Case: Union of India Vs. Bibhuti Bhusan Sen, and Others

1. These appeals are from an order of the High Court of Calcutta dated April 3, 1953, by which the said High Court rejected an application made on behalf of the appellant herein to grant leave to attach and sell through the Certificate Officer, Alipore, the properties and assets of Messrs. Sen Brothers and Co. in the hands of a receiver appointed by the High Court, for the recovery of arrears ofdue from the aforesaid firm. The facts lie within a narrow compass and are stated below There was a partition suit going on between certain Sens and one of the properties included in the suit was the firm called Messrs. Sen Brothers and Co. A preliminary decree having been passed in that suit by a court at Alipore, there was an appeal to the High Court of Calcutta and in that appeal an order was made for the appointment of receivers in respect of the firm. From the year 1945 to the year 1953 the receivers were two of the Sens themselves, namely, Balai Lal Sen and Bibhuti Bhusan Sen. Assessments ofwere made on them as receivers with respect to the income of the firm for the years2 andbut of those assessments that for the yearwas subsequently cancelled. Thedepartment having been unable to realise the tax from the receivers, started certificate proceedings in respect of their dues under each one of remaining four assessments but while the certificate proceedings were pending, the two Sens ceased to hold the office of receiver. They were succeeded by Sisir Kumar Basu and Kanai Lal Sen on February 5, 1954, but on December 23 following, Sisir Kumar Basu came to be the sole receiver. Thereupon, on February 6, 1955, the Union of India, represented by the Commissioner ofWest Bengal, made an application to the High Court by which they asked for two reliefs, namely, (a) leave to attach and sell through the Certificate Officer, Alipore, the property and assets of Sen Brothers and Co. in the hands of Sisir Kumar Basu, the receiver, and to realise the arrears ofdue from Sen Brothers and Co. and from the said receiver, out of the sale proceeds and (b) leave to serve notice under section 46(5A) of theAct on the said receiver, that is, Sisu Kumar Basu, and to take further proceedings as provided in the section. A rule was issued on that application by P. N. Mookherjee and Renupada Mukherjee JJ. in terms of the prayers. Thereafter, while the rule was pending, Sisir Kumar Basu resigned and M. K. Sen came to be appointed receiver. An application was then made for the substitution of M. K. Sen which was allowed and the rule came up for hearing as a rule against the receiver so substitutedThe rule was heard by S. C. Lahiri and S. K. Sen JJ. They discharged the rule on the main ground that there was no provision in the IndianAct, 1922, or the Bengal Public Demands Recovery Act for substituting in place of the receiver who was assessed for the income obtained by him on behalf of the owners of the firm, another receiver who has not been so assessed, and that in the absence of an assessment on the firm, it would not be right to hold that the assets in the hands of a subsequent receiver (namely, M. K. Sen), who was not an assessee and who was not before the Certificate Officer at all, could be proceeded against with the permission of the court. It may be stated here that the form of the application made by the present appellant to the High Court was such that the question of the right of the appellant to proceed against the successor to the assessee receivers was directly raised and reliance was placed on(2) of section 41 of the IndianAct and section 43 of the Bengal Public Demands Recovery Act. The learned judges dealt with those provisions and came to the conclusion that they did not justify leave being granted to the appellant to proceed against the assets of Messrs. Sen Brothers and Co. in the hands of a receiver who was not assessed and who could not be substituted in place of the assessee receiver

Reasoning: 4. The point raised is not free from difficulty, and in view of the provisions of section 65 of theAct, the question might well arise whether any proceedings for recovery of tax, lay against the successor to the assessee receivers, in the absence of any assessment on the owners of the firmFortunately for us, these appeals can now be disposed of on the short ground that Bibhuti Bhusan Sen has now been appointed receiver in place of M. K. Sen, discharged by the order of the High Court dated March 28, 1958. Bibhuti Bhusan Sen as one of the receivers was an assessee on whom assessment was made with respect to the income of the firm for the years3. These are the assessments in respect of which the appellant now wishes to take proceedings for recovery of tax. As Bibhuti Bhusan Sen was an assessee on whom the assessments had been made, no question of any substitution of a receiver subsequently appointed arises now and it is unnecessary to consider the effect of(2) of section 41 of the Indian