Income-tax--

----Recovery of tax---Abatement of proceedings---Attachment of properties of individual for recovery of arrears of tax due by H.U.F.---Suit by individual that properties belonged to him as sole owner---Suit decreed in favour of individual---Appeal against decision---Father of individual impleaded by individual as defendant alongwith union of India and T.R.O.-- No relief claimed against individual's father---Death of father of individual during pendency of suit---Proceedings would not abate---Father of individual was not a necessary or proper party---Dismissal of appeal was not valid-- Indian Civil Procedure Code, 1908, O. XXII, R. 4.

When Order 22, rule 4, of the Civil Procedure Code, 1908, does not provide for the abatement of appeals against co-respondents. of a deceased respondent, there can be no question of abatement of the appeal against them. The only question is whether the appeal can proceed against them. The provisions of Order 1, rule 9, Civil Procedure Code, also show that if the Court can deal with the matter in controversy as regards the rights and interests of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it. It is only when it is not possible for the Court to deal with such matters, that it will have to refuse to proceed further with the appeal, therefore, dismiss it.

The question whether a Court can deal with such matters or not, will depend upon the facts of each case and, therefore, no exhaustive statement can be made about the circumstances when this is possible or is not possible. However, ordinarily the considerations which weigh with the Court in deciding upon this question are whether the appeal between the appellants and the respondents other than the deceased can be said to be properly constituted or can be said to have all the- necessary parties for the decision of the controversy before the Court. The test to determine this has been described in diverse forms. Courts will not proceed with an appeal (a) when the success of the appeal may lead to the Court's coming to a decision which will be in conflict with the decision between the appellant and the deceased respondent and, therefore, which would lead to the Court's passing a decree which will be contradictory to the decree which had become final with respect to the same subject-matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the Court; and (c) when the decree against the surviving respondents if the appeal succeeds, will be ineffective, i.e., it could not be successfully executed.

There was a firm named Bhagwan Dass Sud & Sons. B claimed that the firm was a firm of a Hindu undivided family. He further claimed that he had been filing income-tax returns of this concern up to the assessment year 1955-56. Huge arrears of income-tax fell due against the Hindu undivided family firm. The income-tax authorities sought to recover the arrears of income-tax as land revenue. Recovery proceedings were initiated by the Tax Recovery Officer of the Income-tax Department. The property in dispute was attached. A, one of the sons of B, claimed to be the sole owner of the property. He filed objections before the Tax Recovery Officer pleading that the suit property was not liable to be attached and sold for recovery of arrears of income-tax due from the Hindu undivided family firm. The objection petition was dismissed. A filed a civil suit seeking three declarations: that he was the sole owner of the suit property; that the suit property was not liable to attachment and sale for the recovery of arrears of income-tax; and that the order, dated March 21, 1969, passed by the Tax Recovery Officer was illegal, null and void and not binding on him. A impleaded the Union of India and the Tax Recovery Officer as defendants Nos. 1 and 2 and his father B as defendant No.3 but did not claim any relief against B. B did not put in appearance and contest the suit. The suit was decreed in A's favour. Meanwhile B died in January, 1976. The Union of India and the Tax Recovery Officer filed an appeal on January 18, 1978, impleading A as respondent No. 1 and B as respondent No. 2 though he had died during the pendency of the suit. The First Additional District Judge, Hoshiarpur, dismissed the appeal. On second appeal:

Held, that the decree having been passed only against defendants Nos. 1 and 2, B had no interest in the lis, there being no decree against him, as he was proceeded against ex parte in the trial Court. Even if he were alive, he was not expected to file any appeal. Therefore, his impleadment as respondent No.3 in the appeal was nothing but surplus age. The appellants could bring action against A alone for the necessary relief. In the event of success of the appeal, the decree against A could be an effective decree against him. These aspects were neither considered at the time of deciding the application under Order XXII. rule 4 of the Civil Procedure Code, nor at the time of decision of the appeal by the Appellate Court which let it to reach a wrong conclusion. The appeal deserved to be allowed and the case should be remanded to the First Appellate Court for decision on the merits.

State of Punjab v. Nathu Ram AIR 1962 SC 89 ref.

B.S. Gupta, Senior Advocate with Sanjay Bansal for Appellants.

