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PETITIONER: VEMULA SIVIAH NAIDU

       Vs.

RESPONDENT: STATE OF A.P. & ANR.

DATE OF JUDGMENT:       28/11/1996

BENCH: K. RAMASWAMY, G.T. NANAVATI

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      The appellant is the auction-purchaser of 5.86 acres in Peddayyasamudram village  in Village District. The said land was brought  to sale on November 2, 1967 to realise the debt due to  the Govt.  from one K. Sankaraiah, the brother of K. Radhakrishaniah, the respondent-plaintiff. The appellant had purchase the  same in  the said  auction. He was granted the sale certificate  on April 31, 1969 under Ex-8-1. Later, the second  respondent,   Radhakrishaniah  filed  the  suit  for setting aside  the sale. The trial Court dismissed the suit. On appeal,  the District Judge confirmed the same. In Second Appeal No.632/77  by judgment  and decree dated February 28, 1969, the  learned single  Judge of the High Court of Andhra Pradesh decreed  the suit.  Thus,  this  appeal  by  special leave.      The admitted  facts are  that K. Sankaraiah, the debtor and the  second respondent  are members of the joint family. At  a   partition  dated   July  26,   1954  under  Ex.B-13, Radhakrishaniah was  granted a  greater share  since he  had undertaken to  discharge all  the liabilities  on the  joint family  properties   including  the   debt   contracted   by Sankaraiah  from   the  Government  under  a  mortgage.  The contention raised  by the second respondent, which was found acceptable by  the High  Court, was  that since he was not a defaulter within  the meaning  of  Section  5  of  the  A.P. Revenue Recovery  Act, 1894  (for  short,  the  ‘Act’),  the property belonging to the respondent could not be brought to sale. In  support thereof, the learned Judge has relied upon another judgment  of that Court in Chatrati Srirama Murthi & Ors. vs.  Official Receiver  Krishna &  Ors. [(1957)  1  AWR 216]. The  question is;  whether the  view taken by the High Court is correct in law? The learned District Judge recorded a finding,  which was  also accepted by the High Court, that the properties  are joint  family properties hypothecated to the Government  for securing  the loan  by  Sankaraiah.  The second respondent  under  Ex.B-13  had  taken  bulk  of  the properties including  the suit schedule property allotted to him in  the partition  with an undertaking "to discharge all the liabilities  of the erstwhile joint family including the loan obtained  from  the  Government".  Thus,  the  question

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arises: whether  the second respondent is a defaulter within the meaning  of Section  5 of  the Act?  Section 5  reads as under:      "Whenever revenue  may be in arrear      it  shall   be   lawful   for   the      Collector    or    other    officer      empowered by  the Collector in that      behalf, to  proceed to  recover the      arrear, together  with interest and      cost of  process  by  the  sale  of      dafaulter’s movable  and  immovable      property, or  by execution  against      the  person  of  the  defaulter  in      manner hereinafter provided."      It is  to remember  that the  word ‘defaulter’ connotes the person  who is  liable to discharge the debt. In view of the fact  that the joint family property was hypothecated to the  Government  for  recovery  of  the  debt  taken  by  K. Sankaraiah and  the  second  respondent  had  undertaken  to redeem the  debt taken  by Sankaraiah  and the partition was subject to  the above undertaking, the property is liable to be proceeded for recovery of the debt contracted upon it. As a consequence,  the second respondent is a defaulter for the purpose of Section 5 of the Act.      Shri A.  Subba Rao,  learned counsel  appearing for the second respondent, contended that the word ‘defaulter’ would be  understood  to  be  the  person  who  has  incurred  the liability.  Though   Radhakrishaniah,  had   undertaken  the liability under  Ex.B-13, for  the purpose  of Section 5, he cannot be  considered to  be a  defaulter, but R. Sankaraiah was the  defaulter;  therefore,  the  property  had  by  the respondent at  a partition is not liable to sell. In support thereof, learned  counsel placed reliance on the judgment of Madras High  Court in  C. Dhanalakshmi  Ammal vs. Income-Tax Officer, Madras [31 ITR 460]. The facts therein are that the husband of  the petitioner  therein  was  the  defaulter  of arrears of income-tax. The property belonged to his wife who was sought  to be  proceeded against for recovery of arrears of income-tax  due by  the assessee, on the premise that the wife is  only a benamidar and the real owner of the property was the  husband, the  defaulter. The  Madras High Court had held that  since the  husband is the defaulter, the property cannot be  straightaway proceeded  with since  they stand in the name  of the wife, unless appropriate steps are taken to ensure first  that the wife is only a benamidar and the real owner of  the property  is the husband. We need not consider the correctness  of the  view taken by the Madras High Court for the reason that the facts therein are entirely different from the facts in this case.      It is  seen that  the property  which is proceeded with for recovery  of the debt due to the Government is the joint family property  charged to  the debt due by Sankaraiah. The respondent-Radhakrishaniah had  undertaken to  discharge the liability  under   Ex.B-13.  Therefore,   he   assumed   the responsibility  as   a  defaulter   under  Section   5.   In consequence, the  property is  liable to  be proceeded  with since  he  had  not  discharged  that  liability.  The  sale conducted on  November 2,  1967, therefore, is in accordance with the  provisions of  the Act.  The sale  certificate was legal and  valid. Accordingly, Ex. B-1, the sale certificate dated April 31, 1961 binds, the second respondent.      The appeal  is accordingly  allowed. The  judgments and decree of  the High  Court stand  set aside. The suit stands dismissed. No costs.

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