refers to an erleir decision of the Suprme Court in Amalgamated Coalfields Ltd. v. Janapada Sabha, Chhindwara, : AIR1964SC1013 . In that case in a writ petition in which kthe petitioner challented the validity of a tax imposed for one year kwas ultimatley dismissed by th eSuprme Court. Some new points were sought to be raised but the Suprme Court idd not allow them to be raise. When a similar order was passed against the assessee for subsequent year, the additional points were agains riased before the High Corut. the High Court held that it was not open to the Company to raise those points on the principle of constructivre res judicata. The Supreme Court on appeal, hoowever, took the view that the principle of constructive res judicata did not apply and observed that consturctive res judicata was an artifical from of res judicata enacted by Section 11 of the Code of Civil Procedure and it should not be generally applied to writ petiton filed under Article 32 or Article 226.
In kthis case the circumstances under which the impugned order of liquidation was passed were peculiarly within the knwoslege of the Registrar. The order itself idd ot discolse that it was made in exericse of the powers conferred on the Registrar under Secion 5-B as is sought to be cntended now. The petitioner, thereofre, proceeded on what was disclosed by the order itslef. The order did not make any reference ot the fact that the society was a multi-unit co-co-operative society or that order of dissolution was being passed in exercise of the powers under that Act. On the other hand, the order referred ony to the relevant seclitons of the Hyderabad Co-operative Societies Act. The petitoner was therefore entitled to assume and had in fact assumed that the order was made under the provisions of the Hyderabad Co-operative Societies Act and, thereofre, raised grounds which were relevant sections of the Hyderabad Co-operative Societies Act. The petitoner was therfore entitled to assuem and had in face assumed that the order was made under the provisions of the Hyderabad Co-operative Societies Act and, therfore, raised grounds which were relevant to the exeicsie of the powers under that act. Even the Registrar of the Co-operative Societies or the government in their counter -affidavit in the writ petition had not disclosed that the society was a multi-unit Co-operative society and that the order was made in exercise of the powers under that Act.
It cannot, therefore, be stated that the petitioner might and ought to have raised this question in the said writ petition. Even if the principle of constructive res judicata can be invoked in respect of orders made in wirt petitions inappropriate cases to meet the ends of justice, we do not consider this as an appropriate case. We, therefore, hold that the pettitoner is nto barred by the pricnipel of consturctive res judicata by contendint that the liquidation proceedings violate the principles of |Multi-unit Co-operative Societies Act. As the liquidation proceedings and the order of the Liquidator in our opinion are illegal the petition cannot be attacked as not maintainable on the ground that he permission of the Liquidator was not obtained.
50. It was contended on behalf of the respondents that as the entire assets and liabilities of H.C.C.C Ltd. have been taken over by the Government , the Government may be treated as a representative of judgment-debtor and, therefore the direction to the government t deposit the amount payable by the judgment-debtor can be sustained on that ground. It was pointed that in another case where the H.C.C.C. Ltd. had to recover amounts for third parties, the Government as representing the H.C.C.C. Ltd. filed suits for the recovery of the said amounts and obtained decree which was confirmed by this Court in O.S.A no. 5 of 1960. It was also pointed out that even in these proceedings the Government has throughout been asserting that it has taken over the assets and liabilities of H.C.C.C. Ltd., and carrying on its affairs and the H.C.C.C. Ltd., ceased to function, Even in the order of liquidation is stated that the Government took over the functions of the H..C.C.C. Ltd., including its financial affairs with effect from 1-3-1952 and on and after that date H.C.C.C. Ltd, has ceased to function. other instances are pointed out where in the course of these proceedings themselves the Government has taken up the sand that ll the assets and liabilities of H..C.C.C. Ltd. devolved up them.
On the other hand, the learned Advocate General contended that the effect of the notifications dated 1-3-31952 set out at the commencement of this judgment was not to substitute the Government in the place of H.C.C.C Ltd. and their effect was only that the Government took over the managemnt of H. C.C. C. Ltd. Tkhough there is considerable force in the submisison made on behafl of the respndents, we do not think that the said qeustion arises in these proceedigns. The proceedings arise out of an applicatin for attchment under O. 21,R. 52, Civil P. C., of monies said to belong to H.C.C.C. Ltd., in kthe hnads of a Public Officer, namely, Comissioner of Civil Supplies and the only question we have to consider in these apeals is whether there is any such amount of the H.C.C.C. Ltd. in kthe hands of the Public Officer. As we have held that there is no such amout, the consequence is that the jdugment and subseqent direction to deposit he amount in such proceedings would be invalid.
51. It is open to the decre-holder to take up execution aginst the government for the amount due to him form the H.C.C.C. Ltd on the ground that the government has taken over the entire assets and libailites of the H.C.C.C. Ltd.
52. In the result, the apeals are allowed, but in the cicumstances without costs.
53. Before concluding we canot refrain form expressing oru dissatifactiion at the attidude of the Govenment dadopted in kthis case. The proceedings stated above disclsoe that the Government has been dpting inconsisten attutdes form time to time in ordr to delay and defeat the realsiation of the decre amount. The decree was passed in 1959 against H.C.C.C. Ltd and though the Government itslef stated in several proceedings that it ahs taken over the entire assets and liabiiites of H.C.C.C. Ltd., it has not chosen to make any arrangements to see that the decree is satisfied. On the other hand, technial objectlions are being put forward form time to time. If the Government is anxious that all amounts due to it by way of taxes, etc., are paid promptly by its citizens, it should also set an example by seeing that amounts payable by the Government or institutions whose assets and liabilities were taken over by it are also promptly paid. The proper course would have been to pay the maount due to the decree-holder and recover it in its trun from H.C.C.C. Ltd. whose affairs, assets and liabiiites were completly under its kcontrol. insted of fcing execution proceedings.
54. Appelas allowed.