K. Bakshi for Respondent.

JUDGMENT

Amrit Lal filed a Civil Suit No. 357 of 1971 against the Union of India and others. That suit was decreed in favour of the plaintiff and against defendant No. 1, for a declaration to the effect that the lands mentioned in sub-heads (A) and (B) of the plaint are owned and possessed by the plaintiff and not liable to attachment and sale in the recovery proceedings of arrears or income-tax assessed on the concern known as Bhagwan Dass Sud & Sons. Hoshiarpur, and that the order, dated January 11, 1971, passed by defendant No. 2 does not affect the plaintiff 's right in, the land in question.

Feeling aggrieved; defendants Nos. 1 and 2 preferred an appeal, before the First Additional District Judge, Hoshiarpur, who held the appeal ' 'to be incompetent and dismissed the same.

Hence, this regular second appeal at, the instance of defendants Nos. 1. and 2.

The brief facts of the case are there is a firm under the name and style of Bhagwan Dass Sud & Sons, Hoshiarpur. Bhagwan Dass Sud claimed that the firm was a firm of Hindus undivided family. He further claimed that he had been filing income tax returns of this concern up to the assessment year 1955-56. Huge arrears of income-tax fell due against the Hindu undivided family firm. The income-tax authorities sought to recover the arrears of income-tax as land revenue. Recovery proceedings were initiated by the Tax Recovery Officer of the Income-tax Department. The property in dispute was attached vide his order dated March 21. 1969. Amrit Lai, one of the sons of Bhagwan Dass -Sud, claimed to be the sole owner of the property. He filed objections before the Tax Recovery Officer pleading that the suit property was not liable to be attached and sold for recovery of arrears of income-tax due from the Hindu undivided family firm. On January 11, 1971, the objection petition filed by Amrit Lai was dismissed.

On January 13, 1971, Amrit Lai filed Civil Suit No. 357 of 1971 seeking three declarations: that he was the sole owner of the suit property; that the suit property was not liable to attachment and sale for the recovery of arrears of income-tax; and that the order, dated March 21, 1969, passed by Tax Recovery Officer was illegal, null and void and not binding on him. Amrit Lai Impleaded the Union of India through the. Secretary, Ministry of Finance, Government of India, New Delhi, and the .Tax Recovery Officer, Income-tax Department, Amritsar, as defendants Nos. 1 and 2 and his father, Lala Bhagwan Dass Sud, as defendant No. 3, Amrit Lai, plaintiff, did not claim any relief against Bhagwan Dass Sud. Even Bhagwan Dass Sud did not put in appearance and contest the suit.

Defendants Nos. 1 and 2 pleaded in their defence that the suit property was purchased with the funds of the Hindu undivided family of which Bhagawan Dass Sud was the karta and recovery could be made from the suit property.

From the pleadings of the parties, as many as eight issues were framed. Issue No. 6 was to the effect, "whether suit against defendant No. 2 is competent ?" Amrit Lai plaintiff examined himself before the trial Court on May 24, 1976. In his cross-examination, it was stated by him that Bhagwan Dass Sud had died in January, 1976. It was duty of Amrit Lai plaintiff, to bring the legal representatives of Bhagwan Bass Sud, defendant No.3, on record, but it was not so done, and rightly so, as he was not claiming any relief against Bhagwan Dass Sud. The suit was allowed to proceed without deleting the name of Bhagwan Dass Sud from the array of defendants. The suit filed by Amrit Lai was decreed in his favour. The name of Bhagwan Dass Sud continued to be there in the judgment of the trial Court.

The Union of India and the Tax Recovery Officer filed an appeal on January 18, 1978, impleading Amrit Lai, plaintiff as respondent No. 1, and Bhagwan Dass Sud, as respondent No. 2, though he had died .during the pendency of the duty. Notice of appeal was served on Amrit Lai. On notice issued to Bhagwan Das Sud, it was reported that he had died.

As stated earlier, no relief was claimed by Amrit Lai, plaintiff, against Bhagwan Dass Sud, defendant. He was, therefore, neither a necessary nor a proper party. Though there was no necessity of bringing his legal representatives on record, yet on April 28, 1978, the Union of India and the Tax' Recovery Officer filed an application, dated April 27, 1978, under Order 22-rules 4, 4-A, 5 and 11 read with section 151, Civil Procedure Code, 1908, for bringing the legal representatives of Bhagwan Dass Sud .on record. On this application, the other four sons of Bhagwan Dass Sud were impleaded as respondents Nos. 2 to 5 as his legal representatives. The learned First Additional District Judge, Hoshiarpur, dismissed the appeal holding that it was incompetent, with no order as to costs.

