Abdul Hadi J.
1. This appeal by the defendant is against the decree for Rs. 16,800 with interest at six per cent, per annum from March 18, 1978, granted by the trial court in O. S. No. 3423 of 1978 on the file of the XI Assistant Judge, City Civil Court, Madras. The said sum is claimed by the plaintiff as arrears of rent for the period ending with August 31, 1977, at the rate of Rs. 4,200 per year.
2. The main defence in the suit is that, in view of the statutory attachment by the estate duty authority under the Estate Duty Act, 1953, of the rents payable by the defendant to the plaintiff, the suit is not maintainable. The said issue alone is agitated in this appeal by learned counsel for the appellant. The trial court negatived the said contention of the defendant and decreed the suit. Hence this appeal.
3. The few facts necessary for dealing with the abovesaid issue may be stated as follows : The plaintiff purchased the suit property from one Sambandam under exhibit A-3 sale deed dated July 17, 1974. The said Sambandam inherited the said property from his father, Manicka Chettiar, who died in about 1963 and the said Manicka Chettiar's estate was sought to be assessed to estate duty under the abovesaid Estate Duty Act. The said Sambandam was the accountable person under the said Act. In the estate duty proceedings, the Assistant Controller of Estate Duty issued a notice, exhibit B-1, dated November 30, 1973, under section 73(5) of the Estate Duty Act read with section 46(5A) of the Indian Income-tax Act, 1922, to the defendant, demanding from the defendant 'forthwith' a sum of Rs. 1,56,622.90 (the estate duty due from the accountable person, Sambandam) 'or rent payable' by the defendant to the above estate. The said notice also mentioned that, if he (the defendant) discharged 'any liability (of his) to the estate of the deceased after receipt of' the said notice, the defendant would be personally liable to the said estate duty authority to the extent of the liability of the estate for tax and penalties. No doubt, the abovesaid attachment or garnishee order is a few months prior to the purchase of the suit property by the plaintiff. However, the defendant replied to the Assistant Controller of Estate Duty by exhibit B-3 dated December 6, 1973, stating that the rent for the period up to August 9, 1974, had already been paid and the defendant can 'commence remitting' the rents only from August 10, 1974, to the Assistant Controller of Estate Duty. The defendant also wrote subsequently be exhibit B-4 dated October 9, 1974, stating that the plaintiff-landlady was asking the defendant to pay the rent to her and that hence the Assistant Controller of Estate Duty might let the defendant know whether the abovesaid sale in favour of the plaintiff was to the knowledge of the said Controller and whether the estate duty had been cleared by the said Sambandam and whether it would be in order for the defendant to make payment to the plaintiff. The Assistant Controller of Estate Duty replied by exhibit B-6 dated October 19, 1974, stating that the abovesaid sale was void and was in violation of section 74(1) of the Estate Duty Act and that, hence, it would not be in order for the defendant to pay the rent to the plaintiff without estate duty clearance certificate. Subsequently, by exhibit B-16, dated January 13, 1978, the Assistant Controller of Estate Duty sent another notice under the very same provisions of the Estate Duty Act and the Income-tax Act asking the defendant to pay forthwith a sum of Rs. 14,300 to meet the abovesaid estate duty payable by the said estate. Here again it was specifically mentioned that, if the defendant discharged any liability to the estate of the deceased after the receipt of the said notice, the defendant would be personally liable to the Assistant Controller of Estate Duty to the extent of the liability of the estate for tax and penalties. So, this is a second attachment or garnishee order by the Estate Duty Department.
4. In the light of the abovesaid background, it has to be seen whether the claim of the plaintiff to recover the abovesaid rents from the defendants is maintainable in the light of the relevant provisions of the Estate Duty Act. That is the only question that was argued before me. No doubt, the case of the defendant is that, pursuant to the abovesaid second garnishee order, exhibit B-16, the defendant has paid a sum of Rs. 14,257.44 out of the abovesaid sum of Rs. 16,800 due, and learned counsel for the defendant-appellant submits before me now that the defendant is now ready to pay the balance and that a decree could be passed for the same.
5. Section 74(1) and (2) of the Estate Duty Act, run as follows :
'(1) Subject to the provisions of section 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 incumbrances allowable under Part VI of this Act; and any private transfer or deliver of such property shall be void against any claim in respect of such estate duty.
(2) A rateable part of the estate duty on an estate, in proportion to the value of any beneficial interest in possession in movable property which passes to any person (other than the legal representative of the deceased), on the death of the deceased shall be a first charge on such interest : Provided that the property shall not be so chargeable as against a bona fide purchaser thereof for valuable consideration without notice.'