I have heard learned counsel for the parties and have carefully gone through the record. It was argued by learned counsel for the appellant that Amrit Lai plaintiff had not claimed any relief against Bhagwan Dass Sud defendant. The relief, if any, was claimed against the contesting defendants. Bhagwan Dass Sud despite service did not put in appearance and contest the suit. He was proceeded against ex parte in the trial Court. Amrit Lai-plaintiff being the son of Bhagwan Dass Sud was already on record and the estate of Bhagwan Dass Sud was being represented by him. Even, his legal representatives were required to be brought on record, it was the duty of the plaintiff to make an appropriate application for bringing the legal representatives of the deceased on record, but he failed to make any such application within the statutory period. Therefore, the trial Court should have dismissed the suit as having abated. It was further argued that the appeal was not filed by the appellants before the First Additional District Judge to avoid any decision in favour of Bhagwan Dass Sud but to have the judgment and decree in favour of Amrit Lai set aside as illegal. The plaintiff having not claimed any relief against Bhagwan Dass Sud (deceased), the appellants were not claiming any relief against Bhagwan Dass Sud so far as the present litigation is concerned. Only Amrit Lai had the interest, if any, in the matter. He was already on record and there was no necessity of bringing the legal representatives of Bhagwan Dass Sud on record. Therefore, the presence of the name of Bhagwan Dass Sud only could be ignored. According to learned counsel, the appeal as constituted was perfectly legal and competent. It was also argued that the learned First Additional District Judge erred in holding that Union of India had the knowledge of the death of Bhagwan Dass Sud in January, 1976. Despite the fact that Bhagwan Dass Sud had died, his name still appeared in the judgment and decree of the trial Court as party to the suit. It was submitted that the trial Court committed a grave error in not deleting the name of Bhagwan Dass Sud from the array of defendants. The appellants were misled by the memo of parties in the judgment and decree taking the same as correct on their face value and had imp leaded Bhagwan Das Sud (deceased) as respondent. According to learned counsel in such a situation the appellants could not be penalised for the error committed by Amrit Lai and by the trial Court. Learned counsel went on to argue that even under the new rule as it stands today, it is the duty of the persons interested as legal representatives of the deceased defendant/respondent, as the case may be, to apply for being brought on the record as legal representatives but in the instant case, none of the legal representatives of Bhagwan Dass Sud made any application. Even Amrit Lal plaintiff did not take any steps in that direction. No doubt, an application under Order 22, Code of Civil Procedure, was made by the appellants but it was made only with a view to bring the memo. of parties in accord with the parties of the case. He was contended that the learned first appellate Court did not properly appreciate the legal proposition and came to the erroneous conclusion. Therefore, the first appellate Court was not justified in dismissing the appeal without going into the merits of the case and the appeal deserves to be allowed. The judgment and decree under appeal may be set aside and the suit filed by the plaintiff is liable to be dismissed.

After bearing learned counsel for the parties at length, I am of the view that the appeal deserved to be allowed and the case should be remanded to the first appellate Court for decision on the merits. In State of Punjab v. Nathu Ram (1962) AIR 1962 SC 89, it was held by the apex Court that when Order 22, rule 4, Civil Procedure Code, does not provide for the abatement of the appeals against the co-respondents of the deceased respondent, there can be no question of abatement of the appeal against them. The only question is whether the appeal can proceed against them. The provisions of Order 1, rule 9, Civil Procedure Code, also show that if the Court can deal with the matter in controversy as regards the rights and interest of the appellant and the respondents other than the decreased-respondent, it has to proceed with the appeal and, decide it. It is only when it is not possible for the Court to deal with such matters, that it will have to refuse to proceed further with the appeal and, therefore, dismiss it.

The question whether a Court can deal with such mattes or not, will depend upon the facts of each case and, therefore, no exhaustive statement can be made about the circumstances when this is possible or is not possible. It may, however, be stated that ordinarily the considerations which weigh with the Court in deciding upon this question are whether the appeal between the appellants and the respondents other than the deceased can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the Court. The test to determine this has been described in diverse forms. Courts will not proceed with an appeal (a) when the success of the appeal may lead to the Court's coming to a decision which will be in conflict with the decision between the appellant and the deceased respondent and, therefore, which would lead to the Court's passing a decree which will be contradictory to the decree which had become final with respect to the same subject-matter between the appellant and the deceased resplendent; (b) when the appellant could not have brought the action for the necessary reliefs against those respondents alone who are still before the Court; and (c) when the decree against the surviving respondents if the appeal succeeds, will be ineffective, i.e., it could not be successfully execute.

In the instant case, the suit was filed by Amrit Lai Sud, son of Bhagwan Das Sud, against the Union of India through the Secretary, Ministry of Finance, Government of India, and Tax Recovery Officer, Income-tax Department, Amritsar, impleading his father, Lala Bhagwan Dass Sud,as defendant No. 3, Amrit Lai Sud, plaintiff, sought a declaration to the effect that the property situated in the premises known as Bhagwan Rosin and Turpentine Factory, Bhagwan Das Road, Hoshiarpur, is owned and possessed by him and, as such, is to liable to attachment and sale in the proceedings taken-by defendant No. 2 for recovery of the alleged arrears of income-tax assessed on the concern of respondent No. 3 known as Bhagwan Dass Sud & Sons, Hoshiarpur; that the order of defendant No.2 dated January 11, 1971, rejecting his objection petition with regard to the property in dispute is wrong and unlawful and does not affect his rights and interests therein. Whatever relief was claimed by Amrit Lal Sud plaintiff was claimed against defendants Nos. 1 and 2 only. No relief was claimed against Lala Bhagwan Dass Sud, defendant No. 3. The suit was not contested by Lala Bhagwan Dass Sud as he was proceeded against ex parte. Amrit Lal Sud, plaintiff, examined himself before the trial Court on May 24, 1976. In his cross-examination, it was stated by him that Lala Bhagwan Dass Sud had died a few months ago somewhere in the month of January, 1976. Amrit Lal Sud plaintiff did not make any application for striking off his name from the array of the defendants nor he made any application to bring his legal representatives on record perhaps in view of the fact that he himself being the legal representative was already on the record and that he was not seeking any relief against him. None of 'other four sons or any other legal representative of Lal Bhagwan Dass Sud made any application for impleadment as such. Even the trial Court did not take care to strike off the name of Lala Bhagwan Das Sud from the array of the defendants and the suit was allowed to proceed. The suit was decreed in favour of the plaintiff Amrit Lala Sud. The name of Bhagwan Dass Sud continued to be there in the judgment of the trial Court which led the appellant to implead Lal Bhagwan Dass Sud deceased as respondent No. 3 before the appellate Court. The decree having been passed only against defendants Nos. 1 and 2. Lala Bhagwan Das Sud had no interest in the lis there being no decree against him, as he was proceeded against ex parte in the trial Court. Even if he were alive, he was not expected to file any appeal Therefore, his impleadment ac respondent No. 3 in the appeal was nothing but surplus-age. If a joint decree had been passed against all the defendants and Lala Bhagwan Dass Sud had not filed any appeal, in the event of success of the appeal preferred b3. defendants Nos. 1 and 2, the decree passed against Lala Bhagwan Das was to remain intact and would have become final. Therefore, both the decrees being contradictory with each other would have become inexecutable against Lala Bhagwan Dass Sud; and in that event the appeal was bound to abate. But in facts and circumstances of the instant case, that eventuality does not arise. The appellants could bring action against Amrit tai Sud alone for the necessary relief who was still before the Court. In the event of success of the appeal, the decree against Amrit Lai Sud could be effective decree against him. These aspects were neither considered at the time of deciding the application under Order XXII, rule 4, Code of Civil Procedure, nor at the time of decision of the appeal by the appellate Court which held him to reach a wrong conclusion and dismissing the appeal as having been abated. The decision of the appellate Court in the circumstances of the case is not in consonance with law. Therefore, it cannot be allowed to sustain. The appeal, therefore, is allowed and the judgment and decree of the lower appellate Court is set aside and the appeal is remanded for fresh decision on the merits.

The parties through their counsel are directed to appear before the lower appellate Court on May 5, 1997. The said Court shall decide the appeal within two months.

M.B.A./3293/FC Appeal allowed.