6. Further, the above-referred to section 73 of the Estate Duty Act, 1953, provides for a notice of demand and recovery of estate duty, and particularly sub-section (5) of the said section 73, provides that the provisions of section 47 and certain sub-sections of section 46 of the Indian Income-tax Act 1922, shall apply as if the said provisions were provisions of the said Estate Duty Act. Further, it has also been held in T. T. P. Beepathumma v. Special Deputy Tahsildar : [1982]134ITR488(Ker) , that since the provisions of the Indian Income-tax Act 1922, have been incorporated bodily the said 1922 Act has no effect upon the construction or effect of the said Estate Duty Act and that recovery of estate duty will be governed by the provisions of the 1922 Act, even after the introduction of the 1961 Income-tax Act repealing the Indian Income-tax Act, 1922.
7. So far as the interpretation of section 74 of the Act read with section 73 of the Act is concerned, the Calcutta High Court held in Madan Lal Lohia v. Asst. CED : [1972]85ITR99(Cal) , that where a notice under section 73 of the Estate Duty Act was served on the lessee of the decreased against whose estate proceedings were taken for realisation of estate duty and where despite the said notice, the lessee paid rents to his landlord, penalty could be levied on such a lessee for so paying rents since he was bound to comply with the notice under section 73.
8. But, learned counsel for the respondent-plaintiff argues that the above referred to proviso found in section 74(2) would apply even to section 74(1) and that since the respondent was a bona fide purchaser of the property, the property purchased by her shall not be a charge for the duty payable. But, I am unable to agree with this contention. The proviso is only for section 74(2) which relates to movable property and it will not apply to section 74(1). In the text book Estate Duty in India by O. P. Chopra, Fourth edition, the author also has mentioned at page 68 that the proviso to sub-section (2) of section 74 governs only that sub-section. Apart from pointing out this passage from the said text book, learned counsel for the appellant also drew my attention to the following passage in the report of the Select Committee of 1948 referred to at page 867 of the same text book as follows :
'We also think that there should be no charge on movable property acquired by a bona fide purchaser for value without notice.'
9. But, despite the abovesaid legal position, I find that there is total absence of evidence regarding the actual payment of the abovesaid sum of Rs. 14,257.44 by the defendant to the estate duty authority. Though it has been stated in the written statement of the defendant that a sum of Rs. 14,257.44 representing the rental for the period from August 10, 1974, to December 31, 1977, has been paid on February 10, 1978, there is no proof of the said payment. Neither is there any document to that effect, nor even did D. W.-1 say anything about the said payment.
10. However, learned counsel for the appellant submits that once a garnishee order is passed as stated above, only the estate duty authority can recover the abovesaid amount from the defendant and the plaintiff cannot recover, it. So, according to him, even assuming that there is no proof of the abovesaid payment, the suit by the plaintiff will not lie for recovery of the abovesaid Rs. 14,300. On a reading of the abovesaid garnishee orders and the relevant provisions of the abovesaid Act, I also think it is so. However, learned counsel for the respondent-plaintiff point out that, as per the original garnishee order exhibit B-1, there was a restraint only with reference to the rent payable as on November 30, 1973, but that there were no rental arrears due from the defendant as on that date. (In fact, as already stated, the defendant became the owner of the property only subsequently, that is, on July 17, 1974). So, learned counsel for the respondent argues that the suit for the rental arrears, which accrued subsequently, could be maintained. This contention has force. But, subsequently, the abovesaid exhibit B-16 garnishee order also had been issued. That is dated January 13, 1978. From exhibit B-17 the covering letter, it could be gathered that exhibit B-16 was served in person the same day. But, the suit was filed only subsequent to the said date, viz., on March 18, 1978. So, on the date when the suit was filed, there was a bar preventing the respondent from filing the suit and recovering the abovesaid arrears. So, the suit filed on March 18, 1978, cannot be maintained with reference to the abovesaid sum of Rs. 14,300. But the defendant ought to have paid at least the balance of Rs. 2,500 to the plaintiff after January 13, 1978. Anyway, now, since learned counsel for the appellant also states that a decree for the balance could be given and since the said balance now actually comes to Rs. 2,542.56 (that is, Rs. 16,800 minus Rs. 14,257.44 said to have been paid by the defendant to the estate duty authority, as per the plaint, a decree could be given now for the said sum of Rs. 2,542.56). It is fair that the plaintiff should also be given interest at the rate of six per cent. per annum from the said date January 13, 1978, till realisation.
11. In the result, the judgment and decree of the court below are hereby modified by restricting the decree granted by the court below only to the above said sum of Rs. 2,542.56 with interest on the said amount at the rate of six per cent, per annum from January 13, 1978, till realisation. Accordingly, the appeal is allowed in part with proportionate costs.